ABC – TV News Breakfast

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






Company tax cuts, By-elections

MICHAEL ROWLAND: Let us get the Government's perspective now. We are joined from Perth by the Finance Minister Mathias Cormann. Minister, good morning to you.

MATHIAS CORMANN: Good morning.

MICHAEL ROWLAND: Is the Government willing to proceed with the full suite of its company tax cuts in the wake of the by-elections?

MATHIAS CORMANN: We are proceeding, because it is so important for working families around Australia that the businesses that employ them, the businesses that pay their wages, can continue to be viable and competitive and profitable into the future. To keep business taxes in Australia high by international standards helps businesses overseas compete against us, helps businesses overseas take investment and jobs away from Australia. It puts investment and jobs here in Australia at risk. We understand that for families today and into the future to have the best possible opportunity to get ahead, we need to ensure that the businesses that employ them, big and small, have the best possible opportunity to be viable, to be competitive and to be profitable into the future.

MICHAEL ROWLAND: Proceeding with the company tax cuts, if those tax cuts, especially for big business are knocked down by the Senate, will they still be a Coalition policy at the next election?

MATHIAS CORMANN: We are working with the crossbench as we speak to secure the necessary support. Our position is that we believe that all businesses here in Australia need to have access to a lower, globally more competitive business tax rate. That is, because as I have mentioned to you, to ensure that businesses here in Australia and their employees are not put at a competitive disadvantage with businesses and employees in just about any other part of the world where business taxes are significantly lower. By putting more lead into the saddle bag of businesses here in Australia, we are helping businesses in other parts of the world and their workers take investment and jobs away from us and compete against us.

MICHAEL ROWLAND: So you passionately believe, therefore, you are making a passionate argument for businesses big and small to get tax cuts. I will ask that question again, will you take that policy, come whatever happens in the Senate, to the next Federal Election?

MATHIAS CORMANN: That is our position. This is all about what is in the best interest of working families around Australia. The bigger businesses around Australia in many ways are most exposed to the pressures of global competition and they employ many millions of Australians directly. Weaker bigger businesses in Australia means less business for smaller and medium-sized businesses. It also means lower job security for the people that big business employ directly and lower job security for the many employees i  the many small and medium-sized businesses who supply products and services to those bigger businesses. In the end, Australia is an open-trading economy. We are globally exposed. We compete for capital. We compete for access to markets overseas, we compete for access to our own market with businesses in other parts of the world. If we keep our taxes in Australia high, we lock in a competitive advantage for businesses overseas to take business, jobs and investment away from us. The reason we are so focused on this is because we understand that for families around Australia to have the best possibly opportunity to get ahead, we need to ensure that the businesses that employ them can be viable, competitive and profitable into the future.

MICHAEL ROWLAND: What broader political lessons Minister, are you taking from Saturday's by-elections?

MATHIAS CORMANN: For the Opposition of the day to win seats that they already held was always the most likely outcome. If you look at the history of by-elections, a Government has not won a seat from an Opposition at a by-election in about hundred years. Invariably there are strong swings against the Government of the day at by-elections. If you look at the results, in particular in Braddon, in Braddon there was no swing towards Labor at all. If I was Labor, I would be quite concerned about that fact that. They are crowing about the fact they are just about ready to move into the Lodge. They should have had a much stronger swing towards them in Braddon and even in Longman, the swing towards the Opposition is below the historical average at by-elections. The result on Saturday, we will reflect on it, we will consider carefully the messages that we received from people throughout those campaigns. But let us keep a bit of perspective here and certainly let us not rush into decisions based on what was always the most likely outcome in a by-election.

MICHAEL ROWLAND: The Coalition suffered a 10 per cent drop in primary vote in Longman. Is the Coalition on the nose in Queensland?

MATHIAS CORMANN: In the seat of Longman there were a range of factors, including local factors and look, these are all matters now that will be carefully assessed. On a two-party preferred basis it was a swing of less than 4 per cent. When all of the votes are counted, that is probably still...interrupted

MICHAEL ROWLAND: Minister, excuse the interruption, but once you lose the primary vote, it is very hard to come back from 10 per cent in the space of six, eight months, whenever the next election is?

MATHIAS CORMANN: There is no sugar coating this. We are disappointed with our primary vote in Longman, but let me say this though, very importantly, you cannot translate by-election results when people do not make a judgement on who to entrust with running the economy and the country with results at a general election. They do not translate. Again, if you look at the history of by-elections, many Governments have failed to win seats from Oppositions at a by-election and subsequently won the general election. I know that media commentators and our opponents like to hype these things up, but if you look at the facts and the history of these things, these sorts of translations are just not appropriate.

MICHAEL ROWLAND: And finally Minister, is it time for the Government to make peace with the Catholic school sector? They ran what appears to be a very successful ground campaign in seats like Longman?

MATHIAS CORMANN: Again, we will assess all of the issues. We have provided significant additional funding to schools across the board, including Catholic schools. But we will consider all of the issues in these campaigns and make judgements as we move forward.

MICHAEL ROWLAND: Lots to consider. Mathias Cormann, Finance Minister, thank you very much for joining us on News Breakfast.

MATHIAS CORMANN: Always good to talk to you.


Senator the Hon Mathias Cormann, Minister for Finance, Perth