Sky News – AM Agenda

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






Personal income tax relief, business tax cuts

KIERAN GILBERT: That is a good segue to bring in Mathias Cormann now. The Finance Minister, the Leader of the Government in the Senate. Very complimentary of the Prime Minister of your efforts this week and working with the crossbench.

MATHIAS CORMANN: It was a great team effort delivering for working families around Australia. We have been able to secure income tax relief in the first instance, over the next four years for low and middle income earners. But over time, delivering income tax relief for all working Australians who pay tax. 

KIERAN GILBERT: When it comes to, I know you say you are targeting low and middle income earners first, but when you look at the cost of living pressures now, the vast majority of them won’t get any payment until July 1at the end of the next financial year. That is quite a way away. 

MATHIAS CORMANN: We are doing as much as we can, as soon as we can. We have calibrated our income tax relief package in a way that is fiscally responsible. But nevertheless it is $144 billion worth of income tax relief for hard working families. The Labor party wants to increase taxes on families by $70 billion as part of their more than $200 billion in higher taxes. 

KIERAN GILBERT: Would you potentially bring the tax relief forward further? Because we are every chance of having another Budget, or at least a major economic statement before the next election which is most likely due in May next year. 

MATHIAS CORMANN: Last night we legislated our seven year plan to provide income tax relief to all hard working Australians who pay tax. As the economy continues to strengthen, as we continue to get the Budget in to a better position, our focus will always be on keeping taxes as low as possible ... interrupted

KIERAN GILBERT: And as soon as possible?

MATHIAS CORMANN: If there is opportunity to lower taxes into the future, our instinct will be to deliver lower taxes. That is what we have demonstrated. That is what we have delivered last night. But right now, where we are today, what we have legislated last night is what we believe is the best possible deal for working families now. 

KIERAN GILBERT: It is interesting though, because you have got that contrast with Labor, sure, but you could potentially go further if the economy continues to pursue the trajectory on which it has been showing in the last financial year. 

MATHIAS CORMANN: Our economic plan is all about delivering stronger growth and more jobs, while also making sure that funding for all of the essential services Australians rely on can be guaranteed in the Budget. We want to ensure that our Budget is on a strong and sustainable fiscal foundation and trajectory for the future. But governments should only ever raise as much as necessary, as little as possible and as much as necessary to spend on the important services government provides, in the most efficient, most effective, well targeted way possible. Our instinct always is to deliver lower taxes. Bill Shorten stands for higher taxes. We understand that lower taxes help strengthen growth and create more jobs, which drives higher wages. Bill Shorten’s attack on Australian families with higher taxes will deliver less investment, lower growth, fewer jobs and lower wages. 

KIERAN GILBERT: Well it is interesting because if you were to, it is a big step forward no doubt, with the $144 billion passed yesterday, but one of the criticism is that it is a tax cut on the never, never. That there is two, possibly three elections before it is fully implemented. But if you were to bring it forward you would negate that particular criticism. 

MATHIAS CORMANN: It is a long term plan. We have provided a long term plan to provide income tax relief. It is a plan that is fair. It is a plan that is fiscally affordable. As a Government, we always focus on making sure that taxes are only as high as necessary, as low as possible, but as high as necessary.

KIERAN GILBERT: When you look at Labor’s approach though, still those earning less than $90,000 a year will benefit the most under Labor’s plan right throughout your approach though, so they would argue that is still their heartland.

MATHIAS CORMANN: Labor wants to impose $70 billion in higher income taxes on working Australians, which would be bad for the economy, bad for growth. It would lead to fewer jobs and lower wages. All Australians will be worse off, including and in particular lower income Australians, who would have less opportunity to find a job, to keep a job, to get these additional hours, or to move from casual work into permanent work. That’s the effect of what Bill Shorten is proposing to do. And his numbers do not add up anyway, he says that he delivers double the tax cuts, but for some reason, it does not cost twice as much. Only the Labor party can promise to deliver you double without it costing double. Our plan, it is a comprehensive plan, it prioritises low and middle income earners in the first instance, as we should. But it also recognises that it is important that we address bracket creep, because if we do not address bracket creep, just by inflation, middle income earners will continue to be pushed into higher and higher income tax brackets, which would then take them backwards from where they are. 

KIERAN GILBERT: Pauline Hanson, how did you get her on board to support it?

MATHIAS CORMANN: Pauline Hanson was persuaded by the proposition that this is very important income tax relief for hard working families. We are very ... interrupted

KIERAN GILBERT: No side agreements at all?

MATHIAS CORMANN: I know that the media get obsessed about these things. We were able to persuade Pauline Hanson and her team that this was very important reform for hard working families. Hard working families around Australia today are very grateful to those crossbenchers, including Senator Hanson, who decided to support our income tax relief package. Let me say though, it is a matter of public record, we are always prepared to engage with all Senators and Members of the House of Representatives who are prepared to engage with us, who bring good ideas to us ... interrupted

KIERAN GILBERT: What was the deal? Was there a deal? Because, I guess the reason is the media are obsessed with it, is because it is about transparency, isn’t it?

