Senator the Hon Mathias Cormann

FRAN KELLY: Well the problems are piling up for the PM. There is the forced closure of the Manus Island detention centre on Nauru, in PNG rather. There is the fresh Liberal party divisions over the proposed changes to the race hate laws. Finance Minister Mathias Cormann joins us very early from Perth. Minister thank you very much for joining us.

MATHIAS CORMANN: Good morning Fran.

FRAN KELLY: So Bill Shorten saying there saying negotiation by Prime Ministerial megaphone is not the way to do business. You must know that. If you really want the Opposition’s cooperation on Budget matters, it is not really smart to put out an ultimatum in the morning papers and in a speech is it?

MATHIAS CORMANN: Bill Shorten needs to be a bit less sensitive and focus on the national interest. In fact, the starting position for Bill Shorten should be that he sticks to the promises that he has made during the election campaign. All the Prime Minister did in his speech yesterday, as a starting position, as the absolute bottom line starting position, was to put on the table those savings measures which Bill Shorten and Chris Bowen indicated during the election campaign they would now support. In order to ensure that we can put our fiscal position on the strongest possible foundation as soon as possible, we took Labor at its word. We decided to move swiftly when the Parliament goes back in just over ten days to legislate those savings, which Labor has indicated ... interrupted

FRAN KELLY: And that might be fair enough. But the point that I am making and I guess that is the point Chris Bowen made on this program yesterday that if you are serious about that and you want to progress that. Wouldn’t you sit down and talk that through with the Opposition Leader and the Shadow Treasurer first.

MATHIAS CORMANN: These sorts of processes always take place of course. But there was actually ... interrupted

FRAN KELLY: Well they haven’t though, that’s the point.

MATHIAS CORMANN: Fran, in relation to this, this is what I am saying, that Bill Shorten needs to be a bit less sensitive and a bit more constructive. This is a matter where Bill Shorten explicitly said during the campaign that these are savings we may have opposed in the past, but we now support, because we have finally realised that we can’t afford all of the spending promises that we were making during the campaign. You have to remember that Labor during the election campaign ended up in a position where they had to concede that deficits would be bigger under Labor, to the tune of about $16.5 billion. That was after more than $100 billion in additional taxes that Labor put on the table and after they changed position, backflipped on a series of savings measures that they had previously opposed. If we can’t trust even what Labor said during the election campaign when it comes to the savings measures that they now support, people across Australia will be able to form their own judgement about the integrity of what Bill Shorten and Chris Bowen have to say.

FRAN KELLY: Okay.

MATHIAS CORMANN: We never anticipated that there would be any argument at all in relation to $6.5 billion worth of spending cuts, savings which Labor themselves explicitly themselves, during their election costings release said that they would now support.   

FRAN KELLY: Okay. I find it hard to understand that you didn’t anticipate it, given the fierce politicking that is going on ahead of this resumption of Parliament... interrupted

MATHIAS CORMANN: How can there be any argument in relation to savings that Labor themselves say they support? You have an argument about those things where we need to find common ground, because we start from different starting positions, but when you are dealing with issues where Labor explicitly put on the table that these savings measures are savings measures we now support, I don’t know why you need to have another argument about that after that.

FRAN KELLY: Okay. The Prime Minister in his speech talked about reaching across the aisle. That works both ways though and the Opposition Leader has said that Mr Turnbull has got to come to the party and give up some of the things he thinks are important. I think the point Labor is making there, is why should Labor support your omnibus Bill, with $6.5 billion of funding cuts, when the Government just dismisses Labor’s spending measures that it campaigned on during the campaign, including negative gearing changes and capital gains tax, if it is serious about Budget repair?

MATHIAS CORMANN: In relation to the $6.5 billion, I say it again, these are now bipartisan spending cuts, because both the Labor party and the Coalition in the course of the election campaign indicated to the Australian people that should we be successful, that these would be savings that we would pursue. Beyond that, we are at the beginning of this term of Parliament. Parliament is due to resume in just over 10 days. I would expect that from the Prime Minister, the Treasurer, myself and other colleagues, that we will be sitting down and working constructively with Members of all parties in order to advance the national interest, in order to ensure that we can implement a plan that delivers a stronger economy, stronger growth, more jobs and indeed makes sure that Australians are as safe and secure as possible.  

