Senator the Hon Mathias Cormann

ROSS GREENWOOD: The Federal Government right now faces significant hurdles in trying to get through some of its key legislation in particular some of those Budget bills as we told you last night when we spoke with the Greens leader Christine Milne they have now confirmed that the Greens will not support an increase in the fuel excise. In other words the indexation that the Howard Government walked away from around 11 years ago. And indeed that money that was to be raised would have been going into new motor ways, new roads to improve infrastructure. Well the Greens the leader Christine Milne last night told us last night told us on this program that unless it goes into public transport, forget it, the deal's off. It wasn't about face because the Greens had indicated that they would support this measure. It seemed likely to get through both houses of our Parliament. Then in just the last few minutes, you have heard from the Palmer United Party leader Clive Palmer indicating that his party in some way, shape or form will not support the repeal of the carbon tax. He wants an Emissions Trading Scheme to come but only when other major trading partners, including China, the United States, South Korea, Japan, that they do the same thing and yet all of those countries are on their way to having their own Emissions Trading Scheme in some way, shape or form. So where does that leave the Budget? In fact, where does it leave politically as a nation? Let's go to our Finance Minister Mathias Cormann who is on the line right now. Many thanks for your time Mathias.

MATHIAS CORMANN: Good evening Ross and good evening to your listeners.

ROSS GREENWOOD: Let's start with Clive Palmer. I mean his statement this afternoon does that give any clarity to you as to what you face in the Senate in trying to get some of these key election promises through?

MATHIAS CORMANN: Clive Palmer confirmed tonight that he will support the abolition of the carbon tax and indeed that the Palmer United Party Senators will support the abolition of the carbon tax. Of course we welcome that. That is one of our key commitments that we took to the last election. It is a central part of our Economic Action Strategy to build a stronger, more prosperous economy and to provide some cost of living relief for families across Australia.

ROSS GREENWOOD: While that's true, he also has indicated that he does not believe that the Direct Action plan that your Government has proposed will work in any way shape or form and he has suggested that an Emissions Trading Scheme is the best way to do it. So how is this going to end up do you believe?

MATHIAS CORMANN: Well firstly as I have said, we welcome the fact that he will support and that his Senators will support the abolition of the carbon tax. That of course is long overdue. The Labor party should have long supported our mandate to get rid of the carbon tax. This will help reduce costs for the average household by about $550 a year. Now in relation to the Direct Action, we do believe that we need strong action on climate change. Our Direct Action policy will help reduce emissions in Australia in a way that actually achieves a net reduction in emissions for the world, instead of just shifting emissions to other parts of the world which is what the carbon tax in Australia does, because it helps overseas emitters and overseas businesses who are more emissions intensive to take market share away from us, which leads to increased emissions in other parts of the world and hence just a shifting of the problem. Our Direct Action policy will actually help us address the problem in a way that is proportionate.

ROSS GREENWOOD: Clive Palmer says he will not support that however, notwithstanding if that is the direction the Government wants to go, does it mean that it is that likely that the Emissions Trading Scheme that remember Kevin Rudd said he would introduce, is it likely that that is what Australia is going to end up with?

MATHIAS CORMANN: Today we welcome the fact that the Palmer United Party will support us in achieving our
mandate to repeal the carbon tax...interrupted

ROSS GREENWOOD: Okay. Is there going to be a difference in the ordinary persons' mind though Mathias, is there going to be a difference between an Emissions Trading Scheme where carbon is still going to be priced and a carbon tax where it will be priced at a different rate? It is still going to be priced.

MATHIAS CORMANN: This is what I am trying to get across. The first step which is going to take place is that the carbon tax will be gone given that the Palmer United Party Senators have indicated they will be supporting our initiative to repeal the carbon tax. All of the other things that Clive Palmer has said tonight, they will continue to be part of the conversation that we will have with him and with his Senators in the months and years ahead no doubt...interrupted

ROSS GREENWOOD: Well what about that Clean Energy Finance Corporation? Now he has indicated tonight that he will be voting against the abolition of the climate change authority. Is that going to be important or not?

MATHIAS CORMANN: Well in our view it's inappropriate, in particular in the current fiscal circumstances, for the Government to borrow another $8 billion in order to underwrite a taxpayer funded bank which picks and chooses projects to compete on with the private sector. In Australia we don't have a very good track record with government run banks and so we will continue to make the argument as to why $10 billion for a taxpayer funded bank is not the most appropriate use of our resources.

