Senator the Hon Mathias Cormann

ASHLEIGH GILLON: Let’s bring you more on this issue now. Let’s go live to Perth, we’re joined by the Finance Minister Mathias Cormann. Minister thank you for your time. 

MATHIAS CORMANN: Good to be here.

ASHLEIGH GILLON: You are there at the WA Liberal State conference meeting. There are plenty of issues to discuss around that meeting as well. But let’s start on this proposal from Labor to launch a Parliamentary inquiry into the abuse allegations on Nauru. Will the Government be supporting that?

MATHIAS CORMANN: I will let Peter Dutton as the Minister responsible deal with that particular proposal that Labor has put on the table. But what I would say is that many of the allegations that have been put forward, many of the claims that have been reported earlier this week, are claims that are quite historical in nature, that have previously been investigated, that have been dealt with appropriately. The Department of Immigration and Border Protection as I have been advised, is currently reviewing every single one of those documents that have been released in recent days to see whether there is any new claim. There are very strict processes and procedures within the Department of Immigration and Border Protection and the offshore processing framework, to deal with any allegations of abuse of this nature and appropriate action is always taken. 

ASHLEIGH GILLON: Let’s move onto issues that are no doubt dominating your mind there in Western Australia. When it comes to Mr Turnbull’s pledge yesterday to establish a floor price for GST distribution. Where do you think negotiations will land on what that floor price should be?

MATHIAS CORMANN: The Australian Government has long been of the view that the share of the GST coming back to Western Australia is inappropriately low. It went as low as 30 per cent. 30 cents of every dollar collected in GST in Western Australia is returned to Western Australia. In the past two years, that is why the Australian Government has made additional investments into Western Australian infrastructure projects, making payments that effectively stopped the further drop in WA’s share of GST. The reason that has happened, the reason there has been such a strong fall, is on the back of Western Australia’s success in particular in relation to the iron ore industry, with very high prices and increasing production volumes and export volumes of iron ore. The price of iron ore has come down quite significantly in recent years. Over time, the WA share of the GST will start to increase again. What the Prime Minister has announced yesterday, is that once that happens, in order to ensure that what has happened to Western Australia this time round can not happen to any other state in the future, it would be appropriate to set a floor. That will now be a matter for discussion between the Prime Minister and the Premiers and Chief Ministers in the Council of Australian Governments forum.   

ASHLEIGH GILLON: Labor in WA is pushing for an 80 cent floor. Is that unrealistic do you think?

MATHIAS CORMANN: I was listening in to your interview with Bill Shorten, who was working very hard to avoid answering your question. I am not going to lock into a specific number here today. It was a very important announcement by the Prime Minister yesterday, to put on the table the fact that there needs to be a floor. That he will work to pursue a floor. Indeed the Australian Government will now engage with all State and Territory Governments to ensure that that is done in the appropriate fashion. 

ASHLEIGH GILLON: Okay so we don’t have any more details on what the floor price would be. Do you have any sort of range though as to what will be up for discussion?

MATHIAS CORMANN: It is a matter of public record that previously there has been a discussion at the Council of Australian Governments to at least have a 50 per cent floor initially. Premier Colin Barnett in Western Australia has advocated for a 75 per cent floor. We are going into these conversations with an open mind. But we do believe there needs to be a floor, that the gap between the share of GST that is going back to Western Australia and the share that is going to other states is too large. It is inappropriately large. It is unprecedented. It is true that Western Australia in the past has been a beneficiary of so called horizontal fiscal equalisation, but no other state has ever fallen below 80 cents in the dollar when it comes to the returns going back into those respective states. 30 cents is just completely inappropriate and unsustainable. That is the reason why over the past two years, the Federal Government has made additional contributions to Western Australia in recognition of that, but we need a more structural, more sustainable and more long term solution. That is what the Prime Minister has put on the table yesterday.

ASHLEIGH GILLON: And how much of a priority is this for the Government? What is a realistic timeline as to when we can actually expect a floor to be in place? 

MATHIAS CORMANN: What the Prime Minister has said, is that the floor should be put in place once Western Australia exceeds a certain threshold. Because of what has been happening to the price of iron ore in recent years, the GST sharing arrangements are backward looking, it does take three years for changes in royalty revenues and the like to work their way through the system so to speak. So over the next few years, it is expected that WA’s share of the GST will increase again in the ordinary course of events under the current system. As that happens, the proposal is to put in a floor at that time. That means that no other state will actually be disadvantaged, because no other state will lose compared to the projected GST shares that they will be receiving at that time.  

ASHLEIGH GILLON: Would you like to see your Government reassess its position when it comes to the Racial Discrimination Act and 18C? Do you think that this is something that does need to be back on the table for the Liberal Government to examine? 

MATHIAS CORMANN: The Government has no plans to put this back on the table. This has been extensively debated in 2014. We are focused on implementing our plan for stronger growth and more jobs. We are getting on with implementing all of the commitments that we took to the last election. This wasn't one of them. 

ASHLEIGH GILLON: Finance Minister Mathias Cormann, we appreciate your time. We will let you get back to that conference that is about to kick off for its second day. Thank you so much.

MATHIAS CORMANN: Always good to talk to you.