Senator the Hon Mathias Cormann

LAURA JAYES: Live now to Perth where we find the Finance Minister Mathias Cormann. Senator thanks so much for your time. Can I first ask about China? How concerned are you at what’s behind the decision?

MATHIAS CORMANN: We are aware of unconfirmed, unsourced reports in relation to coal into China. We are getting these reports verified through our Ambassador in Beijing. But what I would say is that this has happened before at a local level. Individual ports have made certain decisions in relation to coal. That was related to domestic economic and environmental considerations at a particular time, not to the bilateral relationship between Australia and China. Australia continues to be a highly reliable supplier of coal into China. Our export volume into China in the final quarter of 2018 was higher than our export volume in the final quarter of 2017. We are very confident that we will continue to have the appropriate market access. Simon Birmingham is working these issues through.  

KIERAN GILBERT: Andrew McKenzie the chief executive of BHP has suggested that he doesn’t think it is any geopolitical issue. That is more about China managing its domestic consumption of coal versus that being imported. Do you think that that might be the case, particularly given we saw a similar dip and blocking of coal imports in the first quarter of last year, only for it to rebound and rebound very strongly.

MATHIAS CORMANN: That is what I just indicated. That has been the experience in the past. When decisions like this have been made in the past at local port level it was related to domestic supply related issues and environmental issues at a local level. It was unrelated to anything to do with the bilateral relationship between Australia and China. We do not have any reason to believe that it is different on this occasion. But our Ambassador to China has been asked to verify these unsourced and unconfirmed reports. 

LAURA JAYES: So you have no reason to believe Mathias Cormann that this has anything to do with spying allegations largely reported with China being involved this week. Nothing to do with Huawei from being banned from major infrastructure projects, because often when we see retaliation as Peter Jennings has pointed out this morning, it is hard actually link the two. But do you have this as a consideration that China might be upset with Australia politically? 

MATHIAS CORMANN: Again, I have answered that question. We do not believe and it has not been related to the bilateral relationship in the past when these sorts of decisions have been made. We do not believe that there is any reason to consider that it is different on this occasion. Furthermore, as I have indicated to you, in the final quarter of the last calendar year, so the most recent quarter, our export volumes in relation to coal into China were higher than what they were the year prior. The trend has actually been one of increasing export volumes, not reducing export volumes. 

KIERAN GILBERT: Alright, let’s turn our attention to the issue that has dominated a lot of your focus this week and that being the travel company that didn’t charge you initially for flights to Singapore. One of the questions that has been asked is, and it is your opportunity this morning to respond to our viewers, is how would you not notice that $3000 had not come off your credit card?

MATHIAS CORMANN: I did answer a lot of questions about all of this in Senate Estimates earlier in the week. Let me just say that when it was brought to my attention that a payment that I was certain had been made, had in fact not been processed, I was absolutely mortified. The proposition that the company did not charge me is false. What happened is that I booked a trip. I supplied my credit card to make payment. The payment as it turns out was not processed as a result of an administrative error in the accounts department of that company, which is something that the company has apologised for. I should say, at all times this account on this invoice was listed as an unpaid, outstanding debt. It was never waived. It was never paid for by anybody else. It was something that remained due. Once that was brought to my attention I immediately paid for it. I understand what this looks like. I understand that people find it hard to understand how somebody would not notice. But by way of explanation if not as an excuse, in my job where I travel a lot, where I spend a lot of time in hotels, week in week out, there is a lot of travel related expenditure that goes through my credit card. On that occasion, I just did not go back to it, having assumed that when submitting that credit card to make payment at the time of the booking that it would be and had been processed. I just did not go back and did not notice. It is obviously highly embarrassing for me. It is deeply regrettable that that happened. 

LAURA JAYES: Bad look and nothing else Minister.

MATHIAS CORMANN: Sorry.

LAURA JAYES: A bad look and nothing else.

MATHIAS CORMANN: It is certainly embarrassing. As I say I was mortified. But the Labor party is trying to make something out of this which they understand very well is actually not accurate. They are suggesting that somehow that this is linked to tender decisions. Bill Shorten pursued an absolutely disgraceful smear in the House of Representatives yesterday, which he knows or he should know is inaccurate and which he should withdraw and apologise for. He has been suggesting that we have been making tender decisions as far back as 2014 to favour Mr Burnes and his company, when the contract he was referencing in 2014 was actually awarded after an independent tender process to a competitor of Mr Burnes at the time. In fact, Mr Burnes and his company, during the period of our Government back in 2014 missed out. Whereas it was Labor in 2012 who awarded a major travel contract to Mr Burnes and his company at the time, again as a result, no doubt, of an independent tender process. It was that 2012 contract which was renewed in 2017 as a result of another independent tender and on materially better terms for the Commonwealth and for taxpayers than Labor’s contract back in 2012. So on Bill Shorten’s logic, which is highly flawed, it was Labor who made a decision to award a contract to a Liberal donor, whereas it was our Government in 2014 that made a decision to award a contract against him, in favour of his competitor. Bill Shorten should now review what he said in the House of Representatives and quite frankly, he should officially withdraw and apologise for what he said.

