Senator the Hon Mathias Cormann

KIERAN GILBERT: Good morning and welcome to the program. The first week of Parliament has wrapped up with no further clarity on where the Government is heading on the issue of tax reform. In fact there could well be less than what we had at the start of the week after a number of backbenchers both privately and publicly expressed their concerns about the prospect of a rise in the GST. In fact the Prime Minister himself also appears at this stage not be convinced. Coming up this morning, Graham Richardson and Peter Reith. First though I am joined by the Finance Minister, Mathias Cormann live from Perth. Senator Cormann, give us a sense of where things are at right now? Is it fair to say the Prime Minister is not convinced on the need to increase the GST, because the economic dividend hasn’t been proven yet?

MATHIAS CORMANN: When it comes to tax reform, the conversation is ongoing. Our focus and our commitment is to pursue policies that deliver stronger growth and more jobs. In that context, building on all of the other policy reforms that we are pursuing in other parts of Government, we want to ensure that our tax system is as growth friendly as possible. In that context we have been engaging in a conversation with State and Territory Governments. We have been engaging in a conversation with interested stakeholders from around the country. At this point, we haven’t made any final decisions. But in good time, before the next election, we will be making decisions and we will be making relevant announcements on what we would intend to do in the second term of a Turnbull Government to put the country on an even stronger economic and fiscal foundation for the future.   

KIERAN GILBERT: Even if the GST is not on the table, if that’s how it turns out and Turnbull and your Cabinet decide not to push ahead with it, can you still undertake significant reform even without the consumption tax being on the table?

MATHIAS CORMANN: When we came into Government over two years ago, our commitment then was to ensure that our tax system would be more growth friendly, was less of an inhibitor on stronger economic growth. That’s why we got rid of the mining tax and the carbon tax. That is why we pursued company tax cuts for small business in last year’s Budget. Now, at the moment, we are working through what we can sensibly do to improve our tax system moving forward, to ensure that it is the most efficient, least distorting in the economy possible. That we raise the necessary revenue for Government in the best, most efficient way possible. In the next few weeks and months, we will make some decisions as we finalise our consideration.  

KIERAN GILBERT: Are you surprised by the strength of opposition to an increase in the GST within your ranks, because it is not just the so called bed-wetters as they were described in marginal seats. I have spoken to some hard heads close to Turnbull who also believe that the handbrake should be put on here. 

MATHIAS CORMANN: This is an important conversation. It is entirely appropriate for everyone that represents communities across Australia to express their view. In the end, what we as a Government are focused on is how we can best achieve cuts in personal income tax, how we can ensure that our company tax rate is internationally competitive and how we can ensure that our tax system is as growth friendly as possible. That means that we have to have a look at how the tax mix can be improved and how our system generally can be made simpler, fairer and more efficient. 

KIERAN GILBERT: So can you give us at least one bit of certainty here on this issue, does this include tax cuts? Will there be tax cuts, of some sort delivered to income earners to try to deal with this issue of bracket creep?

MATHIAS CORMANN: That is our intention. Our commitment always is when we pursue policy change like that, that we need to do the hard yards to identify how we would pay for it. That is the work that is currently underway. The only certainty I can give you is that we will reach a landing point in good time before the next election and that we will be making relevant announcements about our policy decisions before the next election so people can pass judgement on them. 

KIERAN GILBERT: The superannuation guarantee under Labor was meant to rise to 12 per cent by 2019. Tony Abbott delayed that to 2025. Now David Crowe in The Australian reporting that it is going to be scrapped all together. Employers would welcome that, they are saying it adds a $20 billion a year cost to their wages bills. Is this something the Government is considering?

MATHIAS CORMANN: That is an entirely speculative piece. There has been no such statement from the Government. There has been no such decision. There has been no such policy decided by the Government. That is entirely speculation by my very good friend in The Australian, David Crowe. 

KIERAN GILBERT: Are you thinking about it, considering it?

MATHIAS CORMANN: It is not something that is in front of us as we speak. It is not something that we have decided to do. It is an entirely speculative piece. 

KIERAN GILBERT: And so that’s a no, you’re not considering it then? If it is not before you.

MATHIAS CORMANN: Again, I’m not going to go into this rule in, rule out game. It is not something that has been decided by Government. It is not something that we have announced. It is entirely something that David Crowe has thrown out there by way of speculation. 

KIERAN GILBERT: Let’s look at a few other issues before you go, the leaked document overnight that outlines plans to remove direct access to permanent citizenship for refugees who are migrating here, also greater monitoring of individuals. This is something that Peter Dutton is apparently going to put to Cabinet. First of all is it worrying, another leak at that level, the Cabinet level, and secondly is it something the Government is looking at?  

MATHIAS CORMANN: I don’t know that you can say it’s a leak at a Cabinet level when it hasn’t actually on the face of it come to Cabinet yet. That’s the way that you’ve just put that to me. There are lots of drafts of documents generated across the public service every day. There are lots of draft documents that have the words ‘Cabinet in confidence’ written on top of it because they might be intended in that direction. That is not something... interrupted

KIERAN GILBERT: Has it gone to Cabinet ranks?

MATHIAS CORMANN: I don’t talk about what goes to Cabinet. But there are lots of drafts that are being generated right across the public service. I don’t think that anybody would be surprised that the Government is weighing up very carefully how we can ensure that our immigration system has got the appropriate levels of integrity and that there is appropriate consideration of security considerations, given what is happening around the world at present. 

KIERAN GILBERT: Finally and just quickly, Angus Taylor, again under a bit of a cloud over his pre-selection. Apparently Matheson, fellow Liberal is saying that he wants to contest that seat up against Angus Taylor up in the seat of Hume. This pre-selection drama continues. What’s your thought on that one specifically?  

MATHIAS CORMANN: I’m not aware of what Russell’s intentions are. But let me just say that Angus and Russell are obviously both valued colleagues. I look forward to having both of them serve as Government Members of the Parliament after the next election. 

KIERAN GILBERT: That means you would urge Matheson to stay where he is in his current seat and not challenge, not set that up in the seat of Hume?

MATHIAS CORMANN: These are not matter for me. I’m very confident that the Liberal party organisation in New South Wales will work through these issues if they arise in a sensible fashion. 

KIERAN GILBERT: Okay, thank you Finance Minister Mathias Cormann, appreciate it live there from Perth this morning. 

MATHIAS CORMANN: Always good to talk to you.