Senator the Hon Mathias Cormann

TOM CONNELL: We’ve just had week one of the new Senate and one gets the sense that the Government is taking a deep breath. When the Parliamentary schedule was devised by the Government they pencilled in a Senate only sitting week for the second week in July because they thought it would be a chance to repeal the carbon and mining taxes. As we now know that didn’t happen. What was supposed to be a simple piece of legislation when it comes to repealing the carbon tax became a negotiation nightmare. Clive Palmer making it clear his main aim in this Parliament at least for now, appears to be to frustrate the Abbott Government. We’ll be hearing from Labor Senator and Parliamentary Secretary to the Environment or Shadow Parliamentary Secretary I should say, Lisa Singh later on in the program. But first to Perth where the Finance Minister, Mathias Cormann has been good enough to join us. Mathias Cormann, thanks very much for your time today.

MATHIAS CORMANN: Good to be here.

TOM CONNELL: I would just like to get your thoughts first of all. It’s been an interesting week it is fair to say in the Senate and that first week of the new Senate. What have you made of it all?

MATHIAS CORMANN: It was obviously an important week for a range of people that are now new to the Senate. We are disappointed that the Senate failed to take the opportunity to help families and small business by scrapping the carbon tax. But we are absolutely determined to persist until the carbon tax is gone, because that was the commitment we made in the lead up to the last election and because that is the right thing to do for families and for business and for the economy as a whole.

TOM CONNELL: Can you clarify for everybody out there, including business. Clive Palmer, there was some talk that this 250 per cent penalty for not passing on the cost of repeal the carbon tax might apply to all entities. Now if that is presented by the Palmer United Party next week, if he changes his mind again and says it should apply to all businesses, every single business that have paid for electricity essentially, would the Government consider that? Or would they rule out having that as a penalty?

MATHIAS CORMANN: We will let the Palmer United Party talk for themselves in terms of their amendments. What we are focused on and what we have always been focused on is that the scrapping of the carbon tax, which leads to reductions in the cost of generating electricity, those cost reductions should be passed on to consumers and to business. Now we have sought to achieve that by giving additional resources to the ACCC. Electricity price regulators around the country have already come out to say that those cost reductions will be passed on. A number of the private generators have come out to say that they would pass those cost reductions on. From my point of view we were...interrupted

TOM CONNELL: Just very specifically though, business is concerned that perhaps this 250 per cent penalty could possibly apply to all businesses, all entities. Can you rule that out right now?

MATHIAS CORMANN: Again I will let the Palmer United Party talk for themselves. They have made very clear that they only seek to apply that to electricity and gas generators. From our point of view as I have just said to you, we have always been committed to ensuring that cost reductions in terms of the cost of generating energy as a result of scrapping the carbon tax are properly passed through to consumers and to business. We have said all the way through that we were prepared to support amendments put forward by the Palmer United Party to put that even further beyond doubt. I understand that the Palmer United Party is getting some further advice in terms of making sure that the construct of their amendments is consistent with all of the relevant requirements, including of course the important requirement to be consistent with our Constitution. We look forward to concluding this debate hopefully sometime next week.

TOM CONNELL: Okay. You know you’ve spoken about letting Clive Palmer speak for himself, what have you made of him so far? His role this first week in the Senate, would you agree that his policy position seems somewhat erratic?  

MATHIAS CORMANN: No I don’t agree with that. What I would say though is that 25 Labor Senators who went to the last election asserting that they had already removed the carbon tax again voted to keep it. 25 Labor Senators and 10 Greens Senators voted for higher electricity prices, higher gas prices and of course higher cost of living expenses for families and pensioners across Australia. That is again certainly inconsistent with what the Labor party made people believe they would do in the lead up to the last election.

TOM CONNELL: Right but on this issue of Clive Palmer for example, the Government appears set to be at the moment to be in a mode of mollifying him, not biting back for example at various verbal insults that he has thrown at Tony Abbott and he and his Senators have thrown at Tony Abbott and also for example this issue of Citic taking legal action against him for a $12 million dispute. We haven’t heard anything or anyone come out from the Government and say well Clive Palmer has got questions to answer. Nothing at all. Is he off limits at the moment? Is it a case of treating Clive nicely?

