Senator the Hon Mathias Cormann

BARRIE CASSIDY: We'll go straight now to our program guest and this week it's the Minister for Finance, Mathias Cormann, who joins us in the very early hours from our Perth studios. Minister, good morning, welcome.

MATHIAS CORMANN: Good morning Barrie. Good to be here.

BARRIE CASSIDY: Is it playing fair to bring the meeting forward 24 hours and really deny the members the opportunity to gather in Canberra and talk among themselves?

MATHIAS CORMANN: I think it is the right decision that the Prime Minister has made. It provides certainty for the Party and for the country. My colleagues are all professionals. This issue has been discussed among colleagues for some time now. I believe that my colleagues know what it is that they are wanting to do. And I believe that overwhelmingly my colleagues will support the leadership team that took us successfully to the last election in Tony Abbott and Julie Bishop.

BARRIE CASSIDY: And I have to say, I thought that the prospect of the Prime Minister given the circumstances going into Question Time on Monday with this unresolved wouldn't have been a good look?

MATHIAS CORMANN: It is inconceivable that it would be in the best interests of either the Liberal Party or the country for the Prime Minister to go into the Parliament tomorrow with this issue unresolved. So I think the Prime Minister has made absolutely the right decision and I believe that overwhelmingly my colleagues would agree that that was the right decision.

BARRIE CASSIDY: Now how do you understand the Cabinet solidarity thing? Are all Ministers, including the outer ministry, parliamentary secretaries, the whips, are they all bound by Cabinet solidarity?

MATHIAS CORMANN: Well I am very confident that the Prime Minister has the unanimous support of his Cabinet. I believe he has the overwhelming support of the party room...interrupted

BARRIE CASSIDY: That's not the question, that's not the question.

MATHIAS CORMANN: Let me get to it. I am very confident that the Prime Minister has the unanimous support of the Cabinet and indeed, Malcolm Turnbull confirmed again today that he will be voting against the spill as will Julie Bishop, as a range of other Cabinet colleagues have of course indicated over the last few days as well. It will be a secret ballot. So that obviously gives everyone the opportunity to do things as they see fit. But, I'm very confident that the Cabinet unanimously supports the Prime Minister and that the party room overwhelmingly supports the Prime Minister continuing in his role.

BARRIE CASSIDY: But the whole purpose of this is to test the strength of support for Tony Abbott and you've got this ludicrous situation where Malcolm Turnbull will vote against the spill?

MATHIAS CORMANN: Malcolm Turnbull is a team player. He has consistently indicated that he is a strong supporter of Tony Abbott as our Prime Minister and that is of course why he will be voting against the spill.

BARRIE CASSIDY: But then how can you walk out of that meeting and say now that is an accurate reflection of the mood of the party?

MATHIAS CORMANN: The vote on Monday on the leadership spill motion will be a vote of confidence into the current leadership team, the leadership team that took us successfully to the last election. The question that is before the party room really is whether we want to go down the Labor Party path of tearing down a first term Prime Minister or whether we don't. My view is that Tony Abbott and Julie Bishop, having worked extremely hard to take us successfully from Opposition into Government deserve the opportunity to turn this situation around. That is why I will be voting against the spill motion, to support Tony Abbott and Julie Bishop and to support the current leadership team working to turn the situation around.

BARRIE CASSIDY: Right, that's your view. It is clearly not the view of the public.

MATHIAS CORMANN: The next election is still about 18 months away. The Prime Minister has been written off before. The Prime Minister back in 2007 was told that his political career was over and he's come back stronger and better. I've got every confidence that the Prime Minister working closely with Julie Bishop, the whole Cabinet and the whole party room, will be able to turn this situation around and to get us into a winning position in the lead-up to the next election.

BARRIE CASSIDY: John Howard did turn things around but he was never at minus 36 in terms of approval rating. And you are asking somebody who is sitting on minus 36, somebody who will be further damaged by this process that's about to happen, you're suggesting that he has the ability, the trust, to win back the electorate?

MATHIAS CORMANN: On Monday last week the Prime Minister set out a strong and clear direction for the Government in 2015, which will build on the achievements we made in 2014. I have every confidence that the Prime Minister working closely with his Deputy Julie Bishop, the whole Cabinet and the whole party, the party room, the party organisation, will be able to turn the situation around and get us into a winning position, absolutely.

