Senator the Hon Mathias Cormann

MICHAEL ROWLAND: Now we are joined by Finance Minister Mathias Cormann now at our Parliament House studio. Senator, good morning to you.

MATHIAS CORMANN: Good morning. Good to be here.

MICHAEL ROWLAND: Now, great to have you. How is Education Minister Christopher Pyne going to change the minds of those crossbench Senators who are quite determined to continue voting against the higher education reforms?

MATHIAS CORMANN: Christopher Pyne has worked very hard to progress what are very important reforms for our universities, for our students and for our country. They are designed to ensure that our universities can be as competitive internationally as possible, that our students get the best possible education preparing them for their workplace. Christopher Pyne has been able to convince four crossbench Senators to support our reforms. We need six, so there are two more to go. Situation normal. Many structural reforms in the past did not pass the Senate on the first attempt. The previous Government had to put various reforms to the Senate two or three times and we will bring those reforms back in February and hopefully we will be able to convince two more crossbench Senators.

MICHAEL ROWLAND: And one of those crossbench Senators, as you know, Glenn Lazarus, is particularly unhappy with the way Christopher Pyne has gone about this. How is that going change?

MATHIAS CORMANN: Christopher Pyne was very committed to get his reforms through this week. We are now going to work on getting them through in February/March next year. As I understand it, Christopher has tried to have meetings with Senator Lazarus and that hasn't been possible, so text messaging apparently was the only way of communicating. But look, between now and early next year, conversations will be continuing with those Senators that are prepared to talk to us. We need two more Senators in order to get majority support in the Senate and we are going to continue to focus on that, because we need to get those reforms through the Parliament in our national interest.

MICHAEL ROWLAND: Do you believe Christopher Pyne went overboard with text messaging?

MATHIAS CORMANN: No, I don't. I believe that Christopher Pyne was totally focused and committed on passing what are very important structural reforms, designed to ensure that our students have got the best possible opportunity into the future to receive an education at the best possible universities across Australia that are internationally competitive and of course the efforts will be continuing.

MICHAEL ROWLAND: All this comes down, Mathias Cormann, to as you say building, consolidating, sustaining relations with those crossbench Senators. We know you have a fairly good relationship with Clive Palmer. There was that photo of you and him meeting in that Canberra hotel I think it was Sunday night. So you're talking to him. Can your colleagues like Christopher Pyne draw messages from you, take lessons from you in terms of negotiating with these crossbench Senators?

MATHIAS CORMANN: Christopher Pyne is very good at negotiating, but this it is a very significant structural reform and sometimes it takes a little bit longer than we would like to get enough people in the Senate to support the reforms that we want to progress. The work will be continuing. All of us work as a team. We will all pitch in to ensure that important reforms will ultimately get through the Parliament.

MICHAEL ROWLAND: If this reform fails for a second time, how will the Government go about filling that $5 billion hole in the Budget?

MATHIAS CORMANN: I don't accept the premise of that question because we are very confident that over time we will be able to convince the necessary six non-Government Senators to support what is a very important reform. We will be bringing the relevant legislation back in February. And let's see how we go.

MICHAEL ROWLAND: Is this, in the Prime Minister's words Mathias Cormann, has this been another very ragged week for the Government?

MATHIAS CORMANN: No, I don't believe so. This year has been a very good year. By any objective measure if you look at what's been achieved over the past 12 months. We have been able effectively to stop the boats as promised. We were able to repeal the Carbon Tax which is good for families and business. We have been able to repeal the mining tax. We have been able to reduce significant levels of excessive red tape, all of which is designed to help build a stronger, more prosperous economy where everyone can get ahead. We will just continue to press ahead. Budget repair is not finished obviously. There are still some challenges ahead of us. But we have made significant progress and we say with some certainty that the situation is better than it would have been if Labor had been returned to Government at the last election.

MICHAEL ROWLAND: You make that point and the polls show something entirely different. Voters are marking the Government down and the Prime Minister down quite heavily.

MATHIAS CORMANN: We have had to make some difficult but necessary decisions over the past 12 months. That is not always popular. In the lead up to the next election, which is still about two years away we are quietly very hopeful that over time people will accept that what we have been doing was right for the country and has strengthened our country for the future.

MICHAEL ROWLAND: The midyear Budget update is due to be released by the Treasurer in the next fortnight. Will there be further cuts in that mid-year update?

MATHIAS CORMANN: What the Mid-Year Economic and Fiscal Outlook will show is that since the Budget commodity prices have fallen more sharply than anticipated. Whoever is the Government, on the revenue side, there is a limited level of control on what can happen on the revenue side in relation to these sorts of matters. On the spending side though, what it will also show is that wherever the Government has made decisions because of unforeseen circumstances to spend more, such as on our national security in the context of a heightened security threat level, that we will be offsetting whatever additional expenditure we have had to incur since the Budget.

MICHAEL ROWLAND: Offsetting means more cuts in the mid-year Budget update?

MATHIAS CORMANN: It means reprioritising the expenditure across the whole of the Government.

MICHAEL ROWLAND: Are they expected to be fairly savage cuts?

MATHIAS CORMANN: What we have said is we will not be chasing down the revenue impact from lower commodity prices. The iron ore price is down to $63 a tonne. 20 per cent of our export income comes from iron ore exports so that is going to have a significant impact on our revenue collections. We won't be chasing down the falling revenue in the Mid-Year Economic and Fiscal Outlook. But what we will be doing is making sure that wherever we have had to spend money on higher priorities, that that is offset by savings in areas that, in the circumstances, are a less high priority.

MICHAEL ROWLAND: Finally, is the Government confident of achieving its aim of a balanced Budget by 2017-18?

MATHIAS CORMANN: We will be working to achieve a balanced Budget as soon as possible.

MICHAEL ROWLAND: Do you have a timeframe though?

MATHIAS CORMANN: As soon as possible. When circumstances change, it is only responsible to reassess what can responsibly be achieved in the time frame that is in front of us. The commitment is that we will be achieving a Budget surplus as soon as possible. Given Labor's decisions so far would see a worsening of the Budget bottom line by $43 billion we are very confident that we will be achieving a surplus more quickly than the Labor Party would in Government.

MICHAEL ROWLAND: Mathias Cormann, thank you for your time this morning.

MATHIAS CORMANN: Always good to talk to you.