Senator the Hon Mathias Cormann

FRAN KELLY: Well the summer break is finally over for our federal politicians and Parliament resumes later today for 2017. The Government will focus on its key pledges of corporate tax cuts and energy security as the Parliamentary year unfolds. But in a major setback for the Coalition, it is about to lose one of its number as we have been discussing this morning, Liberal Senator Cory Bernardi is expected to announce in the Senate today that he is splitting from the Liberals and setting up his own rival conservative party. Mathias Cormann is the Finance Minister and Deputy Leader of the Government in the Senate as such he will again be a key player for the Turnbull Government this year. He joins me in the Parliament House studios. Minister welcome back to Breakfast.

MATHIAS CORMANN: Good to be back.

FRAN KELLY: We will get to the Government’s agenda in a moment. But first to Cory Bernardi, if as expected he quits today is that putting it up in lights, this criticism that the Government has lost touch with its conservative base that it has drifted to far from the conservative values that many of your supporters hold?

MATHIAS CORMANN: Let’s see what…interrupted

FRAN KELLY: If your own politicians cannot stomach it.

MATHIAS CORMANN: Let’s see what Cory Bernardi has got to say today. There is of course a very strong conservative tradition inside the Liberal Party. If Cory Bernardi were to leave today there will still be a strong group of conservative Members of Parliament represented inside the broad church that is the Liberal party. 

FRAN KELLY: I have just been handed a piece of paper as you have seen and it has just been reported that Cory Bernardi spoke about twenty minutes ago and has confirmed he is leaving. He will announce at 12:30pm in the Senate. What is your reaction then to that news?

MATHIAS CORMANN: I am disappointed. Cory and I have been friends and colleagues for more than ten years. We have known each other since before either of us entered the Senate. Our preference, my preference would have been for Cory to remain as a strong and effective conservative voice within the Liberal party party room. If that is indeed what is happening, that is disappointing.Hopefully he will change his mind sometime in the near future. 

FRAN KELLY: I am pretty sure he is not going to change his mind. But do you think he should change his plan and resign from the Senate? Do you think that is a Liberal Party Senate place that he got elected on, what just six months ago?

MATHIAS CORMANN: It is a matter of public record that six months ago he was elected as a Liberal party candidate to represent the Liberal party for the state of South Australia here in the Senate. But let us see what Cory Bernardi has to say later today and there will be ample opportunity to be a commentator in relation to all these things. 

FRAN KELLY: Well speaking of commentators, there is plenty of commentary around about the conservative base splitting away, a fracture within the Party room itself and within the Party. You are shedding votes on the right, there is no doubt about that. Your primary vote dropped four points over summer, it is down below Labor now and many of those votes, they do not seem to have gone to Labor they have gone to One Nation. Tony Abbot‘s former Chief of Staff Peta Credlin said last night on Sky, ‘the problem has arisen because Malcolm Turnbull does not espouse or represent your conservative base.’ Let’s have a listen.

PETA CREDLIN (EXTRACT): I think it is very tough. This is a separation of the Party along ideological lines. A rent upon the party facilitated, promulgated, driven by a man who the party do not recognise as the leader of their values.

FRAN KELLY: That is Peta Credlin, former chief of staff to the Prime Minister saying that Malcolm Turnbull, Prime Minister, a lot of the Liberal party voters do not represent him as reflecting their values. Is Malcolm Turnbull the right person at the moment to be leading your party?

MATHIAS CORMANN: Of course he is the right person. I completely disagree with Peta. What I would say firstly is that we went to an election just over seven months ago. We won that election. We have a responsibility to deliver on the agenda that we took to the last election. If I was the Labor party today, with everything that is going on, if I was Bill Shorten today, I would be very worried. Because as you say the Labor Party vote has not shifted, despite everything that is going on. There has not been an increase in the Labor Party primary vote at all. It remains very low. Bill Shorten remains much less popular than Malcolm Turnbull as Prime Minister. Malcolm Turnbull remains… interrupted 

FRAN KELLY: Yeah but you are the party that has lost four points, four percentage of your voter base. 

MATHIAS CORMANN: Malcolm Turnbull remains by far the more popular Prime Minister. Bill Shorten is not popular at all. The Labor party primary vote is not shifting. 

FRAN KELLY: So, is there an ideological separation, a rent within your party? Do you accept that?

MATHIAS CORMANN: The Liberal party has always been its most successful when it had a very strong conservative and strong liberal tradition effectively represented in the broad church that is the Liberal party. That continues to be the case today. It was the case yesterday. It will be the case in the future. There will always be a diversity of views. There will be a range of issues that will be hotly debated inside the party room. That is the way the system is meant to work. I am very confident that the Liberal Party will continue to be a very, very strong party providing good Government for many years to come.