ROSS GREENWOOD: Last time, Mathias Cormann, I did ask the Greens Leader Christine Milne where the Government would come up with the extra $2.5 billion if The Greens do not support the reintroduction of indexation on fuel excise. She said: 'ah well, that's the Government's issue' and she really is flummoxed on that one and said ah well that's the Government's issue. So my question now to you, given that the Greens will not support that, neither will the Labor Party, then in that case, where do you get the extra $2.5 billion from?

MATHIAS CORMANN: Firstly, don't make any assumptions on where this particular measure will end up. The announcement that Christine Milne made yesterday in relation to the fuel excise is really quite unbelievable. The Greens have lost all credibility now. They are telling us now that they are the party standing for real cuts in the tax on fuel every year over the forward estimates. You've got to remember that in 2001, the fuel excise was at about 41.5 per cent. Today it's about 25 per cent. The Greens now are telling us that their policy position is that they want the fuel excise to continue to go down and down and down every year from the 25 per cent it is at the moment. I don't believe that is ultimately going to be a sustainable position for them. So there will be further conversations and let's just see where all of that ends up. That is part of the normal democratic process that we're engaged in.

ROSS GREENWOOD: One of the things that Tony Abbott promised, that his team promised coming into power, was that we would have a period of stable government. That we would get no surprises, we would know what was taking place and Australia would be open for business. The real issue with the composition of the Senate as it's going to emerge after July 1 is that most legislation that you want to bring forward, and it has been a very aggressive Budget trying to, as you've indicated, to get Australia's debts back on track. The fact is that you do not know, the people do not know, what will get through and what won't. That doesn't lead to stability surely?

MATHIAS CORMANN: Well at the end of the day, at the last election, people passed judgements in terms of who they wanted to represent them in the House of Representatives and in the Senate. Obviously as the Government we've got to work within the parliamentary representation that was elected by the Australian people and of course we are doing that. From our point of view, we delivered the Budget that Australia needs if we want to protect our living standards and if we want to build prosperity and opportunity for the future. Despite all of the political posturing, and you just mentioned what Christine Milne said to you yesterday, but despite all of the political posturing, nobody has come up with an alternative plan and it's really quite reckless and irresponsible to just say 'ah well, that is just the Government's problem'. It's all our problem. The truth is that we inherited a debt and deficit disaster from the Labor/Green Government that went before us. We are taking responsibility for fixing the mess because we don't think that it is appropriate for us to leave the sort of legacy to our children and grandchildren that would come with continuing to fund our living standards today based on borrowed money.

ROSS GREENWOOD: But Mathias Cormann, if you can't get key Budget bills through, it's not as if supply is being blocked but it's as good as being blocked in regards to some of those key initiatives that you've got. Given that also you have got obstructions in the Senate, I know that it's not your call, it's always the Prime Minister's call, but is it one of those situations where the Government may have little alternative if it becomes almost a lame duck Government and can't fulfil its obligations and its promises to the people, that it's simply got to head back to the polls.

MATHIAS CORMANN: Well Ross you talk about measures being blocked, but let me just remind you that, so far, every single budget measure that went to the Senate has been passed by the Senate. So when we first announced the need for a Temporary Budget Repair Levy, Bill Shorten and the Labor Party said that they would never support it. Last Monday they quietly voted in support of it. Initially the Greens said that they would be supportive of indexation of the fuel excise, now they are telling us that they are against it. Let's see what their position is next week. The truth is we are making judgements in the national interest. We will be putting to the Senate all of the Budget measures that we delivered just over a month ago. We will be making the argument as to why they are necessary, day in day out. We will engage constructively with all of the parties and individual Senators represented in the Senate, continue to make our case. If we don't get our measures through in our first attempt, we will put them to the Senate a second time and we will continue all the way through to explain the reasons for judgements that we've made and where we would end up if we don't correct the spending growth trajectory that we are on now. The important point here is that people might think that this is a tough Budget now, but if we don't make the tough decisions now, those decisions required into the future would only become harder. It will only become harder to make the necessary corrections to get us back onto a sustainable spending growth trajectory for the future.

ROSS GREENWOOD: Mathias Cormann, the Finance Minister and the one thing that is true is the population is ageing, that the debts are there and rising unless something is done and as I say, as the Finance Minister of Australia, the hard decisions actually fall to him in trying to get that budget balanced and we appreciate your time this evening Mathias.

MATHIAS CORMANN: Always good to talk to you Ross.