Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Wednesday, 7 October 2020
KATIE WOOLF: Joining me on the line is the Federal Finance Minister, Mathias Cormann. Good morning.
MATHIAS CORMANN: Good morning.
KATIE WOOLF: Now Minister COVID-19 has pushed the Budget deep into the red. In an effort to try and steer the economy forward, the Treasurer Josh Frydenberg, last night announced tax cuts and incentives to try to get Aussies into jobs and spending and, well, to get small business moving. How many jobs will be created for the Northern Territory?
MATHIAS CORMANN: Across Australia we expect that about a million jobs will be created through the Budget that we delivered yesterday. Clearly a proportion of that will take place in the Northern Territory. Now, Australians and Northern Territorians were hit very hard by the economic and jobs impact of the coronavirus pandemic. We know why we are in the position we are in, but the Budget last night is our plan to get Australia out of this COVID recession and back into in the strongest possible economic and jobs recovery moving forward.
KATIE WOOLF: Minister, do the measures announced overnight provide businesses with the confidence to invest and keep people employed?
MATHIAS CORMANN: We believe they do. In most parts of Australia, the economic recovery is already in full swing. In jurisdictions, including the Northern Territory, I might add, which has had zero active cases for a very long time. I cannot remember whether or when there has last been any locally acquired community transmission in the Northern Territory. In most parts of Australia the economic recovery is already in full swing and the plan that we outlined yesterday will help provide a significant boost to that. We are providing time-limited tax incentives. So we are really saying to business, if you are thinking of investing in your future growth and success, this is the time to do it because we are allowing you to immediately fully expense and fully deduct the entire value of your investment in the one financial year. That will, we believe, trigger a lot of investment all around Australia, including in the Northern Territory. A business that invests in its future growth and success, a growing business will hire more Australians, will hire more Territorians.
KATIE WOOLF: And we know that there is also going to be a JobMaker hiring credit. It is going to be paid for a year to businesses who hire an unemployed worker aged between 16 to 35 from the JobSeeker program. Why is this only eligible for young people?
MATHIAS CORMANN: The reason is that young people were particularly hard hit by the jobs impact of the coronavirus pandemic. The learnings out of previous recessions are that it is very dangerous for the economy as a whole if younger people remain disconnected from the labour market over an extended period. It is very, very important for us, through a measure like this to get young people back into the labour market, back into the workforce as soon as possible, so that they do not become entrenched on income support because that ultimately is bad for them and is bad for the economy as a whole. The reason here really is there was a disproportionately high impact on young Australians. We need to ensure that we do not have them entrenched on welfare support and that we get them back into the active economy as soon as possible because that is important all round.
KATIE WOOLF: Now, Jim Chalmers, the Opposition spokesman for Finance says that the Budget leaves many Aussies out in the cold, does it?
MATHIAS CORMANN: No. He is just making a political point. Here we are, we have been hit with a one in a hundred year global pandemic with serious implications for our Budget. We have been working hard to cushion the blow on the economy and on jobs in the initial phase. We have been working hard to help facilitate the recovery. The Budget yesterday is our plan to get Australia out of this COVID recession, to get all Australians back into a position where they have the best possible opportunity to get ahead. He is just politicking and that is very disappointing.
KATIE WOOLF: I guess there will be some people listening this morning though, who are aged over 35 and who are maybe on JobSeeker or JobKeeper and are concerned about what is going to happen for them after that ends. What would you say to those Territorians?
MATHIAS CORMANN: All of those Territorians will benefit from the strong economic and jobs recovery that this Budget will help facilitate. Older, more experienced Australians with a longer track record in the workforce prior to this crisis hitting are several steps ahead compared to younger Australians and they will find it comparatively much easier to get back into the labour market, because they are able to demonstrate a work history and a level of performance that lets them get back into the labour market as the opportunities come back on stream. All Australians of all ages will benefit from the strong economic and jobs recovery that will follow as a result of the many initiatives in the plan that the Treasurer released last night.
KATIE WOOLF: Now Minister locally, the Federal Opposition are saying that the Budget is going to rack up $1 trillion of debt but the Northern Territory still copping a $100 million cut to our GST payments which will make recovery more difficult in their words. What is in the Budget for the Northern Territory?
MATHIAS CORMANN: Firstly, I have to completely reject that proposition that has just been put. GST payments to the Northern Territory are estimated to be $2.7 billion in 2020-21. That is an increase of $221.6 million compared to what was in the 2019-20 Budget. Overall, total payments to the Northern Territory are increasing by $402 million. There is the increase of $66.5 million to the Northern Territory health and hospital system. There is $190 million or thereabouts of additional funding for infrastructure projects in the Northern Territory. There is significant funding for education and skills training across the Northern Territory. About 120,000 income taxpayers in the Northern Territory will receive tax relief for the 2020-21 financial year and there are many Territorians that will continue to receive JobKeeper and enhanced JobSeeker payments and, indeed, the cash flow boost measure for businesses is benefitting many small and medium sized businesses in the Northern Territory.
