Senator the Hon. Mathias Cormann
Minister for Finance
Special Minister of State
Leader of the Government in the Senate
Senator for Western Australia
OLIVER PETERSON: Arguing the case and leading this is WA Senator and Finance Minister Mathias Cormann, who joins me live on the program this afternoon. Senator, thank you for your time.
MATHIAS CORMANN: Good afternoon Ollie.
OLIVER PETERSON: It is the first time we have spoken to you since the election victory and congratulations to you for that. Do you believe that that was an indication to the Government that you should get on with the job, you should be able to pass these tax cuts on in full?
MATHIAS CORMANN: Very clearly. The Australian people have spoken. The West Australian people have spoken particularly loudly. They want us to pass our income tax relief, which we promised at the election, to all working Australians in full. They want to ensure that we get our legislation through the Parliament, to put more money into workers pockets and to get more people into jobs because lower taxes will help stimulate the economy.
OLIVER PETERSON: The Opposition Leader, as I mentioned there, Anthony Albanese indicating he is after some more facts. What is he missing out on?
MATHIAS CORMANN: He is just continuing to run this pre-election argument that the Labor party has been prosecuting for some time. All of the information is in the Budget papers. All of the information has been fleshed out during the election campaign. Very clearly, the argument is around stage three of our income tax relief package. What we are trying to do here is to provide income tax relief to all working Australians, but we are prioritising low and middle income earners in the first instance, before starting to address bracket creep further and to provide tax relief to all other working Australians. We are phasing it in over a seven year period in order to ensure it is affordable in the Budget, because we want to boost funding for hospitals, schools and infrastructure at the same time as keeping the Budget in surplus all the way through. We are providing tax relief to low income earners in the first instance and then phasing in tax relief to all others because that is the way we can afford it over the medium term and beyond. All of that information is in the Budget. The third stage, which is to reduce the tax rate of 32.5 per cent to 30 per cent for incomes between $45,000 and $200,000 from 2024-25 onwards, that costs the Budget $95 billion. That is all in the Budget Papers. At the end, once our plan is implemented in full, the highest income earners continue to pay about the same proportion of overall income tax. The top one per cent of income earners will pay slightly more as a proportion of overall income tax. But the top 20 per cent of top income tax earners will be paying about 60 per cent of income tax as they are doing now. The problem is, because our income tax thresholds are not indexed, they are not adjusted automatically for wage inflation. If we do not pass our package in full, then middle income earners will progressively be pushed into the higher income tax brackets. Bracket creep if unaddressed is the silent thief that completely undermines aspiration. The reason we believe that bracket creep needs to be addressed is because we believe that all Australians need to have the right incentive and reward for effort to be the best they can be, because that is good for the economy overall. That is the plan that we were elected on in this election.
OLIVER PETERSON: Alright because that has been the argument. They are happy to pass stages one and two, but because stage three is off into 2024, the argument is that you do not have a mandate to 2024 because it is 2019. Your argument Mathias Cormann is in regards to if you do not get this structural reform in place right now, it creates what, too much uncertainty in to the out years?
MATHIAS CORMANN: We went to the election with a seven year plan. That is our plan. That is what we promised that we would do, to the Australian people. The only way you can provide across the board income tax relief is if you do it as part of package. We have said we are going to prioritise low and middle income earners. What the Labor party are saying is they want us to give up on providing income tax relief to all other working Australians because that is the effect of what they are suggesting. Our point is it is a seven year plan. It is phased in to make it affordable within the Budget. The argument the Labor party is running cuts both ways. When they say this does not come into effect until after the next election, that means they can go to the next election promising to reverse the change that we have legislated. We are the Government of the day. The Labor Party should not be trying to govern from Opposition. Our judgment, a judgement that was shared by the Australian people, a judgement that was particularly strongly shared by people here in Western Australia, is that that income tax relief is necessary to put more money into workers pockets, to stimulate the economy and help create more jobs. If the Labor Party has a different view in relation to a change that comes into effect after the next election, it is very simple, go to the next election again attacking the top end of town, running the politics of envy and the class warfare arguments, arguing for higher taxes. If the Australian people this time round say that is the way to go, well then they can change it.
OLIVER PETERSON: Yeah, it is pretty difficult to mount an argument against tax relief for all Australians. I think that that was a pretty loud message sent to Bill Shorten and now to Anthony Albanese on his listening tour around Australia, is the tactics at the last election did not work. Attacking the big end of town ended up backfiring on the Labor Party. This just seems quite odd Mathias Cormann that the Labor Party would be standing in the way. If you cannot jockey with them, who do you go to the crossbench because Pauline Hanson is making life pretty difficult at the moment. She says she won’t support all of the tax policies?
MATHIAS CORMANN: I am not going to let the Labor party off the hook here. Bill Shorten ran at the last election on an agenda of higher taxes, politics of envy and sneering at anyone earning more than $180,000 as the top end of town. Our judgment then was and what we said to the Australian people, that sort of agenda would make our economy weaker and would leave everyone worse off. The Australian people agreed. Anthony Albanese says that he is on a listening tour, that he is listening and learning. What we would say to Anthony Albanese is this is the time to accept the verdict of the Australian people, to respect the verdict of the Australian people and to act on it by voting in support of the income tax relief plan that the Australian people voted for.
OLIVER PETERSON: Mathias Cormann appreciate you time. Thank you very much.
MATHIAS CORMANN: Always good to talk to you.