Senator the Hon. Mathias Cormann
Minister for Finance and the Public Service
Leader of the Government in the Senate
Senator for Western Australia
FRAN KELLY: Jobs and the economy will spearhead the Government’s re-election strategy with the Prime Minister pledging an extra 1.25 million new jobs over the next five years. Scott Morrison is spending much of the week in Queensland and in a major economic speech in Brisbane today, he will also promise to wipe out net debt over the decade. That is more than $350 billion of debt reduction and rolling out the scare campaign, the Government is warning the election of a Shorten Government will mean recession. Finance Minister Mathias Cormann will be with the Prime Minister for the economic address and he joins us from Brisbane. Minister welcome back to Breakfast.
MATHIAS CORMANN: Good morning Fran. Good to be back
FRAN KELLY: So the Prime Minister is promising 1.25 million jobs. What sort of jobs Minister? Full time, part time, casual? What is this guarantee?
MATHIAS CORMANN: Our track record over the last five and a half years is that we have delivered 1.2 million new jobs, most of them full time and most of them very good jobs across every industry. We, over our period in Government, have seen the highest number of new jobs created for women, for older Australians, for younger Australians, indeed for all Australians. What we want to do is build on that track record and provide the conditions in the economy to ensure that one and a quarter million new jobs can be created over the next five years.
FRAN KELLY: I am not sure that is building on it is, given that 268,000 jobs were created last year, more than 400,000 jobs the year before that. What you are promising and what the Prime Minister is promising today is business as usual or a bit worse isn’t? What is so good about that?
MATHIAS CORMANN: You have to remember that when we came into Government, we inherited from the Labor Party, when Bill Shorten and Chris Bowen were last in Government they left behind, a weakening economy, rising unemployment and a rapidly deteriorating Budget position. The economy now is stronger, employment growth is much stronger, the unemployment rate is lower and indeed, wages growth has started to pick up. What we know is that if Bill Shorten was able to implement his high taxing agenda, it would leave the economy weaker and it would leave the country weaker and it would make Australians poorer and indeed it would lead to fewer jobs, higher unemployment and lower wages over time.
FRAN KELLY: You are making this promise of 1.25million jobs. Are you locking in the current unemployment rate of five per cent or less, will you stake the Government on that?
MATHIAS CORMANN: Our current forecast is for the unemployment rate to be at five per cent over the forward estimates period. You have to remember when we came in, the unemployment rate was heading past six per cent and rising. Indeed, Chris Bowen as Shadow Treasurer in his initial outing said that the test of our economic success or failure was whether we would keep the unemployment rate below 6.25 per cent and indeed, it is down to five per cent. You have to remember Bill Shorten and Chris Bowen left behind a weakening economy, rising unemployment and a rapidly deteriorating Budget position. They have not learned from their mistakes. They want to go back to their failed high taxing approach of the past, which will deliver the same outcome, weaker growth, fewer jobs, higher unemployment and lower wages. It would make our economy weaker and it would make Australians poorer.
FRAN KELLY: Well promising more jobs is all very well, but Australians who have a job say the issue for them is wages growth. Real wages have barely moved over the past five years. What is the Government promising on that?
MATHIAS CORMANN: As employment growth strengthens and the excess supply in the labour market reduces, wages will go up. You have to remember…interrupted
FRAN KELLY: Wages will go up if there is more people out of work basically won’t they?
MATHIAS CORMANN: Under Labor, as the economy was weakening and unemployment was rising, of course wages were going to be less than they otherwise would have been and that would be the recipe again. If Labor was able to implement their high taxing agenda and unemployment goes up, it stands to reason that less competition for workers means lower wages, whereas under us, with stronger economic growth, stronger employment growth, of course as the unemployment rate has gone down and there is more competition for workers, wages grow by more…interrupted
FRAN KELLY: But there has not been, there has not been, we have had strong productivity, but low wages growth.
MATHIAS CORMANN: You are quite wrong. Wages growth has started to pick up…interrupted
FRAN KELLY: Minimally.
