Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Saturday, 18 January 2020
MATHIAS CORMANN: Today confusion reigns about Labor’s tax on retirees.
Labor’s tax attack on older Australians was comprehensively rejected by the Australian people at the last election. Anthony Albanese should do the right thing by older Australians and scrap Labor’s retiree tax.
It is a tax that would have harmed many older Australians. In fact it is a tax which would have harmed low income older Australians, while actually not doing anything at all at the very high income end. People at the very high income end would have been completely unaffected by Labor’s tax on retirees. Whereas lower income older Australians would have been those most harmed by Labor’s tax on retirees.
Clearly some Labor people were briefing out today that Labor would scrap Labor’s retiree tax. Today Anthony Albanese has put it back on life support. Anthony Albanese should do the right thing. He should do the right thing by low income older Australians. He should make very clear that Labor will scrap their retiree tax. It is an ill though out, harmful, unfair tax which the Australian people comprehensively rejected. He should stop playing games and just get on with it.
Happy to take questions.
QUESTION: Were you surprised to see Labor has officially dumped its franking credits policy?
MATHIAS CORMANN: This morning everyone was led to believe that Labor had dumped its tax on retirees. It is a tax which would have harmed many, many low income older Australians. It would not have had any impact on high, very high income older Australians. It was ill thought out. It was harmful. It was unfair. I think that many Australians would have been relieved to see this morning that Labor was dumping their tax on retirees. But it turns out that later today Anthony Albanese actually put Labor’s ill thought out, unfair, harmful, retiree tax back on life support. Anthony Albanese needs to do the right thing by low income older Australians in particular and scrap this ill thought out Labor attack on low income older Australians. He should not be holding on to this ill thought out, harmful, unfair Bill Shorten policy. He clearly is showing that he cannot do what is right by older Australians.
QUESTION: In your opinion, what were the problems with that policy?
MATHIAS CORMANN: It is a policy that would have harmed low income older Australians in particular. Let’s just remind ourselves what franking credits are all about. Franking credits are there to avoid double taxation. Labor’s policy would have meant that low income company shareholders would have been hit with a tax that high income shareholders would have been able to fully deduct. It was completely unfair. It was ill thought out. It was rejected by the Australian people at the last election, for good reason. If Anthony Albanese cared about the future opportunities and aspirations of older Australians who have worked hard all their lives, he would have come out today and confirmed that Labor was scrapping what was always a bad, ill thought out, harmful, unfair policy.
QUESTION: Do you think they’ll, or do you suspect that they’ll bring a version of that policy in if they do win government? Or they will try…
MATHIAS CORMANN: Who knows what they will do. Confusion reigns today. Clearly somebody was briefing out that Labor would scrap their tax on retirees, only to be corrected by Anthony Albanese later in the day. Anthony Albanese put Bill Shorten’s tax attack on retirees back on life support. That is very bad news for hardworking Australians around Australia, because people around Australia clearly understood that Labor’s tax attack on retirees was bad for them, was bad for the economy, was bad for Australia, which is why they voted against it comprehensively at the last election.
QUESTION: On another issue, interest rates, do you think we need to put interest rate cuts on hold? And if so why?
MATHIAS CORMANN: Monetary policy is entirely a matter for the Reserve Bank. The Reserve Bank makes these decisions independently. That is a very important feature of our system. I am confident that the Reserve Bank will continue to review all of the economic data, all of the economic information and make decisions as appropriate. We back their independence.
QUESTION: On bushfires, what are some of the challenges that the economy is facing now, because of the widespread disaster?
MATHIAS CORMANN: It is too early to quantify the economic impact of those bushfires. Clearly there will be an impact. We will be reviewing the economic data as it comes through in coming weeks and months. As we are working to prepare the Budget, the 2020-21 Budget, we will be assessing all of that data and make judgements accordingly as we put the next Budget together.
QUESTION: On cuts to elite funding, why has money for elite sports been cut?
MATHIAS CORMANN: We always need to make judgements to prioritise the allocation of limited resources. These are judgements that have been made in order to ensure that there was as broad as possible a beneficial impact across Australia from the federal investment in sport.
QUESTION: Can I jump in on there sorry, Minister were you aware that Bridget McKenzie was running her own parallel grant selection process, and she was handing out the $100 million sports grants program?
MATHIAS CORMANN: Individual Ministers run their responsibilities. That is a matter that Minister McKenzie has addressed comprehensively. I am aware that Minister McKenzie reviewed the recommendations from the Auditor-General. Those recommendations will be taken on board into the future.