FRAN KELLY: Does the Bernardi defection make it more likely that the Liberal party in your home state of WA will exchange preferences with One Nation?

MATHIAS CORMANN: Preferences are a matter for the Liberal party organisation in Western Australia. I do not understand what link you are suggesting there is between those two issues.

FRAN KELLY: Do you support the notion of the Liberal Party preferencing One Nation?

MATHIAS CORMANN: I do not know what link there is between the announcement that apparently Cory Bernardi is going to make later today and the … interrupted

FRAN KELLY: Well you do now, it is all about appealing to that element of the vote of the electorate that perhaps represents more conservative values that seems to be the group you are shedding from your primary vote. 

MATHIAS CORMANN: It is certainly true that there is a section of the community that we need to convince again to support more strongly the Liberal party with their primary vote. Going into any election, including the West Australian election on 11 March, we want to maximise our support, our primary vote support. We want to convince as many Australians, as many West Australians as possible to support us with their primary vote.

FRAN KELLY: Do you support exchanging preferences with One Nation?

MATHIAS CORMANN: That is entirely a matter for the Liberal party organisation in Western Australia.

FRAN KELLY: You are listening to RN Breakfast our guest this morning is the Finance Minister, Mathias Cormann. Let’s go to your portfolio now and the business of Government for 2017, the business tax cuts, the centrepiece of the Government’s economic plan. Will you get the numbers for the full business tax cut, reducing the tax rate from 30 to 25 per cent? Not just business that turn over less than ten million?

MATHIAS CORMANN: That is our intention. We will do as we have done ever since we have been re-elected in July last year. We will work with all parties represented in the Parliament, in particular all parties represented in the Senate, to get as much of our agenda through as possible. 

FRAN KELLY: Well Nick Xenophon told us recently he is attracted to stopping that $10 million threshold. I know you have talked with the cross benchers have you been able persuade him?

MATHIAS CORMANN: I am aware of Nick Xenophon’s public statements. What I will not do and what I never do is conduct negotiations through the media. On 2 July last year, people would not have believed us if we had told them that we would we get as much through by the end of the year as we have. Getting the Australian Building Construction Commission re-established, getting the Registered Organisations Commission established, getting personal income tax cuts through, passing another $20 billion worth of Budget improvements legislated, getting our superannuation reforms through. So we did get a lot done in the first six months after the election. There is more work to be done. Our next cabs off the rank, boosting support for low and middle income families in particular when it comes to accessing child care, paying for it with outstanding savings in the social services space and our 10 year enterprise tax plan to boost jobs and generally boost economic growth. 

FRAN KELLY: And power prices that is another strategy. You are going to go after Labor over the renewable energy target. On two of these key polices, key messages, the business tax cuts and the jobs and the renewable energy target and power prices. There is some evidence that the voters are not with you though. ReachTEL polling released today commissioned by the Australia Institute shows your voter base in two blue ribbon seats of Sydney, Warringah and Wentworth. Tony Abbott and Malcolm Turnbull’s seats. In Warringah, only 17 per cent wanted the tax cuts for big business and in both those seats a clear majority want more money for renewable energy not less.

MATHIAS CORMANN: I see that you are focusing on the marginal seats across Australia. Our focus as a Government is to help… interrupted

FRAN KELLY: But these are your voters, supporters though.

MATHIAS CORMANN: We are focused as a Government on helping families getting ahead and on helping businesses be the most successful they can be so they can hire more Australians. A more competitive business tax rate is an important part of that. Making sure that energy supply is reliable and energy prices are as affordable as possible while we continue to reduce emissions is an important part of that. Labor’s focus is on making it harder for business to be successful, which means fewer jobs, higher unemployment. Our focus is on helping businesses be more successful, helping families get ahead and we make no apologies for that.

FRAN KELLY: Just finally you mentioned childcare that is very much an issue dear to many, many households. The Government’s Bill is linked to cuts to the end of the year supplements that people on family tax benefits receive. Are you looking grandfathering current recipients, is that a compromise that you might take to the cross bench?

MATHIAS CORMANN: Again we are not negotiating through the media. What we would say is that we are very keen to support families get better access to high quality childcare. As always we need to ensure that when we intend to pay more for higher priorities that we pay for it with savings and spending reductions in other parts of the Budget. That is … interrupted 

FRAN KELLY: Is compromise in the air?

MATHIAS CORMANN: As a Government we have shown that we are very willing to pragmatically negotiate. We will continue to do that, but we will not be doing that through the media.  

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

MATHIAS CORMANN: Always good to talk to you.