Senator the Hon Mathias Cormann

TOM CONNELL: But back on the domestic front to talk about the Abbott Government one year on, we’re joined from our Perth studio by the Finance Minister, Mathias Cormann. Thanks for being with us today.

MATHIAS CORMANN: Good morning. Good to be here.

TOM CONNELL: Mathias, you obviously have had a front row to this Government. One year, in what could the Government have done better?

MATHIAS CORMANN: One year on what we can reflect on is that we went to the last election promising to scrap the carbon tax and the mining tax and both the carbon tax and the mining tax are gone. We promised to stop the boats and the boats are stopping. We promised to repair the Budget and we’re repairing the Budget. We promised to build the roads of the 21stCentury, we’re building the roads of the 21stCentury. So we are pressing ahead in an orderly and methodical fashion, continuing to deliver on our agenda to build a stronger, more prosperous economy so that everyone can get ahead and building a safe and secure Australia.

TOM CONNELL: Okay, but obviously they’re the achievements you’re happy with so far, but what perhaps could you have done better, and perhaps reflecting on one of the things we heard over and over again from Tony Abbott in opposition, he said there would be a no surprises government. Over the last year can you look back and say no surprises, or was that perhaps a lofty ambition? 

MATHIAS CORMANN: I’ll leave commentators to provide commentary on the performance of the Government. As far as we’re concerned, we’re focussed on delivering on the commitments we made in the lead up to the last election. We’re focussed on building a stronger economy and building a safe and secure Australia.

TOM CONNELL: The Prime Minister is in The Australian newspaper today in an interview saying that he does perhaps need to consult a little bit more. Is that something you’ve noticed that he is perhaps learning as he goes as Prime Minister and being a bit more open and canvassing more opinions?

MATHIAS CORMANN: Providing good government for Australia is a big job with a lot of stakeholders involved obviously. We're a big team. We’re always reflecting on how we can do the job that we’re doing even better. But reflecting on the year that’s just been, if you look at the outcomes that we’ve achieved in the context of what we said we would do in the lead up to the last election, then you’d have to say we’re on track to deliver what we said we would deliver.

TOM CONNELL: One of the deadlines the PM did give on his various election promises is there would be cranes over the city skylines over the twelve months. That appears to be one you’re falling a bit behind on. Perhaps because of getting approvals to actually build these roads has taken a bit longer. Has that timeline blown out a little bit?

MATHIAS CORMANN: We’re working very hard at building the roads of the 21st Century right across Australia. We’ve made significant commitments in terms of additional investment in productivity enhancing infrastructure. We’ve put forward a $50 billion package to boost economic growth on the back of increased investment in productivity enhancing infrastructure. We’ll continue to proceed as fast as we can. There are obviously processes ...interrupted

TOM CONNELL: Right, but to have that underway after twelve months hasn’t quite happened has it? That one’s just been a bit tricky to hit.

MATHIAS CORMANN: We’ll continue to work as best as we can to make progress as fast as we can, bearing in mind that we’ve got to work in with our partners at a State level and we’ve got to go through certain processes to ensure that taxpayers money is spent wisely and effectively.

TOM CONNELL: As for the economy as a whole, if you look at, take a snapshot from a year ago and now, consumer confidence lower than it was a year ago, business confidence about the same, perhaps slightly lower, unemployment half a point higher, that must be somewhat disappointing for you as Finance Minister?

MATHIAS CORMANN: I don’t accept your description of where consumer confidence is at. Consumer confidence has actually been rising. When we came into Government, we inherited an economy growing below trend, rising unemployment, low consumer confidence, business investment which had plateaued, a Budget in very bad shape with a rapidly deteriorating position and a spending growth trajectory that was taking us to Government debt of $667 billion within the decade and growing beyond that. So over the last twelve months we’ve been working very hard to turn that situation around. A central element of our plan to turn that situation around was to get rid of the carbon tax and the mining tax. We would have liked to have got rid of the carbon tax and the mining tax sooner, to provide certainty to business sooner but we’re dealing with a Labor Party and a Greens Party in the Senate, and they were in control of the Senate until just a few months ago, who were putting politics ahead of the national interest. We’re going as fast as we can ... interrupted

TOM CONNELL: Right, when it comes to dealing with that Senate and Clive Palmer in particular, how have you found that. That’s obviously hasn’t quite been a whole year dealing with the Senate but Clive Palmer he’s seen by some to be rather erratic. He says no to a few things then eventually comes on board and says yes. What happens with the negotiations there? When he says no, you don’t really take it as a final answer do you?

MATHIAS CORMANN: I just look at the outcomes. The new Senate has only sat for four weeks so far and in those four weeks we have been able to scrap the carbon tax, which is good news for Australia which will help us strengthen the economy. We’ve been able to confirm the Government’s improvements to our financial advice laws, which is good for the economy, which will take costs out of the economy. We’ve been able to scrap the mining tax, which is something that we promised we would do in the lead up to the last election. As far as bargaining with ... interrupted

TOM CONNELL: In terms of the things you haven’t been able to pass as yet, we know that there are still billions of dollars worth of savings there, what’s the ultimate plan there, because there’s a lot of talk about bracket creep, essentially inflation happening and if you don’t make tax cuts periodically then people essentially pay more tax is that going to be a way to recoup some of the savings you haven’t been able to make?

