Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
HAMISH MACDONALD: Crunch time is looming for the Government’s income tax cuts with debate over the $144 billion package due to start today in the Senate. The Coalition is facing pressure to split the legislation, amend it to allow the first instalment to start from July 1 for low and middle-income earners. Much of the focus will be on Labor, which is yet to decide on stage two of the ten year plan, while it openly remains hostile to the final phase due to start in 2024, which is at least two elections away. To unpick the road ahead or to plot it perhaps, we are joined by the Government’s chief Senate negotiator, Finance Minister Mathias Cormann. Good morning to you.
MATHIAS CORMANN: Good morning Hamish.
HAMISH MACDONALD: Let us put Labor to the side for a moment, take a look at the crossbenchers. You can pass the entire package if you get eight of the ten independents onside. You are close, no cigar. It is all coming down effectively to One Nation isn’t it?
MATHIAS CORMANN: Your maths are right. The Government has 31 Senators in the Senate, we need 39. If Labor and the Greens persist with opposing income tax relief for hardworking families around Australia then yes, we will need to persuade eight out of the ten Senate crossbenchers to come on board.
HAMISH MACDONALD: So what is the approach with Pauline Hanson now, cups of tea? What are you going to do?
MATHIAS CORMANN: I do not conduct these sorts of discussions through the media. What I can say to you is that this week the Australian people will find out who is in favour of tax relief for hard working families around Australia and who wants to continue to impose higher taxes on all Australians.
HAMISH MACDONALD: One Nation though says it will not be your lap dog, you have already managed though to pick off Brian Burston to back the business tax plan. Is there going to be a similar tactic with Peter Georgiou?
MATHIAS CORMANN: I had reached an agreement with Pauline Hanson and One Nation as a whole, all three One Nation Senators to support our plan to lower business tax rates so that businesses and employees in Australia were not disadvantaged with businesses and employees in other parts of the world. Because Bill Shorten has made a decision to stand in the way of a globally more competitive business tax rate here in Australia, he is helping, he is trying to help businesses and workers in other parts of the world take investment and jobs away from the Australia. We do not want to see that happen. We want to ensure that businesses and workers in Australia have the best possible opportunity to be successful into the future and that is why we are so committed to bring that company tax rate down.
HAMISH MACDONALD: You are committed though as well to low and middle-income earners here in Australia. You have more than enough support for the first instalment of your income tax package, worth up to $530 a year for low and middle-income earners. Why not be pragmatic about this and get that through?
MATHIAS CORMANN: What we have put forward is a long-term plan. We are not interested in just a short-term cash giveaway. What we want to do is we want to reform our income tax system…interrupted
HAMISH MACDONALD: But no one is saying you cannot do that in the longer term. Why not get the first stage through, maybe the second stage and continue fighting for the third stage? It is not due to come in until 2024, 2025.
MATHIAS CORMANN: Because we think it is very important for all of these different stages to be legislated at the same time…interrupted
HAMISH MACDONALD: Why?
MATHIAS CORMANN: We think it is important at the same time to prioritise low and middle-income earners in terms of the immediate tax relief, but also to provide certainty to all working Australians that might be approaching higher income tax brackets, that we will ensure that they will not go backwards as a result of bracket creep…interrupted
HAMISH MACDONALD: Why don’t you have the confidence in your own plan though to say look, we might be able to get stages one and two of this through now and go to the next election fighting on the third phase of this? Is it because you are not all that confident about arguing for cuts for higher income earners, which would be those collected by the final stage of this?
MATHIAS CORMANN: It is actually because we are so confident that our plan is right, that our plan is what Australian families need, that we are putting the whole plan forward now. You are telling us that we should give up on what we believe is the best plan for working families around Australia right now…interrupted
HAMISH MACDONALD: I think that would be putting words in my mouth Minister.
MATHIAS CORMANN: I am just responding to your assertion. The reason we are progressing with the plan the way we have put it forward is because we believe that Australia needs both immediate income tax relief prioritising low and middle-income earners, but also certainty around a legislated plan to address bracket creep over the next seven year period. We understand that bracket creep is a drag on economic growth. If it is left unaddressed, it means that middle income Australians would continue to go backwards as their income increases through inflation and through additional work effort and that is not something that we want to see happen.
HAMISH MACDONALD: But if you do not get stage one of this through soon, how will you justify to the people that would have been receiving that extra $530 a year that actually you think they should wait rather than get it now because you want in seven years’ time to be able to give higher income earners some relief as well.
MATHIAS CORMANN: That is a hypothetical. We are committed to give all working Australians…interrupted
HAMISH MACDONALD: It is not a hypothetical, you have not been able to present us a way in which you can get this through the Senate yet.
MATHIAS CORMANN: The vote will take place in the Senate this week and all will be revealed. What I am saying to you is the Government is committed to provide income tax relief to all hardworking Australians. Yes, prioritising low and middle-income earners because we believe they deserve relief from cost of living pressures, but we are also committed to ensure that all Australians receive appropriate reward and incentive in terms of the hard work that they display every single day.
HAMISH MACDONALD: Okay, one of Labor’s major tax policies is the change to franking credit refunds for retirees. An external review by the Treasury has reportedly found a $1 billion hole in the package, rising to $10 billion over a decade. What is your response to that?