MATHIAS CORMANN: It has started to pick up by more and having inherited a deteriorating trajectory, we had to turn that around. We have turned that around. The key now is not to change direction, to keep heading in the same direction, to continue to implement our plan for a stronger economy and more jobs. The state of the economy has a real impact on real people. If the economy is stronger, there is better opportunity for all Australians to get ahead and there is better opportunity for the Government to fund all the essential services Australians rely on. When the economy is weaker, of course there will be fewer jobs, higher unemployment, less competition for workers and lower wages over time. That is the threat of a Shorten Labor Government pursing higher taxes again, as they have in the past.
FRAN KELLY: As the Prime Minister promises 1.25 million new jobs over the next five years, he is also promising to entrench a permanent immigration cut to 160,000 immigrants per year, to keep that cap. Can you fulfil both promises, keep immigration down and jobs up? Isn’t that a conflict?
MATHIAS CORMANN: We do not believe it is a conflict…interrupted
FRAN KELLY: Why not?
MATHIAS CORMANN: Because we always very carefully calibrate the level of migration consistent with our economic needs. That is the judgement that we are making in the context of our economic conditions and in terms of what we see happening into the future. That that is the appropriate level. That is why we make these judgements. We always make judgements across a whole range of indicators to make sure that we calibrate them properly in our national interest.
FRAN KELLY: Yes, but as economist Chris Richardson points out again today, population and jobs are inextricably linked. So, if you are putting a cap on population growth because of the immigration cap, aren’t you putting a cap on jobs growth?
MATHIAS CORMANN: No we are not putting a cap on jobs growth. We are a trading nation. We want to ensure that we can sell more Australian products and services all around the world, which is why our focus has been on signing on to as many export agreements as possible, to help our exporting businesses sell more Australian products and services around the world. That is why as part of our comprehensive plan we have focused on congestion busting infrastructure, but also our trading infrastructure, to make sure that we get our products to market in the most efficient, lowest cost, safest way possible. So, we do have a comprehensive plan for the economy, it also means that we need to attract the right people and the right amount of people…interrupted
FRAN KELLY: And attracting the right people on that, the Government’s 1.2 million jobs since it was elected in 2013, according to the Department of Home Affairs, about half of those were filled by temporary visa workers.
MATHIAS CORMANN: The unemployment rate was heading past six per cent and it is down to five per cent. Again, when we came into Government…interrupted
FRAN KELLY: Yeah, but my point is it was 1.2 million jobs, so essentially the same promise you are making, half of those, almost 500,000 people filled by temporary visa workers. Do you expect that to be the pattern into the future?
MATHIAS CORMANN: Obviously we want to create as many new jobs as possible. Our commitment is to 1.25 million jobs over the next five years. When we made the promise of one million new jobs back in 2013, the Labor Party dismissed it as they are dismissing it now. They said it could not be done essentially back in 2013. Not only have we delivered on the one million new jobs, we have exceeded that target. Across the economy there always are many different indicators that you have to focus on. The one thing we know is that Bill Shorten’s high taxing agenda would make the economy weaker and would lead to fewer jobs and higher employment as it has in the past.
FRAN KELLY: You are listening to RN Breakfast, our guest is the Finance Minister Mathias Cormann. Minister as we have been speaking, it has not escaped our listener’s attention that this seems to be basically scare campaign in the run up to the election, That the message is when it comes to the economy, your message is Government good, Labor bad. Is that really the message you want voters to hear?
MATHIAS CORMANN: I completely reject the proposition that this is a scare campaign. This is telling the Australian people the truth. This is telling the Australian people the truth about the impact of a weaker economy as opposed to a stronger economy. What we have seen over the last five and half years is a stronger economy, with more jobs being created, with the Budget getting back into surplus with a capacity to fund more of the essential services Australians rely on, putting more money into schools, more money into hospitals, more money into listing important medicines on the Pharmaceuticals Benefits Scheme…interrupted
FRAN KELLY: Labor is promising all those things and how can you say it is not a scare campaign when the Government is basically saying a Shorten Labor Government will bring on a recession, that is what Defence Minister Christopher Pyne said yesterday.
