Transcripts → 2020


Doorstop – Mural Hall

Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia


Date: Friday, 24 July 2020

July Economic Update

QUESTION: You were just asked about how realistic the Government’s and Treasury’s assumptions are that Melbourne will be out of lock down by the middle of August. But one of the other assumptions that this announcement was made on yesterday was that all the State borders will be re-opened, that the other States will be back at stage four by mid-December. As a West Australian, how likely do you think this will be?

MATHIAS CORMANN: I am very clear in relation to Western Australia. While I fully understand that there is a need to have a fence around the localised outbreaks in Victoria and parts of New South Wales, the number of active cases in Queensland, the Northern Territory, South Australia and Tasmania is actually lower than what it is in Western Australia. In fact in South Australia and Tasmania when I last looked there were no active cases. There is virtually no community transmission in any of these States. There is absolutely no reason why Western Australia would not open its borders to those other jurisdictions. To keep those State borders closed does unnecessary harm to the West Australian and to the national economy. It does unnecessary harm to jobs in Western Australia and in other parts of Australia. We do hope that by that time, if not before, that State borders will be re-opened, which is entirely sensible in the circumstances. There is no public health reason at present, to keep borders closed between Western Australia and Queensland, the Northern Territory, South Australia and Tasmania.

QUESTION: That has been the Government’s position since the pandemic began. Is putting this is in the Treasury assumptions putting more pressure on the State Government in WA?

MATHIAS CORMANN: No, not at all. This update yesterday is based on the best available information at a point in time. It reflects the decisions that have been made up to a point. In relation to State border arrangements, these matters will be resolved through the High Court. A number of people have taken action in the High Court. The Commonwealth is intervening, as is appropriate and normal, in cases involving Constitutional law. I am confident that by that time one way or the other the issue will be resolved. Depending on what the outcome is, there will be further updates to the fiscal outlook at the appropriate time.

QUESTION: Senator, should Australians be bracing themselves for major spending cuts come October.

MATHIAS CORMANN: No. We have been very clear, we are going to focus on maximising the strength of the economic and jobs recovery on the other side. There is quite a way to go. We want to repair the Budget as soon as possible on the back of stronger economic growth, generating more revenue and helping to reduce expenditure on the back of a lower reliance on welfare payments for example. On the back of stronger growth, what you will get is stronger employment growth, more people paying income tax, more businesses paying tax on their profits. That is how we want to repair the Budget moving forward. We are not going to take either a major austerity approach in the short or even medium term. We are not going to impose higher tax burdens on the economy.

QUESTION: What about lower taxes? How are you going achieve that? Are you going to cut income tax?

MATHIAS CORMANN: I am not going to announce the Budget here for you today. That will be delivered on 6 October. What I would say is that intuitively we will always look for opportunities to provide tax incentives to business to encourage them to invest more in their future growth and success, because more successful businesses will generate more jobs, will hire more Australians. You have to remember, yes we want to keep as many jobs as possible, we want to restore as many jobs as possible, we want to create as many new jobs as possible. But these jobs do not grow on trees. They are created by successful, profitable businesses. That is why we need to do everything we can to ensure that businesses around Australia have the best possible opportunity to be successful and profitable into the future. 

QUESTION: Is now the right time to revisit the idea of a cut to the company tax rate?

MATHIAS CORMANN: I am not going to go into specific measures. But what I will say is that we will look very carefully at ways to provide the appropriate incentives to businesses to invest in their future growth and success, including by looking for opportunities through the tax system. We have already done quite a bit on this front, through things like the instant asset write off and accelerated depreciation arrangements. We will be looking forward to what more we can do in order to give businesses the confidence to invest more and to hire more Australians.

Thank you.