Transcripts → 2019


ABC Radio - Adelaide

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


Date: Wednesday, 3 April 2019

2019-20 Budget, ASC

DAVID BEVAN: Mathias Cormann, Federal Finance Minister, good morning to you.

MATHIAS CORMANN: Good morning.

DAVID BEVAN: Can you confirm South Australia’s GST revenue it is forecast to fall by half a billion dollars, is that right?

MATHIAS CORMANN: Well, what we will be providing to South Australia will be an estimated $6.8 billion in GST payments in 2019-20, which is an increase of $43.3 million compared to 2018-19. There are relativities that are set by the Commonwealth Grants Commission independently and these decisions are then reflected in respective Budget papers. But, the GST payment to South Australia in 2019-20 will be $43.3 million higher than 2018-19.

DAVID BEVAN: Is it half a billion dollars less than what Rob Lucas was expecting?

MATHIAS CORMANN: Well, you would have to ask Rob Lucas what he was expecting, consistent with his Budgets, but what I can say is that in 2019-20, South Australia will be getting more GST than last year. 

DAVID BEVAN: Now, Minister, you know that Rob Lucas would have built his Budget and indeed, he tells us he has built his Budget around reasonable forecasts given from the Federal Government. The question is, have those forecasts been revised downwards by half a billion dollars, in reality you might be getting $43 million more you got the year before, but can you just confirm for us, has the forecast been revised down by about half a billion dollars on what was originally given?

MATHIAS CORMANN: Well, South Australia’s relatively for 2019-20, consistent with the formula, as applied by the Commonwealth Grants Commission is 1.46552, which is a slight decrease compared to its GST relativity of 1.47727 for 2018-2019, but above your long run average and it is $43.3 million more in 2019-20, than in 2018-19. South Australia’s slightly lower relativity reflects the fact that your fiscal capacity has improved slightly in the three-year assessment period to 2017-18 because South Australia’s share of Commonwealth payments are lower because it has increased and there is a lower infrastructure requirement.

DAVID BEVAN: Minister, all that is code for is yes, because he was expecting $7.3 billion, and this is important because this is what pays for hospitals and schools and roads and police. He was expecting $7. 3 billion, he is now going to get $6.8 billion, that is half a billion drop.

MATHIAS CORMANN: Let me just also say that when it comes to Federal payments to South Australia, that health funding to South Australia increases by $157 million between 2019-20 to 2022-23, education and skills funding for South Australia increases to about $108 million. There are a whole range of payments that are made by the Federal Government into South Australia. In fact, if you look at total payments to South Australia they have increased by $1.3 billion or 5.9 per cent over the forward estimates, compared to what was forecast in the 2018-19 Budget. So, that is $1.3 billion more, 5.9 per cent more than what we had forecast in the Budget last year.

DAVID BEVAN: So Lucas, when he says to ABC News, I am surprised and I am going to have to manage this short fall in revenue, he has got nothing to complain about? 

MATHIAS CORMANN: Well, there are always swings and roundabouts and on the GST, these relativities are set independently by the Commonwealth Grants Commission, but if you look at the overall impact, if you look at all the swings and roundabouts, total payments made from the Federal Government to South Australia have increased by $1.3 billion or 5.9 per cent over the forward estimates compared to last year’s Budget.

DAVID BEVAN: Labor says, you promised $2.7 billion for the South Road upgrade, to finish it off, they cannot find it in the Budget.

MATHIAS CORMANN: Well in the 2019 Budget we have committed $2.6 billion over the next decade for new lands transport infrastructure projects in South Australia, which includes $1.5 billion additional for the North-South corridor, that is there, $260 million for a South Australian rural roads package, which includes $73.6 million for the Victor Harbour Road duplication and… interrupted

DAVID BEVAN: Just to focus on South Road, Finance Minister Mathias Cormann, where is the page in the Budget committing the Federal Government to finishing South Road?

MATHIAS CORMANN: Well if you ask me for a page in the Budget, I will supply that to you after this interview. I do not have thousands of pages of Budget papers at my fingertips right now, but I am happy to provide that to you. 