MATHIAS CORMANN: There’s a series of different and unconnected issues that you are raising there. Firstly, to the extent that there are legal proceedings, it would be entirely inappropriate for anyone from Government to give a running commentary on what are proceedings that are appropriately taking place through the usual and appropriate processes. But when it comes to what happened on the floor of the Senate, I’m very mindful, I’ve been in the Senate now for seven years. I well remember the first day I arrived in the Senate. When you get into any new work environment like that, it does take a while to properly settle in to everything. I’ve got to say I felt for all of those new cross bench Senators who, right in the first week, were confronted with a pretty robust and significant debate. As far as I’m concerned, I’m sure that all of these things will settle down over time as everybody gets to know each other better and as everybody settles into the routine of the Senate.

TOM CONNELL: Do you have permission from the Prime Minister and the Prime Minister’s Office to talk freely with cross benchers to try to convince them yourself, mount a personal case for the Government’s agenda? Do you have that permission, you’re allowed to go out there?

MATHIAS CORMANN: It’s not a matter of having permission, it’s a matter of it’s my job to ensure that, in the areas that are my areas of portfolio and policy responsibility, it’s expected of me that I do everything that I can to help ensure that the Government’s policy agenda, that the commitments that we took to the last election are effectively implemented.

TOM CONNELL: We heard when Labor was in power of course, many times from the Coalition, that it was a dysfunctional minority Government, what would you expect in light of that, voters to make of the first week of the Senate?

MATHIAS CORMANN: This is a new Senate. We've got a large number of new cross bench Senators. I don’t think that there is anything surprising in the proposition that the new Senate is still finding its feet. I’m pretty confident that, as has happened in the past, that these issues will be worked through over a period of time. There’s nothing new under the sun. Governments have very rarely had a majority in the Senate. Governments have historically always had to work their way through difficult majorities against them in the Senate. We will do this in an orderly methodical fashion, continue to put our policy agenda to the Senate, make our case and hopefully persuade them of the merits of what we’re doing.

TOM CONNELL: Do you think the last week was orderly and methodical?

MATHIAS CORMANN: It was the first week of a new Senate. We’re disappointed the Senate did not take the opportunity to reduce cost of living expenses for families, to reduce the cost of doing business in Australia by scrapping the carbon tax, but we’ll stick with it. We are going to reintroduce the carbon tax repeal legislation in the House of Representatives on Monday and the Senate will have another opportunity …interrupted

TOM CONNELL: But this mantra of orderly and methodical right now, it’s not working out is it? So when you look over the next six or twelve months and comments from Tony Abbott yesterday, well perhaps after six or twelve months, then we look at it. That was his response to whether or not he would push another election. Is that a realistic time frame considering you’ve got issues, more than $40 billion of savings blocked by various parties?

MATHIAS CORMANN: The problem that we have is that the Labor Party is still in a complete state of denial. They are in a state of denial about the state of the Budget they left behind. They are right now opposing nearly $40 billion in savings measures. We will continue to make the case as to why it is important to deliver the Budget measures that we brought down just under two months ago and let’s see what happens over time. We’ve only just started putting budget measure after budget measure to the Senate. The first two significant Budget bills that we put to the Senate, despite contradictory indications initially, were actually passed by the Senate with Labor quietly voting in favour of the Temporary Budget Repair Levy after initially having indicated that they’d oppose it. We call on Bill Shorten and the Labor Party to finally face up to the debt and deficit disaster that they left behind and to start becoming part of the solution.

TOM CONNELL: Is that a realistic call though, well given arguably the Coalition put the ‘no’ in Opposition when you had your time, are you really expecting Labor to come to the party?

