Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Friday, 10 August 2018
KIERAN GILBERT: Good morning, welcome to the program. It is D-day for the Government’s National Energy Guarantee, as the Energy Minister Josh Frydenberg is set to meet with his State counterparts in the next half an hour. How much is at stake? Well, warnings that the next cost of $300 million plus for major energy users if the energy guarantee is scuttled. Let’s bring in the Finance Minister and Leader of the Government in the Senate, Mathias Cormann. These sorts of warnings from major energy users and you have got the Energy Security Board, other experts urging some bipartisanship on the energy guarantee. Are you confident that this will be achieved today?
MATHIAS CORMANN: Josh Frydenberg had a very good meeting over dinner with State Energy Ministers last night. We are certainly looking for in principle support to proceed with the National Energy Guarantee from all States. This is all about bringing down the price of electricity, improving reliability. As you say, the National Energy Guarantee has very strong and very broad support from consumer groups, from small business, manufacturers, businesses overall, you name it. This is now the time to proceed. Should this be supported in principle by the Ministers meeting today, there will be federal legislation, which would go to our party room and the next steps would follow from there.
KIERAN GILBERT: We have seen these major energy users warning that further interventions from the energy market operator over the coming summer could see those prices for the big energy users costing more than $300 million additional in terms of the cost. Is that the sort of ballpark that we are looking at if there is not reliability, if there is not certainty in terms of the investment in this space?
MATHIAS CORMANN: If any State decides to stand in the way of the National Energy Guarantee from proceeding to the next stage today they will be exposing business and consumers across Australia to higher electricity prices. There is no question about that. Any State that wants to see lower electricity prices and more reliable energy supplies for their households and for businesses in their States, will support the National Energy Guarantee today. The design is fundamentally the same as what was in front of the States in April, when they agreed to proceed to the next stage and to proceed with the development of further detail. They now have in front of them further layers of detail. We are very much looking to receive in principle support from all the States and Territories today to proceed.
KIERAN GILBERT: And is basically the argument, because as you say the States met with the Federal Government last night and there is a lot of posturing in the lead up to it. It seems more positive this morning when we were previewing this actual meeting where it is going to be decided whether or not the States are going to remain on board. Is it your view that this is about achieving a framework and then within that if the Labor State governments, the Federal Opposition want to campaign for tougher emission reductions, well they can do that within this framework of an energy guarantee? That is basically the bottom line isn’t it?
MATHIAS CORMANN: That is quite right. What we need to do is provide certainty to investors. We do need to ensure that the appropriate architecture is in place that helps drive down electricity prices and helps to increase reliability. If Labor wants to go into the next election and argue that any particular target should be higher and is open and transparent about the fact that that will increase the cost of electricity for households and business, then that is open to them under the National Energy Guarantee framework. What is very important is that we lock in the framework, that we lock in the architecture. We have put on the table very clearly what the specific arrangements are under which we would like to proceed. If Labor wants to increase electricity prices and argue that case, then that is something that they can do in the lead up to the next election.
KIERAN GILBERT: The Prime Minister has apparently contacted Daniel Andrews and Anastacia Palaszczuk and reassured them that he does have support of the party room on the NEG. Is that confidence well placed?
MATHIAS CORMANN: Absolutely. We had a very thorough discussion in the party room on the National Energy Guarantee policy. A very thorough discussion and there was very strong and very broad support. Ever since there has been the opportunity for colleagues to raise issues in relation to the National Energy Guarantee in the party room. What will happen in the ordinary course of events is that as legislation is finalised and before legislation is introduced into the Parliament it comes through our party room in the ordinary course of events. I am very confident that when that legislation comes forward that it will have the strong support from colleagues.
KIERAN GILBERT: So some optimism on the energy guarantee. Do you still have any optimism at all that you might be able to achieve what many think is the unthinkable and that is to get the rest of the company tax cuts through the Senate when the Parliament resumes next week?
