Senator the Hon Mathias Cormann

ELLEN FANNING: More than 70 Government Agencies will be abolished or merged in the Budget and a $7.50 co-payment for visits, visiting hospital emergency departments is also on the cards. On the upside the Treasurer says there will also be more than $40 billion in Federal money over six years for the biggest roads funding package in Australian history. In a moment, the Shadow Infrastructure Minister, Anthony Albanese, but first, the Finance Minister, Mathias Cormann who is speaking with our political editor, Alison Carabine in Parliament House.

ALISON CARABINE: Mathias Cormann, good morning.

MATHIAS CORMANN: Good to be here.

ALISON CARABINE: Minister we know that there will be a co-payment to visit the GP in the Budget but will it also include a $7.50 charge for visits to the hospital emergency departments?

MATHIAS CORMANN: Look I will leave it to the Treasurer Joe Hockey to deliver the Budget tomorrow night. However, what we have focused on in this Budget is making sure that our world class hospital system, our world class health care system, continues to be sustainable into the future, continues to provide affordable access to high quality healthcare for patients and continues to be affordable for taxpayers.

ALISON CARABINE: So you are not ruling out a co-payment for casualty ward visits?

MATHIAS CORMANN: I will leave it to the Treasurer Joe Hockey to provide the detail in the Budget tomorrow night. But just to say again, our focus very much has been on building an even stronger health system, to make sure that the world class health system that we expect here in Australia continues to be affordable and sustainable into the future for our children and grandchildren.

ALISON CARABINE: But if there is a co-payment to visit a bulk-billing GP, won’t there have to be a matching charge for emergency departments to stop those casualty wards getting clogged up?

MATHIAS CORMANN: You can rest assured that whatever changes we have made in the Budget we thought through their implications very carefully and whatever secondary consequences that needed to be managed, will be very carefully managed.

ALISON CARABINE: And who would decide who would pay that co-payment in an emergency department? Would it be doctors and nurses?

MATHIAS CORMANN: We are getting way ahead of ourselves now. I’ll let the Treasurer Joe Hockey deliver the Budget tomorrow and we will be able to have these sorts of conversations for the next few weeks and months.

ALISON CARABINE: Minister, the Budget will include the abolition or merger of up to 70 Government Agencies. We know that. How small do you actually want government to be in this country?

MATHIAS CORMANN: Well government has become way too big and way too wasteful under the previous government. When we came into government we were told by Finance that there were nearly 1,000 different individual government bodies. There was a lot of waste, a lot of duplication. Our focus has been on making sure that government services and government administration is as efficient, as effective and as accountable as possible and that taxpayers aren’t asked to pay for things they shouldn’t be asked to pay for. So yes there will be a significant effort in this Budget as a second phase in our effort to reduce the size of government, which will be followed by further efforts down the track. Really the purpose is to make sure that government administration is as efficient and as cost-effective as possible.

ALISON CARABINE: How many more agencies could be abolished or merged down the track in your third phase of rationalisation?

MATHIAS CORMANN: We are working through these things very carefully and methodically. We are not giving ourselves a blanket rule in terms of a number, but we are looking at very carefully are the functions that are being performed, how they compare with functions being performed by other agencies and where it makes sense to merge various bodies into one or where it makes sense to ask the private sector to perform certain functions currently supplied by the Government sector then we will make those decisions in an orderly fashion.

ALISON CARABINE: Now some of the agencies to be abolished outright include Labor’s Australian Renewable Energy Agency, also the National Water Commission. Is this just about saving money or are these cuts in some part ideologically driven?

MATHIAS CORMANN: Not at all. This is about making sure that government is as efficient and as effective as possible. There is a lot of overlap with existing departments of government, whether it be the Department of the Environment when it comes to renewable energy or indeed the Department of Industry which has certain responsibilities in this area as well. There have been too many agencies responsible for the same area of Government. This leads to blurred lines of accountability, it leads to uncoordinated action and we think that by doing what we are proposing to do that we can make government decision making and government service delivery more effective.

ALISON CARABINE: It must also lead to job losses. How many public servants will lose their jobs in this Budget? Will it be around the 16,000 mark?

MATHIAS CORMANN: We do think that we can provide the services of government, the front line services of government in a way that is more efficient...interrupted

ALISON CARABINE: With fewer people, how many fewer people? 

