Senator the Hon. Mathias Cormann
Minister for Finance
Special Minister of State
Leader of the Government in the Senate
Senator for Western Australia
Date: Friday, 19 July 2019
KIERAN GILBERT: Let’s get some reaction to that story with the Finance Minister, Leader of the Government in the Senate, Mathias Cormann. Jacinda Ardern meeting Prime Minister Morrison the first time since your re-election win, the Coalition’s re-election win. But there is that thorny issue isn’t there about deportations. She describes it as corrosive. Given they are such a close ally and friend of Australia, really cousins as the Prime Minister put it, why not at least compromise?
MATHIAS CORMANN: Our relationship with New Zealand is a close and friendly relationship. It is an incredibly friendly relationship. But our job as the Australian Government is to keep the Australian community safe. If there are foreign nationals who commit criminal acts here in Australia and pose a threat to the health and the safety of Australians then we have a responsibility to take action. Anyone who is here as a foreign national, if they breach their visa conditions, then the Government preserves the right to consider any such visa for cancellation. That is what we have been doing.
KIERAN GILBERT: But can you understand Prime Minister Ardern’s concern here, where the Government is deporting some individuals on occasion with next to no links with New Zealand any more. They might have left when they were six months old.
MATHIAS CORMANN: I am not sure what you are suggesting there. Either someone is an Australian citizen or they are not. If someone is a foreign national who is subject to visa conditions, then somebody in those circumstances who commits serious criminal offences submits themselves to relevant judgement where those visa conditions are no longer met.
KIERAN GILBERT: So no compromise on that with New Zealand?
MATHIAS CORMANN: Our job as the Australian Government is to make judgements to keep the Australian community safe. Foreign nationals who commit serious criminal offences in Australia are at risk of deportation in appropriate circumstances. That is something that we believe is an important tool for the Australian Government to help ensure that we can keep the Australian community safe.
KIERAN GILBERT: The Government, the Prime Minister and the New Zealand leader will be meeting today discussing the Pacific as well and our approach to that. Do you think Australia and New Zealand are on the same page when it comes to the Pacific? I guess the key question I am thinking about is climate change, because for Pacific nations they see it as an existential threat. Jacinda Ardern is very strong on that issue. Does your Government step up to the plate as well?
MATHIAS CORMANN: Our position in relation to climate change is well understood. We are committed to effective action on climate change. We are on track to meet and exceed our emissions reduction targets for 2020 as agreed to in Kyoto. We have a plan to meet our emissions reduction target for 2030, which was agreed to in Paris. Our position has been consistent and very clear for the last six years. That is what we will continue to pursue.
KIERAN GILBERT: We will get to the APRA issue specifically in a moment, but it has prompted a discussion about the broader implementation of the Hayne Commission, the Royal Commission’s recommendations. Will the legislation necessary for the remaining Hayne recommendations be passed this year?
MATHIAS CORMANN: We are continuing to work to implement all of the recommendations which the Government has endorsed when the Hayne Royal Commission report was delivered. Some recommendations appropriately required some further consultation to ensure that the effect was as intended and that there were no unintended consequences in the way these recommendations were pursued. The Government is absolutely committed to continue to work through the body of work that was flagged when those recommendations were released.
KIERAN GILBERT: Is it true though that some will be delayed until next year? That seems quite a wait after the recommendations were handed down. Why hasn’t the Government got this done sooner, at least in terms of the Parliamentary timetable for the rest of this year?
MATHIAS CORMANN: We are working through the remaining issues as swiftly as possible. But these are areas where you need to ensure you get all of the judgements right. There is a level of consultation involved to ensure that we avoid any unintended, undesirable consequences in terms of some of the ways forward. It is a matter of going through proper process. But I can assure you that we are going through those processes as swiftly as possible.
KIERAN GILBERT: We have some breaking news, the NAB has announced the Royal Bank of Scotland boss Ross McEwan is the next CEO. Have you got any reaction to that? And I guess as well this is the fallout of one of the big banks which handled the Royal Commission so terribly really in terms of their testimony before Commissioner Hayne.
MATHIAS CORMANN: I congratulate him. I wish him well. There is a body of work to be done for him as he steps up to lead one of the major banks here in Australia. We wish him all the very best in that very important endeavour.
KIERAN GILBERT: He comes under the prudential regulator as all the banks do. Do you think that APRA gets it when it comes to the Samuel report, the need to change culture? Some of the messages we have heard from the Chairman seem to be pushing back against some of the key findings.
MATHIAS CORMANN: The capability review that has taken place has found that APRA is a very impressive and forceful regulator. That is important. It has also identified a whole series of areas for further improvement. There are about 24 recommendations, 19 of which are directed at APRA on how APRA could become an even better organisation. That is appropriate housekeeping from time to time, to go through those self-assessment and review processes. APRA has already indicated that it will support those 19 recommendations that are directed at them. The Government is going to take action in relation to all five recommendations that are directed at the Government.
KIERAN GILBERT: In terms of APRA though, as an organisation, do you think that the leadership recognises the cultural shift they need to make? They seem very much focused on financial stability. That’s fine, they get a tick for that, certainly through the global financial crisis. But they have such a broad remit. Do they need to rethink their approach to their duties here?
