Senator the Hon Mathias Cormann

KIRSTYN MARCH

Potential candidates for the Federal seat of Canning have been streaming in since Don Randall passed away last month. There has been a significant push by Liberal party heavyweights for their candidate Andrew Hastie. Today, Federal Finance Minister, Mathias Cormann is flying into Kalgoorlie Boulder for a Liberal party fundraiser. He joins us on the line. Good morning, Mister Cormann.

MATHIAS CORMANN

Good morning.

KIRSTYN MARCH

What are you coming to Kalgoorlie Boulder for?

MATHIAS CORMANN

I’m meeting a number of local business people, with the local Federal Member for O’Connor Rick Wilson. I’ll be seeking their feedback on how things are going in Kalgoorlie, how the Kalgoorlie economy is going. I’ll be talking about the Federal Government’s plans for stronger growth, more jobs and how we propose to deal with the current structural challenges we are facing as a country given the significant drops in global prices for some of our key commodities. 

KIRSTYN MARCH

We know you’re here for the Liberal Party fundraiser as well, is it also essentially about an increased presence for the candidate for the seat of Canning, Andrew Hastie? 

MATHIAS CORMANN

No, Andrew Hastie is the candidate for Canning and that is the seat that is centred around Armadale and Mandurah. By coming to Kalgoorlie, I’m coming at the request and at the invitation of Rick Wilson, the Federal Member for O’Connor, which covers the areas from Kalgoorlie all the way down to Esperance and Albany. I’ll be meeting with local community leaders at his request. I will be meeting with the President of the Goldfields Chamber of Commerce and Industry, Lee Jacobson. I will be meeting with the local manager for the Chamber of Minerals and Energy. I will be meeting with a series of other individual business people. Yes, we will be having a dinner at the Overland Motel later tonight, where no doubt, I will be getting another lot of feedback about how things are going.  

KIRSTYN MARCH

Our guest this morning is Mathias Cormann, he is the Federal Minister for Finance flying into Kalgoorlie Boulder tonight. Now in your opinion how important is the Goldfields Esperance region to the Federal economy? Just last week Sandra Close from Surbiton Consultant said gold output is worth $14 billion in exports a year. So how important is this region?

MATHIAS CORMANN

The Goldfields is a very important part of the West Australian and of the national economy. Kalgoorlie, like other parts of Western Australia given our very significant export focus, we are dependent a bit on what happens in global markets. We are dependent a bit on what happens with global prices for our commodities, which we don’t control. So at times, when prices for gold and nickel are high, places like Kalgoorlie do very well. At times when resources like gold and nickel are a bit more subdued, the overall environment is a bit more challenging. The important thing for all of us is to ensure that in the good times we put ourselves into the best possible position to be as resilient as possible in the more challenging times. That is what the Federal Government is very much trying to do. Reduce the cost of doing business. Getting rid of some of the lead that the previous government put into our saddlebag like the carbon tax and the mining tax, reducing red tape costs for business by more than $2 billion a year so far. That is also why we are entering into all these free trade agreements with countries like China, Korea and Japan, because we want to get better access to key markets so that more products out of the Goldfields and indeed more products out of the whole of Western Australia can get sold into more markets.  

KIRSTYN MARCH

At ten past eleven at ABC Goldfields Esperance. Last night on ABC you said Australia is an economy in transition. In the Goldfields, despite the higher gold price we are hearing that people are struggling because of the mining industry downturn. So how will your plan for stronger growth and more jobs help people in this part of Australia?

MATHIAS CORMANN

The Australian economy continues to grow when commodity based economies in other parts of the world like Canada and Brazil are in recession. We believe that is because we have worked very hard to improve our competitiveness and to, as I said, shed some of the lead that we had in our saddlebag like the mining tax and the carbon tax. Now the truth is, we have got to get ourselves into the best possible position so that when opportunities do come our way, we can take advantage of them. The good news for us is, that geographically we are located in the Asia-Pacific. This is the part of the world where most of the global economic growth will be generated over the next few decades. But, we have got to ensure that we can supply our products in a way that is competitive in terms of quality and in terms of price. That is what we are focussed on and I know that is what the business community is focussed on as well. 

KIRSTYN MARCH

We know there has been strong lobbying from the State Government for WA to get a bigger slice of that GST. Now considering that WA is an economic powerhouse, any plans to re-analyse or to recalculate the cut that WA gets of that tax?

MATHIAS CORMANN

All of the GST revenue that is collected goes to the States. It is shared among the States by the Commonwealth Grants Commission. It is a zero sum game, the way it currently operates. If you want to give more to one State you have to take money away from another State. What we have done at a Federal level is we, having recognised that the share of GST for Western Australia is inappropriately low, we have stopped the drop by effectively making up the difference between WA’s share of the GST last year and the further drop that would have occurred this year, by making a $500 million additional investment in productivity enhancing infrastructure across Western Australia. Moving forward, if the iron ore price stays where it is at present, WA’s share of the GST will start increasing again, sadly for the wrong reason. It will be increasing again because our export income and the related royalty revenue from iron ore exports will be falling and as such there will be a flow on effect in terms of the higher share of the GST. Having said all of that, there are some reforms that ought to be pursued in this space. As the Prime Minister indicated a few months ago, this is a matter very much that the State and Territory leaders have to work through. Recently during the leaders retreat this was an issue that was further explored and certainly there is a conversation about putting in a floor of at least 50 per cent in place once Western Australia gets back past that 50 per cent share of the GST as another step forward. 

KIRSTYN MARCH

Can we expect any announcements out of your visit?

MATHIAS CORMANN

Today it is very much a listening visit. I will be meeting with people in and around Kalgoorlie, seeking their feedback about how things are going, seeking their feedback about what else the Federal Government should be doing down the track. Depending on how my visit goes today, there may well be some announcements, yes. 

KIRSTYN MARCH

All the best and thank you for your time with ABC Goldfields Esperance today. 

MATHIAS CORMANN

Always good to talk to you.