Transcript

Doorstop – Mural Hall, Parliament House

Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia

Transcription: 

PROOF COPY E & OE

Date: 

17/6/2018

Topic(s): 

Business tax cuts, personal income tax relief, GST distribution, ABC

MATHIAS CORMANN: This next fortnight the Senate will have the opportunity to vote for income tax relief for hardworking Australians. The Senate will also have the opportunity to support Australian working families, to protect investment and jobs here in Australia, by supporting a lower, globally more competitive business tax rate for all businesses here in Australia. 

Any vote against a lower, globally more competitive tax rate here in Australia is a vote to help businesses overseas better compete against businesses here in Australia, which would put jobs and investment at risk. To protect investment and jobs here in Australia at a time when countries around the world have lowered their business tax rates substantially, we need to ensure that we also have a globally more competitive business tax rate in place. Keeping taxes high in Australia when other countries have lowered theirs puts Australian workers at a disadvantage because it helps businesses and workers overseas take business, investment and jobs away from Australia. 

We call on the Senate, we call on all Senators, to very carefully consider the national interest. We call on all Senators to very carefully consider the implications for working families around Australia, to put them at a disadvantage with businesses and workers in other parts of the world.

Happy to take questions.

QUESTION: Where are your numbers at with the tax package?

MATHIAS CORMANN: I do not provide a running commentary on these things …interrupted

QUESTION: How many more votes do you need?

MATHIAS CORMANN: Everybody knows that the Government has 31 Government Senators in the Senate. We need another eight in order to pass legislation that is opposed by Labor and the Greens. Labor and the Greens are opposing business tax cuts. Bill Shorten is recklessly opposing business tax cuts even though he knows that Australia needs to be globally competitive. He knows that by standing in the way of a lower, globally more competitive business tax rate here in Australia, he is helping businesses and workers overseas take investment and jobs away from Australia. He should stand condemned for that.

QUESTION: With the corporate tax cuts, we have had to put off that vote before because you did not have the numbers then. It looks like nothing has changed. Why hold the vote now?

MATHIAS CORMANN: We are committed to getting these tax cuts legislated. We have said all the way through that we will work very hard to convince the majority of Senators that this is a very important economic reform for Australia. I cannot imagine that any Senator who very carefully considers the national interest, who very carefully considers the interests of working families around Australia, could possibly vote against business tax cuts for all Australian businesses. You have to think about this. Australia is an open trading economy. We compete with businesses all around the world for capital and for markets. We are a relatively small population. The United States, which now has a business tax rate of 21 per cent, has a comparatively significantly larger domestic capital market and a domestic market for its products and services. For Australia to put ourselves into a position of competitive disadvantage with a country like the United States when we rely on overseas capital to continue to develop our economy is reckless and irresponsible. Working families around Australia would be the ones paying the price for Bill Shorten's reckless decision to stand in the way of business tax cuts here in Australia.

QUESTION: You are the chief negotiator for the Government on this, can you give us an insight into what response you're getting from those crossbenchers. I'm sure you have been ringing them furiously over the last couple of days?

MATHIAS CORMANN: I do not provide running commentary on my conversations with Senate colleagues. These conversations are not conducted through the media. I conduct those conversations with courtesy and respect in private. That will continue to be the case. Once this legislation progresses through the Senate, the debate will take place. In the course of the debate, all of the relevant information will become apparent.

QUESTION; On the income tax cuts, are you amenable to amending the bill in negotiations with the Senate? Are you amenable to getting rid of the third stage of the tax cuts? Or is it a take it or leave it proposition you are going to maintain?

MATHIAS CORMANN: We have been extremely clear. We have a long term plan to provide income tax relief to all working Australians. We have prioritised low and middle income earners but we have also ensured that we address bracket creep across-the-board. We do not think it is appropriate for middle-income earners to be pushed into the higher income tax brackets because we are not prepared to do anything to address bracket creep. Our plan is therefore to see. We are committed to the whole plan. We will not be supporting any amendments to split the Bill. We want the Senate to pass our income tax relief plan for hardworking families around Australia in full. That is the basis on which we are proceeding.

QUESTION: When will the Bill actually be tabled in Parliament?

MATHIAS CORMANN; The Bills are in Parliament, both of them. The personal income tax package has passed the House of Representatives. It will be dealt with in the Senate this week. That is on the agenda. The business tax cuts are scheduled for the second week in this fortnight.

QUESTION: Will you take business tax cuts to the next election if they don't pass or will you ditch that altogether?