FRAN KELLY: Moody’s yesterday, the ratings agency, affirmed Australia’s AAA credit rating. It says the economy’s strong enough to endure in an uncertain global environment. That is good news for you, the Finance Minister in particular. Does it take the pressure off? And, on the other side of that, undermine the case for the urgency of the Budget cuts?

MATHIAS CORMANN: No it does not take the pressure off. It is true that the Australian economy is growing more strongly, firstly than when we came into Government and also more strongly than any of the G7 economies around the world. But, we are still in an uncertain world. We are facing global economic headwinds, still. Our economy is an economy in transition, from record resource investment driven growth to broader drivers of growth in a stronger, more diversified economy. That comes with risks. That comes with challenges as you work your way through that transition. We need to continue to do everything we can to put ourselves on the strongest possible economic and fiscal foundation for the future.

FRAN KELLY: Okay. You are listening to RN Breakfast. Our guest is the Federal Finance Minister Mathias Cormann. Offshore processing is a significant drain on the federal Budget. The price tag for running Nauru and Manus Island detention centres, around $1.2 billion a year. How much is it going to cost the Government for the closure of the Manus centre and the resettlement of those 854 detainees?  

MATHIAS CORMANN: Firstly, we have saved a lot of money as a result of the successful Operation Sovereign Borders and our successful efforts to stop illegal boat arrivals on our shores. Indeed, we have been able to close 17 detention centres so far. We have been able to get all children out of detention and we have saved about $11 billion so far... interrupted

FRAN KELLY: So how much will this resettlement cost?

MATHIAS CORMANN: We have had a long standing position to close the Manus Island regional processing centre. We have been working with the PNG Government in relation to this. One thing is very certain, nobody who has been processed through the Manus Island regional processing centre will come to Australia. The details on all of that are being negotiated between the Minister for Immigration and Border Protection, Minister Dutton and the PNG Government.

FRAN KELLY: Well you are the Finance Minister. The Immigration Minister said yesterday on RN Drive that it will be a significant cost. Can you give us a sense of what significant indicates? What kind of ballpark?

MATHIAS CORMANN: We are currently working our way through these things.

FRAN KELLY: Okay. Can I ask you on another matter, the Racial Discrimination Act, Senator Cory Bernardi says he will re-introduce a Private Senators Bill in the first week back to remove ‘insult’ and ‘offend’, those words from Section 18C. Do you support that?  

MATHIAS CORMANN: The Government has made our position very clear. We will not initiate or support any changes to the Racial Discrimination Act. It is a debate that we have had about two years ago. We are focussing on implementing the commitments that we took to the last election. We are focussed on implementing our plan for a stronger economy and more jobs.  

FRAN KELLY: So if Senator Bernardi, when he introduces that Private Members Bill, will all Liberal MPs and Senators be locked in behind that position you just espoused? They won’t be free, there won’t be a free vote?

MATHIAS CORMANN: My good friend Senator Bernardi is a backbench Senator. There are some liberties that come with being a backbench Senator. I am a member of the Government. I am a member of the Cabinet. Clearly, I support the Government’s position.

FRAN KELLY: Yes, but I am wondering, there won’t be a free vote for people?

MATHIAS CORMANN: No.

FRAN KELLY: Senator Bernardi announced his Bill on the very day the Prime Minister was reaffirming the Government has no intention to change the race hate laws. Is that a bit of an ‘up yours’ by the conservative wing at Malcolm Turnbull?  

MATHIAS CORMANN: Not at all. In the Parliament it has always been thus. If you are a backbench member of Parliament, you are able to pursue certain matters in a different way than when you are a member of the executive. That is always the way it has been. That is the way the process works.

FRAN KELLY: Minister can I just ask you finally, your view on the decision by the Vietnamese Government to cancel the commemorative events remembering the battle of Long Tan 50 years ago there. The Prime Minister did speak with his counterpart last night, there has been a slight reprieve but never the less, the commemoration ceremony and the concert have all been cancelled. What is your view?

MATHIAS CORMANN: The Prime Minister did have a long conversation with the Vietnamese Prime Minister last night. We are very keen for Australian veterans and their families who have travelled to Vietnam in good faith to be able to pay their respects at Long Tan. As I understand it, there has been some arrangement put in place where there will be wreath laying at the site and where groups of up to 100 are able to visit the site and pay their respects. From the Government’s point of view, we are very keen to ensure that Australian veterans and families who have travelled to Vietnam are able to pay their respects in the appropriate way.   

FRAN KELLY: Minister thank you very much for joining us.

MATHIAS CORMANN: Always good to talk to you.