Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
MATHIAS CORMANN: Australians voted for income tax relief for all working Australians. Most Australians now want Labor to vote for our income tax cuts in full when they go to the Senate in the first week of July. In fact, a majority of Labor voters want Labor to get on with it and vote for our income tax cuts for all working Australians.
We call on the Labor party to act in the national interest. Income tax relief for all working Australians is in our national interest. It puts more money into workers pockets. It helps get more Australians into work by stimulating the economy. Our plan is a comprehensive plan, which prioritises low and middle income earners in the first instance, but then also addresses bracket creep and simplifies our tax system, so that we can continue to build a stronger economy. It is a plan which is deliberately calibrated and phased in over seven years to make it affordable within our Budget.
We call on the Labor to vote for it.
QUESTION: You say Labor voters want Labor to support it. How do you know that Labor voters want them to support it?
MATHIAS CORMANN: We have conducted post-election research which very clearly identifies that a majority of Labor voters want Labor to get on with it. They want Labor to vote for income tax cuts, which put more money into workers pockets, which help to get more Australians into work by stimulating the economy. At the last election the Australian people voted for a plan, which they understood was deliberately calibrated in a way to make it affordable within the Budget. That is why it is phased in over seven years. It is a plan that is in the national interest. It is the right thing to do. Most Australians including a majority of people that voted for the Labor party at the last election want Labor to get on with it and vote for it.
QUESTION: Minister, if Labor continues to reject it and you are unable to reach a consensus with the crossbench, would you still put the legislation for a vote on the first week back and risk it being voted down?
MATHIAS CORMANN: We will absolutely put that legislation to the Parliament when we go back. That is absolutely what we will do. The Australian people deserve income tax relief at the earliest opportunity. Low income earners deserve income tax relief at the earliest opportunity. That is why we will put this legislation into the Parliament when we go back. We absolutely are working to secure passage of that legislation when we go back in that first week of July.
QUESTION: There is no denying that the economy is softening and that tax cuts are needed to stimulate the economy. Would you be willing to bring forward stage two and three to then give it greater chances of passing and then therefore boosting the economy by increasing disposable income?
MATHIAS CORMANN: No. Our income tax relief plan is part of a pro-growth Budget. When we put our Budget together, we had all of the information in front of us about where the economy was at. In fact, we made that very clear in the course of the election. We designed our plan for income tax relief for all working Australians in a way that prioritises, deliberately prioritises, low and middle income earners, but also delivers income tax relief for all working Australians over time in a way that is affordable in the Budget. To change it would not be affordable within the Budget. That is not something that we are proposing to do.
QUESTION: Minister, given you say that you have got a mandate for tax change, but the tax change will take over seven years, which takes us past the next election. Why does winning this election give you a mandate to change tax law after the next election? Shouldn’t you take that to the next election?
MATHIAS CORMANN: Absolutely not. We took a seven year plan to provide income tax relief to all working Australians to the last election. That is what the Australian people voted for. If the Labor party wants to go to the next election, again campaigning for higher taxes on what they call the top end of town, that is a matter for them. That argument that you have just put cuts both ways. It means that Labor has two more elections to campaign again for higher taxes on hard working Australians, if that is what they want to keep doing.
QUESTION: Jim Chalmers has today said that, well he’s asked for the Government to, and I quote, stop playing pig headed games and split the bill. What is your reaction to that? And are you now standing in the way of boosting the economy and help what is a floundering economy by not splitting the bill?
MATHIAS CORMANN: That question is a question for us to break our firm election commitment that we made at the last election. What Jim Chalmers is apparently suggesting is that only a few weeks after the election, after the Australian people voted in favour of income tax relief for all working Australians that we should now break our election promise. We will not be doing that. We will be delivering on our commitment to the Australian people. That is to deliver income tax relief for all working Australians. That is to put forward legislation to implement our income tax relief plan in full, into the Parliament in the first week of July.
QUESTION: Minister do you think that with the economy growing at its slowest pace since 2009, these income tax breaks will in effect enable people to spend more money?
