Senator the Hon Mathias Cormann

FRAN KELLY: And with just days to go to that all important by-election in the WA seat of Canning this is the Prime Minister’s mantra.

PRIME MINISTER [EXCERPT]: As far as I’m concerned, the Canning by-election is about the people of Canning. It’s about what’s good for Canning. It’s not about Canberra. It’s not about me. It’s about the candidate and it is about Canning.

FRAN KELLY: Well I guess we’ll see how true that is on Saturday, because certainly all the chatter right now seems to be about the leadership crisis engulfing the Abbott Government. To discuss the Government’s prospects in Canning on Saturday we are joined by the Finance Minister, West Australian Senator Mathias Cormann. Minister good morning thanks very much for joining us. 

MATHIAS CORMANN: Good morning Fran, good to be here. 

FRAN KELLY: You have spent the weekend in the West, are people talking about Tony Abbott? 

MATHIAS CORMANN: The mood in the West is very good. In Canning we have an outstanding candidate in Andrew Hastie who is working very hard to earn the trust of the people of Canning, to represent them in Canberra. He has got some big shoes to fill. Don Randall who sadly passed away two months ago was an outstanding local member, representing that area very, very effectively. Andrew Hastie is working very hard to follow in his footsteps. 

FRAN KELLY: He’s not being helped though is he, it’s been a shocker this week for the Coalition. You’ve had that leak of the Cabinet reshuffle hit list, Peter Dutton offending the Indigenous community and our Pacific neighbours with jokes about Cape York time and rising seas and then right now, a leadership speculation at fever pitch. How much impact is this having on the result in Canning do you think? 

MATHIAS CORMANN: We aren’t getting distracted by any of that. In Canning we are running a very strong and effective campaign. Andrew Hastie is working very hard on the ground, presenting himself as the candidate with the experience and with the leadership qualities, the competence, to be a strong voice for the people of Canning in Canberra. All of us here in Canberra, part of the Coalition team, from the Prime Minister down, all of us will do everything we can to help Andrew Hastie be successful on Saturday. 

FRAN KELLY: Well some of you. Certainly some of your Ministerial colleagues and the ABC has spoken to eight of them, are talking about other things besides Canning. They are talking about the leadership. Six of those Ministers who have spoken to the ABC say Tony Abbott will be challenged no matter what happens in Canning. Is a leadership challenge now inevitable?

MATHIAS CORMANN: I can’t provide commentary on what you say is anonymous commentary. What I can say, is that in my judgement Tony Abbott continues to enjoy the strong and overwhelming support of the party room. I certainly, as far as I am concerned, I continue to support the leadership team of Tony Abbott and Julie Bishop, which took us successfully from Opposition to Government back in September 2013. We came into Government facing a series of challenges left behind by the previous Government. The economy was weakening, unemployment was rising, the Budget position was deteriorating and the previous government had lost control of our borders. Over the last two years we have been working very hard to put the Australian economy on a stronger foundation for the future and to get our borders back under control, which we have successfully been able to do. There is more work to be done. All of us in the Coalition are focussed on doing everything we can to put Australia on a stronger economic and fiscal foundation for the future and to ensure Australia is safe and secure. 

FRAN KELLY: There is plenty of work to be done, but the question that seems to be consuming the thoughts of many of your colleagues is Tony Abbott the man to lead you to do that work. Let me quote to you what one Minister has told the ABC. He said Tony Abbott asked for six months, he has had six months and things have gone from bad to worse. Tony Abbott should just resign. Have you heard that sentiment expressed by your colleagues?

MATHIAS CORMANN: No, I have not heard that sentiment. Let me just say that I disagree with that sentiment. We did have some challenges to deal with earlier in the year. I think that in the period that followed that things actually went very well for the Government. We had a very good Budget ...interrupted.

FRAN KELLY: And not so well in the last few weeks.

MATHIAS CORMANN: At any one point in time, you will face challenges from time to time. You will go through challenging periods from time to time. The important thing is that this Saturday we have an important by-election. All of us have a responsibility to do everything we can to help Andrew Hastie be successful. Some time next year there will be a general election at which people across Australia will be able to pass judgement on our performance, where they will be able to pass judgement on our plans for the future and where they will be able to pass judgement on Labor and Bill Shorten who quite frankly haven’t done the work to put together a credible plan for Australia. 

FRAN KELLY: The latest Ipsos poll over the weekend shows the Liberal Party winning, Andrew Hastie winning, but with a swing of 10 per cent against the Government. With a swing of 10 per cent, is Tony Abbott’s leadership safe? Or even tenable? 

MATHIAS CORMANN: I will leave it to you to run commentary on what which result means for whom. As far as I’m concerned and as far as every member of the Liberal Party in Western Australia is concerned, we are doing everything we can to earn the trust of the people of Canning again at this by-election. We are doing everything we can to win this by-election on Saturday. We are working to win. Everything after that is going to be commentary by good people like yourself.  

