Senator the Hon Mathias Cormann

MATHIAS CORMANN: Families across Australia need the Australian Parliament to work to repair the Budget mess that Labor left behind. Bill Shorten and the Labor party remain in a state of denial about the debt and deficit disaster they left behind. The Government delivered our plan to get our Budget back onto a sustainable path to surplus because if we keep borrowing from our children and grandchildren to fund our lifestyle today, what we are doing is reducing opportunity for them. That is not fair. It is time that Bill Shorten and the Labor party stopped putting politics ahead of the national interest. It is time that Bill Shorten and the Labor party started to work with the Government to repair the Budget mess they left behind. Happy to take questions.

JOURNALIST: Minister what is the emergency? Or is there not an emergency? How urgent is it to get these Budget measures through? What kind of time frame are you now talking about?

MATHIAS CORMANN: We inherited a Budget emergency from the previous Government and we are dealing with it in an orderly and methodical fashion through the usual processes of Parliament. The previous Labor Government left behind $123 billion in projected deficits on top of $191 billion of deficits in their first five Budgets. They have put us on a trajectory, a debt growth trajectory taking us to $667 billion of debt within the decade and growing beyond that. That is not sustainable. Labor put us on a spending growth trajectory where spending as a share of GDP would be 26.5 per cent within the decade when tax revenue as a share of GDP has averaged at 22.4 per cent over the past 20 years. So there is a big gap between revenue and expenditure and manifestly if you want to balance the Budget, you have got to reduce your level of expenditure if you don't want to increase taxes.

JOURNALIST: So what kind of time frame are we talking about then if it is a Budget emergency, wouldn't that suggest that perhaps these $47 billion in saving measures need to get through in the next fortnight or at least by the end of the year?

MATHIAS CORMANN: We are dealing with a Budget emergency left behind by the previous government. That doesn't mean that we should respond to it in a Labor way. Labor's way in the previous six years was to respond to any challenge with chaos, dysfunction and without working things through properly, through orderly and methodical process. Our way is to deal with any challenge in an orderly and considered way. Clearly our Budget contained our plan to fix Labor's Budget mess. It includes a series of measures including structural reforms. Now, evidently, self evidently, changes that don't take effect for some time can be dealt with at a later stage. You deal with measures in a sequential and prioritised way. That is the absolute appropriate way to go. That is why in the Budget we have made very clear which measures start immediately, which measures start at a later date, because you actually plan these things in an orderly fashion. That is something clearly the Labor party doesn't get its head around.

JOURNALIST: According to the Government's program, the GP co-payment and higher education changes are set to be through the Parliament in the Spring sittings. Do you stand by that timetable as your deadline for those pieces of legislation?

MATHIAS CORMANN: Our proposal to introduce a price signal for access to medical services so we can make access to medical services sustainable, affordable and timely access to medical services, affordable for tax payers in the medium to long term is due to start on 1 July 2015. Our reforms to higher education to ensure that our children across Australia can continue to benefit from world class higher education services are due to take effect in early 2016. So obviously from our point of view, our focus is on getting our Budget measures through as quickly as possible, working courteously, constructively and in a positive fashion with all of the relevant crossbenchers, in particular in the Senate, in order to ensure that we get our Budget measures through.

JOURNALIST: So that spring sitting deadline is not firm?

MATHIAS CORMANN: We will pursue all of our Budget measures in the quickest way possible, bearing in mind that we obviously have to work through the usual processes of Parliament.

JOURNALIST: What about the fuel excise? Aren't we a couple of months ago due on that? That was meant to kick in [inaudible]

MATHIAS CORMANN: The fuel excise is evidence of how Labor and the Greens are putting politics ahead of the national interest. We have got the ridiculous and ludicrous situation right now where the Greens are suggesting to us that they are the party that is in favour of regular reductions in the real value of the excise on fuel. Back in 2001 when indexation of the fuel excise was removed, the value of the fuel excise as a proportion of the average pump price was 42 per cent or thereabouts. Now it is about 25 per cent. The Greens are now arguing that they stand for regular reductions in the value of the excise on fuel. So clearly we still have some work to do in relation to that. We are hopeful that in time we will be able to convince relevant parties in the Senate that this is good public policy and good structural reform.