MATHIAS CORMANN: We will continue to work to do what is right for Australia. We will continue to work to secure the right outcome for working families around Australia. We want working families around Australia today and into the future to have the best possible opportunity to get ahead. That is why we need to ensure that the businesses that employ them, here in Australia, have the best possible opportunity to be viable, to be competitive, to be successful, to be profitable into the future. There is always a lot of noise and a lot of commentary in the lead up to these sorts of debates in the Senate. A lot of predictions are always made. What I have learned over the years is to just keep working. Try and secure the best possible outcome for Australians.
KIERAN GILBERT: When it comes to that, would it be the best possible outcome to expedite the tax cuts for smaller businesses? I know there are concerns within the Government about locking in a permanent way a discrepancy between smaller and larger companies at that $500 million threshold. But does the same point stand for say a $50 million mark? And if you were to speed up the tax cuts to 25 per cent, that would mean that that difference is even greater than it otherwise would be.
MATHIAS CORMANN: The best possible outcome for working families around Australia is to ensure that all businesses here in Australia have access to a lower globally more competitive business tax rate. In many ways, our bigger businesses across Australia are most exposed to global competition. Weaker, bigger businesses hire fewer people themselves directly and they buy fewer products and services from small and medium sized businesses. When larger businesses are less competitive and less successful, it hurts the economy and it hurts jobs right across the economy. The way that we have put our ten year enterprise tax plan together, it is designed to ensure that all businesses have the best possible opportunity to be successful into the future. So they can hire more Australians and as they hire more Australians and more jobs are created, the increased competition for workers drives up wages. If we put in a cap above … interrupted
KIERAN GILBERT: But have you been thinking about a plan B?
MATHIAS CORMANN: I am focussed on securing the package that in our judgement is in the best interest of Australian families, in the best interest of our economy and jobs. If we put in place a cap that provides as Bill Shorten used to argue quite strongly it would provide a perverse incentive to business to downsize. It would encourage bigger businesses to become smaller businesses. When what we want to secure is the right incentives for smaller businesses to become bigger businesses, which hire more Australians and pay them better wages over time.
KIERAN GILBERT: Okay, finally on another matter. I know that there have been suggestions that the Government wants Bill Shorten to hand over this report from NSW Labor to the Finance Department, which basically is the employing agency of staff to Parliamentarians. What sort of role do you see the Department undertaking here to ensure the welfare of any workers that may have been caught up in this alleged poor behaviour?
MATHIAS CORMANN: The first point to make is that the employer of any staff in an electorate office is the Member of Parliament him or herself. The responsibility for the welfare of staff and to ensure that the appropriate employment conditions are preserved at all times lies with the Member of Parliament. The Finance Department provides HR support. Yes, there are processes available through the Finance Department for staff to lodge complaints in relation to bullying and harassment or work health and safety issues. These complaints, appropriately, are handled independently and confidentially at arms length from the Government. I do not think that anyone would think, on reflection, that it would be appropriate for the Government to be directly involved in the staffing arrangements say of Members of Parliament in the Opposition. There is an obvious conflict there. But by the same token, our framework is set up in a way that does give the opportunity for staff with complaints to lodge these complaints with the Finance Department or the Independent Parliamentary Expenses Authority, to have them dealt with independently and confidentially at arms length from the Government. That is an opportunity that is open to all staff working in electorate offices, all staff working for Members and Senators.
KIERAN GILBERT: And finally in relation to Bill Shorten, he maintains that his office was not discussing this with staff members affected and maintains he did not know about it prior to the most recent revelations.
MATHIAS CORMANN: I find that very hard to believe. There are 22 odd staff who have made clear that they have been complaining about certain events for months with the union, with Bill Shorten’s office, within the Labor party. Everybody in the Labor party seemed to be aware with the exception of Bill Shorten. It does not look plausible to me. I have to say I agree with the Prime Minister there. People can form their own judgements. Bill Shorten used to give a rolled, gold guarantee that none of his members had citizenship issues and then they did. He pursued the Mediscare campaign which has been exposed as a lie. I think that there are believability and trust issues with whatever Bill Shorten has to say.
KIERAN GILBERT: Finance Minister we are out of time. We will talk to you next week after Parliament returns on Monday.