Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Sunday, 2 June 2019
BARRIE CASSIDY: Minister, good morning and welcome.
MATHIAS CORMANN: Good morning.
BARRIE CASSIDY: That seems to be the nub of the argument there. That you're asking too much of the Parliament to legislate tax cuts that won't be delivered for somewhere between three and five years?
MATHIAS CORMANN: We took a plan to the election promising income tax relief for all working Australians. It is a plan that prioritises low and middle-income earners in the first instance but it also addresses bracket creep and continues to simplify our tax system. It is a plan that was endorsed by the Australian people. It is a plan that we believe is important to ensure that our economy into the future can be as strong as possible, because it provides the right incentive and the right reward for effort for all working Australians. This is Labor’s groundhog day. The argument that you just put and the argument that Anthony Albanese there just put is precisely the argument that Bill Shorten put when we legislated our first $144 billion plan to provide income tax relief, which went through the Parliament in June 2018. All the same arguments were run. The Parliament passed it. On this occasion there is even more reason for the Parliament to respect the mandate of the Government, because we took this plan to the election. The Australian people voted for it.
BARRIE CASSIDY: All of that stands up if you were introducing these tax cuts today, but what is the response to that. How is this good economic planning to commit to something five years from now when you don't know how the economy will behave over the next five years?
MATHIAS CORMANN: It is precisely because we are so focused on building a stronger economy. We want to ensure that over the next decade and beyond, Australia is in the strongest possible position to ensure that families around Australia, today and into the future have the best possible opportunity to get ahead. This is about making sure that as many jobs as possible can be created across the economy. This is about providing certainty to Australians. It is about providing certainty to business, and providing the right incentives, the right reward for effort and providing confidence about the future. This is a very important ingredient to ensure that our economy is as strong as possible into the future.
BARRIE CASSIDY: But you did, during the election campaign, often talk about headwinds. What if there was to be a significant economic downturn and you could no longer afford the tax cuts - what do you do then?
MATHIAS CORMANN: Barrie, these are precisely all of the arguments that Labor put to us during the campaign ... interrupted
BARRIE CASSIDY: What is the response to those arguments?
MATHIAS CORMANN: ... and the response that we provided during the election campaign is that it is precisely because of the global economic headwinds that we might face from time to time that we need to ensure that we are in the strongest position domestically here. That is why we do need to ensure that we do provide income tax relief. We need to ensure that Australians do not go backwards. If we did not do what we are proposing to do, Australians would be going backwards. The Labor Party used to recognise that bracket creep is a drag on the economy, holds the economy back, holds Australians back. We want to ensure that all Australians have the best possible incentive to get ahead, to be the best they can be, so that the economy as a whole lifts which is important in particular for low and middle-income Australians.
BARRIE CASSIDY: Is there any risk at all if you legislate these tax changes and you're committed to them and there is an economic downturn, you've committed to them, so the result of that might be you have to kiss goodbye basically to the promises Budget surpluses into the future.
MATHIAS CORMANN: I completely reject the premise of that question. If there was further and strengthening global economic headwinds, the worst thing to do in that circumstance would be to increase the tax burden on the economy, to increase the tax burden on individual Australians. That is actually the core of the argument that was prosecuted during the election campaign. We went to the election with a plan for lower taxes to build a stronger economy, to secure Australia’s future. Whereas Labor went to the election with a plan for higher taxes which we argued would weaken the economy and would leave all Australians worse off. Australians voted for our plan for lower taxes and a stronger economy and against Labor's high taxing, politics of envy, class warfare agenda, which Australians understand would make our country weaker and would leave families around Australia worse off.
BARRIE CASSIDY: Alright, the stage two starts January 2022. So there is a good chance that they will be introduced inside this term in office. It is the next stage, stage three 2024, five years from now. Is there any chance at all that in your negotiations with Labor you might agree to split that so that stage three can be voted on at some other time?
MATHIAS CORMANN: No. None. This is again a groundhog argument. This is precisely the conversation that Bill Shorten was pursuing back in 2018. We rejected it then and we reject it now. We have put forward a holistic plan. It is a holistic plan that provides income tax relief to all working Australians. We are not, like the Labor Party has been in the past, in favour of turning Australian against Australian. We have put forward a plan to provide income tax relief to all working Australians. We are prioritising low and middle-income earners but we are addressing bracket creep, and we are also simplifying the tax system. It is a holistic plan that needs to be legislated as a whole, because we want to provide the right level of confidence into the economy, certainty around tax policy settings over the medium term. That is what we are doing.
BARRIE CASSIDY: Okay. Tax cuts are one way to help the low paid and wage rises are another. The minimum wage went up this week 3 per cent. $19.49 an hour. You say that the economy is strong and you are hoping it will remain strong. Do you accept that rise is affordable?