BARRIE CASSIDY: Has anyone in the Ministry ever complained to you about the Budget? Have they complained, have they suggested to you that it was unfair?

MATHIAS CORMANN:
No. We are having constructive conversations in the Ministry and in the Party all the time about how we can do better moving forward, how we can further develop some of the policy proposals we've put forward and that is of course the normal process.

BARRIE CASSIDY: So, no Ministers have ever said to you there's a perception of unfairness in the budget?

MATHIAS CORMANN: No Minister has ever said to me that the Budget was unfair, that's right.

BARRIE CASSIDY: What does that say to you about their political antenna when you look at what the polls suggest, and you look at the response to the Budget?

MATHIAS CORMANN: The truth is this, we inherited a very challenging situation back in 2013. A weakening economy, rising unemployment, a Budget position which was rapidly deteriorating. So as well as implementing the policies that we took to the last election, scrapping the mining tax, scrapping the carbon tax, stopping the boats and the like we also had to make some difficult though we would say necessary decisions to protect our living standards and to build better opportunity for the future. Now that has clearly not been popular in all parts and that has been reflected in the polls. Now we have to listen, we have to learn and we have to adjust. But you know fundamentally when you have a circumstance where under Bill Shorten the Labor Party is opposing even their own savings, $5 billion of their own savings, which they initiated and banked in their last Budget but never legislated, they are now opposing in the Senate. When you are dealing with a circumstance like that and you are committed to strengthening the economy, creating more jobs, repairing the Budget, then obviously that is a challenging context in which to operate.

BARRIE CASSIDY: And you did say a lot about repairing the Budget and the debit and deficit prices. In 2012 the Coalition promised to reduce debt by $30 billion, in 2014 you delivered an increase of around $60 billion. The same with the deficit, the projections were around, are now suggesting up to $40 billion would be added to the deficit over the next four years. Can you understand why people are disappointed that you haven't been able to match your rhetoric?

MATHIAS CORMANN: Obviously since we came into Government and even in the period since the Budget last year, global economic headwinds have significantly added to the challenge as have the negotiations and delays in the Senate. Now the truth is, commodity prices like the iron ore price going from a high of $180 a tonne down to about $60 a tonne now, that would have happened irrespective of who is in government. The important point here though is that we are working to get our Budget under control in order to strengthen the economy whereas the previous Labor Government continued to ramp up expenditure at a time when clearly revenue was starting to fall.

BARRIE CASSIDY: Joe Hockey was mentioned this morning that he could possibly be cast overboard to bring Malcolm Turnbull in and settle the whole thing down. What did you make of that?

MATHIAS CORMANN: Joe Hockey has the full and complete support of the Prime Minister. That story is wrong.

BARRIE CASSIDY: Can I just ask you too about the approach to the next Budget because clearly it is going to be difficult to match political realities with economic necessities. Tony Abbott said during the week that the Government would slow the rate of the increase in spending – so spending will increase but he will simply slow the rate. Is that the tactic?

MATHIAS CORMANN: Well that is what we have done. Over the current forward estimates spending in real terms, spending growth in real terms is around 1 per cent compared to 3.6-3.7 per cent under Labor. That is what we have been doing. Now our focus in 2015, building on our achievements in 2014, will be on strengthening the economy, creating more jobs, helping families and making sure that Australia is safe and secure. Now it is important to actually remember that in 2014 we did make some significant progress. The economy did strengthen, growing at 2.7 per cent, compared to 1.9 per cent the year before. Jobs were growing at about 600 a day, three times as high as the year before. So we are heading in the right direction, we are making progress and our objective in 2015 is to build on our achievements in 2014 and to continue to head in the right direction.

BARRIE CASSIDY: Can I just put it, perhaps, simplify it a bit. Will you continue to cut in the next Budget or is that work done?

MATHIAS CORMANN: In 2014 we initiated a lot of structural budget reforms. In 2015 our focus will be wherever there is additional new expenditure on high priority areas, we will seek to offset that by reductions in expenditure on comparatively lower priority areas in the circumstances. But as the Prime Minister indicated in his Press Club speech, in our next Budget, we will not press ahead with repairing the Federal Budget at the expense of the household budget and that is our focus.

BARRIE CASSIDY: Minister, it's good to have you back as you promised. Thank you.