MATHIAS CORMANN: Fran, when Labor was last in Government, not only did they leave behind a weakening economy, rising unemployment and a rapidly deteriorating Budget position. They had stopped listing key medicines on the Pharmaceuticals Benefits Scheme, even though they had been recommended by the Pharmaceuticals Benefits Advisory Council. That is because they had completely lost control of the Budget. The Budget was in such bad shape that they could no longer afford to list key medicines…interrupted
FRAN KELLY: Okay, let me ask you this, do you believe a Shorten Labor Government would lead Australia into a recession?
MATHIAS CORMANN: What we have said is that a high taxing Shorten Labor Government would make the economy weaker, would make our country weaker and would make Australians poorer. There is no question about that.
FRAN KELLY: Would it mean a recession?
MATHIAS CORMANN: I have answered your question. A Shorten Labor Government…interrupted
FRAN KELLY: Not really.
MATHIAS CORMANN: I have, absolutely directly.
FRAN KELLY: Well Christopher Pyne says when asked what will a Labor Government mean, he says it will mean a recession, do you agree?
MATHIAS CORMANN: A Shorten Labor Government will make our economy weaker, will make our country weaker and it will make Australians poorer. It will lead to fewer jobs, higher unemployment, lower wages, people will end up paying more tax and earning less, that is what a Shorten Labor Government would mean. It would seriously damage their living standards, it would seriously damage the Government’s capacity to fund the essential services Australians rely on because a weaker economy and fewer jobs and higher unemployment also means a weaker Budget position.
FRAN KELLY: Minister, away from the economy, yet another high profile Independent is announcing that they will challenge a senior Coalition figure, this time Treasurer Josh Frydenberg. It is the former Chief Executive of the Clean Energy Finance Corporation Oliver Yates. He is a long time Liberal Party Member. Is Oliver Yates a chance in Kooyong?
MATHIAS CORMANN: This particular gentleman has not been a Liberal for a very long time. He was appointed to a very…interrupted
FRAN KELLY: But he was a Liberal for a very long time.
MATHIAS CORMANN: He was appointed to a very senior role by the Gillard Labor Government. He has been that way inclined for a very long time. Good luck to him. It is a free world. I am very confident that Josh Frydenberg, who is not only an outstanding Treasurer, but also an outstanding local Member for Kooyong. I am very confident that the people of Kooyong will know that Josh Frydenberg is the right representative for them in the Parliament over the next term.
FRAN KELLY: Oliver Yates is yet another Independent motivated in part by the Government’s lack of action on climate change. We have had Kerryn Phelps, we have got Zali Steggall challenging Tony Abbott on that issue particularly in recent times. Are you getting the message?
MATHIAS CORMANN: I completely disagree with the underlying assertion. We do of course have a commitment to effective action on climate change. We are committed to the Paris emission reduction targets. We have the policies in place to ensure we meet those targets…interrupted
FRAN KELLY: Our emissions are going up Minister.
MATHIAS CORMANN: Actually compared to the business as usual trajectory, as is of course what our objective is, we have met and exceeded our emissions reduction target under Kyoto 1. We are on track to meet our emissions reduction target under Kyoto 2 and we believe that we can meet our emissions reduction target under Paris by 2030.
FRAN KELLY: Okay, just finally and briefly, three Ministers have announced their retirement over the past week or so, not a great look for the Government. Are you urging colleagues, including fellow Western Australian Julie Bishop to hold tight?
MATHIAS CORMANN: Again, I reject that characterisation entirely. In the lead up to every election, senior people on both sides decide, that is the time when people announce that they will retire. On the Labor side you have got Jacinta Collins, you have got Kate Ellis, you have got Jenny Macklin, there will probably be others. In the lead up to every election on both sides of Parliament there are people who announce they will retire at the upcoming election. That is the moment of time when that happens. Over the last 20 years that I have watched Australian politics closely, it has happened in the lead up to every election.
FRAN KELLY: Have you spoken to Julie Bishop? Do you think she will re-contest Curtin?
MATHIAS CORMANN: Julie Bishop has been adamant. She is very clear that she intends to re-contest the next election. She has made that an extremely safe seat and we look forward to Julie continuing on as a member of our team.
FRAN KELLY: Minister thank you very much.
MATHIAS CORMANN: Always good to talk to you.