Senator the Hon Mathias Cormann

JOURNALIST: Rolling into this Budget, the State Government had created a lot of Budget problems of its own as it sought to cushion the State from some hard decisions I think is fair to say and also to leave it into good shape running into a State election campaign so we racked up debt and a recurrent deficit, what tipped over the billion dollar mark, the State Government is now saying however that there is going to be pain and broken promises in this Budget and the people to blame aren't them but the Federal Government particularly Joe Hockey and the man we talk to now Mathias Cormann, Federal Finance Minister, welcome Minister.

MATHIAS CORMANN: Good morning.

JOURNALIST: Are you prepared to cop it sweet?

MATHIAS CORMANN: Look, Labor governments around Australia are notorious for blaming others for their own failings. Ever since Jay Weatherill became Premier in South Australia, the Budget deficit in South Australia has been blowing out – from $53 million in 2010/11 to over $1 billion as you have just mentioned in 2013/14. That was before we became the Government. Now if you compare Labor's last Budget at a federal level with our first Budget which we delivered about a month ago, South Australia is getting $1.5 billion more over the forward estimates than what they were able to expect this time last year.

JOURNALIST: Is the killer here though that once you get out of the forward estimates, what was locked in funding under a Federal Labor Government, the previous government, vanishes and that is a big problem for States like South Australia?

MATHIAS CORMANN: Again, the Budget that is going to be delivered today I suspect is going to be over the next four year period and over the next four year period the State Government in South Australia is going to be receiving $1.5 billion more in Federal funding than what they were able to expect this time last year. So there really are no excuses. Labor in South Australia has made a complete mess of the Budget. They have made a mess of the economy. South Australia right now has got stagnating growth, they have got the highest tax rates in the nation, they have presided over a situation since coming into government where there are now more people leaving South Australia than moving to South Australia. So it really is time for Labor to start to face up to its responsibilities rather than to try and blame everybody else for their own failings.

JOURNALIST: Well Tom Koutsantonis, the State Treasurer says that over the next four years, there will be a cut in what they were expecting to get from you of $898 million. That can't be right?

MATHIAS CORMANN: That is manifestly wrong. I mean I refer you to Labor's last Budget in Canberra. Wayne Swan's last Budget. If you look at the numbers in Wayne Swan's last Budget and if you look at the numbers in our first Budget, what you will see is that South Australia is getting $1.5 billion more over the forward estimates than what they were able to expect this time last year. That is just a matter of absolute fact.

JOURNALIST: It is coming back to the point that Matt made a few moments ago and that is after four years, you have signalled that there will major structural changes, there will be deep cuts in years five and six. Now that is beyond the forward estimates but you have signalled that there will be big cuts years five and six. Isn't it prudent to start to make changes now? You can't spend money if it is going to be unsustainable?

MATHIAS CORMANN: I completely reject that there is going to be deep cuts. What we have done is to ensure that the funding growth trajectory out of Canberra is sustainable, affordable and realistic into the future. The previous Labor Government here in Canberra, Julia Gillard and Kevin Rudd, made all sorts of promises, spending promises left, right and centre, including towards the States that were never properly funded. Everyone can make promises of what they will do in the period beyond the Budget forward estimates without actually showing where the money comes from. What we will be doing, we will continue to grow funding into South Australia strongly. If I can just look at for example school funding, Federal funding for schools in South Australia, there will be a 37 per cent increase for government schools over the next four years. There will be a 33 per cent increase in hospital funding to 2017/18. And when it comes to funding for roads across South Australia, we will be investing about $2 billion over the forward estimates which is $435 million more than in Labor's last Budget. So really, if the State Government in South Australia does what they have done all over the last four/five years, ever since Jay Weatherill became Premier, then really they only have themselves to blame for that growing deficit and the growing Budget mess that they are inflicting on the South Australian State.

JOURNALIST: The Treasurer according to The Australian today is going to have around $284 million of capital spending that he won't now spend on four hospitals which is just going to float around in the system and wait and see what happens with your Federal Budget as it goes into the Senate. How much of your Budget do you think will survive the Senate process?

MATHIAS CORMANN: Well so far, every single Budget measure that we have put to the Senate has been adopted by the Senate. You would be aware that when we started talking about the need to have a Temporary Budget Repair Levy, in order to spread the Budget repair effort fairly and equitably across the community, Labor's initial response was that they would oppose it. Well I am pleased to report that on Monday, Labor quietly voted in support of it.

JOURNALIST: Well that is the easy one, taxing the rich.

MATHIAS CORMANN: You say it is the easy one. The point I am making though was that Labor's initial response was to oppose it. Now let's see what happens in the Senate. But as far as we are concerned we delivered the Federal Budget that Australia needed if we want to protect our living standards for the future and if we want to build prosperity and opportunity for everyone. So we will be putting that Budget to the Senate in full and we will go through these measures one by one.

JOURNALIST: We are talking to Federal Finance Minister Mathias Cormann just a couple of hours before the State Budget is delivered. Mathias Cormann you say that the former Federal Labor Government left you with all sorts of unfunded promises. I am thinking of the National Disability Insurance Scheme. Are the finances for that an absolute nightmare?

MATHIAS CORMANN: What Labor did was follow a political timetable instead of following a methodical, properly structured timetable to ensure maximum benefit and most efficient delivery of that important program. Now we are working to deliver the NDIS because we do recognise that it is an important program. We are working on delivering it in the most efficient, cost effective and well targeted way and I am pleased to report that Senator Fifield who has got responsibility for this as part of our Government has made some great progress working with stakeholders in putting it on a sustainable, well workable track.

JOURNALIST: We have been told that the original agreement with the States was to fund up to 5,000 spots. That's blown some say to around 10,000 and from July 1, seven to 13 year olds are meant to come on stream in this pile up stage in South Australia and parents can't get any information, the NDIS can't give them any information, they are told that there is a gridlock.

MATHIAS CORMANN: The previous Federal Labor Government didn't do their homework, they just wanted to go out and make announcements without having doted all the 'i's and crossed all the 't's. We are going through that process now...interrupted

JOURNALIST: Write a letter for July 1 for seven to 13 year olds?

MATHIAS CORMANN: The Australian described that what we were forced to do was like having to build a plane in flight. Senator Fifield is doing that at the moment and he will probably be best equipped to provide specific answers in terms of where the program is at.

JOURNALIST: Jay Weatherill has probably, fair to say boasted that he got a great deal out of the Gillard/Rudd Government over the NDIS and if there is a blow out, the Federal Government will have to cover it, not South Australia. Our commitments won't increase.

MATHIAS CORMANN: The first point is that the Federal Government is committed to the effective roll out of the NDIS and we will continue to work our way through that systematically. Now in terms of whether Jay Weatherill has been suggesting that he is getting great deals out of the Federal Government, well the previous Federal Labor Government kept making promises, spending money that they didn't have. And of course they were quite happy to let other people worry about how to actually deliver on the unfunded spending promises they made. But when it comes to the NDIS, we are fully committed to it and we will deliver it.

JOURNALIST: Minister, thank you for talking to 891 Breakfast.

MATHIAS CORMANN: Always good to talk to you.