Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Wednesday, 7 October 2020
FRED BOTICA: The Budget was released yesterday for 2020, and joining us to talk about it this morning, the Minister for Finance Mathias Cormann. Good morning Minister, thank you for your time today, we really appreciate it.
MATHIAS CORMANN: Good Morning.
LISA SHAW: Good morning, so Federal Budget 2020, a year like no other, I guess calls for a Budget like no other... interrupted
MATHIAS CORMANN: Doesn’t it ever.
LISA SHAW: …the key announcements that affect us and households, I think the one that is often the one people are most interested to know about is tax. What is in the tax side of things in this Budget?
MATHIAS CORMANN: Well, there is going to be income tax relief for more than 11 million Australians, including many working families across Western Australia. I would have thought that was very good news.
FRED BOTICA: And of course, jobs, jobs, jobs, which is very important of course.
MATHIAS CORMANN: Indeed, we are providing significant, time-limited tax incentives to businesses around Australia to encourage them to invest now, in their future growth and success. In the end, a growing business will hire more people, and hiring more people is what we need them to do.
FRED BOTICA: Minister, these figures for the lay person are pretty incredible to actually you know, comprehend. A Budget deficit of $213.7 billion for this year and next year, I mean those figures are quite amazing to deal with, aren’t they? For us?
MATHIAS CORMANN: Well, it is a high deficit, in an Australian context. It is 11 percent as a share of GDP, but it also drops off very quickly. In fact, it might be a bit specific, but I would encourage any Australian to go to Budget Paper One, page 3-30 and it shows a very comforting graph, that is that after a two or three year period, the payment trajectory goes back to what it was expected to be before the crisis. So the point here is, we are providing substantial support, but it is temporary support required in order to get the economy out of the COVID recession, but it will not be imposing ongoing structural burdens on the Budget or on future generations of Australians.
LISA SHAW: Right, another thing that certainly does support people is housing, and housing gets a pretty good look in in this Budget.
MATHIAS CORMANN: Public housing is mostly the responsibility of the States and that is where most of those decisions are made, but we are providing support across all sectors of the economy, including the construction sector and we are also extending the first home buyer loan scheme arrangements with another ten thousand places there.
FRED BOTICA: Well of course, as we keep saying it has been an unprecedented year and especially for people with jobs and for young people. For young workers now, what, there is support for about 450,000 people aged between 16 and 35 to get a job?
MATHIAS CORMANN: Yes, so what we are doing is any business other than a major bank is able to access the hiring credit and that is for any young Australian between 16 and 29 years of age, there is a $200 payment per week available to subsidise their wage. It goes down to $100 per week for people between 30 and 35. That is in recognition of the fact that young Australians were disproportionately impacted by the impact of this crisis.
LISA SHAW: Yeah, I was going to say I think it is the first Budget I have ever seen with the word pandemic in it. But quite a bit of money has been put aside in the health column to deal with the coronavirus pandemic.
MATHIAS CORMANN: Well yes, we have provided very significant additional resources to the health system all the way through. Our first priority was to protect people’s health when the virus hit and we put the resources in place that were required to ensure our health system could cope with the expected inflow of patients, which ended up being quite a bit less in most parts of Australia than expected. Except for Victoria I guess, but yes we are continuing to invest in the strength of our health system moving forward.
LISA SHAW: I was curious to read with the superannuation aspect, the ability to keep your superannuation fund when you shift employers effectively stapling the fund to the worker, which is great. But I didn’t - how is that different to way that super works now? Do not all businesses allow you to choose your own fund and take it with you?
MATHIAS CORMANN: Yes, if you exercise choice you can do that. The problem is that too many Australians don’t make active choices in relation to their superannuation and as they move from one job to another, they end up with unintended multiple accounts. Each of those accounts then imposes fees, and insurance premiums, and many of these fees are unnecessary and reduce the size of your retirement nest egg. So, what we are saying is we are actually, as a matter of course, stapling the first superfund when you go into a job to the individual worker and unless they make an active choice in relation to what they want their arrangement to be, that superfund will continue to follow them from job to job until such time as they choose otherwise.
LISA SHAW: That’s good because I’m guilty of what you said before, of not you know, keeping on top of that.
FRED BOTICA: We’ll end it on a good news note. Thank you for your time this morning Minister, we really appreciate it.
MATHIAS CORMANN: Always good to talk to you.