KIERAN GILBERT: Now Joe Hockey the Ambassador to the United State has very strong links to the Trump Administration as we have reported over many months. Cameron Stewart writes about that today, but contacts with Larry Kudlow, the economics adviser, which helped get Australia exemptions in terms of aluminium and steel tariffs and so on. Contacts with the Treasury Secretary, Steve Mnuchin, Mick Mulvaney, the Chief of Staff. The point I am making is he does have good connections there, yet Labor is saying that this serious enough for them to consider recalling him as Ambassador. What do you say to that?

MATHIAS CORMANN: Bill Shorten and the Labor party have for some time been getting way ahead of themselves. They are increasingly cocky and arrogant. They are conducting themselves as if the election has already happened. Completely ignoring the fact that the Australian people are yet to have their say at an election. Bill Shorten knows that Joe Hockey is doing an outstanding job for Australia in our national interest in the US. He is extremely well connected at the most senior levels in the US Administration. Yes, he has been able to help secure beneficial outcomes for our country, for our economy and ultimately, in the best interest of families around Australia wanting to get ahead. There is nothing in the smear that Labor has been throwing around this week that in any way detracts from that.

LAURA JAYES: We have heard Bill Shorten and Labor speak far more glowingly about another one of your colleague in the former Foreign Minister Julie Bishop. Do you think she might be in line for an ambassador role after her announcement yesterday? 

MATHIAS CORMANN: Julie Bishop has made an absolutely outstanding contribution over her more than 20 years in the Parliament. She has been a trail blazer. Her record of achievement is, as I say outstanding, 11 years as Deputy Leader, one of the most outstanding Foreign Ministers of her time. I am sure that there will be opportunities for Julie to continue to contribute consistent with what she would like to do into the future. Certainly from my point of view I wish her and David all the very best for their future endeavours.

KIERAN GILBERT: It makes it more important as well doesn’t it to get talented women into comfortable seats, in terms of seats like Curtin for example, because as difficult as it will be to fill the void left by Julie Bishop, who has been really, a giant of the modern Liberal party.

MATHIAS CORMANN: Julie Bishop has been a giant of the modern Liberal party. As The West Australian points out on the front page of our paper here today, she is leaving some very big shoes to fill. We have two seats in Western Australia, Stirling and Curtin now for which the Liberal party locally will have to select candidates. I am very confident that the Liberal party here in WA will make the right decision, selecting great people to represent us in Canberra moving forward. 

LAURA JAYES: Minister today Labor has announced if it wins the election it would put forward a banking compensation scheme and it would be retrospective. Have you had a look at these details? Do you like this idea?

MATHIAS CORMANN: Firstly, Labor is playing catch up. It was the Coalition which established the Australian Financial Complaints Authority in 2018. It is our Government, which immediately after the Royal Commission reported announced our compensation scheme. We are funding the past outstanding compensation payments as a Government because we do not think it is reasonable to impose a cost in particular on small businesses retrospectively for events that many of them would not have been responsible for …interrupted

LAURA JAYES: The big banks can afford it can’t they?

MATHIAS CORMANN: Bill Shorten always tries to distract people’s attention by talking about the big banks. The truth is there is 35,000 odd small businesses here. If you get the policy settings wrong what will end up happening is that you reduce the level of competition because smaller businesses will not be able to get into the market or remain in the market. If Bill Shorten imposes increased costs on smaller businesses, which they cannot afford or prevents them from getting access to indemnity insurance and the like, he would actually be helping the big banks because he would be concentrating market power in their hands, making it harder for smaller and medium sized businesses to compete with them. We believe that we have our settings right and appropriately well calibrated. We are certainly proposing to levy the industry moving forward. But we do not think it is appropriate to impose that sort of cost burden retrospectively when many of the businesses were not involved in the malfeasance that is being compensated for. 

KIERAN GILBERT: So Laura has asked you about that position from Labor on the banking compensation. Onto another thing that is firming up on Labor is their position on mortgage brokers. It seems that it is not that far from where the Government’s thinking is either on this in relation to ending trailing commissions but keeping upfront commissions. Is that something that is acceptable to you?

MATHIAS CORMANN: Again, the Labor party is playing catch up. We have said right from the word go that we would be introducing the best interest duty, we would removing volume bonuses and trailing commissions, but that as far as the remainder of the banking Royal Commission’s recommendations were concerned, that in our view, in relation to mortgage brokers, we needed to tread very carefully, because of the potential impact on competition that any decisions in this space can have. We will continue to make decisions based on what we think is the best way forward, an appropriately well balanced way forward, making sure that consumers are protected, but also that there is appropriate competitive tension within the system. 

LAURA JAYES: So you don’t criticise Labor for not implementing all the recommendations from the Hayne Commission because indeed the Government is not doing the same are they?

MATHIAS CORMANN: We are taking action on all recommendations. But I note that Labor was giving us a hard time …interrupted

LAURA JAYES: Except mortgage brokers.

MATHIAS CORMANN: When we explained and I have explained this on your program before, when we openly and candidly and transparently explained why we thought we needed to proceed cautiously in relation to mortgage brokers, Labor was being highly critical of us. Now, what I notice is that they are crab walking to our position because they on reflection have realised that the Government’s judgement was actually accurate in relation to these matters, as was identified at a number of previous inquiries including the Financial Systems Inquiry under David Murray and various other inquiries.

LAURA JAYES: Mathias Cormann as always, thank you very much for your time. Live from Perth this morning.