Senator the Hon. Mathias Cormann
Minister for Finance and the Public Service
Leader of the Government in the Senate
Senator for Western Australia
SABRA LANE: The Finance Minister Mathias Cormann joins us now. Good morning, welcome to AM.
MATHIAS CORMANN: Good morning, good to be back.
SABRA LANE: How important is this Budget to your re-election chances?
MATHIAS CORMANN: This is our sixth Budget and it is the next instalment in our plan for a stronger economy, more jobs and a stronger and improving Budget position, which helps ensure that all of the essential services that Australians rely on can be sustainably funded.
SABRA LANE: And your re-election chances?
MATHIAS CORMANN: When we came into Government, we inherited a weakening economy, rising unemployment and a rapidly deteriorating Budget position from Labor. We have been able to turn that situation around. The unemployment rate is much lower and our Budget is in a stronger and improving position. Our message to the Australian people at the election certainly will be that we are heading in the right direction. This is not the time to change direction. The high taxing, anti-business agenda of the Labor Party would make our economy weaker again, would make our country weaker and would make Australians poorer.
SABRA LANE: Let us look at your record, net Government debt was 10 per cent of GDP when you were elected, it is now 18 per cent. Gross debt, $273 billion, now $535 billion. Joe Hockey promised that your first Budget was going to be a surplus.
MATHIAS CORMANN: You are quite wrong, Joe Hockey, in the lead up to the 2013 Election did not promise that…interrupted
SABRA LANE: He did in 2012.
MATHIAS CORMANN: In 2012, Wayne Swan promised four years of surplus Budgets and then delivered more deficits as far as the eye could see. When we came into Government we inherited a deteriorating Budget position and a deteriorating forward trajectory, a spending growth trajectory of more than four per cent spending growth above inflation year on year. We have more than halved that. We inherited a spending growth trajectory that was taking Government expenditure to 26.5 per cent as a share of the economy and rising. We have been able to bring that down to the point where in the half-yearly Budget update it showed that we were heading for 24.6 per cent, below the 30-year average in terms of Government expenditure. We have worked very hard to control expenditure. We have worked very hard to strengthen the economy. Employment growth has been much stronger, which means that we have had higher personal income tax revenue as well as lower welfare payments. The proportion of Australians of working age on welfare is the lowest it has been in 30 years and all of these things help with Budget repair.
SABRA LANE: It is suggested the Government is going to bring forward the second stage of tax cuts already passed by Parliament. They are supposed to kick in from 2022. For most taxpayers according to Chris Richardson that would be about an extra 20 cents a week. How impressed do you think people are going to be with that?
MATHIAS CORMANN: Firstly, the detail in terms of the policy measures in the Budget for 2019-20 will be delivered tomorrow by the Treasurer and I am very happy to answer then questions about what we are actually announcing rather than to provide commentary on commentary that is not informed.
SABRA LANE: All right, so let us talk about what the Government is doing, the energy cash assistance that you are giving. A single person, that works out to be $1.45 extra a week and for someone on Newstart, nothing. What do you think people are going to make of that?
MATHIAS CORMANN: We have made a judgement, given the Budget position we were in in 2018-19, which was much better than what was anticipated, that we would be able to afford to make a one off energy assistance payment to aged pensioners and eligible welfare recipients of $75 per single and $125 per couple. That is a contribution to help ease cost of living pressures and it comes on top of all of the other things that we are doing…interrupted
SABRA LANE: Sure, but Newstart recipients have not had an increase is 20 odd years and they are not deserving of some sort of relief?
MATHIAS CORMANN: Newstart recipients are receiving a transitional payment pending going back into work. Under our Government, we have been able to get record numbers of Australians back into work. The unemployment rate has got a four in front of it now. When we came into Government, the Labor Party expected the unemployment rate to go past six per cent and a quarter. We have been able to create more than 1.2 million new jobs. It is not ever the intention for people to be permanently on Newstart allowance and incidentally you will also find that most Newstart recipients receive a whole series of other welfare payments as well.
SABRA LANE: The Government has often said that the National Disability Insurance Scheme is fully funded, yet on Saturday the Government announced $850 million more for the scheme. For years, service providers have said that there is a structural problem with the scheme, insufficient cash. What has gone wrong?
MATHIAS CORMANN: The NDIS is fully funded. We are going through a transition…interrupted
SABRA LANE: How can it be fully funded when you are tipping more money in and indeed the sector is really concerned that there is another $2 billion is up your sleeve that you are not spending on it.
MATHIAS CORMANN: That is actually quite wrong. That is a mischaracterisation of what is happening. What we are going through is a massive exercise where the outdated state based block funding model, where providers in the disability sector were getting block funding from the states and a lot of demand was not met, we are transitioning to a national scheme, which is demand driven and where every Australian with a disability will be able to get the appropriate level of support. It will be a demand driven program, but it will be a demand driven program that relies on the provider market in the disability sector continuing to develop, so that they can meet the demand out in the community. It also depends on making sure that all of the states sign onto the scheme. We are expected to reach the full rollout of the NDIS by the end of 2019-20. There are regular pricing reviews to make sure that the pricing that is available for providers in this market is appropriate. Providers will always want to get more money. We have to make sure that we have the balance right, that the funding is appropriate for the services that are being provided to Australians.
SABRA LANE: Finance Minister Mathias Cormann, thank you very much for joining AM this morning.
MATHIAS CORMANN: Always good to talk to you.