MATHIAS CORMANN: All will be revealed in the Budget. There will be a further reduction in the size of the public service over the forward estimates, which comes on top of some of the efficiencies which were imposed by the previous government in their dying days before the last election.

ALISON CARABINE: Mathias Cormann, on the roads package, that’s another significant element of the Budget, $40 billion over six years for roads according to the Treasurer from his interview yesterday. But that is not all new money is it? Nothing like it?

MATHIAS CORMANN: Well what people will see in the Budget tomorrow is a significant boost to the investment in infrastructure...interrupted

ALISON CARABINE: How much is new money?

MATHIAS CORMANN: You will have to wait for the detail in the Budget. It will be a significant boost to the infrastructure investment and it will be a focus on productivity enhancing infrastructure as part of our Economic Action Strategy to build a stronger, more prosperous economy and create more jobs. But the important thing in the way that we have structured our infrastructure investment is that it will leverage significant additional investment from the States and Territories and indeed from the private sector so the actual investment in infrastructure across Australia will be much more significant. 

ALISON CARABINE: The Coalition did promise before the election that you fund West Connex in Sydney, the East West Link in Melbourne, the Toowoomba Range Crossing in Queensland, there may also be some road work around Badgerys Creek. But apart from those major roads, can you name one single new road the Coalition will be funding with new money over the next six years?

MATHIAS CORMANN: Well the ones that you have just mentioned are very significant investments that we committed to in the lead up to the last election. Indeed in relation to significant road infrastructure investments across Australia we have accelerated or increased the level of funding available to those projects in order to ensure that they are delivered more quickly than they would have been under Labor. But in the Budget you will see some significant additional investments in all States across Australia that will significantly lift our productivity and our economic growth into the future.

ALISON CARABINE: And will that money come from withdrawing funding from urban rail projects? Will you be shuffling the money that way?

MATHIAS CORMANN: You will have to wait and see where the money comes from. One thing that I might just point to though because we have made this point on the public record some time ago, we are engaged in a process of asset recycling. We have already announced that we would proceed with the sale of Medibank Private and we have said we would reinvest the proceeds from that sale into productivity enhancing infrastructure...interrupted

ALISON CARABINE: So some of that money could go to roads?

MATHIAS CORMANN: That is what we said we would do. What is emerging is, we will continue to go down this path of looking for opportunities to recycle the proceeds from the sale of existing assets to reinvest them into new assets which will help us build a stronger, more prosperous economy for the future. 

ALISON CARABINE: Minister, another revenue stream could come from indexing, reintroducing the twice a year indexation of petrol. That money, according to the Treasurer would be hypothecated to roads. But less than one quarter of the revenue currently raised from petrol taxes goes back to road works. So how much of the new revenue stream would actually be spent by the Coalition Government on roads? 

MATHIAS CORMANN: Well as the Treasurer said yesterday, if there is such a measure in the Budget to reintroduce indexation of the fuel excise then all of that money would be hypothecated...interrupted

ALISON CARABINE: Every cent, every dollar? Not less than one quarter as it currently is? 

MATHIAS CORMANN: All of the money from that measure would be hypothecated for investment in road infrastructure. Again, this is becoming a bit of a refrain, all of the detail will be revealed by the Treasurer tomorrow night.

ALISON CARABINE: And the true state of the Budget will be revealed tomorrow night as well. Is the Budget in as bad shape as the Government claims? Figures from your department on Friday show that this year’s deficit as at the end of March was just $24 billion. Now that’s a significant amount of money and it could grow in the final quarter. But it is hard to see it get anywhere near the $47 billion you forecast in your mid-year economic update. Are you overstating the problem facing the Budget to justify spending cuts?  

MATHIAS CORMANN: No we’re not. And you are mentioning the fiscal figure rather than the figure on a cash basis. The point that I would make here is that in 2007 Labor inherited a strong economy and a strong Budget, no Government net debt, a $20 billion surplus, money in the bank and in their first five Budgets they delivered $191 billion worth of deficits. We inherited $123 billion of projected deficits and debt heading for $667 billion...interrupted  

ALISON CARABINE: Yes but will the Budget deficit this year come in lower than $47 billion?

MATHIAS CORMANN: What we have worked very hard, very hard to achieve is to put the Budget back onto a believable path to surplus. That will be very obvious in the Budget. We have made sure that when people see the Budget, they can actually trust that we are back on track to a believable surplus.

ALISON CARABINE: Minister, thanks so much for your time.

MATHIAS CORMANN: Always good to be here.