Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Friday, 2 October 2020
QUESTION: Minister, how much will it cost to adopt all of the recommendations that you have accepted from the aged care report.
MATHIAS CORMANN: We have committed more than $1.6 billion in additional resources to aged care since the beginning of the COVID crisis. That builds on a substantial record of additional resources in previous Budgets and Budget updates. We have immediately committed a further $40 million in relation to various measures. We have accepted all of the six recommendations. Implementation of four out of the six recommendations is substantially underway. But there will be more to say about all this in the Budget next week.
QUESTION: The Royal Commission found that elements of the Government's actions were insufficient. Are you sorry?
MATHIAS CORMANN: Of course I am sorry. This was not a perfect situation, though. We were dealing with a rapidly-evolving pandemic. The reason we have a Royal Commission into the aged care sector is because the Prime Minister judged that that was warranted to ensure that there could be a significant improvement in the way all of these relevant issues are dealt with and how matters are run, in that very important sector. But with the benefit of hindsight, you always ever review these sorts of events with the benefit of hindsight and not while you are actually in the process of making judgements.
QUESTION: On the Budget there's been some speculation about foreign aid. Will there be cuts to foreign aid?
MATHIAS CORMANN: I will commend the Budget to you next week.
QUESTION: Will you be disappointed if there were cuts to foreign aid?
MATHIAS CORMANN: I am not a commentator. I am happy to explain the Budget to you next week. I will leave the commentary to you.
QUESTION: The business tax concessions announced today, how many jobs would that save?
MATHIAS CORMANN: It is one of a suite of measures. We are lifting the small business threshold for relevant tax purposes from $10 million to $50 million. So businesses with a turnover of up to $50 million will be able to benefit from about 10 various small business tax concessions. That will provide benefits to about 20,000 additional businesses, employing more than 1.5 million Australians before this crisis. So this is one of a suite of measures that is designed to help save and restore and create as many new jobs as possible. We will be putting some more numbers on these things next week.
QUESTION: You said the Budget aims to create jobs. How many jobs can we expect to see created in the next year?
MATHIAS CORMANN: We went into this crisis in a comparatively strong position. Our economy was growing, employment was growing, the unemployment rate was falling. We had created more than 1.5 million new during our period in Government. We want to restore all of the jobs that have been lost. We want to create as many new jobs as possible. In terms of the specifics, I will leave that to the Treasurer on Budget night.
QUESTION: Mathias, you have suggested I think that WA may be in breach of Section 92 of The Constitution over some of its border constraints. I just note that the Commonwealth did pull out of its High Court action against WA. Is this grounds for the Commonwealth to reconsider recontesting that in the High Court?
MATHIAS CORMANN: No, that is not the point that I was making this morning. The Premier of Western Australia yesterday, I believe for the first time, rather than to pursue a public health argument, essentially pursued an economic State protectionist argument in favour of continued State border closures. He was arguing that West Australians, who enjoy certain rights as Australian citizens under our Constitution, that West Australians somehow should be prevented from spending their money in South Australia or the Northern Territory for State protectionist reasons rather than public health reasons. No doubt that is because there is no public health reason that is apparent to me on why West Australians should be prevented from engaging freely with South Australia and the Northern Territory. Because South Australia and the Northern Territory have been in a better position when it comes to COVID-19 than Western Australia for some time. They have had zero locally-acquired community transmission for months. They are both, and I think in the case of the Northern Territory, have for a very long time, been at zero active cases for many months. Western Australia, is not at zero active cases. Admittedly, these are cases that came from overseas and are appropriately detected in quarantine, but that is the same for South Australia too. All I am saying is Section 92 of the Constitution is pretty explicit. It is the core foundation of our Federation of the Commonwealth of Australia. That is, that trade and movement of people across State borders must be absolutely free. These are the words in Section 92 of the Constitution – absolutely free. If the Premier is now saying that he is no longer seeking to keep hard border closures in place because of public health grounds but, rather, because he wants to prevent West Australians from exercising their rights and their freedoms to spend their money freely in jurisdictions that are entirely COVID-safe, then I think he has to explain how that is consistent with the protections that all Australians enjoy under our Constitution.
QUESTION: On the pension, will there be more merit in increasing the rate or another one-off cash payment for pensioners?
MATHIAS CORMANN: The Budget is on Tuesday.
QUESTION: Are you aware of Western Australians being locked out of their own State, and unable to get back in there?
MATHIAS CORMANN: Yes. I have had representations from people in recent times who have loved ones that are stuck interstate. Families are being inconvenienced. People are not able to visit loved ones in South Australia, the Northern Territory. People interstate are not able to return home. I am aware of quite a number of people stuck interstate. Again, if there is a public health reason for it, that can be justified. But when there is no public health reason, then the usual freedoms that we enjoy as Australians should prevail. That is why we have an Australian Constitution. When the states came together to form the Commonwealth of Australia, one of the core provisions was there should be no borders between States. I am supportive and understanding of the public health argument that has previously been prosecuted, but if there is no longer a public health reason then we should not substitute public health reasons with State protectionism as a reason to keep borders in place.
QUESTION: The comfortably below six per cent employment threshold for the Budget strategy, it has been interpreted that it is when Budget repair would begin. You have made a slightly more subtle, more nuanced point. Can you just explain that?
MATHIAS CORMANN: It is not a subtle nuanced point at all. Economic recovery, jobs recovery, increased employment, reduced unemployment, in itself is a significant component of structural Budget repair. If the economy recovers and more Australians are employed, more Australians pay income tax and the revenue of Government improves. As more Australians are employed and fewer Australians are on income support through the welfare system, then less is spent on that welfare support. So the economic and jobs recovery, which is our first priority, in itself is an important part of the structural Budget repair strategy. But what we have said is that we would not seek in the short term to repair the Budget by either increasing the tax burden on the economy or by pursuing excessive austerity measures. Over time, as the economy recovers and as jobs recover and the unemployment rate comes down again, we will need to continue to strengthen our Budget repair effort by controlling expenditure growth, appropriately controlling expenditure growth. That has been a proven method in the past. I am confident that that can work in the future.
QUESTION: Why not then reduce the overall corporate tax rate?
MATHIAS CORMANN: We are very focused on providing incentives and confidence to business to invest in their future growth and success, because we know that growing businesses will hire more Australians. Nine out of ten jobs are generated by private sector businesses. So we are very aware and very conscious of the need to provide incentives and confidence to business to invest in their future growth and success. What specific measures will achieve that will be reflected in the Budget next week.
QUESTION: We still don’t know the migration mix. That will come out as part of the Budget process. A couple of questions, how important will migration be to the economic recovery? And secondly what do you say to people who see migration as a threat to Australians getting jobs in this recession?
MATHIAS CORMANN: For obvious reasons, migration levels are down. There are severe restrictions on the movement of people internationally. But from an Australian point of view, looking back, a significant part of our strength as a nation, a significant part of our economic strength, is the contribution of generations of migrants to our country. The key always is to attract those talented people from all corners of the world that come here to help make our great country even better. I am sure that that will continue to be the case into the future.