MATHIAS CORMANN: We stood up against a tax that was bad for the economy, bad for families, bad for pensioners, bad for jobs, bad for investment and the Australian people supported the judgement that we’ve made. But the proposition that Labor is putting to us at the moment is that they want us to continue to borrow from our children and grandchildren in order to fund our living standards today. That is not sustainable. It means that we would be reducing opportunity for our children and grandchildren instead of protecting living standards and building opportunity for the future. Over time, I can’t believe that the Labor Party would continue to persist with a proposition that would weaken our country into the future.

TOM CONNELL: What about the amendments to the carbon tax, just to return to that for a moment. These amendments that Clive Palmer has proposed, how does that fit in with the Government’s mantra of reducing red tape?

MATHIAS CORMANN: Scrapping the carbon tax massively reduces red tape. We’re always focused on making sure that we achieve our objectives in the most efficient way possible. That is our objective here too. You’ve got to understand that the carbon tax that Labor and the Greens put in place, imposed extraordinary levels of red tape, extraordinary levels of compliance burdens, extraordinary levels of additional cost to business across Australia. We are getting rid of all of that.

TOM CONNELL: Just on the replacement, your direct action plan. Have you had any discussion with the cross bench or for that matter any members of the Senate on the likelihood of that passing? Is that still looking pretty unlikely that it’s going to get that support?

MATHIAS CORMANN: The legislation that is before the Parliament at the moment, which was before the Senate last week, which we’re introducing into the House of Representatives on Monday is the carbon tax repeal bill. The implementation of our Emissions Reduction Fund will be one of the next pieces of legislation that we’ll be dealing with. We’ll cross that bridge when we get there. 

TOM CONNELL: But you’re already there. You’re already negotiating. Do you have any indications from any of the cross bench Senators, many of whom have said that they are unlikely to support this, how is that bridge building going?

MATHIAS CORMANN: Right now we are focused on passage of the legislation to scrap the carbon tax, so we can bring down the cost of living and so we can bring down the cost of doing business in Australia. The implementation of the Emissions Reduction Fund will be the subject of a separate piece of legislation, which will be dealt with after we have repealed the carbon tax, after we’ve dealt with the mining tax repeal legislation and various other high priority commitments that we took to the last election. 

TOM CONNELL: Okay, a battle for another day perhaps. I just want to finish on the visit of Shinzo Abe, the Japanese Prime Minister. It attracted a lot of criticism by the Chinese state media, not just of Japan, but also of Tony Abbott and his praising of the Japanese soldiers saying they acted with a sense of honour. Chinese state media said that was appalling. What was your take on that?

MATHIAS CORMANN: I thought the Prime Minister gave a very good speech. Clearly it was a very important visit to Australia by Prime Minister Abe. Clearly the relationship, the personal relationship between Prime Minister Abe and Prime Minister Abbott is very good. That is good for Australia, it helps of course in continuing to strengthen a very important relationship that we have. We have an important relationship and an important friendship with Japan. But of course we also have an important relationship and a very important friendship with China. We will seek to continue to build... interrupted

TOM CONNELL: Yeah, and on China. Just to bring you specifically to those comments Tony Abbott said about Japanese soldiers – ‘we admired the sense of skill and honour that they brought to their task although we disagreed with what they did’. Now he’s talking about World War II, a time when Japanese soldiers carried out, going into some of the gruesome details, mass execution of prisoners of war, of civilians, Chinese civilians in particular in some areas in Singapore as well. This is a sensitive area for Australia and China. Was it a mistake to talk about it a ‘sense of honour’ of Japanese soldiers by Tony Abbott?

MATHIAS CORMANN: No, I don’t believe it was. You’ve got to remember, Australia and Japan were on opposite sides in the Second World War. The comments made by Prime Minister Abbott weren’t directed against anyone. They were essentially part of moving forward into a stronger period, reflecting on some of the experiences of the past. We have a very important relationship with Japan. We have a very important relationship with China. One relationship doesn’t exclude the opportunity for a strong relationship with the other. We are focused on continuing to strengthen our friendship and our trade relationship in particular with both those very important partners in our region.

TOM CONNELL: Okay, Mathias Cormann we’ll have to leave it there. But thank you for your time today on Saturday Agenda. 

MATHIAS CORMANN: Always good to be here.