MATHIAS CORMANN: Again we have been consistent and very clear. We are absolutely and utterly committed to passing those tax cuts. Yes, we would take them to the next election. Our preference is to pass them this fortnight because if we provide certainty to businesses here in Australia that they will have the benefit of a lower globally more competitive business tax rate here in Australia moving forward, they will make investment decisions today. Investment decisions which will lead to more jobs and stronger growth. Australians are looking for more jobs and stronger growth because they know that is a necessary ingredient for higher wages. The business tax cuts that we took to the last election are even more important and more urgent now, because since we went to the last election, the United States has reduced their business tax rate from 35 per cent to 21 per cent. The biggest source of foreign direct investment into Australia, the biggest source of investment that helps us grow our economy is the United States. What do you think an investor in the United States will think when he sees a 21 per cent business tax rate in the US and a 30 per cent business tax rate in Australia? Investors will look at the opportunity for after-tax profits in Australia as opposed to the United States. Clearly, the United States now has seriously got their nose in front. We cannot expose businesses and workers in Australia to the risk of investment and jobs going to other countries around the world at our expense.

QUESTION: Senator, from the outside looking in, these negotiations look hard. Are you feeling the pressure?

MATHIAS CORMANN: I am feeling pretty relaxed actually.

QUESTION: Just on the NEG, a lot of the party room wanted the emissions reductions targets to be towards the end of the 2020s and it seems they are going to steadily come in straightaway and they'll be legislated reductions coming in immediately. Do you think this could cause ructions within the party?

MATHIAS CORMANN: I do not accept your assertion at all. I did not know you were in the party room when we discussed this. There was strong and overwhelming support for the package that was put to the party room by the Prime Minister and the Minister for Energy, Minister Frydenberg. The policy is there for all to see. Our commitment is to bring down electricity prices, to improve the reliability and stability of our energy system. Subject to those objectives, to bring down emissions consistent with the commitments we made in Paris. That is our policy. It is the policy that has the overwhelming support of our party room. I am not sure what you are talking about.

QUESTION: What are your thoughts on the privatisation of the ABC, is it a good idea?

MATHIAS CORMANN: The Government has no plans to privatise the ABC. In fact, let me go stronger. In case you are worried, let me reassure you, the Government will not be privatising the ABC.

QUESTION: So why didn’t frontbenchers stand up at that conference and argue against the motion?

MATHIAS CORMANN: Because this is a conference for the rank-and-file. It is a conference for party volunteers to have their say. This was a motion... interrupted 

QUESTION: You could have had your say on that, too?

MATHIAS CORMANN: The Minister responsible, Minister Fifield did speak in actual fact. I am not sure that you are quite right in your representation there. The rules of debate at these conferences are that is a conference for party volunteers, but the responsible Minister gets the opportunity to have their say. That is what Minister Fifield did.

QUESTION: Also on the Federal Council Minister, did you abandon your home state by abstaining from the GST vote?

MATHIAS CORMANN: I did not abandon my home State at all. I made the position of the Government very clear. I spoke to it. I made the position of the Government very clear, which I strongly support. That is that we recognise that the GST sharing arrangements are unfair for Western Australia. That is why we have made several top-up payments, federal top-up payments for Western Australia, initially stopping the drop of WA's share of the GST which was headed to below 30 cents in the dollar and now having lifted it to 50 cents in a dollar. We have also initiated the Productivity Commission review which looked at the national productivity and growth implications of GST sharing arrangements. That review will soon be released in the next little while by the Treasurer. It is at that point that a comprehensive response in relation to medium to long-term reform options should be pursued. I made it very clear that in my view, it was not appropriate to pursue ad hoc measures in isolation of a broader plan, so my position was very clear and on the record.

QUESTION: Have you spoken to Pauline Hanson or to Peter Georgiou since Brian Burston resigned from the party?

MATHIAS CORMANN: Pauline Hanson as I understand it has been overseas for the last few weeks. I have not spoken to Pauline since the last sitting week. But I have spoken to all other crossbench Senators who were prepared to speak to me.

QUESTION: And just Peter Georgiou? 

MATHIAS CORMANN: Again, I am not going to go into the ins and outs of everything. I am just telling you that I speak to every non-Government crossbench Senator who is prepared to speak to me or who reaches out asking to speak to me, I speak to.

QUESTION: Just back on income tax cuts, so you are saying there will be no room at all for any amendment to the package, that even if it is defeated, at the pain of defeat you will not going to entertain any amendments at all?