MATHIAS CORMANN: There has been a comprehensive review now. The comprehensive review found that APRA is a very impressive organisation but that there are areas for improvement. APRA has positively responded to those 19 recommendations identifying areas for improvement that are necessary. The Government will support APRA in its efforts. The Government will take action in relation to all of those recommendations that are directed at the Government. This is a matter of making sure that we make a strong organisation even better. That is normal standard procedure, to take stock from time to time, to assess where things are at, the areas of strength, the areas of further improvement and to take action as appropriate. That is what APRA will be doing. That is what we will be doing.
KIERAN GILBERT: We have seen the discussion continue this week in terms of the broader economy and who is pulling their weight on infrastructure. The Government is adamant with your $100 billion pipeline of infrastructure investment that you are getting enough done in this sense. How far off do you think the broader economy is in terms of the States’ contribution to where the RBA Governor wants it?
MATHIAS CORMANN: The Government, when we put the Budget together on 2 April, had the same information in front of us that the RBA has been assessing. Not only did we put forward another $158 billion worth of income tax relief, taking income tax relief overall in two financial years to more than $300 billion. We also boosted our federal infrastructure investment pipeline to take it up to $100 billion over a 10 year period. That funding is available. We do work in partnership with the States in order to ensure that funding is rolled out as swiftly as possible. We are always keen to work with our colleagues in State and Territory governments to ensure that investment is rolled out as swiftly as possible. There is $100 billion worth of investment which is going to roll out, which is very significant. About half of that is over the forward estimates period. It is a matter of getting on with it. That is certainly what we are focused on.
KIERAN GILBERT: So you are not protecting the surplus just for the vanity project as one Labor MP put it?
MATHIAS CORMANN: The Labor MP that you are referring to is Ed Husic. It is just incredibly reckless and irresponsible for him to refer to it as a vanity project. It is very important for us to ensure that the Australian Government can live within its means. It is very important to ensure that the funding for all of the essential services Australians rely on across health, education, welfare and infrastructure is funded on a sustainable basis over the medium and long term. That is why the Government is committed to get the Budget back into surplus. 2019-20 is our first surplus year in a very long time. But we can walk and chew gum at the same time. We are focused on our plan to build a stronger economy, to create more jobs. That is why, among other things, we have delivered substantial income tax relief to hard-working families. That is why we are pursuing an ambitious free trade agenda to help our exporting businesses get better access to markets around the world. That is why we are pursuing an ambitious infrastructure investment program. That is why we are pursuing reforms to bring down the cost of electricity. You name it. We are focused on making our economy stronger but we are also focused on ensuring that the funding for the essential services of Government is sustainable, is on a sustainable fiscal foundation and trajectory for the future. We make no apologies for that.
KIERAN GILBERT: And you speak about living within your means, just to backtrack a little bit, because it did remind me of one of the recommendations or findings of the Samuel report was that the funding cuts you made to APRA contributed in part to their failings. Does the Government take accountability for that?
MATHIAS CORMANN: We have actually boosted APRA funding by $150 million in our Budget on 2 April. The Government always reviews … interrupted
KIERAN GILBERT: So prior cuts were wrong?
MATHIAS CORMANN: We inherited a very difficult Budget situation when we came into Government. We made all the necessary judgements to ensure that organisations like APRA and others were appropriately resourced. We have provided additional funding at a number of Budgets and Budget updates. The Budget on 2 April provided $150 million in additional funding. All of these matters are always under review. But in the end we have to make judgements on what is affordable.
KIERAN GILBERT: Okay, and finally we have seen off the back of the deeming rate change a renewed push to have a look at Newstart and you have got people from the Business Council of Australia, economists, all the way through to the Council of Social Services and St Vincent de Paul, everyone basically saying it should be raised. Why doesn’t the Government look at this because there hasn’t been an increase in real terms for 25 years?
MATHIAS CORMANN: Firstly, Newstart allowance is increased twice a year, in March and in September. Newstart allowance is a transitional payment for Australians looking to get back into work. What we are focused on is to get more and more Australians back into work. We have been able to create more than 1.3 million new jobs in the economy. The best form of welfare is a job. The Newstart allowance … interrupted
KIERAN GILBERT: You also need to be able to get dressed and equip yourself and feed yourself in order to get a job. Is that enough?
MATHIAS CORMANN: Indeed. Newstart allowance is a transitional payment. Nearly all of the Newstart recipients also receive other forms of welfare support. It is generally not their only form of welfare support. Our focus is on making sure those on Newstart can get back into the paid workforce as soon as possible. That is what we will continue to do.
KIERAN GILBERT: It is a nice aspiration, but only 20 per cent of Newstart recipients are on it for less than three months.
MATHIAS CORMANN: It is not just a nice aspiration. It is our absolute mission to ensure that … interrupted
KIERAN GILBERT: But it is not a reality…
MATHIAS CORMANN: More than 1.3 million new jobs. When we came into Government in 2013 the unemployment rate was rising rapidly. Since that time we have been able to bring that back down and get more and more people into jobs. The employment participation rate is at record levels. That is what we are focusing on. As I say, Newstart allowance does get increased twice a year. It is not the only payment that most recipients of Newstart receive from the Government. These are matters of making sure that we keep things affordable within the broader Budget context.
KIERAN GILBERT: Finance Minister, we will see you next week at Parliament. Appreciate it.
MATHIAS CORMANN: Always good to talk to you.