Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Wednesday, 7 October 2020
ROBBIE BUCK: Mathias Cormann is the Federal Finance Minister. Are you a Van Halen fan Mathias?
MATHIAS CORMANN: Of course! Who’s not?
ROBBIE BUCK: Ok, right answer. I hear that as you were walking into the Budget, or just pre-Budget, you said it was a little bit like attending your own funeral. Is that right?
MATHIAS CORMANN: No, not quite. In recent days, a lot of people have said nice and kind things about me and what people believe my contribution was in recent years and I said that that felt a bit like attending your own funeral. You should never be there when people say nice things about you like that in my view.
ROBBIE BUCK: This Budget obviously relies on a lot of what ifs and the biggest one is…interrupted
MATHIAS CORMANN: Every Budget does.
ROBBIE BUCK: Yeah, that is true, but this one especially because we are in the middle of a pandemic and the big what if here is if we get a vaccine. All these figures are really relying on the fact that we get one by the end of next year.
MATHIAS CORMANN: It is a Budget like every other Budget in the sense that we are providing Budget estimates. Budget estimates are based on the best available information and advice at a particular point in time. We are, as you say, in the context of a pandemic and the environment is more uncertain even than normal, but what are you suggesting? That we do not make decisions, because the information in front of us is not entirely perfect and not entirely certain? The truth is, of course we are making assumptions and we are publishing those assumptions openly and transparently and people can make judgements on what the implications of that would be. If a vaccine is there sooner, there will be a positive variation. If a vaccine is there later, there will be a negative variation. But based on the advice in front of us, we believe that the most realistic expectation at this point, based on what we know right now, is a vaccine available for all Australians by the end of next year.
WENDY HARMER: You are in some ways I guess Minister, you are hoping that Australian businesses will take a leap of faith to take on another staff, worker or an apprentice or go and spend and perhaps they are going to be looking at that before they are experiencing an increase in demand. What would you say to businesses personally who will be looking at the figures there and trying to make that decision?
MATHIAS CORMANN: We are doing a whole range of things in the Budget to give businesses confidence and encourage them and provide incentive for them to invest now in their future growth and success. The reason we are doing that is because we know that a growing business will hire more Australians. What we would say to businesses, the fundamentals in the Australian economy were strong before this crisis, they will be strong after this crisis. We continue to be the entrepreneurial, can do nation that we were before. We continue to be in the Asia Pacific where most of the global economic growth will be generated for decades to come. So all of the fundamentals are there for us to be successful again into the future, but we need to provide that trigger to encourage business to take that leap of faith now, as you say. That is why we are providing time limited, temporary, tax incentives that are there for a time limited period to encourage businesses to bring that investment forward now, rather than to wait for later.
ROBBIE BUCK: It is of course a huge amount of spending, the most that we’ve ever seen in Australia. We are looking at about $507 billion of spending because of the pandemic. It is a long way from the back in black statements that were being made and forecast of course just last year, we are looking at a $1.1 trillion debt ceiling that’s been announced by your Government. Of course it’s very different to what you were saying about Labor when you were in Opposition when they were spending a lot of stimulus following the GFC.
MATHIAS CORMANN: You cannot compare the global pandemic we are dealing with now with the GFC. The GFC, even at a global level, led to a contraction in the global economy of just 0.1 per cent. What we are dealing with now is a contraction that is…interrupted
ROBBIE BUCK: But the…
MATHIAS CORMANN: … If I may. What we are dealing with now is a contraction in the global economy that is 45 times larger, a 4.5 per cent contraction in the global economy. We are dealing with a real crisis, and of course it was incumbent on the Government, given a million job losses in one month in Australia, of course we had to step up…interrupted
ROBBIE BUCK: But Minister, surely the principle in the same. The spending that was spent back then was smaller than what you’re spending now too.
MATHIAS CORMANN: The spending back then was more wasteful, less targeted and it was structural. Whereas what we are doing now is, we are providing targeted, proportionate, temporary support, using existing programs. We are not rolling out a multi-billion dollar pink batts program, spending billions putting pink batts into people roofs and then having to spend billions of dollars taking those batts out again because they were putting roofs on fire. We are using existing programs, providing support directly to business, to working families, to those Australians who lost their jobs. Now providing incentives through the tax system and through the income support system to ensure that we maximise the strength of the economic recovery. There is no comparison either in terms of the strength of the negative impact on the economy between the GFC and this pandemic, and there is absolutely no comparison when it comes to the quality and the specific targeting of the fiscal support that is being provided now compared to previously.
WENDY HARMER: Let’s go to aged care. There has been some criticism that you could have spent more there, but you would, I guess saying that you’re waiting on the results the aged care Royal Commission. Have you got more money in the tank there when you look at those recommendations?
MATHIAS CORMANN: We will be providing more support in the context of the Royal Commission. But let me hasten to add that we are spending more money in this Budget on aged care too. $2.7 billion in additional funding for aged care in this Budget, which builds on significant funding boosts in previous Budgets. We understand there is significantly more work to be done and we will be receiving, as you say, a further report with further recommendations and if and as required, of course we will continue to step up.
ROBBIE BUCK: Minister if you’re a woman in Australia over 45, have you been handed a bit of a dud Budget here?
MATHIAS CORMANN: Not at all. What we are putting forward here is a Budget for all Australians. We are putting forward a Budget that will help get Australia out of the COVID recession, which will help support a million jobs, which will help ensure that Australians today and into the future have the best possible opportunity to get ahead. Younger Australians and women across Australia were disproportionally impacted by the economic impact of the COVID recession and younger Australians and women will be proportionately the greatest beneficiaries of the economic recovery moving forward.
ROBBIE BUCK: Alright, well okay. Finally, you of course are going to be walking away from this after many years in this role. What are you looking forward to in the future?
MATHIAS CORMANN: I have given this job my everything. I have put my heart and soul into this. I have loved this job and very much appreciated the opportunity to contribute. I will be making decisions at the appropriate time on what I might be able to do next.
ROBBIE BUCK:Thank you very much for your time this morning.
MATHIAS CORMANN: Always good to talk to you.