Senator the Hon Mathias Cormann

PATRICIA KARVELAS: My first guest today is the Finance Minister Mathias Cormann. I spoke to him a short time ago.

Mathias Cormann, welcome.

MATHIAS CORMANN: Good to be back.

PATRICIA KARVELAS: At 9:00pm last night the Treasurer said Newstart recipients would not be getting this $75, then in the morning apparently they were. Did you make a mistake?

MATHIAS CORMANN: No, we made a deliberate decision initially, but with some of the statements that were made yesterday, we were, as the Treasurer said during his Press Club speech today, we were focused on facilitating efficient passage of this measure through the Parliament. Given the statements that have been made by various people in the Parliament, we made a judgement that because we wanted this legislated passed before the end of this week, because we wanted pensioners in particular to have access to this cost of living pressure relief, we made a decision to adjust the measure and add a cost of about $80 million.

PATRICIA KARVELAS: So it was deliberate and then you had a crisis meeting after the Budget was actually published, that is quite extraordinary, you have to admit that?

MATHIAS CORMANN: No, we did not have a crisis meeting. We had a very calm conversation, focused as we do every day on the management of Parliament, on the management of Budget measures through the Parliament. This is a measure, which we had clearly indicated we wanted to see legislated this week. We wanted pensioners to have the benefit of this additional energy assistance payment this financial year and in order to facilitate speedy and efficient passage through the Parliament, we made the adjustment, having listened to the feedback from across the Chamber.

PATRICIA KARVELAS: Do you admit that it looks pretty messy and chaotic that it was added in after the Budget was published?

MATHIAS CORMANN: Look, I leave the commentary to you. It is not unusual…interrupted

PATRICIA KARVELAS: But it is unusual. I have covered 17 budgets, it is very unusual.

MATHIAS CORMANN: If I could finish. What is unusual is the fact that this is the last week of sittings of a Parliament in the lead-up to an election and it is a Budget week. Normally after a Budget, that is what happened in 2016 too incidentally, but after a Budget normally, the Parliament would come back some time down the track. But because we have to have the election by the end of May, this time around that is not going to be possible. We are always as a Government focused on getting our Budget measures through the Parliament. We always say…interrupted

PATRICIA KARVELAS: But that deliberate decision you say you made to exclude Newstart recipients, it was a mistake right?

MATHIAS CORMANN: I would not characterise it as a mistake…interrupted

PATRICIA KARVELAS: It must be because you are changing it.

MATHIAS CORMANN: I have explained why we are changing it. We are changing it to facilitate efficient passage through the Parliament. As we always say, 100 per cent of nothing is not useful for us. If we get 80 per cent of something it is better than 100 per cent of nothing. It was very important to us for aged pensioners in particular, to get that cost of living pressure relief. We as a Government, always listen very carefully to what the various people in the Parliament have to say about Budget measures that we have put forward. Given our intention to pass this swiftly this week we made the adjustment that we made, which means that in 2018-19 there will be about an $80 million deterioration to the deficit, but the deficit is still more than $10 billion lower than it was when we released the Budget this time last year.

PATRICIA KARVELAS: All right, just a couple of other issues. Newstart, there is no rise in Newstart. Arthur Sinodinos, one of your Senate colleagues thinks there should be. Do you think it should be looked at down the track?

MATHIAS CORMANN: The Newstart increases twice every year …interrupted

PATRICIA KARVELAS: Hang on a minute, that is not fundamentally an increase, that is just raised as it always is, that is not changing the rate of Newstart?

MATHIAS CORMANN: People cannot say there has not been an increase in Newstart allowance in 20 years when Newstart allowance increases twice a year. It is indexed twice a year…interrupted

PATRICIA KARVELAS: Do you think fundamentally it should be raised as a policy question?

MATHIAS CORMANN: Obviously not. We have made a judgement in the context of all the information in front of us, we have made a judgement that that is not something that was an appropriate priority for this…interrupted

PATRICIA KARVELAS: It will not be on your agenda?

MATHIAS CORMANN: That is not something that we have put forward as part of our plan for the next four years and the reason being, our focus is on making sure that as many Australians as possible are in employment, that the unemployment rate is as low as possible, that people are on Newstart as short as possible. We have been successful in that. More than 1.2 million new jobs. But also the proportion of working age Australians on welfare is the lowest in 30 years. That is what we are trying to achieve.

PATRICIA KARVELAS: Last night you told my colleague Elysse Morgan that this was not the first time the Government had used the Future Fund to boost the bottom line. $7 billion of the $9 billion surplus in the last year of the forward estimates is from the Future Fund earnings. Do you concede you made a mistake?