MATHIAS CORMANN: Our income tax cuts will put more money into workers pockets. They will help get more Australians into work by stimulating the economy. Income tax relief delivers higher take home pay for all Australian workers. The Labor Party is standing in the way of higher take home pay for all working families around Australia. That is what they are effectively arguing for, less money for workers and more money for the Government.
QUESTION: You just had this fight Minister during the election. Do you think that the Australian public and I know your polling is your polling but do you think the feeling is within the Australian public is just stop bickering and get on with it?
MATHIAS CORMANN: That is our point. That is our argument. We have had this argument in the lead up to the election. The verdict from the Australian people is in. The Australian people voted in favour of our plan to provide income tax relief to all working Australians and against Labor’s agenda of higher taxes and the politics of envy. The Australian people supported policies in support of opportunity and aspiration and voted against the politics of envy. That is why we are saying to the Labor party, respect the verdict of the Australian people, act in the national interest. In the lead up to the last election, when Labor thought they were going to win this election, they said that they expected the Parliament to accept their mandate on higher taxes. The Australian people have spoken. The Australian peopled voted for our plan to deliver lower taxes for all working Australians. That is what we will be putting to the Parliament. That is what we will be asking the Parliament to vote in favour of.
QUESTION: Minister are you saying that you will protect your promised surplus at all cost regardless if growth continues to falter?
MATHIAS CORMANN: Our Budget is based on all of the relevant assumptions based on advice from Treasury as appropriate. All of these things have been factored in to our Budget. We are on track for a surplus in 2019-20. In fact all of our Budget forecasts and projections show that after we have boosted spending on hospitals and schools and infrastructure and other essential services that Australians rely on, after we have accommodated the fiscal impact of income tax relief for all working Australians, our Budget returns to surplus in 2019-20 and remains in surplus all the way over the forward estimates and all the way over the medium term. That is why we are phasing in income tax relief over a seven year period, prioritising low and middle income earners in the first instance before providing income tax relief to all other working Australians.
QUESTION: Minister can I clarify sorry, did you rule out bringing forward stages two and three to give it greater chances of passing?
MATHIAS CORMANN: We will not be changing the plan that we put to the Australian people at the election. We will not be bringing anything forward. That cannot be afforded within the Budget. I say it again. The plan that we have put forward, the plan the Australian people voted for, the plan to provide income tax relief to all working Australians has been very carefully designed to ensure that it delivers more money into the pockets of low and middle income earners in the first instance and then provides income tax relief to all working Australians in a way that is affordable in the Budget. We will not be changing our plan. If the Labor party had won the election, they would not be changing their plan. What Jim Chalmers is essentially saying today is that a few weeks after the Australian people have spoken that we should break our promise to the Australian people and just do whatever the Labor party, who lost the election, wants us to do.
QUESTION: But you have already broken your promise by not bringing the Parliament to pass stage one.
MATHIAS CORMANN: That is not true. You should not believe everything the Labor Party says in an attempt to distract. The income tax relief for low and middle income earners was only ever going to be available from 1 July. The tax relief for the 2018-19 financial year was only ever going to be available once income tax returns were lodged with the tax office, which cannot happen before 1 July. So as long as we vote in the Parliament, when we go back in that first week in July on this income tax relief for all working Australians, the tax office will be able to provide that tax relief to hardworking Australians very, very swiftly as part of their tax return for the 2018-19 financial year.
QUESTION: So your final words to the Labor Party?
MATHIAS CORMANN: Let us get on with it. Let us act in the national interest. Let us provide income tax relief to all working Australians, prioritising low and middle income earners in the first instance, by putting more money into workers pockets and getting more Australians into work by stimulating the economy through our plan for a stronger economy.
QUESTION: Minister just a couple of quick questions if I may. Some lenders are refusing to pass on the interest rate cuts. Is it time for the Government to consider the Reserve Bank’s power to lend money rather than borrowing it from overseas?
MATHIAS CORMANN: The Reserve Bank acts independently. These are matters for them.
QUESTION: What about interest rates, how low do you think they can go?
MATHIAS CORMANN: I am not a commentator on interest rates. Again, the Reserve Bank acts independently. That is a necessary and important feature of our system. I leave these sort of judgements and commentary to the Reserve Bank.