JOURNALIST: John Madigan has indicated that there could be some kind of deal soon. Do you want to give us those details?

MATHIAS CORMANN: The Government is determined to get the Budget through. We are determined to fix the debt and deficit disaster that we inherited from the Labor Party. Obviously there are conversations ongoing in relation to some specific structural reforms and when those conversations are finalised relevant announcements will be made.

JOURNALIST: There has been a lot of negotiating with the crossbenchers in the Senate. How many approaches have you made to Labor?

MATHIAS CORMANN: The door is open. If Labor finally wants to take responsibility for the debt and deficit disaster they left behind, if Labor finally wants to become part of the solution rather than to continue putting politics ahead of the national interest, our door is wide open. So far what we have found is that Labor is in a state of denial. Labor seems to suggest that there is no problem with the Budget. Labor seems to completely ignore that they left behind $314 billion in cumulative and projected deficits in their six Budgets. Labor seems to completely ignore that they have put the country on an unsustainable trajectory. Our plan, in our Budget is to spend less. Our plan is to repair the Budget by spending less so that over time we can have lower taxes. The only alternative to that plan, if Labor is not prepared to support our plans to spend less, the only alternative from Labor's point of view, that either we will have more Labor debt or more Labor taxes. Which one is it Bill?

JOURNALIST: It is the Government's responsibility to get the Budget through, shouldn't you be the one knocking on Labor's door rather than you leaving the door open?

MATHIAS CORMANN: It is our responsibility to get the Budget through and the Government is totally committed to get the Budget through. We are absolutely committed to work with anyone that is prepared to work with us to fix the Budget mess that Labor left behind.

JOURNALIST: You have spoken about the threat of higher taxes. Can you identify what taxes you are referring to?

MATHIAS CORMANN: I have actually not spoken of the threat of higher taxes, what I said on Insiders on Sunday very clearly, is that our plan is to spend less, our plan is to reduce the unsustainable spending growth trajectory that Labor has left behind. What I also said is that if Labor is not prepared to spend less, if Labor is not prepared to reduce the unsustainable spending growth trajectory that we are on, then the only other alternative, if Labor is committed to delivering a surplus, is to increase taxes. That is not a threat. That is a reality. That is a reality that Labor clearly so far has not faced up to. We want to spend less, so that over time we can tax less, so we can continue to build a stronger, more prosperous economy where everyone can get ahead. Labor is opposed to our plans to spend less. The consequence of that, if we stay on this unsustainable track for much longer, if we continue to head in the wrong direction and debt continues to increase, then eventually either a future government would have to impose higher taxes or deeper cuts. People might think that the Budget is tough now. If we don't make the necessary decisions now it will only become tougher in the years ahead and that is the inevitable truth that Labor is completely and recklessly trying to ignore. Thank you very much.

JOURNALIST: But what taxes are you referring to Minister, that was my question.

MATHIAS CORMANN: Our plan is in the Budget. Our plan is to spend less…interrupted

JOURNALIST: No what higher taxes are you suggesting will be put in place?

MATHIAS CORMANN: The Government does not have any plans for taxes increases. In the Budget, the tax burden in Australia is actually lower than what it would have been under Labor. We got rid of the carbon tax, we are working to get rid of the mining tax, we will be delivering a company tax cut. Under the Coalition the tax burden is actually lower than what it would have been under the Labor Party. Our plan is to spend less so that over time we can tax less. Labor is standing in the way of our efforts to repair the Budget and it is a statement of fact, not a statement of intent, it is a statement of fact that if Labor continues to block the necessary reductions in spending, then necessarily that must mean that Labor's alternative plan is either more Labor debt or more Labor taxes. It is not the Government's plan, it is not the Government's intention. I am just pointing out the mathematical reality because clearly Labor does need a reality check in relation to this. Thank you very much.