MATHIAS CORMANN: No. She asserted this was the first time that we were doing it. That this somehow was a change. It is not a change. It is something that has been part of our Budget methodology for some time…interrupted

PATRICIA KARVELAS: $7 billion of the $9 billion is on the earnings, do you concede that that is true? I that true? It is in the Budget.

MATHIAS CORMANN: That was not the question I was asked yesterday. The question I was asked yesterday was whether we had somehow fiddled the books was the implication by changing the treatment of Future Fund earnings. We have not changed the treatment of Future Fund earnings in this Budget and what I said very clearly in the interview yesterday if you want to revisit this is that Government gets revenue from a whole series of sources, from tax, from fees and charges and also from earnings on its investment. All of the earnings on investments and the income from tax is properly disclosed in the Budget. You can say if income tax revenue was higher or if earnings were higher than the surplus would be higher. If revenue from any source is lower than the Budget balance would be lower. But you know what, our forecasts have stood the test of time in recent years.

PATRICIA KARVELAS: You do not challenge that number though, do you?

MATHIAS CORMANN: I am not challenging the numbers in the Budget, of course not. What I am saying to you is, this is not a change in methodology. This has been the methodology in terms of the way revenue for Government has been accounted for for some time.

PATRICIA KARVELAS: Your Government said repeatedly it would cost $1.4 billion to reopen Christmas Island and now it is in the Budget that it will close in July and will cost $185 million. Where is the discrepancy, did you make up that number?

MATHIAS CORMANN: No, not at all. The number was based on advice from officials. The decision to reopen the Christmas Island facility was based on advice from our national security officials…interrupted

PATRICIA KARVELAS: And was that advice wrong because that figure is way off.

MATHIAS CORMANN: You are wrong. If I can answer a question for once, right to the end. We made a decision based on advice to reopen, but the Budget document is a reflection of policy decisions of the Government. We have made a policy decision that if we were successful at this election we will reverse the bad legislation that has undermined our border protection policy…interrupted

PATRICIA KARVELAS: But that was already your position. But it was already your position.

MATHIAS CORMANN: If I may, if I may finish for once, a sentence in response to a question. So we made a decision, we made a decision that we would reverse immediately after the election the legislation that was passed and we have, in that context, have made a new decision to close Christmas Island from 1 July 2019, because in that circumstance it will no longer be necessary…interrupted

PATRICIA KARVELAS: But that was already your position.

MATHIAS CORMANN: No, we made a decision in the context of this Budget to close Christmas Island again on 1 July 2019 should we be successful. We previously made a decision to reopen it based on advice from officials.

PATRICIA KARVELAS: Has a single asylum seeker gone to Christmas Island?

MATHIAS CORMANN: I suspect that in the context of the objective of the legislation, the fact that the Government made a decision on advice to transfer any such asylum seekers to Christmas Island, has perhaps reduced the level of enthusiasm to take advantage of that Bill that Bill Shorten passed through the Parliament. That is the precise purpose why we made the decision to reopen Christmas Island.

PATRICIA KARVELAS: The Shire President of Christmas Island, Gordon Thomson says its residents feel used by this decision to close it right after opening it. What is your response to that?

MATHIAS CORMANN: I disagree. We are making decisions in the…interrupted

PATRICIA KARVELAS: Were they used for political purpose?

MATHIAS CORMANN: Can I answer a question?

PATRICIA KARVELAS: Sure, you can.

MATHIAS CORMANN: We made a decision in the national interest that in order to protect our borders, that based on advice, that we needed to reopen Christmas Island. We did so. We have also made a decision that should we be successful at the next election that we will close the centre again from 1 July 2019. This is consistent with what has happened in the past. When Labor was in Government they had to reopen detention centres all around the place. We closed detention centres. We moved children out of detention. We actually addressed the problem that Labor left behind last time. What we are trying to do right now is to make sure that this reckless piece of legislation that went through the House of Representatives and the Senate does not undermine our strong border protection arrangements right now.

PATRICIA KARVELAS: Fraser Anning was censured by the Senate, you co-sponsored the censure motion. What did you make of his response because he spoke and he said his freedom of speech was being attacked.

MATHIAS CORMANN: His response was very disappointing. He doubled down, which is extremely disappointing. The statements that he made in the wake of this horrific terrorist attack in Christchurch were completely unacceptable. They were appalling, divisive, inflammatory and the Senate today appropriately censured Senator Anning for his conduct.

PATRICIA KARVELAS: What message does it send to Australia?

MATHIAS CORMANN: The Australian people are the ultimate arbiter of who sits in the Parliament. The Australian people will have an opportunity in a few weeks' time to pass judgement on what they think about the statements and conduct of Senator Anning.

PATRICIA KARVELAS: Mathias Cormann thanks for coming in.

MATHIAS CORMANN: Always good to talk to you.