Senator the Hon. Mathias Cormann
Minister for Finance
Special Minister of State
Leader of the Government in the Senate
Senator for Western Australia
LAURA JAYES: Joining me now is Finance Minister Mathias Cormann live from Canberra this morning. Have you seen Phil Coorey’s piece this morning Minister and what did you think of it?
MATHIAS CORMANN: There are obviously some people inside the Labor Party trying to make life difficult for Anthony Albanese. Any Labor MP who thinks that even before the Parliament has reconvened they should fight for $137 billion in higher taxes and continue to prosecute the politics of envy, class warfare argument that the Australian people have rejected is just arrogantly thumbing their noses at the Australian people. The truth is that our plan for income tax relief is in the national interest. It puts more money into workers pockets. It prioritises low and middle-income earners, but it addresses bracket creep, which holds the economy back. It provides income tax relief over time to all working Australians in a way that is affordable within the Budget. I cannot understand why Anthony Albanese would want to be tied down to a losing pre-election argument based on the politics of envy and class warfare.
LAURA JAYES: The Senate results seem to have come in a little earlier than expected, meaning that, if you wanted to, the Government could bring back Parliament next week. Will you do that?
MATHIAS CORMANN: No. The Parliament will resume on the 2nd of July. The truth is it makes no practical difference. The 2018-19 financial year finishes on 30 of June. People will only be able to lodge their tax returns from 1 July and as long as the Parliament passes our income tax plan in full, swiftly that first week of July, the Tax Office will be in a position to process the tax returns and put more money into people’s pockets and process those tax refunds.
LAURA JAYES: Yes, but what is the process? At the moment, is it going to pass in the first week because Labor is holding out, it seems the Senate crossbench as well, so what is your advice to people lodging their tax returns, just wait until the package passes?
MATHIAS CORMANN: No. People should lodge their tax returns in the ordinary course of events and the Tax Office will process the tax returns in the ordinary course of events. I cannot imagine that the Labor Party would want to stand in the way of more money into workers pockets, would want to continue to persist with the losing pre-election argument that the Australian people rejected based on class warfare and the politics of envy. Our message to the Labor Party is very clear and overwhelmingly the message from the Australian people right around Australia is very clear. People around Australia are calling on Labor to pass the income tax relief package of the Government swiftly because people around Australia understand that it is in our economic interest and will help Australian families get ahead.
LAURA JAYES: When will you introduce this legislation, on the 2nd of July and do you expect it to go to a vote in that first week of Parliament?
MATHIAS CORMANN: The specific logistics, they will take place in that week. There are a few thing that happen with the opening of Parliament, there will be a condolence motion to former Prime Minister Bob Hawke. So there are some things we have to do first up, but we will introduce the legislation that first week and Anthony Albanese is on the record as saying that this could be dealt with very swiftly in an hour. We agree and with good will from across the Parliament, this could be easily dealt with that first week, but we do not control the actions of all others, but our intention…interrupted
LAURA JAYES: Yeah sure, but there is a very real prospect Minister isn’t there, that it will not be passed until the end of July.
MATHIAS CORMANN: It does not have to be. That really depends on whether the Labor Party wants to stand in the way of income tax relief for all working Australians, whether the Labor Party wants to stand in the way of low and middle income earners getting their income tax relief quickly. Does Labor really want to stand in the way of $1080 for a single worker or $2160 for a couple, a dual income earning couple? Do they really want to stand in the way of Australians getting that money quickly by playing political games and by persisting with a losing pre-election argument based on the politics of envy, which the Australian people have firmly rejected?
LAURA JAYES: Will you provide the extra information that Labor has requested?
MATHIAS CORMANN: We have provided all of the relevant information. It is all published in the Budget papers incidentally. The Labor Party again, they are persisting with an argument that they prosecuted very aggressively during the election campaign. The Australian people heard that argument. They rejected that argument. The information that is in the Budget is broken down by the three stages in terms of the fiscal impact and the revenue impact of our plan. The third stage, which is what the argument seems to be centering around, which involves the reduction of the tax rate from 32.5 per cent to 30 per cent for people on incomes from $45,000 to $200,000 in 2024-25, that costs $95 billion over the medium term. We have also provided relevant distributional analysis, our Budget papers show that the proportion of tax paid by the highest income earners remains broadly the same. In fact, the top one per cent of income earners will pay slightly more tax as a proportion of overall income tax. The Labor Party just really is trying to run this dishonest argument around the politics of envy. They are still trying to turn Australian against Australian. The truth is, all we are doing at the higher income end is to ensure that people do not go backwards, that we do not allow the silent thief that is bracket creep to undermine aspiration. Everybody understands that bracket creep is bad for the economy. We need to continue to address bracket creep to ensure that the economy continues to grow as strongly as possible, which is important for low and middle-income earners in particular, because their future opportunities depend very much on our future economic growth.
