Senator the Hon Mathias Cormann

KIERAN GILBERT: Let’s bring in the Finance Minister Mathias Cormann, Leader of the Government in the Senate. Minister thanks so much for your time. Can I start with that question I mentioned at the start of the program and that is why would law enforcement agencies under this model have their corruption hearings in public, but politicians would be in private?

MATHIAS CORMANN: The law enforcement division of the new Commonwealth Integrity Commission is the equivalent of the current Australian Commission on Law Enforcement Integrity, which has that power, though which I am advised they have never used. In practice, the processes if you look back at how they have played out in the past would actually be completely equivalent. We are not interested in setting up a kangaroo court, which can be used as a political weapon or even as a commercial weapon as it has on occasion in bodies around Australia in the past. What we want to ensure is to further strengthen our already very strong anti-corruption framework. At present we have a multi-agency framework at the Federal level. We are proposing to establish a single, independent, statutory agency with significant resources, appropriate powers and a dedicated level of expertise with the job of investigating alleged corrupt behaviour and then refer any prosecutions to the appropriate bodies so it can be pursued through the courts. 

LAURA JAYES: I know this won’t be retrospective Mathias Cormann, but why is this body now necessary? Is this because there is now sentiment in the community? There is a lack of trust in political and public figures? Or are there cases that you would identify in recent past that show that we need this?

MATHIAS CORMANN: You cannot provide a generalisation without specific facts in the way that you have just asked me. In terms of retrospectivity, public sector corruption is illegal and is an offence now. To the extent that there is offending behaviour now, of course the Commonwealth Integrity Commission would be able to investigate that. But to the extent that we are putting in place additional offences, new offences, it is a very important principle that new criminal offences should only apply prospectively and not retrospectively. That is a very important principle of course. We have, as I say, we have got very good anti-corruption measures in place now. As a country we have a very robust anti-corruption policy framework. This is just another step to take that to another level through a dedicated, independent, statutory agency, which has the specialised expertise to deal with alleged corrupt behaviour in a way that is effective.

KIERAN GILBERT: A big week in Budget terms next week with MYEFO on Monday. Is it true, off the back of the National Accounts, that the wealth story in this country is having an impact on growth levels, obviously consumption, consumer consumption was down. Is that all linked to the property price fall?

MATHIAS CORMANN: The half yearly Budget update will be released on Monday. What I can say is that having inherited as a Government a weakening economy, rising unemployment and a rapidly deteriorating Budget position back in September 2013, after five years of good economic and fiscal management, today the economy is stronger, the economic growth outlook is stronger, employment growth is much stronger, the unemployment rate is well below where it was and where it had been anticipated it would be. Indeed the Budget position is improving to the point where we are now forecast to return to balance from next financial year onwards. All of these numbers will be updated next week. There are always movements, up and down, in between Budgets and budget updates, both in term of economic and fiscal indicators. All of that will be reconciled on Monday.

LAURA JAYES: How concerned are you about the movements in the housing market? And APRA has played a big role in this, it has tightened up lending. Some would say it was responsible, but has there been a slight over correction in that do you think?

MATHIAS CORMANN: What I can tell you is that if Labor imposed its housing tax after the next election, it would seriously harm those seventy per cent of Australians who won their own home or are paying off a mortgage on their own home. As it would harm those thirty per cent of Australians who rent, because rents would go up and the values of people’s properties would go down by way more than what has been experienced so far. There was a level of concern in the past, in relation in particular to the property market in Sydney and Melbourne in terms of demand outstripping the level of additional supply. That had an impact on prices. But moving forward, the last thing that people who own their own home or are paying off a mortgage on their own home would want to see is further falls caused by an increase in tax as is proposed by the Labor party.

KIERAN GILBERT: You and the Government have been arguing the merits of that APRA crackdown that Laura spoke about over recent years. In that sense, did you know or did you anticipate a fall of ten per cent for the property market in Sydney and five per cent in Melbourne?

MATHIAS CORMANN: There are a number of measures that are coming together. There are developments in the market where the supply and demand equation is more appropriately balanced than what it has been before. APRA has taken some macro prudential measures which is their independent, statutory responsibility to make those judgements. They have made some judgements, in particular when it comes to the investor lending market, which has had an impact in the market. The evidence is there. But these are judgements that APRA makes independently as is appropriate. These are not political decisions. They are decisions made by the prudential regulator.

LAURA JAYES: Mathias Cormann you have got a pretty good political antenna. We have seen some pretty interesting moves from business of late, business bodies. Do you think they are factoring a Labor win at the election. They are seeing this as a fait accompli?

