Sky News – AM Agenda

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






Education funding, UN secondment, superannuation

TOM CONNELL: For more on this I am joined by the Finance Minister, Mathias Cormann. Minister thank you very much for your time today. What have you made from this intervention from Rob Stokes, he says essentially he doesn’t want to sign up, he doesn’t want to continue what he calls special deals.

MATHIAS CORMANN: He does not have to sign up to the funding arrangements with non-Governments schools. Nothing that has been agreed in terms of improvements to the funding formula for non-Government schools has got any bearing on our Federal funding agreement in relation to State Government schools. Funding for State Government schools is increasing strongly, 6.3 per cent per year on average, much stronger than the funding increases incidentally into the non-Government schools. We believe that once the New South Wales Education Minister has had the opportunity to have a closer look at what we have actually done here, he will see that our improvements are entirely in keeping with the principles of needs based funding. It is just designed to improve the evidence base on which these allocations are made in the non-government sector, basing decisions on parental income, a formula involving parental income. It is based on a review, the Chaney review, which made a series of recommendations which the Government has accepted. The fundamental point is, firstly the States do not have to sign on to the agreement that the Commonwealth reaches with the non-government school sector. Secondly, once he has had the chance to look through the detail we are confident that he will be reassured that what we are proposing is fair and equitable. 

TOM CONNELL: The issue for Rob Stokes though he says you are pitting the independent and Catholic schools against public schools. You mentioned the different tool for calculating it. Putting that to one side, it is a more precise way so sure that makes sense, I don’t think too many people have an issue with that. The other thing that has been given here is that it is a big pot of money, mainly to Catholic schools as a so called transition fund. Basically they are going to get a lot more money over the next ten years. That’s what Rob Stokes appears not to be happy with. 

MATHIAS CORMANN: You have to look at this in perspective. Over that same period the Federal Government will be providing funding to all schools of about $310 billion. So when you consider that there is Federal funding to all schools of about $310 billion, I think you can put the decisions that we have made this week into a better perspective. There were legitimate issues that were raised by the Catholic and independent schools sector. We did conduct a review, or rather the Chaney review considered all of those issues and made some recommendations on how the formula could be improved in relation to the non-government sector. We have adopted those recommendations. It makes the system better, fairer, more equitable and stronger into the future. We believe it is very much in the public interest. Federal funding, I will repeat that again, federal funding for state government schools will increase strongly by billions and billions of dollars in years to come. It will grow more strongly than federal funding for non-government schools. Indeed it will grow by 6.3 per cent on average, year on year. 

TOM CONNELL: $4.6 billion is the cost to the Budget, Minister, is there a firm message to the school systems, independent and Catholic ones that from 2029 then there will be this needs based funding system and there won’t be more top ups because we want to actually be paying off debt.   

MATHIAS CORMANN: There is a needs based funding system now. What is happening here is that in 2019 … interrupted

TOM CONNELL: But that top up is that going to end in 2029?

MATHIAS CORMANN: We have reached an agreement over the next decade. I would like to think that we would still be providing good government in 2029, but I suspect that a lot of things will happen between now and then. What is happening here is that in 2018 we had some interim arrangements in place for the non-government schools sectors. They will be extended into 2019. From 2020 onwards we will be using a more precise formula involving the assessment of parental income to ensure that needs based funding into the non-government school sector is targeted as well as it possibly can be. This actually, if anything, is an improvement, a further refinement and improvement to the principle of needs based funding.

TOM CONNELL: Is it fair to say that this is $4.6 billion that would have paid off debt over the next decade that it will no longer?

MATHIAS CORMANN: Our government is making significant progress in paying off the debt trajectory that Labor has left behind. Over the current forward estimates, we are projected to reduce government net debt by $30 billion and over the next decade by $232 billion. In the context of … interrupted

TOM CONNELL: And does this come off that figure, the decade figure?

MATHIAS CORMANN: All of the budget numbers will be updated in MYEFO. There are always a whole range of movements up and down. We will be providing a Final Budget Outcome for 2017-18 next week, the Treasurer and I. You will see how the Government has been tracking in terms of actual performance against budget. There are always a range of movements up and down and all of that will be reconciled in the mid-year Budget update before Christmas.

TOM CONNELL: Speaking of taxpayers’ money, Minister, these trips to the UN that both major parties send MPs on. Two retirees going this year. So this knowledge that they will get presumably won’t be of much help to the Parliament. Is this a good use of taxpayer money?

MATHIAS CORMANN: This is a long standing arrangement. It is not just about the knowledge they get. It is also about being a voice for Australia’s interests in the context of various meetings and sessions that take place at the United Nations. It is important for Australia to participate appropriately in those international fora and for us to have on a bipartisan basis appropriate representation. Given where we are in the political cycle it is easier for Members of Parliament who are not recontesting the next election to take on that responsibility to represent Australia in that forum. If you look back over the last decade or so, and I suspect even before that, it is not unusual for Members of Parliament towards the end of their career to take on that responsibility to represent Australia at the UN in New York for that particular purpose. 

TOM CONNELL: That what has voters and we have had a lot of feedback on Sky News about this though, so cynical of that, particularly given Julia Banks announced she would be quitting Parliament. Clearly she is not happy with the culture of the Liberal party. She was offered this, she turned it down. Ann Sudmalis announced she was quitting Parliament. She was offered this and now she is going and she was unhappy with parts of the party as well. Surely cynicism levels on this one are high.   