MATHIAS CORMANN: Labor has form. Labor gets these numbers wrong. Labor always overestimates the revenue they believe they can raise and commit all of that additional revenue in spending before they have collected a dollar. That is what happened with the mining tax and in the end, they have to scramble for more higher taxes targeting other Australians to make up the difference. This is what we are saying. So, here we are $45 billion in higher taxes targeting self-funded retirees, targeting people who have worked hard all their life to save for their retirement. They are $10 billion short over the next decade and that means that other Australians will be on the receiving end of higher taxes.
HAMISH MACDONALD: Do you know who wrote this review for the Government?
MATHIAS CORMANN: I do not know what individual officers are involved. What I do know is that the head of the tax policy analysis division in Treasury signed off on the Treasury advice. Labor can easily…interrupted
HAMISH MACDONALD: Are you familiar with the name James Doolan?
MATHIAS CORMANN: No I am not.
HAMISH MACDONALD: I understand that he is a Treasury analyst, was involved with the writing of this report. Have you heard anything about his name mentioned in reference to this report?
MATHIAS CORMANN; I have never heard that name to my knowledge. What I can say to you is that the head of the tax policy analysis division in Treasury signed off on this report. If Labor wanted to come clean with the Australian people, all they would need to do is to publicly release their PBO costings, their Parliamentary Budget Office costings. They have kept them secret. We have not been allowed to see what assumptions they have imposed on the Parliamentary Budget Office. We have not been allowed to see what caveats the Parliamentary Budget Office put onto their costings. If Labor has got any problem with the Treasury analysis, signed off by the head of the of the tax policy analysis division in Treasury, then they can very easily deal with that by releasing their Parliamentary Budget Office costing.
HAMISH MACDONALD: It is my understanding that James Doolan’s name is listed as the creator of the document, the one that the Government is providing as a Treasury note and that he used to work for Mitch Fifield and Kelly O’Dwyer. Is this advice independent?
MATHIAS CORMANN: Again, all I can say to you is that the head of the tax policy analysis division has signed off on it. You have obviously been on the receiving end of some Labor briefings here in relation to a gentleman, whose name I have never heard. Let me just say to you that there are former Labor Government staffers, Gillard and Rudd Government staffers, indeed Shorten staffers that work in Treasury and there are indeed former Coalition staffers who work in Treasury. Treasury officials from time to time work for both sides of Government in ministerial offices. That is not something that is unusual. Labor can easily clear all of this up. All they need to do is to release the Parliamentary Budget Office costing, so that everyone can see the assumptions they have imposed on the Parliamentary Budget Office in costing that policy and so that everyone can see the caveats that the Parliamentary Budget Office put on their costing that they provided to the Labor Party.
HAMISH MACDONALD: On the ABC, would you like to take this opportunity to clarify whether or not the ABC will be sold in this or any other term of a Liberal Government?
MATHIAS CORMANN: You must have been hiding under a rock for the last 48 hours. I have made very clear and many of my colleagues have made very clear that the ABC will not be privatised under our Government. Not now, not after the next election, never.
HAMISH MACDONALD: You were at that meeting of the Federal Party Council at the weekend. Why didn’t you speak against the motion?
MATHIAS CORMANN: Again, I have answered this question in response to questions from ABC journalists over the last two days too. The meeting procedure at Federal Council meetings of the Liberal Party is that this is a meeting for Party volunteers. Yes, the responsible Minister gets to address relevant motions that are relevant to their area of portfolio responsibility, which is what Mitch Fifield did as the Minister for Communications, incidentally making very clear that the Government had no intention to privatise the ABC.
HAMISH MACDONALD: So what is the point of these processes then if you do not take any notice of what the decisions are?
MATHIAS CORMANN: It is always important to bring our Party membership together. It is appropriate for the Party membership to have discussions on topics…interrupted
HAMISH MACDONALD: So you just ignore it?
MATHIAS CORMANN: We make judgements as a Government and our judgement as a Government is that we have absolutely no intention to privatise the ABC now or ever.
HAMISH MACDONALD: Do you think the ABC is fair to you and your Government?
MATHIAS CORMANN: I am always happy to answer questions put to me by the ABC. I do not think you will find that I have ever been one to complain about the way the ABC treats me.
HAMISH MACDONALD: Sure, but do you think the ABC is fair?
MATHIAS CORMANN: There are instances that the ABC itself recognises that they have not been fair or that they have not been as consistent with the requirements in their Charter as they could have been and should have been. It is appropriate in those circumstances for the ABC…interrupted
HAMISH MACDONALD: Sure, but this is a pretty straight forward question I am asking you about the national broadcaster and you do not seem to be able to give me a straight forward answer. Do you think broadly the ABC is fair to your Government?
MATHIAS CORMANN: You are asking me a blanket question and I am not going to give you a blanket answer. I think that there are circumstances where the ABC has not been and the ABC itself has recognised that.
HAMISH MACDONALD: When hasn’t it been fair to your Government?
MATHIAS CORMANN: If you want me to provide you with a log on notice I am quite happy to do that…interrupted
HAMISH MACDONALD: Is there one?
MATHIAS CORMANN: It is a matter of public record that there have been instances where the ABC itself has recognised that the reporting was not up to the appropriate standards.
HAMISH MACDONALD: There is a log is there on unfairness?
MATHIAS CORMANN: It is a matter of public record. The ABC itself would keep a record I am sure of the complaints that were submitted and that have been upheld.
HAMISH MACDONALD: Mathias Cormann, it is always a pleasure to talk to you, thanks for your time this morning.
MATHIAS CORMANN: Always good to talk to you.