MATHIAS CORMANN: Let me tell you, I have been involved in many elections now and it is the same in the lead up to every election, where a whole range of stakeholder groups, including business groups will engage with all sides of politics just in case. But let me tell you, even though the Labor party is extremely cocky and think that they have already won the next election, there is a long way to go. We are going to put everything into making sure that the Australian people can continue to enjoy stronger growth, more employment growth and a Budget position where we can sustainably afford to pay for the essential services in health, education and on our national security under our Government. Compared to the alternative where higher taxes and an anti-business, class war agenda under Bill Shorten would make our country weaker and would make Australians poorer.

KIERAN GILBERT: Finance Minister it certainly looks like the Prime Minister and the Government are trying to clean up some of the more difficult issues that were outstanding like the integrity commission, like the religious protections. On the latter, first of all can you explain to our viewers why it is necessary in your view and secondly, do you in a political sense see a benefit by taking a stronger stance on religious protection in, I am thinking of seats particularly in Western Sydney, held by Tony Burke, Chris Bowen and others, where there is a big cohort of people of faith?

MATHIAS CORMANN: Firstly, in terms of your initial observation, of course the Government continues to make decisions about putting our country on the strongest possible foundation and trajectory for the future. We will continue to do that all the way to the election. When it comes to anti-discrimination provisions, appropriately, there are laws in place to protect Australians from discrimination based on age, based on sexual orientation, based on disability, you name it. Australians should be protected against discrimination based on their religious beliefs. Australians should be free to believe or not to believe for that matter, what they want to believe or not to believe when it comes to religious beliefs. We believe that the same as in relation to other potential areas of discrimination, that there ought to be appropriate legislation in place to protect that religious freedom.

LAURA JAYES: But is it a priority, a legislative one to protect gay students?

MATHIAS CORMANN: Again, we have been prepared to legislate that protection for some time. But it is a matter of making sure that these sorts of laws are appropriately balanced. We want to ensure that students are protected from discrimination based on their sexual orientation, but we also want to ensure that religious schools are able to apply reasonable rules and to teach their faith as appropriate in the context of what are religious schools. What we have said to the Labor party is that we are keen to do both. We are prepared to do both. We are ready to do both. We are prepared to give our Members, our Liberal and National Members a conscience vote in relation to these matters. We are calling on Bill Shorten to do the same. 

KIERAN GILBERT: What do you say to Bill Shorten in relation to his statement that it is not the first 100 things that people raise with him is religion?

MATHIAS CORMANN: You have to deal with the issues as they emerge. This is an issue that is in front of the Parliament now. So we have to make judgements in relation to it. Bill Shorten has asserted that this is somehow about the extreme right wing in the Liberal party. That is offensive, that is absolutely offensive to the millions of Australians who want to enjoy their religious freedom here in Australia, who have a belief and who want to be able to practice their faith without facing discrimination. That is just plainly offensive to those millions of Australians who are in that position.

LAURA JAYES: I just want to ask you about this story I have noted today as well, this push to have paid leave to learn how to become a union member. Is there anything wrong with that, do you have a problem with it? 

MATHIAS CORMANN: It is a $1.3 billion hit on business, which will put jobs at risk essentially to force business to make a donation to Bill Shorten’s union buddies. It is just another example that if in doubt, Bill Shorten will always prioritise the interest of his union buddies ahead of the public interest. This will make business weaker, it will cost jobs, all so that union officials can spend some more time campaigning for the Labor party.

KIERAN GILBERT: Yeah, but in terms of the union modus operandi, I mean there is nothing new in that is there? They are trying to get a foot hold and represent their members.

MATHIAS CORMANN: Well except that this Labor proposal is designed to force business to pay another $1.3 billion to the unions in order to fund union activities. Another $1.3 billion hit on business will mean that business will hire fewer Australians and be able to pay them less in wages.  

KIERAN GILBERT: Okay, I want to finish with one last issue, it is the front of the Financial Review today because it is quite a shift in terms Australia’s approach, but that along with the US, Canada, UK, New Zealand on the big Chinese telco Huawei and I am wondering as Finance Minister, as you look at this and the way that this is being managed, portrayed as a strategic threat, not just Huawei but China itself. Are you worried about the implications for the economic relationship if Australia cannot manage those increasing tensions?

MATHIAS CORMANN: We are managing all of these issues appropriately with a single focus on our national interest. Our judgements in relation to the specific issue you raise are well known. They are publicly well understood and that is what people would expect us to do, to make judgements in the national interest.

LAURA JAYES: Finance Minister Mathias Cormann, thanks so much for your time.

MATHIAS CORMANN: Always good to talk to you.