Senator the Hon Mathias Cormann

MATHIAS CORMANN: Good morning everyone. Last night, the Senate passed another important Budget measure. The legislation passed by the Senate last night will ensure that tax incentives for research and development are better targeted towards small and medium sized business and in the process we will be able to improve the Budget bottom line by more than $1.3 billion over the forward estimates. This was a Budget measure initiated by Julia Gillard and Wayne Swan. This was a Budget measure banked by Julia Gillard and Wayne Swan in their last Budget, but it was never legislated by the previous government. Incredibly, Labor last night voted against this savings measure which they themselves initiated. What it shows is that Bill Shorten does not have what it takes to put Australia on a stronger foundation for the future. He does not have what it takes to strengthen the economy and to repair the Budget, because he was rolled internally, not able even to be responsible to the same extent as Julia Gillard and Wayne Swan. To put that another way, Bill Shorten is even more reckless when it comes to the Budget than Julia Gillard and Wayne Swan and that is saying something. Happy to take questions.

JOURNALIST: Minister, do you support the idea of a two tier corporate tax system?

MATHIAS CORMANN: We will have more to say about our families package and related commitments. That will be an announcement that will be made in the next few weeks or months.

JOURNALIST: Will all companies though be able to expect a tax cut from July? Or just small companies?

MATHIAS CORMANN: Our policy going to the last election was very clear. We had a policy which is reflected in our Budget, which we took to the last election of a 1.5 per cent company tax cut. There was also a 1.5 per cent temporary paid parental leave levy for Australia’s largest companies. We have already said that there will be some further announcements in relation to our families package, in relation to the implications of not proceeding with the paid parental leave scheme as originally envisaged and all of the related consequences.

JOURNALIST: But are you considering having a two tiered system?

MATHIAS CORMANN: We will make announcements when we are in a position to make those announcements. Any other questions?

JOURNALIST: On submarines, can you tell us what a competitive evaluation process is?

MATHIAS CORMANN: I am a non-English speaking background humble immigrant and I thought competitive evaluation process is a pretty straight forward concept to understand. You put all of the options on the table. You assess them based on their comparative merits, their comparative strengths and weaknesses, based on a set of criteria, based on the capability requirements, based on the cost, based on the project risks. You make an assessment based on the comparative strengths and weaknesses of the various options that are on the table and then you make a decision in the national interest. Incidentally, that is entirely consistent with the defence acquisition processes followed by previous governments, including the previous Labor government. When it came to the acquisition of our naval combat helicopters, that was the process pursued by the previous Labor government. When we talk about defence procurement of assets of this sort of size, complexity and sensitivity, when it comes to our national security interests, our defence interests, this is not like a run of the mill procurement process for office supplies, for papers or food or drinks. This is a pretty involved, complex process with a whole range of very strategic and sensitive considerations. We have always been committed to go through a proper process. We have always been committed to ensuring that we get the best possible submarines at the best possible price, to achieve the best possible defence and national security outcomes for Australia. That is our responsibility and our responsibility to taxpayers is to get value for money and that is what we are committed to doing.

JOURNALIST: Will it be an open process though? Will the ASC have a chance to bid to build these submarines based on a set criteria that the Government releases?

MATHIAS CORMANN: Australian companies will have the opportunity to participate. We have been very clear in relation to this. Again, this is a defence procurement process. This involves some sensitive, national security related issues of great importance and the process that is followed by this Government is entirely consistent with the process followed by the previous government and governments before that. When it comes to defence procurement you don’t run open tender processes in the same way as if you are just buying some paper.

JOURNALIST: Are you aware of whether Malcolm Turnbull was sounded out for the role of Treasurer back in December?

MATHIAS CORMANN: Malcolm Turnbull is an outstanding Minister in the Abbott Government. He has done a tremendous job over the last 17 months as the Communications Minister. I am confident that he will continue to do a tremendous job into the future. All of us in the Cabinet, me included, we all serve at the discretion of the Prime Minister and that is entirely a matter for the Prime Minister.

JOURNALIST: Do you agree with Joe Hockey’s comments that the Budget was too ambitious?

MATHIAS CORMANN: We have all been saying that in recent days. On coming into Government we inherited a very challenging situation. A weakening economy, rising unemployment, a Budget in very bad shape and rapidly deteriorating, with the previous government having locked Australia into unaffordable and unsustainable spending growth into the future, including and in particular, the period beyond the published budget forward estimates at the time of the last election. Yes we were very ambitious. We were very bold in last year’s Budget. With the benefit of hindsight it appears that we may have bitten off more than we can chew. That is certainly a lesson that we have learnt from last year and that will guide our thinking and our attitude and our approach to the Budget this year.

JOURNALIST: Minister is the Prime Minister who, declares himself Minister for Indigenous Affairs, is he failing?

MATHIAS CORMANN: I think that is an unfair observation. The Prime Minister has a very personal commitment to doing everything he can and everything his Government can and everything we can do as a country to help close the gap. These are obviously very challenging issues. They have been very challenging issues for a very long time. I don’t think that we can blame the last 17 months for not having solved all of the issues that have been issues for Australia for some time. We continue to be committed to do the best we can to close the gap. There is clearly much, much, much more work to be done. We are making some progress, but we have to be honest with ourselves about where we are at and how difficult it is going to be to genuinely close the gap in this policy area.

Thank you.