Transcripts → 2019


Sky News – AM Agenda

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


Date: Friday, 31 May 2019

Labor leadership; minimum wage increase; bank capital settings; iron ore prices.

KIERAN GILBERT: Let’s go live to Mathias Cormann the Finance Minister. Thanks very much for your time this Friday as always. First of all your reaction to Bill Shorten’s address yesterday. He blamed various other interests. Of course he is still hurting off the back of his unexpected loss.

MATHIAS CORMANN: I do understand that he would be hurting and be disappointed. But those comments were delusional, arrogant and quite disrespectful to the Australian people. He is essentially suggesting that millions and millions of individual Australians were not capable of making their own judgements on who they would support, when clearly Australians embraced Scott Morrison and our agenda to build a stronger economy so that Australians have the best possible opportunity to get ahead. Quite frankly they voted against the high taxing, anti-business, politics of envy agenda that was pursued by the Labor party in the lead up to the last election, which Australians understood would weaken our economy and leave all Australians worse off. 

KIERAN GILBERT: I guess he is referring in part to maybe some of the campaigning around death taxes, about Clive Palmer and that sort of thing. Do you believe some of his point is defensible in that context?

MATHIAS CORMANN: No it is not. The truth is that the Labor party was running in this election on a high taxing, anti-business, class warfare, politics of envy agenda, which we pointed out would make the country weaker and leave Australians worse off. Whereas we were running on an agenda designed to make the economy stronger, make the budget stronger, ensure that we could boost funding for health and education, infrastructure, at the same time as lowering the tax burden on the Australian people. People embraced our agenda. They rejected Labor’s agenda. It is now going to be a question for Anthony Albanese whether he just wants to pick up where Bill Shorten left off, or whether he actually wants to listen to what the Australian people told Labor at the election and whether he is going to take notice of it and change direction. Australians are fundamentally aspirational. They do not want this sneering at the so called top end of town. That worker in Gladstone, earning $250,000 a year, he is working hard, he is not the top end of town. He is looking after his family, paying his mortgage, paying for his kids to get through school. Labor lost its way in the lead up to the last election. The sooner they get back to backing aspirational Australians the better it will be for them and for the country.

KIERAN GILBERT: Voters might be aspirational. Bill Shorten said he’s not though any more. That he has shelved his leadership ambitions after two cracks at it. That’s fair enough.

MATHIAS CORMANN: Do you think that a fish stuck on land wants to get back into water? Honestly, I think you will find that Anthony Albanese knows, that of course Bill Shorten would want the leadership back if he can. I don’t even think that that is particularly remarkable. I think that everyone in the Parliament knows that if there was an opportunity for Bill Shorten to get the leadership back, he would go for it. Honestly, does anyone really believe otherwise?

KIERAN GILBERT: You threw me with the fish analogy but anyway. Let’s move onto the minimum wage now. The minimum wage increase by the Fair Work Commission, did they strike the right balance in your view? 

MATHIAS CORMANN: The Fair Work Commission makes these judgements on the minimum wage independently, in the same way as the Reserve Bank sets our official cash rate independently. They assess economic data and make judgements on what is appropriate. That is their call. We back that process in. We accept the independent decision, by the independent umpire. I would just say this is again an increase, a wage increase, an increase in the minimum wage above inflation. Inflation is running at 1.3 per cent. This is a three per cent increase. That is good news for all those Australians who are paid the minimum wage and all those Australians who are working on relevant award wages.

KIERAN GILBERT: And in that context, I guess, combined with the tax cuts you would be hoping that starts to  chip away at what Labor felt was one of their stronger points and that was about fairness across wages. Mr Morrison has been talking about the need to make further incursions into Labor territory, if you can do that and improve the living standards of those cohorts that would help in that regard.

MATHIAS CORMANN: What the Australian people have shown at this election is that they understand that the only way to sustainably and credibly increase wages is on the back of stronger growth. That is what we are working on. We are working to continue to build a stronger economy, create more jobs, drive the unemployment rate down so that wages will continue to increase and start to increase more strongly. Our personal income tax relief will ensure that people’s take home pay will be higher. People’s effective wages growth will be stronger on the back of our plan for significant income tax relief for all Australian working families.