QUESTION: But were you personally aware that she was running her own process?
MATHIAS CORMANN: I was not involved in the process of allocating those grants. These are processes managed by individual Ministers. That is the usual way. Let’s just be very clear, all of the projects that received grants were eligible to receive those grants. As the Auditor General recognised, the intent of the program was absolutely achieved. This is quite different from grants programs that were run under the Labor administration where the Auditor General made quite harsher findings than that.
QUESTION: Do you support Ministers ignoring departmental advice on grants and aiming the money toward for their own political ends on marginal electorates?
MATHIAS CORMANN: I do not accept the premise of that question. Ministers make decisions. Governments are elected. The government of the day has certain responsibilities, acting on advice. But in the end it is the Government of the day which is accountable to the Australian people.
QUESTION: Do you think that money should have been redirected to elite sport funding?
MATHIAS CORMANN: Decisions that were made are there for all to see. We stand by those decisions. They have had a significantly beneficial impact in communities all around Australia. When you are dealing, in particular in a fiscally constrained environment, with limited resources and a huge number of potential projects able to be supported you need to prioritise. That is what we did.
QUESTION: Does Bridget McKenzie still have the support of the Party?
MATHIAS CORMANN: Bridget McKenzie is a great Minister who does a great job. Absolutely she has the support.
QUESTION: The AOC said funding has been slashed by 20 per cent over the past eight years. Coming into an Olympic year, how do you plan on financially supporting our athletes in future?
MATHIAS CORMANN: We will always make decisions on how we can stretch limited resources in the best possible way across all of the appropriate priorities. That’s what we will continue to do into the future.
QUESTION: Are you worried about the bushfires and what kind of impact it’s going to have on the economy?
MATHIAS CORMANN: It is too early to quantify the economic impact of the bushfires. Clearly, there will be an impact. We will be very closely monitoring the economic data and information that comes through over the next few weeks and months as we are putting the 2020-21 Budget together. We will make judgements as appropriate at that time.
QUESTION: Just how will that impact do you think on consumer confidence, the bushfires?
MATHIAS CORMANN: It is not a uniform impact right across Australia. The impact will be different in different parts of Australia. As I have just indicated, it is too early to quantify the impact. We will be monitoring the economic data as it comes through at a localised and national level over the next few weeks and months. We will make judgements accordingly.
QUESTION: Do you think another interest rate cut will assist in that?
MATHIAS CORMANN: As I have indicated earlier, monetary policy is a matter for the Reserve Bank. The Reserve Bank makes these decisions independently as they must. We will continue to make decisions on how we can best support impacted communities. The Prime Minister has led an unprecedented level of national support into bushfire impacted communities in recent weeks and months. We will continue to monitor the impact in specific regions, but also the impact nationally. We will make judgements on how we can best respond to that into the future.
QUESTION: Do you have any plans at the moment to stop the impact or damaging the economy, these bushfires?
MATHIAS CORMANN: We have put in place a significant number of measures to support local businesses, to support farmers and support communities that are impacted by the bushfires. We will continue to build on those measures that have already been announced. The Prime Minster announced a $2 billion bushfire recovery fund. About $400 million worth of measures out of that have been announced already. There are other measures that will be announced in the next few weeks and months. In the context of the Budget, we will continue to make judgements on what sort of further measures need to be put in place to support those communities directly impacted by the bushfires, but to also support those sectors of the national economy that have been impacted, like for example the tourism sector.
QUESTION: Sorry, Senator McKenzie again. What is the point of having published guidelines determine merits of grants recipients if the Minister is just going to ignore them?
MATHIAS CORMANN: I do not accept the premise of that question. There is an Auditor General’s report. The Minister is very aware of the recommendations in that report. The Auditor General recognised that the intent of the program was achieved and all of the grants that were allocated were eligible. In terms of the recommendations that were made by the Auditor General, I am confident that Minister McKenzie will take those recommendations on board.
QUESTION: If Brisbane were to win the Games in 2032, would more money be spent on the athletes?
MATHIAS CORMANN: That is in 2032. We are right now starting to put the 2020-21 Budget together. Every year when we put the Budget together, every year when we work on our half-yearly Budget update, we review all of the needs, all of the opportunities, all of the challenges, all of the economic data, all of the fiscal opportunities and we make judgements on how best to allocate limited resources to a whole variety of needs, opportunities and challenges. That is what we will continue to do into the future. If there is scope, then there will be judgements on what else can be afforded.
Thank you very much.