Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Tuesday, 6 October 2020
ELYSSE MORGAN: And it is the final Budget for Finance Minister Mathias Cormann, he joined me a short time ago. Mathias Cormann congratulations on a record-breaking final Budget, just not the record you would have been hoping for.
MATHIAS CORMANN: We wouldn't have expected this time last year to be delivering a Budget with deficits and debt of this size, but we all know why we are here.
ELYSSE MORGAN: Are you not worried at all that the Government will be withdrawing stimulus in the economy too fast?
MATHIAS CORMANN: Clearly not…interrupted
ELYSSE MORGAN: A lot could go wrong, particularly with the forecasts that are in this Budget.
MATHIAS CORMANN: We expect expenditure to reduce in real terms by 17.5 per cent in the 2021-22 financial year. But what we would expect to happen in the meantime is for the economy to continue to gradually recover, for Government revenue to increase.
ELYSSE MORGAN: A lot could go wrong here, you have got net debt around 44 per cent of GDP. Admittedly now that is manageable, but at what level of percentage of GDP should Australians start to get worried?
MATHIAS CORMANN: Look, it is what it is. We did not choose to be in this position...interrupted
ELYSSE MORGAN: No, of course not, of course you didn’t, I am just curious to know at what point do you think it might be a debt and deficit disaster?
MATHIAS CORMANN: It all depends on the context. The GFC was benign compared to what we are dealing with at the moment.
ELYSSE MORGAN: You are hoping that demand will drive business, businesses will pick up the incentives that you have got in this Budget and that will drive the economy and growth. What happens if a key plank of the demand, which is the tax cuts that have been brought forward, what happens if people don't spend those tax cuts?
MATHIAS CORMANN: There are many different aspects to this. It is very much geared to the lower and middle income end and the expectation is that households at that income level are more likely than not to spend. But to be honest, it is their choice. If they choose to save some or all of that money, that in itself will also improve their financial position, their personal financial position. It will improve their confidence for the future. I also would hasten to add, income tax relief for hard-working families, bringing that forward, is not the only measure in this Budget. We are providing very significant incentives to businesses.
ELYSSE MORGAN: The Treasurer pointed out tonight that women made up the majority of those who lost their jobs during the crisis. Why hasn't the Government put some more money towards childcare?
MATHIAS CORMANN: We are providing substantial resources into childcare. Childcare is a demand driven program and we provided interim crisis level support when demand in the...interrupted
ELYSSE MORGAN: And that has now ended. Why is there nothing new, why is there nothing new in this Budget?
MATHIAS CORMANN: …If I could answer one question, that would be really helpful. We provided crisis level support at a time when the demand for childcare dropped away because it undermined the business model of the childcare sector. We have now gone back to the proven method of providing taxpayer funded subsidies on a means tested basis.
ELYSSE MORGAN: Mathias Cormann, thank you very much for your time.
MATHIAS CORMANN: Always good to talk to you.