FRAN KELLY: Well let me just read to you another quote from an unnamed senior Liberal source, this one is in the Sydney Morning Herald, saying the Government is doing so badly in states like South Australia and Victoria that a switch of leader is now seen as the low risk option. These are not things that I am making up or other journalists are making up, these are things being told to journalists. What is your view, how do you feel when you read those comments in the media? 

MATHIAS CORMANN: As I have already said to you earlier in this interview, it is very hard for me to provide informed commentary in relation to anonymous commentary. All I can say ...interrupted

FRAN KELLY: But does it frustrate you, does it annoy you, does it anger you? 

MATHIAS CORMANN: I don’t get distracted. As far as I’m concerned, I was appointed by the Prime Minister to do a job as part of the economic team. I am focused every single day on doing everything I can to help put Australia on a stronger economic and fiscal foundation for the future. I think that our plan to strengthen the economy and create more jobs and to get the Budget back under control is working. There is much more work to be done. But if you look at the way the Australian economy is performing, the way the employment growth in Australia is tracking compared to other countries in the world that are facing similar challenges when it comes to significant falls in global priceless for their key commodities. We are facing the biggest fall in our terms of trade in about 50 years yet our economy continues to grow. Employment growth continues to strengthen, the unemployment rate is lower than what was forecast under Labor and it is anticipated to be lower than what has been forecast moving forward. We need to continue to work to implement our plan for stronger growth by bringing down the cost of doing business, improving our competitiveness, improving productivity, shedding some of that lead that Labor put into our saddle bag in their six years in Government. That is what I am focused on. I’m not going to get distracted by some of the political noise that is around. 

FRAN KELLY: Alright Minister I will ask you a question or two about your portfolio but just one final one on this issue of the leadership, your colleague in the West Andrew Nikolic has called on Malcolm Turnbull to rule out a challenge. Do you think Malcolm Turnbull should come out and make a public statement of support for Tony Abbott and rule out a challenge?

MATHIAS CORMANN: All of us in the Coalition party room, we are all professional politicians. We all know what we need to do as part of our jobs. We all know what we need to do in order to give Andrew Hastie the best possible chance to be successful on Saturday. I’m not going to give public advice to any of my colleagues. I’ve got a very good relationship with Malcolm Turnbull. Malcolm is a valued, very senior member of our team. I look forward to continuing to work with him moving forward. 

FRAN KELLY: It’s quarter to eight on Breakfast, our guest is the Finance Minister Mathias Cormann who is also a Senator in Western Australia. As the Government prepares for what might be an uncomfortable result in the by-election in Canning on Saturday. To your portfolio matters, Deloitte is saying that if you lift the GST to 15 per cent, the Government could fully compensate low income earners and cut the company tax rate to 25 per cent and still have tens of billions of dollars for income tax cuts and reform, and spending on health and other issues. It has got to be appealing? Doesn’t it?

MATHIAS CORMANN: The contribution by Deloitte Access Economics today is a very high quality contribution to our tax reform debate in Australia. As far as the Government is concerned, we are committed to continue our efforts to lower the overall tax burden in the economy and to continue the conversation on how best to ensure that the necessary revenue for Government is raised in the most efficient, least distorting way in the economy so that we can facilitate stronger growth and stronger job creation into the future. As part of that, we have got to have a conversation about what is currently too heavy a reliance on personal income tax and company tax as revenue sources for Government. That means we have to continue to talk about how we can best reduce spending growth moving forward to give us the necessary fiscal room to move and also how we can best improve the tax mix in Australia. Between now and the election as we have previously indicated, the Government will be putting forward our plan for a second term when it comes to tax reform. The submission and the report by Deloitte that is reported today is a very high-quality input into the Government’s consideration.

FRAN KELLY: Minister if I could be so bold, listening to that answer it seems to me that you support this notion, you think it is a good idea to lift the GST to 15 per cent. Why don’t you just come out and say it?

MATHIAS CORMANN: I’m not going to get ahead of myself. I am not going to get ahead of the process. There is a very important conversation taking place at present. What I would say is that the contribution by Deloitte today is a high quality input. There is a range of inputs into this tax reform discussion that is currently under way, which the Government will consider and at some point between now and the election, the Government will put forward our plan for a second term on how we believe we can further improve our tax system to strengthen growth, create more jobs and improve opportunities for people across Australia to get ahead.

FRAN KELLY: And so just finally, when will we get the Tax White Paper result?

MATHIAS CORMANN: As I have just indicated sometime between now and the next election the Government will be releasing our plan when it comes to tax reform for a second term.

FRAN KELLY: Mathias Cormann, thank you very much for joining us on Breakfast.

MATHIAS CORMANN: Always good to talk to you.