MATHIAS CORMANN: The agreement was to support very important income tax relief for hard working families. It is a matter of public record. I was about to make that point, that Senator Hanson is one of those Members and Senators who have made representations to the Government, about for example, the idea that she has that we should trial ways to better support apprentices in particular across regional Australia. She has asked the Government to consider it. We have agreed to consider it. 

KIERAN GILBERT: So you are going to do it?

MATHIAS CORMANN: We have agreed to consider it. 

KIERAN GILBERT: Okay, so she has signed on with an agreement to consider it? It is interesting 

MATHIAS CORMANN: She has agreed to support good public policy. She has agreed to support a major win for hardworking families around Australia. Pauline Hanson and her team and all of the crossbenchers who supported our income tax relief package decided to side with hard working families around Australia who pay tax. They should be absolutely applauded for that. 

KIERAN GILBERT: The crossbench likes to horse trade as well. Let us not see them in a totally positive light, they like to get something back. So is that the only thing that she wanted, was that apprenticeship deal?

MATHIAS CORMANN: They are getting something back for hard working families around Australia …interrupted

KIERAN GILBERT: Is the apprenticeship deal the only thing that you gave her, the only thing you promised?

MATHIAS CORMANN: We have agreed to consider it.

KIERAN GILBERT: Is that the only thing though, was there anything else?

MATHIAS CORMANN: Again, we have an ongoing conversation with all crossbenchers. We have been engaging with Senator Hanson and her team ever since she has been elected to the Senate. We are engaging with all crossbenchers ever since they have been elected … interrupted

KIERAN GILBERT: So there are other things on the table? 

MATHIAS CORMANN: We are always prepared to engage and to discuss and to talk about things that would be … interrupted

KIERAN GILBERT: But this is the thing, you say it is the public’s money and that is right, you are giving them money back. It is public policy, why shouldn’t negations or at least the deals be made public? 

MATHIAS CORMANN: It is public. Senator Hanson and her team, Pauline Hanson’s One Nation team decided to support our income tax package in full. Everybody can see that. If we make decisions down the track, if we make decisions which involve the expenditure of public money, we will be making those announcements. We will be accountable for it. We take responsibility. We believe it is actually part of our job to engage with all Members and Senators who are prepared to engage with us, to listen to their ideas, to consider them and if they are good ideas and if we think that they make sense and they fit with our priorities, then we will act on them. 

KIERAN GILBERT: You basically do not want to dud the deal by revealing all those negations right now, right? 

MATHIAS CORMANN: I never conduct discussions with the crossbench through the media. We always conduct our discussions with the crossbench in private. But, once decisions are made … interrupted

KIERAN GILBERT: You will be upfront. 

MATHIAS CORMANN: …once decisions are made, we are entirely upfront. 

KIERAN GILBERT: What about the company tax cuts, because that is still a work in progress. She says she wants more done to target multinationals. Is there scope for that?

MATHIAS CORMANN: We have done a lot to target multinationals, to ensure that multinationals pay their fair share of tax here in Australia. We have certainly made that argument. As with all things, it is what I just said to you, we are always prepared to listen. We are always prepared to engage with the Senate crossbench, clearly. We need to persuade eight non-Government Senate crossbenchers to support any legislation which Labor and the Greens oppose. Self-evidently we will continue to have the conversation. Hopefully we will be able to find a consensus to move forward. 

KIERAN GILBERT: And when it comes to multinationals though, is there scope to target that more, because that was on the thing that she said yesterday. 

MATHIAS CORMANN: I have just answered that question. We have done a lot, but we are prepared to listen, to engage and to see whether there is an opportunity to find a way forward. 

KIERAN GILBERT: What about the Centre Alliance? Is that prospect still open do you think? 

MATHIAS CORMANN: The answer is precisely the same. We are always prepared to listen, to engage and to see whether there is an opportunity to find a consensus …interrupted

KIERAN GILBERT: Does that extend to maybe another incremental shift on the turnover? That is not something you are willing to engage on? 

MATHIAS CORMANN: We have been very clear …interrupted

KIERAN GILBERT: It has got to be all or nothing. 

MATHIAS CORMANN: It is the same as with our personal income tax cuts. It is fundamentally important that we now legislate our business tax cuts in full. The reason is, our biggest businesses in many ways are on the frontline of global competition. They are the most exposed to global competition. Most countries around the world now have lower business tax rates than Australia. If we keep business tax rates in Australia high, when other countries around the world have significantly lowered theirs, we are helping businesses in other parts of the world take investment and jobs out of Australia into those countries. That is not in the best interest of working families around Australia. If we want to protect the job security, the job opportunities, the career prospects and the wage increases of Australian workers, we need to ensure that the businesses that employ them, that pay their wages, have the best possible opportunity to compete with businesses around the world who pay substantially less tax.

KIERAN GILBERT: Minister, as always, thanks so much. 

MATHIAS CORMANN: Always good to talk to you.


Senator the Hon Mathias Cormann, Minister for Finance, Perth