KATIE WOOLF: Minister, can I just go back to that point about GST. This is something that the Government here in the Territory raises quite often and it is often the blame for us going through financial difficulties or different issues within their own Budget. So just to make it really clear for our listeners this morning what you are saying is that there has not actually been a reduction of $100 million to our GST. You are saying that saying that is has been increased?
MATHIAS CORMANN: Let me be very explicit. The Northern Territory in 2020-21 is expected to receive $2.7 billion in GST payments and that is an increase, an increase of $221.6 million compared to 2019-20.
KATIE WOOLF: So why do you reckon the Northern Territory Government and also the Federal Opposition are saying that is still a $100 million cut? They are basically saying that we are going to receive that $2.7 billion in GST payments this financial year and that it is a reduction of about $100 million. Are they going on forward estimates, or?
MATHIAS CORMANN: You will have to ask them that, but clearly all around Australia, all jurisdictions are dealing with the impact of a one in one hundred year pandemic and that has had an impact on consumption all around Australia. It has had an impact on businesses and jobs all around Australia and we are all doing our best, but when it comes to GST payments to the Northern Territory let me repeat, there is an increase of $221.6 million in GST payments to the Northern Territory this year compared to last year.
KATIE WOOLF: Minister, let’s move along. I am keen to talk about gas. There was mention of gas and energy as well as manufacturing in the Budget overnight. What part does the Northern Territory have to play in the nation’s energy needs?
MATHIAS CORMANN: Clearly there is the opportunity for the increased exploration and production of gas out of the Northern Territory and we would like to see that the Northern Territory and all relevant jurisdictions around Australia play their part in boosting the supply of gas, so we can also boost the reliability and affordability of gas supplies, which will help to underpin the international competitiveness of our manufacturing sector in a way that is environmentally more efficient.
KATIE WOOLF: So are there any confirmations about additional gas pipelines from the Beetaloo Basin connecting to the rest of Australia or what exactly are the Federal Government’s plans in this space?
MATHIAS CORMANN: I encourage you to get my good friend and colleague Keith Pitt and perhaps Angus Taylor on your programme and they will be able to take you in some great detail through all of the various components of what we are planning in that regard.
KATIE WOOLF: We will have them on, we are very fortunate to have them on fairly regularly. Now I do want to talk about the fact that the Budget overnight obviously, a lot of the modelling seemed to be based on a vaccine. What happens if we don’t have a vaccine as soon as the Government is predicting?
MATHIAS CORMANN: When you say a lot of the modelling, you are right, we have made an assumption based on expert advice that there will be a vaccine by the end of 2021 in place for mass distribution. That is one of many, many, many assumptions in the Budget. In the end, Budget estimates are precisely that, they are estimates. They are based on the best available information. You never have 100 per cent certainty about information in front of you about what may or may not happen in the future, but we believe that right now based on what we know right now that is the most realistic assumption. Now if the information changes, if the vaccine is available sooner, there will be a positive variation in future Budget updates. If the vaccine ends up being available later, there will be a negative variation in the Budget updates. Bearing in mind that there a lot of assumptions, hundreds and thousands of different assumptions that are made across many different aspects and it is always swings and roundabouts and all of that gets reconciled in future Budget updates.
KATIE WOOLF: Now, Minister finally, there has been a lot of discussion in the Northern Territory about whether we will lose a seat in the lower house of parliament. No doubt you have heard Senator Malarndirri McCarthy and also Senator Sam McMahon pushing quite hard for the Northern Territory to retain those two seats. Do you support the Northern Territory keeping that representation?
MATHIAS CORMANN: Senator McMahon is a very strong advocate for the Northern Territory and there is a process currently underway both through the joint standing committee on electoral matters and through our party room to determine the most appropriate position moving forward. Of course in a general sense, the Northern Territory is a very large jurisdiction, which is in need of appropriate representation and all of that will be properly considered. You can be rest assured that Senator McMahon will be a very, very strong voice for the Territory to ensure that the right decision is made.
KATIE WOOLF: Well, we are really hoping so. Finance Minister, Mathias Cormann, we really appreciate your time this morning. I know it is an incredibly busy day for you. Thanks for having a chat with us.
MATHIAS CORMANN: Thank you so much. Talk soon.