MATHIAS CORMANN: You can speculate. I will leave that to you. The Government is working to secure the passage of what we believe is very important economic reform. If Bill Shorten wants to stand in the way of cost of living pressure relief for hard working families, that is his call. The Government has got a sensible plan an appropriate plan which will provide income tax relief to hard working families around Australia. It prioritises low and middle income earners but it provides the appropriate incentive, encouragement and reward for effort for all Australians who work hard. We do not believe that it is appropriate to allow our tax system to push more and more people into the higher income tax brackets. We believe that that is a serious disincentive to work hard and to do the best you can. Our plan is there for all to see. It is the first opportunity for the Senate to consider the plan that we released in our Budget. Here you are, suggesting that we should walk away at the first hurdle. The Senate has not even had an opportunity to have one minute of debate on it and you already want us to walk away from it.

QUESTION: The income tax changes take effect, or the first part take effect on July 1.

MATHIAS CORMANN: Indeed.

QUESTION: There has been some discussion, I guess technical speculation I guess about whether it really has to be legislated before then in order to take effect because you could back date part of it. What is your thoughts on whether that is possible?

MATHIAS CORMANN: Our intention is to pass them over the next fortnight. That is what we are putting to the Senate. It will be up to the Senate to decide whether they support the Government's strong wish to provide income tax relief to hardworking families, prioritising low and middle income earners but providing relief from bracket creep for all working Australians. It will be a matter for the Senate to decide. The legislation is in front of the Senate this fortnight. We would like to see it passed this fortnight. If it is, it provides certainty to families around Australia about what the income tax policy settings will be over the next few years.

QUESTION: Are you willing to split the business cut tax bill?

MATHIAS CORMANN: No.

QUESTION: You have done it once for $50 million. Why not say do it up to $500 and do the rest after the election.

MATHIAS CORMANN: It is very simple. Since we passed the first three years of the Enterprise Tax Plan, the United States has reduced their corporate tax rate from 35 per cent to 21 per cent. France has decided to reduce their corporate tax rate from 33 per cent to 25 per cent. France is led by a President who was the Socialist Minister for the Economy and Industry in the Socialist administration of Francois Hollande. The President of France hardly a right wing ideologue, understands that he needs to act to protect businesses, investment and jobs in his country. But for some reason, Bill Shorten is quite happy to send investment and jobs overseas. Bill Shorten in standing in the way of business tax cuts here in Australia is helping businesses overseas take investment and jobs away from Australia. That is what he is proposing to do.

QUESTION: They are cutting taxes now and yours is some way beyond, you know, ten years away.

MATHIAS CORMANN: That is not right.

QUESTION: Why not make sure that some tax relief gets through, why don't you split the bill?

MATHIAS CORMANN: It is very, very important that we provide certainty, including certainty for big business today about what the tax rates are going to be into the future. Investment decisions today are based on business expectations of future profitability after tax and by us providing certainty today about what the tax rate is going to be on a glide path down to 25 per cent for all businesses by 2026-27, we provide encouragement for additional investment into Australia which will help businesses grow and expand  which means business will hire more Australians. As business hire more Australians across the economy, there is more competition for workers, which is the key ingredient to driving up wages. The Governor of the Reserve Bank, the other day talked about the capacity of workers to bargain, the bargaining power of workers to secure better wages. The way to improve the bargaining power of workers is to create more jobs so that there is more competition for workers by business. So businesses are forced to pay more to secure the services of workers. The only way we do this is if we attract more investment. In Australia, with a relatively small population, we rely on foreign investment into Australia to develop our economy. We compete for capital around the world. If we put ourselves in a position where there is a lower return on capital after tax in Australia, then there is in other parts of the world, we will get less of it. If we get less capital investment into Australia, there will be less growth, there will less business expansion, there will be fewer jobs. As there are fewer jobs you get higher unemployment. As there is higher unemployment, there will be less bargaining power for workers and workers will get lower wages. Bill Shorten is standing for an agenda that would deliver fewer jobs, higher unemployment and lower wages. Our agenda is all about securing more jobs so we can have lower unemployment and higher wages. If we want to have higher wages, we need to ensure the businesses around Australia that employ nine out of ten working Australians, the private sector businesses of Australia, that employ nine out of ten working Australians, have the best possible opportunity to be successful into the future. If we continue to keep business taxes in Australia high when countries around the world are substantially lowering them, we are making it harder for them to be successful, we are making it harder for them to attract investment, we are making it harder for them to be profitable into the future, which means that they would hire fewer people than they otherwise would, which means higher unemployment than it could be which means lower wages than it could be. Bill Shorten is standing for higher unemployment and lower wages.

QUESTION: Do you concede, though, that to pass that measure in full, to pass that tax plan in full you will have to give huge concessions to the crossbenchers that you are trying to get across the line?