MATHIAS CORMANN: The Fair Work Commission makes these judgements independently in relation to the minimum wage and relevant award wages in the same way as the Reserve Bank makes judgements independently in relation to monetary policy. This is a 3 per cent increase in the minimum wage. It is good news for about 180,000 Australians on the minimum wage and for a couple of million Australians that are on award wages. This is higher than the 2.3 per cent wage increase across the broader economy, which is also of course higher than the 1.3 per cent inflation rate. So wages are growing faster than inflation. The minimum wage and award wages are growing faster than inflation. Our income tax relief will further boost the level of growth in people's take-home pay over the next number of years.
BARRIE CASSIDY: So the Chamber of Commerce has made the same point that the 3 per cent increase is ahead of inflation and they say that, as a result, this will cost jobs. Do you share that judgement?
MATHIAS CORMANN: Again, the job of the Fair Work Commission is to assess all the relevant economic data, all of the relevant information in front of them and make judgements on what is sensible and what is affordable. We respect the judgements by the independent umpire.
BARRIE CASSIDY: On the industrial relations system, more broadly, do you think it's in need of structural change or do you think that it's working pretty well?
MATHIAS CORMANN: What our focus will be and what Christian Porter's focus will be as the new Industrial Relations Minister is to ensure compliance with existing laws. In particular, continuing to enforce compliance with our industrial relations laws on our building sites. There continues to be ample evidence of lawlessness on building sites which holds our economy back and which is bad for Australian families, because it overall increases, it drives up the costs of construction across Australia which is bad for economic growth. So we will very much focus on making sure that our laws are properly enforced.
BARRIE CASSIDY: So what more can you do around that to ensure that doesn't continue to happen?
MATHIAS CORMANN: These are the sorts of matters that Christian Porter will spell out over the next few weeks and months. In the previous Parliament we re-established the Australian Building and Construction Commission, which is doing its job to address lawlessness across building sites. We expect them to continue to do their job as best as they can.
BARRIE CASSIDY: It does appear that there will be a debate both within your party and more broadly around religious freedom. That seems to be inevitable now. What's the starting position though? Are there religious freedoms that are at risk and what are they?
MATHIAS CORMANN: We have had the Ruddock review, which made about twenty recommendations, fifteen of which we have supported. Five of which have been sent to the Australian Law Reform Commission for further advice. We want to ensure that Australians do not have to experience discrimination of any kind. In the same way as we have a Sex Discrimination Act and a Racial Discrimination Act and the like, we believe that people ought to be protected from discrimination based on religious belief through a Religious Discrimination Act. We are certainly committed to press ahead with the introduction of legislation to put in place a Religious Discrimination Act. It is to ensure that people are not subject to inappropriate, unacceptable levels of discrimination based on their religious beliefs, or based on not having any religious beliefs at all.
BARRIE CASSIDY: And then there are people who don't want to be discriminated against based on their religious beliefs.
MATHIAS CORMANN: Exactly. People should not be able to be discriminated against because of their religious beliefs. That is right.
BARRIE CASSIDY: Eric Abetz has apparently written to the Human Rights Commission and Fair Work over the Israel Folau case about the discrimination against employees based on their religious beliefs. Do you think that that's something where the Government should go there, in some way to prevent organisations from what he claims is discrimination against the employees?
MATHIAS CORMANN: Eric Abetz is an individual Senator who has written to existing institutions which act independently. I am not going to make independent judgements on their behalf. It is a matter for these organisations to respond to that correspondence as they see is appropriate.
BARRIE CASSIDY: You have got two Senators departing but six months from now, which leads to six months of speculation, of course, about who's going to fill those positions. Jim Molan has already said that he feels entitled to one of them. Do you accept his argument?
MATHIAS CORMANN: The Liberal Party in New South Wales will have the job to fill the vacancy when it occurs. I have great confidence in the Liberal Party organisations, both in New South Wales and in Victoria, to select outstanding representatives for their respective states. I would never accept, Liberals in Western Australia would never accept anyone from interstate giving us advice on who to select or not to select. So I am not going to do the same in reverse.
BARRIE CASSIDY: But just right around the country, as a general rule, do you think if you're number 4 on the ticket, does that make you first cab-off-the-rank when there's a vacancy?
MATHIAS CORMANN: That is not the way it generally works. Every selection in the Senate is taken on its own merits. Jim Molan has done a great job as a Senator during his time in the Senate. He is an outstanding Australian. But it is entirely a matter for the Liberal Party in New South Wales to make judgements in relation to this vacancy, as to who they think is best equipped to represent the Liberal Party or the State of New South Wales rather in the Senate over the next six years.
BARRIE CASSIDY: OK. Just finally, you're used to Penny Wong as an adversary in the Senate. She's now being joined by Kristina Keneally. It's an all-women team. How are you feeling about that?
MATHIAS CORMANN: I'm looking forward to it.
BARRIE CASSIDY: Thanks for joining us this morning. Appreciate it.
MATHIAS CORMANN: Always good to talk to you.