Senator the Hon Mathias Cormann

FRAN KELLY: The Government facing its own judgement day with the voters by next May there are reports today that it will bring forward the next Federal Budget from May and it will spend up big on election sweeteners. Mathias Cormann is the Federal Finance Minister and Leader of the Government in the Senate. Mathias Cormann welcome back to Breakfast. 

MATHIAS CORMANN: Good morning Fran. Good to be back. 

FRAN KELLY: Minister, is the Government planning to bring forward the Budget to late March or early April? 

MATHIAS CORMANN: I have seen those reports in the media this morning. At this stage I would describe that as speculation…interrupted 

FRAN KELLY: Well if anyone knows, you do I imagine as the Finance Minister. 

MATHIAS CORMANN: As I was about to say, obviously given that next year is an election year. Given the election is due by the end of May next year, there are potential implications for the timing of the Budget. At this stage no decision has been made. As soon as relevant decisions are made, these announcements will be made in due course. 

FRAN KELLY: If we do have an election in May, a Budget at the beginning of April or end of March would be quite timely given there is a lot of money flowing into the coffers, we are told again by Deloitte Access Economics, something like $9 billion extra in tax receipts. Is it your intention to spend any extra cash wooing voters? 

MATHIAS CORMANN: Firstly, I am not going to speculate on the timing of the election and the related timing of the Budget. That is a matter for the Prime Minister. Now you are right, having inherited a weakening economy, rising unemployment and a rapidly deteriorating Budget position from Labor, after five years of a Liberal National Government, our economy today is stronger, more jobs are being created and our Budget is in a stronger and improving position. We will continue to do what is right by Australia. We will continue to do what is required to ensure that Australian families today and into the future have the best possible opportunity to get ahead. That also includes making sure that our Budget continues on its improving trajectory that we have been able to get it on. 

FRAN KELLY: Does it also mean you will continue with your strict Budget rule, that any new spending is offset by savings, or is that going to go out the window and you are going to have plenty of money to throw around in an election campaign? 

MATHIAS CORMANN: Our rule continues. Our rule has not changed. 

FRAN KELLY: That rule has not changed? So any money that comes in above from these river of revenues, that Deloitte Access says is flowing in from higher tax receipts, any new spending would have to be offset? 

MATHIAS CORMANN: Firstly, the fiscal rule is that any new spending, any policy decisions to increase spending on higher priority areas, needs to be offset by spending reductions in other parts of the Budget. That is a fiscal rule that has been in our Budget for some time and it continues to be in our Budget. 

FRAN KELLY: Okay, so if there is more money in the coffers, is it still the rule or will all money have savings accompanying it and does that mean the projections for getting into surplus and bringing down the deficit remains a priority?  

MATHIAS CORMANN: Of course it remains a priority to get the Budget back into balance and into surplus as soon as possible and yes, I cannot be any more clear, the longstanding rule that policy decisions to increase spending have to be offset by policy decisions to reduce spending continues to be a fiscal rule in our Budget. 

FRAN KELLY: And in terms of deficit and surplus, if there is more money in the coffers, would your priority as Finance Minister be to bring the Budget back into surplus earlier? 

MATHIAS CORMANN: It has always been out position to get the Budget back into surplus as soon as possible. The current forecast is that the Budget will return to balance by 2019-20 and then into surplus by 2020-21 and to remain in surplus all the way over the medium term to 2028-29. In the half-yearly Budget update, to be delivered in the middle of December, we will be providing our next update on our current fiscal position and projections moving forward. 

FRAN KELLY: You are listening to RN Breakfast, it is 11 past eight, we are speaking with Mathias Cormann, Finance Minister and Leader of the Government in the Senate. Can we come to the results of the Victorian Election? Victoria, once the jewel in the Liberal crown, on Saturday the wipe-out was so big that the Party could even lose blue chip Liberal seats like Hawthorn and Sandringham, it is still on the cards, which was unthinkable I think two weeks ago. Do you concede the Liberal Party now has a problem in Victoria? 

MATHIAS CORMANN: It was obviously a bad result. We are all disappointed by the result. There is no question that we have a lot of work to do to get ourselves back into the position we would like to be, to serve the people in Victoria. 

FRAN KELLY: We heard from Scott Ryan there, he said Victoria is the cradle of the Liberal Party, but Liberal voters are sick and tired of being set a litmus test by conservatives over what it means to really be a Liberal. Is it time for the right to back off and be a more accommodating of the moderate base within the Liberal Party? 

MATHIAS CORMANN: The Liberal Party is a broad church. It is important that we continue to operate as a broad church, both with the conservative and liberal traditions. If we want to be successful, the best way to be successful is to work together across the broad traditional spectrum that the Liberal Party has covered in the past and I am confident we will continue to cover into the future. 

FRAN KELLY: How can you say continue, wasn’t that what brought Malcolm Turnbull undone. He said he tried to involve both sides of the broad church and basically, the right would not allow him to accommodate the moderates, isn’t that the root of the problem? 