LAURA JAYES: Now, Minister you are making a good argument for actually going further at that higher end, as you say this will barely cover bracket creep by the time stage three is actually put in place. Will you look at further relief at that end? Craig Emmerson for one, this week was arguing that a 47 cent or 49 cent in the dollar rate is just too high.
MATHIAS CORMANN: We legislated $144 billion worth of income tax relief last year. We are proposing to legislate $158 billion worth of income tax relief this year. We are providing income tax relief to all working Australians in a way that is fiscally responsible and affordable within the Budget. We always make judgements on what is responsible. We are pursuing a number of objectives at the same time. We want to ensure that the Budget returns to surplus and remains in surplus all the way over the medium term and beyond. We are boosting funding for hospitals, schools, infrastructure and other essential services and we are providing income tax relief at the same time and all of that is accommodated in the Budget bottom line as it is currently published. What we are putting forward at the higher income end is completely reasonable. There is nothing unfair about it at all. The Labor Party should just recognise that all we are doing here is to ensure that people do not get dragged back and that we do not undermine aspiration into the future.
LAURA JAYES: You still seem to be negotiating with the crossbench, not leaving anything to chance here, at least not betting on Labor supporting these tax cuts and the passage through the Parliament. You met with centre Alliance and Rex Patrick I believe yesterday. There are some demands being put on the table by the crossbench such as lower gas prices, more help for pensioners. Were you able to give any assurances or guarantees?
MATHIAS CORMANN: Firstly, the Government has a long standing agenda to bring energy prices down, including by bringing gas prices down, by boosting domestic supply of gas into the national electricity market, so we have made various announcements including in the lead up to the election to that effect and we continue to focus on implementing our agenda in relation to these matters. We have always said that any non-Government Senator that wants to meet with the Government to explain their views and put forward issues of concern to them, we are always prepared to meet. We are always prepared to discuss issues and where appropriate we are prepared to take good ideas and suggestions on board…interrupted
LAURA JAYES: But no deals per say?
MATHIAS CORMANN: There will be no special deals and there will be no horse-trading. What we are doing is we are engaging in good faith in open and positive and constructive conversations with those non-Government Senators who have sought that engagement. That is what we always do. But any decision has to be a decision on its own merit. Any decision has to be a decision on its own merit. In relation to income tax relief, it is in the national interest, it is in the interest of working Australians, the Australian people voted for it and we will be pressing ahead and we will be asking the Parliament to vote in support of the agenda that we took to the election and that the Australian people want to see legislated.
LAURA JAYES: When is a deal not a deal? If you are not committing to anything that Rex Patrick has put on the table, you are just listening politely?
MATHIAS CORMANN: We are working to persuade all non-Government Senators to support the plan that we took to the last election, which will help to build a stronger economy, which will help ensure that we can put more money into workers pockets and get more people into work by stimulating the economy. That is the conversation we are having. I am not going to provide a running commentary on all of the issues that are raised with us from time to time, but any judgements that the Government makes on any policy issues have to be judgements that stand on their own two feet.
LAURA JAYES: Just finally, Cory Bernardi has flagged that he might want to re-join the Liberal Party. Have you spoken to him? Would you welcome him back?
MATHIAS CORMANN: As you know, I speak to all non-Government Senators that are prepared to engage with us in relation to a whole range of matters. I speak to Cory from time to time, of course. In relation to the reports this morning, that is really a matter for the Liberal Party in South Australia.
LAURA JAYES: It was reports, he said it on Sky News yesterday. Would you welcome him back, would you like to see him back in the ranks, it does not matter to you?
MATHIAS CORMANN: I always like to see additional members in the Senate join the Liberal National team, of course.
LAURA JAYES: Okay, we will see where that ends up. Mathias Cormann thank you for your time.
MATHIAS CORMANN: Always good to talk to you.