Senator the Hon Mathias Cormann

VIRGINIA TRIOLI: Well, it may be a new political year, but the same old issues look set to dog our leaders in Canberra. With the Prime Minister now weighing up whether to refer another MP to the High Court over a dual citizenship problem. With Parliament resuming today, the major parties are gearing up for a war over industrial relations and the cost of living.

MICHAEL ROWLAND: But Malcolm Turnbull is also looking to gather support to refer Labor MP Susan Lamb to the High Court over her UK ancestry and the first Newspoll of the year has given both parties plenty to talk about of course. So let us do that with Finance Minister Mathias Cormann, he joins us from the ABC’s Parliament House studio. Minister, good morning to you.

MATHIAS CORMANN: Good morning.

MICHAEL ROWLAND: Let us start with that Newspoll, a bump, a decent bump for the Prime Minister in the preferred Prime Minister stakes, but yet again for the 26th time in a row under his Prime Ministership, Malcolm Turnbull is behind the Labor Party.

MATHIAS CORMANN: Well, the poll is what it is. We continue to work to deliver our plan for the economy and for jobs, to make sure the people of Australia have the best possible opportunities to get ahead. We are on track. We have had a good year of delivery last year and we will keep at it this year, doing what we said we would do and that is to work on a stronger, more prosperous economy and to ensure that we can continue to create more jobs as we did last year.

MICHAEL ROWLAND: The Government is keen to get the rest of its corporate tax plan through Parliament. Will you legislate to that effect as early as this week?

MATHIAS CORMANN: At the moment that Bill is still in the House of Representatives. We are hoping that it will come to the Senate sometime in the next little while. Certainly, it is a very high priority for us, to ensure that businesses across Australia can be internationally competitive, so that more successful and more profitable businesses can hire more Australians and pay them better wages. That remains a very high priority for us and one that we will be prosecuting over the next few weeks and months.

MICHAEL ROWLAND: The tax effects if legislated will benefit the biggest of Australian companies. The Commonwealth Bank, Minister, is set to report a half-year profit of $5 billion this week. Why should a company, why should a bank, why should an entity like the Commonwealth receive a tax cut?

MATHIAS CORMANN: Well what it will do is it will benefit Australian workers. Do not take my word for it, that is what the former Treasury secretary Ken Henry said in the period of the previous Labor Government. The situation is this. Australia is an open trading economy. We compete for investment with businesses around the world. When you have a business tax rate of 21 per cent in the US, soon to be 17 per cent in the UK, even France proposing to move from 33 per cent down to 25 per cent - if Australia does not ensure that our tax settings are internationally competitive, we will lose investment and jobs to other parts of the world. The future job security, the future career prospects, the future wage increases of Australian workers, and 9 out of 10 of them work in a private sector business, the future wage increases of Australian workers depend on the future success and profitability of those private sector businesses.

MICHAEL ROWLAND: You mentioned America there Mathias Cormann. Should companies here receiving tax cuts do what some companies in America have done as a quid pro quo and guarantee they will increase wages for their employees?

MATHIAS CORMANN: In the US, that was the consequence. There is no doubt in my mind that if businesses here in Australia have the opportunity to invest more of their own money in their future success and their future profitability, that will lead to wage increases in Australia. That is what we would expect would happen as a matter of course. Already now, last year, more than 400,000 new jobs were created. The excess supply in the labour market continues to reduce and as business competes for workers the salaries they will have to pay will go up. That is what you would expect to happen with increased investment, increased growth and increased economic activity.

MICHAEL ROWLAND: Okay, so there will be wage raises? You can tell voters that as a result of your company tax packets.

MATHIAS CORMANN: We have been making the point for the last two and a half years. We have been making the point that a corporate tax cut will lead to additional investment, increased productivity and increased wages over time. That is an argument that we have made since before the last election.

MICHAEL ROWLAND: Wage rises to the extent of more than 3 per cent, which is what Treasury is forecasting to kick in from the second half of next year?

MATHIAS CORMANN: We stand by the forecast in our Budget.

MICHAEL ROWLAND: So many economists do see the forecasts as heroic.

MATHIAS CORMANN: Well, many economists saw the forecast as heroic that underpinned our 2016-17 Budget and we outperformed it. We forecast employment growth of 1 per cent, we delivered 1.9 per cent. and the economic growth outcome was slightly higher than what we had anticipated. Economic observers and analysts will say what they have to say. In the end, it is performance that matters. If you look at the performance against Budget in recent times, we have outperformed our Budget forecasts.

MICHAEL ROWLAND: Let us go to citizenship. Don’t you think Australian voters, Mathias Cormann, are sick to death of this whole saga and want it resolved? Wouldn't one way of resolving that be for the Government to adopt what Bill Shorten is calling for and that is a job lot referral to the High Court of Labor and Coalition MPs with a question make over their heads?

MATHIAS CORMANN: Bill Shorten is an absolute hypocrite. He has been caught out. We offered him that approach in August last year and he kept bragging how Labor had these amazing processes to vet and scrutinise their candidates. It turns out that was not the truth. It turns out he has got Members of Parliament, who even one of them even today, remains a British citizen. The truth is that, Liberal and National Members and Senators, as soon as this problem became apparent, took immediate action. Our Members and Senators either resigned or referred themselves to the High Court or both and we have gone through that process. It was Bill Shorten who held out. It was Bill Shorten who misled the Australian people about the status of Labor Members of Parliament. Now that he has been caught out, he wants us to refer people on the Liberal side, or the Liberal National side, who do not have a problem, in order to balance out those Labor Members and Senators who do have a problem. That is not the way this works. Bill Shorten has been caught out. He needs to take his medicine. He is clearly frightened of having a by-election in Batman and Longman at the same time. He knows that in Batman, he needs to veer even further to the left. Whereas people in Longman would be offended by his anti-jobs, anti-opportunity agenda that he is pursing in Batman. He is trying to sequence the by-elections, imposing additional cost on taxpayers.

MICHAEL ROWLAND: The Labor Party insists still this morning that your colleague, Liberal MP Jason Falinski is a Polish citizen. The Coalition has put forward legal advice suggesting otherwise. Is in your view, that advice watertight?

MATHIAS CORMANN: It is watertight. Bill Shorten is desperate. Bill Shorten has got a Member of Parliament in Susan Lamb out of Longman…interrupted.

MICHAEL ROWLAND: Okay, but we are trying to peak about your side first and also on that front can you guarantee there will be no more…interrupted.  

MATHIAS CORMANN: I know that you do not want to listen to this. I know that you do not want to listen to this, but right now…interrupted.

MICHAEL ROWLAND: But I want to talk about what the Coalition side….interrupted.

MATHIAS CORMANN: But hang on, this is actually an incredible point. I am going to insist on this. There is a Labor Member of Parliament, who according to her own lawyer is a British citizen, who sits in the Australian Parliament in breach of the Constitution and Bill Shorten wants to pursue, a descendant of Holocaust survivors. It is an absolute disgrace what Bill Shorten is doing.

MICHAEL ROWLAND: I will get back to what I was trying to ask. There would be no more citizenship dramas on your side of politics? Can you guarantee that?

MATHIAS CORMANN: We are very confident that all our Members and Senators who had an issue have taken the appropriate steps.

MICHAEL ROWLAND: Mathias Cormann, Finance Minister in Canberra, thank you very much for joining us this morning. 

MATHIAS CORMANN: Always good to talk to you.