MATHIAS CORMANN: I do not accept that. Over the three years that Malcolm Turnbull was Prime Minister, I think you will find that a lot of reform has been pursued and has been implemented, including reform, I would just point out to legalise same sex marriage with a broad consensus across the Party. I think that you will find that conservatives and moderates across the Liberal Party have worked together very effectively over the past five years. In the end, our main focus has been, having inherited a weakening economy, rising unemployment and a rapidly deteriorating Budget position, yes our focus has been on putting our economy on a stronger foundation and trajectory for the future, creating more jobs and repairing the Budget mess that we inherited from our predecessors. Our focus has been on pursuing reforms to ensure our borders were secure. Now, these are all things that we are pursuing to ensure that Australians today have the best possible opportunity to get ahead. That here in Australia, we have a strong, prosperous, peaceful and safe standard of living. 

FRAN KELLY: So what do you think has gone wrong then because we have got Tim Wilson, your colleague in Goldstein, the Victorian seat, say that when he was handing out how to vote cards on Saturday, the message people were telling him, they were angry over the leadership change, the dumping of Malcolm Turnbull, they were angry over a lack of energy policy. Scott Ryan said when he was handing out how to vote cards, people said they were angry at the tone, they were angry at being told that they were not real Liberals, that those who thought other things were the real Liberals. What do you think was the problem? Is there a message for you? 

MATHIAS CORMANN: Self-evidently the events in Canberra a few months ago would not have helped. There is no question about that. Yes, of course, all of us, whether at the federal level or at a state level need to now very carefully dissect what Victorians have told us at this election. We need to ensure that we feed those lessons and those reflections into our approach in the lead up to the next election at a federal level. 

FRAN KELLY: But what are they? 

MATHIAS CORMANN: I am not going to provide…interrupted 

FRAN KELLY: Do you think the fact you have got no energy policy is a problem with voters in a state like Victoria? 

MATHIAS CORMANN: I do not accept that we do not have an energy policy. Our energy policy is very clearly focused on bringing down the cost of electricity, on making sure that we provide reliable energy supplies into the future and to do all of that in a way that helps us meet our emissions reduction targets that we signed on to…interrupted 

FRAN KELLY: But you are not meeting emissions reductions targets…interrupted 

MATHIAS CORMANN: Yes we are. 

FRAN KELLY: … The latest official statistics show that you are not on track to do that. 

MATHIAS CORMANN: With the greatest of respect, I completely reject that…interrupted 

FRAN KELLY: Well emissions are going up not down. 

MATHIAS CORMANN: Emissions were going up in years gone by under the Labor Government incidentally…interrupted 

FRAN KELLY: Well then, they came down under a carbon tax, which you then scrapped. 

MATHIAS CORMANN: If I can point out the facts. The facts are, that we have met and exceeded our Kyoto targets, including the revised targets and that we are absolutely on track to meet our emissions reduction targets that we have signed onto in Paris by 2030. 

FRAN KELLY: So you think the Government’s energy policy is enough? 

MATHIAS CORMANN: We always will listen very carefully to what the Australian people are telling us. We will always continue to make judgements about the best way forward. Politics is not something where you are static at any one point in time. You continue to reflect on how you can find better solutions to the issues and challenges that we are facing as a nation and that is what we will continue to do. 

FRAN KELLY: Mathias Cormann, Kerryn Phelps will be sworn into the Lower House this morning, which confirms the Coalition’s status as a minority Government. Half an hour later Cathy McGowan, another Independent will test the numbers by trying to introduce her Bill for a National Integrity Commission. Will the Government support that legislation or will the Government come up with its own Bill for a federal anti-corruption body? 

MATHIAS CORMANN: We are absolutely committed to making sure that we fight corruption effectively wherever it might appear and we do have a very effective multi-agency anti-corruption framework involving the Australian Commission for Law Enforcement Integrity, the Australian Federal Police and a number of other federal agencies. The only way you would go for a single agency approach is if you think it actually would make things better. Now we believe that there are a range of problems with the Bill that has been put forward by the Crossbench. Just to give you one example, in our reading of that Bill, journalists in the ABC and SBS under the status of that Bill as public servants, could be summonsed to that National Integrity Commission to provide evidence and to reveal their sources and to release legal advice in relation to stories that you might run. We think that that is something that is problematic, just to give you one example…interrupted 

FRAN KELLY: I am glad you are concerned about us, but what is the position then, the Government will try and adapt the policy that is put forward and come up with something else? 

MATHIAS CORMANN: Our position is that we need to ensure we have the most effective framework possible to fight corruption. Our current approach at a federal level is a multi-agency approach, which internationally is recognised as being very effective. Australia is recognised as one of the least corrupt jurisdictions in the world. But we are always open…interrupted 

FRAN KELLY: So is that a no, you are not pursued, the Government is not of a mind to say yes to a federal anti-corruption body? 

MATHIAS CORMANN: We are not of a mind to support the legislation that is currently in front of the Parliament, courtesy of the Crossbench, but as I have indicated, we are always open to consider suggested improvements and that is the position we are in. 

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

MATHIAS CORMANN: Always good to talk to you.