DAVID BEVAN: Because, State Labor and they have been running this for quite a while now, they say look, it is just not in the forward estimates and if it not in the forward estimates, if you cannot point to a line in the Budget saying ‘there is your money folks’, then you have not got it, it is just a promise.

MATHIAS CORMANN: Well, all of our plans, particularly when it comes to infrastructure, our plans go both over forward estimates and over the medium term. That has always thus for Governments of both political persuasions. When it comes to particularly large and complex infrastructure projects, you have to take the run up into account, in terms of getting projects shovel ready and getting projects underway. We make judgements on when the money is most likely to be required and that is reflected both in our forward estimates and in our medium term projections. 

DAVID BEVAN: So is it possible that it is not in the forward estimates?

MATHIAS CORMANN: Well, what I will do is, as I have committed to do, I will provide you the information in relation to that particular project, but I can confirm again that we have allocated an additional $1.5 billion for the North-South corridor in additional funding, which comes on top of previous funding commitments.

DAVID BEVAN: If it is not in the forward estimates for the next four years, what does that mean? Can you explain that to our listeners?

MATHIAS CORMANN: For all infrastructure projects, and State Labor would know this, for all infrastructure projects you make an overall funding commitment and you then have to determine a funding profile depending on when you expect certain works to be undertaken. That is just good Budget management. That is just good normal planning…interrupted

DAVID BEVAN: So, you are not confident enough to put it actually in the Budget, the $2.7 billion…interrupted

MATHIAS CORMANN: No, you are now verballing me, I mean…interrupted

DAVID BEVAN: No, I am not. I am just asking you, if you pause for a moment, I will ask you the question, there will be no verballing. Are you confident enough to the $2.7 billion in a Budget line, saying that this will be spent in the next 4 years?

MATHIAS CORMANN: Well, we are confident that we will spend it as soon as possible, when the project is in a position to proceed, working closely with the State Liberal Government in South Australia, the Marshall Government, which is doing an outstanding job when it comes to delivering additional resources and additional investment into South Australian infrastructure. These things are done in very close cooperation and very close coordination with the State Government, which delivers these projects. The money is available. The money is ready to go and the money will be provided when the project proceeds.

DAVID BEVAN: Mathias Cormann, Finance Minister we appreciate your time. Before you leave us, as Finance Minister, as I understand it, you are responsible for the ASC because it is a Government owned corporation. Can you rule out the submarine sustainment work shifting to West Australia after the election?

MATHIAS CORMANN: We have made no such decision. There is a lot of activity happening in relation to the build program when it comes to both the future submarine and the frigates program. There is a lot of infrastructure development happening. There is a lot of money being invested in the great State of South Australia to make sure we are in the best possible position to roll out that program as effectively and as efficiently as possible. The ASC operates as an independent corporation, but I can confirm that we have made no such decision.

DAVID BEVAN: Because, the word is that your WA colleague Linda Reynolds, who is the Defence Industry Minister, is keen to see that sub work shifted to yours and her state of WA. 

MATHIAS CORMANN: Well that sounds to me like uninformed speculation. There has been no such decision.

DAVID BEVAN: No such decision but you cannot rule it out?

MATHIAS CORMANN: Well I cannot pre-empt what will happen in the future. It depends on what the requirements are in South Australia to build the 12 future submarines as efficiently and as effectively as possible. These are judgements that will be entirely based on advice from  Defence, ASC and relevant stakeholders.

DAVID BEVAN: Before you leave us, how would you some up the message to South Australians from your Federal Budget? Would you say, folks you have never had it so good, this is a very generous Budget to South Australia or look sorry about the cut, we have done the best we can?

MATHIAS CORMANN: This is a Budget that seeks to build a stronger Australia and a stronger South Australia. It is a Budget that seeks to provide incentive and encouragement to South Australians and people right around Australia to work hard and get ahead. We have about 780,000 South Australians who will receive tax relief for the 2018-19 financial year. There are 240,000 small and medium sized businesses in South Australia who will be eligible for the instant asset write-off, which is being increased to $30,000. This is a part of our responsible plan to build a stronger economy and to ensure that families around Australia, including in South Australia have the best possible opportunity to get ahead. 

DAVID BEVAN: Mathias Cormann, thank you for your time.

MATHIAS CORMANN: Always good to talk to you.