MATHIAS CORMANN: The ultimate plan is to continue to implement the Budget in an orderly and methodical fashion, sequentially and in a prioritised way, going through the measures one by one, in the order that they are actually coming into effect. Some people have been making comments and I heard you in your introduction making comments that some Budget measures haven’t gone through yet. Well the price signal Budget measure in terms of access to medical services for example doesn’t come into effect until 1 July 2015. The higher education reforms don’t come into effect until early 2016. There’s nothing new under the sun. It is business as usual where Senates over the years have always dealt with Budget measures sequentially in an orderly and prioritised fashion. And we are continuing to do that. Now when it comes to...interrupted

TOM CONNELL: Okay well let’s look at the revenue side for a moment because we are talking about savings but revenue is important as well. Obviously the Treasurer has been speaking about making sure multinationals pay their fair share of tax. At the same time, the Coalition has opted not to go ahead with various rules around tax including those around thin capitalisation, essentially clamping down on profit shifting. That’s a bit of a double message isn’t it?

MATHIAS CORMANN: No it isn’t. We are just being realistic. We are pressing ahead with everything that realistically can be achieved when it comes to ensuring that companies that generate profits in Australia actually pay their fair share of tax in Australia. The problem with the previous government, they were very good on rhetoric and on the announcement, but they were not very good on the implementation side. So they made a whole series of announcements and banked various revenue estimates in their Budget papers but never actually proceeded to legislate these measures. And when we came into Government and saw advice from Treasury...interrupted

TOM CONNELL: Yeah okay...interrupted

MATHIAS CORMANN: Can I just finish my answer here? When we came into Government and saw advice from Treasury in relation to these measures, we were told that many of them were un-implementable; could not be drafted in legislation. It was essentially just a figment in Labor’s imagination.

TOM CONNELL: Okay you spoke there about Labor being good at the rhetoric and not delivery. We also heard from Joe Hockey, he has told the ATO to try to crack down on multinationals and have a good look at how much tax they do pay. At the same time, thousands of staff from the ATO are being let go, making cuts over the next few years of 4,700 staff. How can you tell them to have more of a focus and with fewer staff to do it with?

MATHIAS CORMANN: By being more productive. All areas of Government have got to be more productive and have to do more with less. That is obviously one of the objectives that we came into Government with. We are very respectful of taxpayers’ dollars and we are very focused on ensuring that the limited resources made available by taxpayers to Government are used as efficiently and effectively as possible.

TOM CONNELL: So you’re saying to tax workers ‘work harder’ essentially. I mean when it comes to these cuts, was it ever looked into how much revenue does each person at the ATO actually bring in? Were the cuts ever going to actually save money or cost money?

MATHIAS CORMANN: Well for starters, quite a lot of those cuts actually were initiated by the previous Government. But be that as it may, we support the proposition that there was actually significant scope for efficiencies. The tax office has got well over 20,000 staff. So you have got to put that into perspective. With modern information technology and the like, there are efficiencies to be made, there are opportunities to achieve more with less. There are opportunities to ensure that taxpayers’ money is spent more efficiently and more effectively. That is what we are doing, as we must.

TOM CONNELL: Okay, we will wait and see what happens obviously at the G20 Finance Ministers on the multinationals. Jut quickly, the CEDEX index which measures how much emissions come from Australia’s electricity grid. It has shown the biggest two month jump since 2006. These are figures from August. Is that a concern given that at the moment, there is no policy in place to reduce emissions?

MATHIAS CORMANN: No, not at all. What you’ve got to remember, is when Labor and the Greens were jumping up and down suggesting that emissions were lower last year that was because the economy was growing below expectations. If you have got an economy growing below expectations, emissions are going to be growing below expectations. In the first half of this year, the economy was actually growing above expectations. If you have the economy growing above expectations, obviously then emissions will be growing above expectations. Our commitment is to reduce...interrupted

TOM CONNELL: But these are emissions of the last two months, when growth actually slowed.

MATHIAS CORMANN: How do you know that? How do you know that growth has slowed? What data have you got available to make that assertion? That’s a very interesting proposition that you put there to me.

TOM CONNELL: Well the indication we have, well you’re right. The indication we have though from the last quarter is that growth has slowed. Yes it grew in the first half of the year, which you spoke about but these figures are for July and August.

MATHIAS CORMANN: And indeed, and the point here is that we are totally focused on reducing emissions in a way that doesn’t detract from economic growth. We are focused on reducing emissions in a way that actually achieves a net reduction in emissions in the world rather than the carbon tax which has shifted emissions from Australia to other places around the world like China and so on, where for the same amount of economic output, emissions were going to be higher and as such emissions in the world were going to be higher than they would have been if that production had happened in Australia.

TOM CONNELL: Okay just finally, I know you are an occasional member of the National Security Committee. On the situation in Iraq, we have had more indications from the Foreign Minister essentially that we are standing by, waiting for more calls from the US. But there won’t be troops on the ground. Where does it end in terms of our readiness to take up the US’ instructions or calls? Is there is something we would say no to if the US requested it? Is boots on the ground being ruled out in any way, shape or form in the situation in Iraq?

MATHIAS CORMANN: None of the countries that are currently involved in addressing what is a humanitarian disaster in Iraq and Syria are interested in, as you say putting boots on the ground at present. As far as Australia is concerned, we obviously stand ready to support international efforts to respond to the humanitarian crisis in a way that is proportionate for Australia, that has clear objectives and that helps to address humanitarian issues. This is an issue with domestic implications for Australia. Obviously the security threats that flow from what is happening in that region, some of them are barbaric things happening in that region, do have implications for Australia. So we do stand ready if and when requested to participate in further activities if that is the way it plays out.

TOM CONNELL: Alright, well we’re right out of time. But Finance Minister Mathias Cormann, thanks very much again for your time on Saturday Agenda.

MATHIAS CORMANN: Always good to talk to you.