MATHIAS CORMANN: The Government certainly, is engaging with the crossbench. The Government has been engaging with the crossbench for some time now about finding a policy consensus that would facilitate the passage of business tax cuts in full. That has always been thus. We have 31 Senators in the Senate of 76. We need 39 to pass legislation. So of course we are engaging with the crossbench to identify on what basis we might be able to secure a consensus.

QUESTION: What are you prepared to give One Nation?

MATHIAS CORMANN: Again, I am not conducting discussions with the crossbench through the media.

QUESTION: And are you still one vote short?

MATHIAS CORMANN: I will not provide a running commentary on individual crossbench Senators. Anyone who wants to declare their position, that is a matter for them.

QUESTION: Will you be campaigning on big business tax cuts in the by-election?

MATHIAS CORMANN: What we will be campaigning on in the by-elections and as we will in the next general election is that our economic mission is to deliver stronger growth and more jobs. To deliver stronger growth and more jobs we need to attract more investment. If we put businesses in Australia at a competitive disadvantage compared to businesses in other parts of the world, we put the workers in Australia that work for those businesses at a competitive disadvantage. That is what we are campaigning on. We are campaigning on this core proposition. We want all Australians today and into the future to have the best possible opportunity to get ahead. We want all Australians today and into the future to get a well-paid job, to be able to develop a career, to get higher wages. The only way we can do this is if the businesses in Australia who employ nine out of ten working Australians have the opportunity to compete with businesses in other parts of the world. If we keep our taxes, our business taxes in Australia high, when countries around the world are substantially lowering theirs, we are making it harder for businesses in Australia to expand, we are making it harder for businesses in Australia to hire more people which means that we will end up with fewer jobs and higher unemployment and lower wages. Is that part of our agenda as we contest the upcoming by-elections? Of course it is.

QUESTION: Is that a tough sell though, I mean the electoral cycle in Braddon and Longman where there are people are naturally sceptical of big business is that a tough sell?

MATHIAS CORMANN: People in those electorates are fundamentally aspirational. They are like all Australians. They want the best for their kids. They want their kids to have the best opportunity to get a well-paid job, to have a career here in Australia. They want to know the Government has a plan that will secure our future economic prosperity that will ensure that into the future people, their kids and their grandkids will be able to be successful and the key to that is to ensure that we remain competitive, that the businesses here in Australia that provide those opportunities are in the best possible position to compete with other businesses in other parts of the world. Now you talk about big business. Let me tell you about a big business. Qantas was a small business one day. In fact, most big businesses, all big businesses started small. Qantas started with three employees. Now they employ 30,000 people. They are a big business. They are on the front-line of global competition in a fiercely competitive industry. You know what is going to happen to those 30,000 direct employees of Qantas if we continue to put them at a disadvantage in their job security will be less than it should be and than it could be because we are making it harder for Qantas to compete. You know who else is going to hurt if we do not ensure that Qantas is as competitive as possible internationally, the 3,000 small and medium-sized businesses that provide goods and services to them. All of the people that work for the 3,000 small and medium-sized businesses including across Queensland and across Tasmania that supply goods and services to Qantas. The big businesses of Australia in many ways are on the front-line of global competition. If we make it harder for them to be successful into future, they will end up being less successful. If they are less successful, they will have to cut costs. As they are having to cut costs, who do you think is going to hurt? Their employees and the employees of the businesses, the small and medium-sized businesses that supply goods and services to them.

QUESTION: I understand the privatisation of the ABC isn't happening, but do you ….

MATHIAS CORMANN: It is definitely not happening.

QUESTION: … think that the Liberal party has not done itself any favours in voting in favour of this and handed a big stick to Labor, basically.

MATHIAS CORMANN: I will let you provide the commentary. The position of the Government is very clear. I am sure that it will be a talking point. If that is the most important issue that the Labor party wants to focus on, a policy change that is not happening, while they are voting against more investment and more jobs in Australia, then go their hardest.

QUESTION: Why do we need a government to own a broadcaster?

MATHIAS CORMANN: Honestly, I think you must have exhausted all of your questions now.

QUESTION: On the terrorism charges, you may have information about that. Those charges, what threat did this guy make?

MATHIAS CORMANN: Our law enforcement intelligence agencies do a great job in keeping Australians secure. I am advised there is no current threat. There has been an arrest. I am not across all of the specifics but except to say our law enforcement and intelligence agencies have again done a great job.

QUESTION: Do we know who he was planning to fight for?

MATHIAS CORMANN: I do not have any specifics. 

Thank you.

[ENDS]

Senator the Hon Mathias Cormann, Minister for Finance and the Public Service, Perth