KIERAN GILBERT: We’re going to see some more APRA reforms, which should make the system of mortgage lending, home loan lending more competitive. Is that going to boost the smaller and medium sized lenders?

MATHIAS CORMANN: Increased competition in the banking sector is good for consumers. These decisions by APRA again are decisions that are made independently by the prudential regulator. However, we welcome any decisions and any moves that help to strengthen competitive tensions in the banking sector because we understand that helps to improve the choices and options available to Australian consumers.

KIERAN GILBERT: And in that context with the likely rate cut expected in the next week or so as well from the RBA. Are you hoping that we are have seen the bottoming out of the property market with more competition in the home loan space, rates down, hopefully that the property market in some of our major capitals might start turning around?

MATHIAS CORMANN: A decision in terms of the official cash rate is a matter for the Reserve Bank. What I would say is that after the election there appears to have been a collective sigh of relief across the property sector, given that Labor’s housing tax will now not be implemented. Certainly the anecdotal data that has been coming through is that there has been a level of firming and an increased level of confidence across the property sector, which is welcome. 

KIERAN GILBERT: The iron ore price has also been much higher than forecast in the Budget and the mid-year update, that must very encouraging because Shane Oliver from AMP and others are saying we are basically in surplus now, effectively for this financial year. 

MATHIAS CORMANN: The Final Budget Outcome for 2018-19 will be delivered by the end of September. So let us not get ahead of ourselves. It is always good when we can get higher prices for our key export products, in particular if we can get prices that are higher than what was anticipated would be the case when we put our Budget assumptions together. That is definitely better than the alternative.

KIERAN GILBERT: And you would be obviously very pleased if you could get there a year early. Mr Morrison saying the surplus will be delivered next year, he said that repeatedly during the campaign, but that would be quite something if that were to be ticked off. I guess it is important to have a buffer though isn’t in, in the context of global headwinds with China and the US still having this trade wars, which seem to be worsening.

MATHIAS CORMANN: Firstly, again, I would caution people to get ahead of themselves. Certainly we will be delivering a surplus in 2019-20. When it comes to 2018-19, if you look at the monthly financial statements to the end of April, what you will see is revenue is broadly in line with expectations at Budget time, whereas payments are about $2 billion less. Any impact on revenue, on Government revenue from higher iron ore prices than anticipated at Budget time are likely to flow through in the 2019-20 financial year, not necessarily over the next five weeks.

KIERAN GILBERT: With your Senate team, there will be a vacancy with Arthur Sinodinos widely, warmly welcomed as the replacement to Joe Hockey in Washington, DC as Australia’s representative there. But to replace Arthur Sinodinos, we are hearing either Warren Mundine, my colleague Andrew Clennell at The Australian yesterday saying he is in the mix. Jim Molan, he says he should be because he is next on the ticket. Who do you think it should be to join you in the Senate? 

MATHIAS CORMANN: Firstly, Arthur Sinodinos is an absolutely outstanding selection to be our next Ambassador to the United States. He will do a great job. I am very, very pleased by that selection. Now when it comes to the selection of a new Liberal Senator for New South Wales, I will leave that entirely up to the Liberal Party in New South Wales. I am a Senator representing the great state of Western Australia. Here in Western Australia we would not appreciate if interlopers from other states were to give us advice. I will refrain from giving advice to my good friends in the Liberal Party in New South Wales. They are well able to make these judgements.

KIERAN GILBERT: Do you think they will both be good choices, Mundine and Molan?

MATHIAS CORMANN: I am very confident that the Liberal Party in New South Wales will make an excellent selection to fill that vacancy. I look forward to whoever they choose joining us in the Senate at the appropriate time. 

KIERAN GILBERT: Minister, thanks very much for your time, we will catch you next week, appreciate it as always.