Senator the Hon Mathias Cormann

ELIZA EDWARDS: So here we are in Budget week. The most exciting prospect for most Australians is income tax cuts. Are you keen to temper expectations about how substantial they will be?

MATHIAS CORMANN: We have always been very clear that we would do the right thing by the economy and the right thing by the Budget. We do want to provide tax relief, prioritising low and middle income earners, but we also want to make sure that our Budget gets back to surplus as soon as possible.

ELIZA EDWARDS: Chris Bowen says people shouldn’t be cheering about a potential return to surplus by 2020 because it will be wafer thing. The surplus would be smaller if it is delivered a year earlier wouldn’t it?

MATHIAS CORMANN: Again, when Chris Bowen lost government in 2013 he left behind a weakening economy, rising unemployment and a Budget position that was rapidly deteriorating. When Chris Bowen was the Treasurer in the Labor Government, the Budget position was deteriorating by $3 billion a week. A staggering amount. We have worked hard to turn that situation around. The economy is now stronger, employment growth is stronger and the Budget is on a believable track back to surplus. We do not take any lessons from the Labor party. They are going back to their bad ways of the past, coming up with ever more tax increases, which would hurt the economy and hurt jobs. 

ELIZA EDWARDS: But if the surplus is razor thin and the global economy starts going backwards, not that it looks like it is going that way, but if it starts to, you could lose that overnight, couldn’t you? 

MATHIAS CORMANN: The numbers in the Budget will be delivered on Tuesday night. What I can say to you is that we have worked very hard to put the economy on a stronger foundation and a stronger trajectory for the future. We have worked very hard to put the Budget on a stronger foundation and stronger trajectory for the future. We have controlled expenditure growth. We have made decisions to strengthen economic growth moving forward. The only way that we can ensure that we can afford all of the services that the Australian people expect into the future is by continuing to strengthen economic growth. That is precisely what the Government is doing. 

ELIZA EDWARDS: One of the big Budget talking points especially for our audience is health. Can people expect a broader health program in the Budget? 

MATHIAS CORMANN: The Government’s focus when it comes to health is always on ensuring that all Australians can have affordable and timely access to high quality healthcare. Under the Turnbull Government the bulk billing rates for example are at record highs. We have made very significant investments into our healthcare. What the Australian people can see in this year’s Budget is a continued commitment to guarantee funding for all of the essential services that the Australian people expect, including and in particular in health. 

ELIZA EDWARDS: Again for our audience, can they expect to see aged care measures to try and help keep people out of aged care homes for longer? 

MATHIAS CORMANN: Specific measures will be announced in the Budget on Tuesday night. But the Government’s focus always is on making sure that funding for essential services can be guaranteed in the Budget. We are guaranteeing that on the basis of stronger economic growth and having managed the Budget very carefully and very prudently. 

ELIZA EDWARDS: You were speaking today about reining in spending growth. But there have been a lot of spending promises made already. Is the Government focused on a smarter level of spending in health and aged care say?

MATHIAS CORMANN: We inherited a spending growth trajectory of four per cent on average per year above inflation. We have more than halved that based on our past Budget update. There will be a further update on that now. What I can say in relation to this year’s Budget is that wherever we have increased spending on higher priority areas we have more than offset that with spending reductions in other parts of the Budget. So any spending increase on a higher priority area has been paid for by spending reductions in other parts of the Budget. 

ELIZA EDWARDS: A big area in that regard is welfare spending. And no doubt reining in that has helped to improve the Budget bottom line. And people would agree that people aren’t eligible shouldn’t be able to receive it. But are you concerned for instance about an increase in homelessness?

MATHIAS CORMANN: Our plan for a stronger economy and more jobs is working. As our plan for a stronger economy and more jobs has continued to take effect, fewer people are now on welfare than ever before. That is a saving to the Budget. A welfare safety net is an important part of our Federal Government system. But the Australian people expect welfare spending to be well targeted, to be targeted at those in genuine need. That is what the Government continues to do.  

ELIZA EDWARDS: Will there be other measures in that regard?

MATHIAS CORMANN: The Budget will be delivered on Tuesday night. 

ELIZA EDWARDS: This has widely been seen as an election Budget. How important is it for the Government to get this one right. 