MATHIAS CORMANN: Journalists and some people will always err on the side of cynicism. What I would say here, if you look at the experience over the last decade and beyond, you will find and for good reasons, that in the period just before an election, that it is not unusual that retiring Members of Parliament take on the role and responsibility of representing Australia at the United Nations for this purpose …interrupted

TOM CONNELL: It is unusual for two to be outspoken about the Party, offered it, to basically go away and keep out of the headlines. That is clearly what this is designed to do.

MATHIAS CORMANN: I completely and utterly reject that. I am not aware of others who have announced that they are retiring. It obviously makes a lot of sense, as has happened in the past that Members of Parliament who have already announced their retirement take on that responsibility. It is important for Australia to participate in these international institutions and these international fora. Given where we are in the political cycle, leading into to an electoral cycle, it is much harder for somebody who is standing for election to commit three months to participate in this sort of process.

TOM CONNELL: There is a report today you could legislate tax cuts for small and medium sized business ahead of the next election, that is the full amount of tax cuts, so down to 25 per cent. Is this something being seriously considered? 

MATHIAS CORMANN: There is always a lot of speculation. As we announced a few weeks back when the Senate refused to pass the remaining part of our ten year enterprise tax plan in full, we are now considering the best way forward, prioritising small and medium sized business and the opportunity for small and medium sized business to create more jobs.

TOM CONNELL: And legislate before the election?

MATHIAS CORMANN: As I have said to you, we are doing what we said we would do and that is that we are currently considering all of the options. When we have made some decisions in relation to these matters, we will make relevant announcements. 

TOM CONNELL: Superannuation, Labor has made an announcement on that, that they will provide super to women while they are on maternity leave. Will you match that?

MATHIAS CORMANN: We have done a lot when it comes to improving superannuation arrangements for women. Labor wants to increase taxes for all Australians on their superannuation, including women. Labor is standing in the way of our efforts to protect women, men and women from excessive fees in superannuation settings. We will always consider how we can further improve the policy settings in superannuation …interrupted

TOM CONNELL: Is this reasonable? You said consider reasonable measures.

MATHIAS CORMANN: We always keep an open mind to consider what options might be available to make further improvements. What I would say, is for example Bill Shorten’s retiree tax disproportionately targets women because 30 per cent more women are impacted by Bill Shorten’s hit on people’s retirement savings through his retiree tax. If he really cared about women he would drop the retiree tax that he has already announced. We have actually got a very strong track record, for example through our catch up arrangements, enabling women to use past unused proportions of their concessional contribution caps and the like. We are making it easier for women to put more money into their superannuation. We have also put in quite a bit of effort to help low and middle income earners, putting more additional savings into their retirement. We will continue to explore options to improve policy settings moving forward.

TOM CONNELL: Sounds like it is a definite possibility. Can I bring you finally to the issue of Peter Dutton that has been…interrupted

MATHIAS CORMANN: I stand by my answer. I am not sure that you need to redefine my answer.

TOM CONNELL: Okay, alright but you are open to this idea?

MATHIAS CORMANN: We are open to considering good ideas. I have not made any comment whatsoever in relation to Labor’s proposition. What I am saying is …interrupted

TOM CONNELL: Was it a good idea?

MATHIAS CORMANN: … Labor has made a lot of decisions that are very bad for women when it comes to superannuation …interrupted 

TOM CONNELL: I get all that, but on this decision you said you were open to good ideas. Is it a good idea?

MATHIAS CORMANN: I am not going to make judgements on what Labor is doing when they are putting their hands into the pockets of women around Australia and their retirement. Labor supports … interrupted

TOM CONNELL: Why can’t you just make a decision though Minister on this one in isolation? This is a separate idea, without any other elements. Is this a good idea?

MATHIAS CORMANN: Maybe you may want to do it the Labor way and try and make judgements in isolation. We do not do it the Labor way. We make judgements as a package. We make judgements as a whole. We look at how we can make sure that women are better off because of the policy agenda that we pursue as a whole.

TOM CONNELL: But I am not asking you to judge the entire Labor policy suite here or say who should voters pick …interrupted

MATHIAS CORMANN: That is what I am saying …interrupted

TOM CONNELL: I am asking you to consider this one specific policy idea to give this superannuation to women on maternity leave and whether you think that is a good idea.

MATHIAS CORMANN: Tom, you can ask the questions and I will provide the answers. What I am telling you is that women would be worse off as a result of Labor’s overall policy settings. We will continue to consider how we can further improve policy settings in superannuation, including and in particular for women. But what I am telling you and I know that you would like me to play the Labor game and just look at one little bit in isolation …interrupted

TOM CONNELL: Minister, it is not a Labor game and you have made the point as well about the broader policies and that is fine to say here are the bits of Labor’s policies we do not like, you have made that point fair enough. But this is another policy you could theoretically adopt without adopting all the other Labor policies. Is it a good idea?

MATHIAS CORMANN: We will continue to consider the package as a whole.

TOM CONNELL: But it is not a package as a whole, it is one policy part.

MATHIAS CORMANN: We have put forward a package, which Labor in large parts is resisting. Labor continues to resist measures that we have put forward that are needed in support of women saving for their retirement. Moving forward, as I have said now many, many times in this interview. We will continue to explore how we can further improve policy settings in superannuation … interrupted

TOM CONNELL: Alright, I am sorry …interrupted

MATHIAS CORMANN: … and in particular for women.

TOM CONNELL: We just had a problem with the line at the end. Mathias Cormann, we will see where this, perhaps negation on goes on superannuation. Thanks for your time.

MATHIAS CORMANN: Always good to talk to you.


Senator the Hon Mathias Cormann, Minister for Finance, Perth