MATHIAS CORMANN: The Government focuses in every Budget on getting it right. In the lead up to every Budget, we review all of the information, we review all of the data, we review all of the suggestions and the proposals on improvements to our policy framework. We make decisions based on what we believe is in the best interest of Australia moving forward. We are focused on helping to ensure that all Australians have the best possible opportunity to get ahead. We are focused on ensuring that Australians today and into the future have the best possible opportunity to get ahead. So in every Budget, of course we are focused on making the right decisions for the right reasons. 

ELIZA EDWARDS: But when you look back at say the 2014 Budget, which was very controversial for Abbott and Hockey. There is no doubt the Government has been trying to get the narrative back on track since then and balance the spending to making sure that people aren’t worse off. Do you think the Government four years down the track is in a better place? 

MATHIAS CORMANN: We are in a better place because of the hard work that we have done in the past to get the Budget back on a stronger foundation and stronger trajectory for the future. Back in 2013. Bill Shorten and Chris Bowen left behind a weakening economy, rising unemployment and a Budget position that was rapidly deteriorating. Now they want to go back to the bad old days, the discredited ways of Labor governments past. What we have done over the last four and half years is put the economy on a stronger foundation and trajectory for the future, create more jobs and put the Budget back on a credible path back to surplus. We have done the hard yards. As the economy strengthens, as more jobs are being created and as the structural savings measures continue to take effect, it does make it easier to manage all of the things that need managing. 

ELIZA EDWARDS: And making sure that people aren’t worse off, that is really the target message in these extra measures for aged care and also these income tax cuts.

MATHIAS CORMANN: Our focus always is on ensuring that all Australians today and into the future have the best possible opportunity to get ahead. That is why we are so committed to our plan for stronger growth and more jobs. That is why we are so committed to making sure that all of the essential services can be guaranteed within the Budget. That is also why we are so committed to ensuring that Government lives within its means. 

ELIZA EDWARDS: In regards to Liberal voters who were annoyed by changes to superannuation in the past, some argued these changes were needed because concessions were too generous. Is this Budget about trying to give back to older Australians. Do you see it as important to try to win back the Liberal party base? 

MATHIAS CORMANN: In the lead up to every Budget, we review all of the information, we review all of the data and we make judgements about the right way forward. That is what we have done in past Budgets. Tthat is what we are doing in this Budget. We are focussed on making sure that the economy can be as strong as possible, that as many jobs as possible can be created, that the Government provides funding for all of the essential services that the Australian people expect and that that funding can be guaranteed within the Budget and we are focused on making sure that the Government lives within its means. When it comes to taxes, our instinct always is to keep taxes as low as possible, to ensure we can fund the necessary services provided by Government. We also focus on making sure that the tax system is fair. 

ELIZA EDWARDS: So is that a yes to trying to win back the Liberal base ahead of the next election?

MATHIAS CORMANN: We are focused on doing the right thing. In the lead up to the next election, we will go to the next election pointing to our record of achievement over the previous three years. We will go to the next election with our plan for the future. We will be going to the next election pointing out that a Shorten Labor government will push up taxes, which would hurt the economy, cost jobs, lead to higher unemployment, which in turn will lead to lower wages. It will be up to the Australian people at the next election to decide whether they prefer our agenda for stronger growth, more jobs, Government living within its means and guaranteeing funding for the essential services of Government or the alternative which will be higher taxes, less private sector investment, lower growth, fewer jobs and lower wages. 

ELIZA EDWARDS: And you would also be hoping for a bounce in the next round of polling as well to make sure your message is getting through? 

MATHIAS CORMANN: We let commentators and others make these sorts of assessments. As far as we are concerned, we are focused entirely on doing the right thing, on making the necessary decisions to put Australia on the strongest possible foundation and trajectory for the future. 

ELIZA EDWARDS: Final question, the Government has trumpeted an increase in revenue and says that will continue, but the unemployment rate still hovering around five and half per cent. Does the Government expect that to go down as companies start hiring more people?

MATHIAS CORMANN: We want to legislate our business tax cuts in full because that will help ensure that businesses across Australia can hire more Australians and pay them better wages. Right now if our business tax rate stays as one of the highest in the world, it will make it harder for business to hire more Australians and pay them better wages. If we continue to disadvantage businesses in Australia, forcing them to pay higher taxes than their competitors in other parts of the world, it will mean that they will be less successful and less profitable into the future, which will mean that there will be fewer jobs and less competition for workers, which in turn would lead to lower wages. That is not what we want. We want more jobs and higher wages. The way to achieve that is by helping to ensure that businesses across Australia have the best possible opportunity to be more successful and more profitable into the future and making sure that they have got access to a competitive business tax rate is a very important part of that.