Senator the Hon Mathias Cormann

PATRICIA KARVELAS: Tax cuts promised in the Budget are the Government’s first priority now that it has won the election, but there is a snag. Parliament won’t resume until after the money was supposed to be finding its way into taxpayers pockets. Mathias Cormann is the Finance Minister and he joins us now. Mathias Cormann welcome. 

MATHIAS CORMANN: Good to be back.

PATRICIA KARVELAS: Senator Cormann, Parliament is not coming back until July, but the Coalition is still promising its unlegislated tax cuts will be delivered as planned. So how can both of these things be true, given the plan was to deliver those tax cuts this financial year? 

MATHIAS CORMANN: Firstly, half of the tax cuts were already legislated last year. The second bit, the additional bit, the additional $550 will be legislated as soon as possible. But the tax office, given both the Labor party and the Coalition support the first phase of the tax cuts, this will be able to be addressed administratively by the tax office. 

PATRICIA KARVELAS: But it can’t be addressed administratively, you have to pass legislation right? 

MATHIAS CORMANN: And we will pass the legislation at the earliest opportunity. People will get their payment as planned and committed. 

PATRICIA KARVELAS: So just to be clear is there any mechanism by which you can retrospectively apply those tax cuts to this financial year after the next financial year begins? 

MATHIAS CORMANN: People only will start to lodge their returns after this financial year has finished. People will get their tax cut as promised in full. 

PATRICIA KARVELAS: So when will they get it? 

MATHIAS CORMANN: This will be reconciled after people lodge their tax return for the 2018-19 financial year. The tax office will be able to process the tax refunds as promised and as appropriate, including the low and middle income earners tax offset, which is what was part of our plan for income tax relief for hard working families, which prioritised low and middle income earners. 

PATRICIA KARVELAS: So will it come in two lots? 

MATHIAS CORMANN: This will be now legislated as swiftly as possible. We have to wait for the return of the writs. That is just a function of the normal democratic processes at work. We will legislate the second part of our tax cuts. You have to remember we legislated $144 billion worth of income tax relief last year. This is for the second bit of $158 billion worth of income tax relief. It will be legislated as soon as possible. The tax office has got administrative processes in place to make sure that people get their full tax refund as quickly as possible. 

PATRICIA KARVELAS: So, just you didn’t answer. Do they get it twice or do they get it in two lots? 

MATHIAS CORMANN: The tax office will process the tax refund as swiftly as possible. That depends on when people’s tax returns have been assessed and properly processed. But I am very confident that people will get their tax refunds as promised and in good time. 

PATRICIA KARVELAS: So they may get it in two lots or they may not? 

MATHIAS CORMANN: You are just now speculating… interrupted 

PATRICIA KARVELAS: I am not. I am asking a question. I can’t speculate. I have no idea. I am actually asking a question. 

MATHIAS CORMANN: And I am telling you that we are legislating this as swiftly as possible. The tax office is able to process these tax refunds as people lodge their tax returns. 

PATRICIA KARVELAS: Okay, I don’t feel like I have got clarity on when people will get it. It depends on when the legislation passes essentially right? 

MATHIAS CORMANN: We must pass the legislation as quickly as possible. Labor has already indicated that they support, certainly the tax cut for low and middle income earners. Let us see what their position is going to be on our overall plan for income tax relief once they have settled on their leadership arrangements and given the outcome of the election. In the meantime, as we have done on previous occasions, there are mechanisms available to the tax office to process and reflect the consensus position across the Parliament in their decision making. 

PATRICIA KARVELAS: Okay, so you are saying yes they will be delivered, but they will be delivered in delay. 

MATHIAS CORMANN: I am not saying that at all. You are verballing me. We have had an election on Saturday Patricia. We have had an election on Saturday. We have to wait for the return of the writs before we can reconvene the Parliament. As soon as the Parliament can be reconvened, it will be reconvened. It is the first item of business, legislating those income tax cuts. That will happen and people will get their refunds. 

PATRICIA KARVELAS: We just don’t know when. 

MATHIAS CORMANN: The 2018-19 financial year has not come to an end yet. We are still in the 2018-19 financial year. People will only start lodging their tax returns from 1 July 2019 onwards. I am just becoming a bit repetitive now. People will get their tax refunds as promised. 

PATRICIA KARVELAS: But we don’t know when the date is, so I don’t think it is a bad question for me to ask. I think it is a standard question. 

MATHIAS CORMANN: You keep asking me the same question and I will keep giving you the same answer. People will get their tax refunds after they have lodged their tax return. I think that that is the usual process. Tax relief will be delivered in 2019-20 as was always promised. It will not be delayed by a year as has been wrongly suggested by …interrupted 

PATRICIA KARVELAS: But it might be delayed by a couple of months potentially though? 

MATHIAS CORMANN: I disagree. I do not believe that is right. It will be delivered as soon as possible. It will be delivered after people have lodged their tax returns, which cannot happen before 1 July 2019. 

PATRICIA KARVELAS: One Nation and Centre Alliance do not like the last stage of your tax cut plan because it favours high income earners, so will you split the legislation to make sure it gets through? 

MATHIAS CORMANN: No. This is the same conversation that I had with you and others in the lead up to our first $144 billion plan to provide income tax relief for hardworking Australians. We are providing income tax relief to all working Australians. We are prioritising low to middle income earners. But it is a an overall plan. It also deals with addressing bracket creep and simplifying our tax system to provide appropriate incentive and reward for effort for all hardworking Australians, because that is what we believe is required to keep our economy strong. It is an overall package. We will be putting it to the Parliament as an overall package. We will be asking the Senate to pass the overall package. Now last time, journalists like you would say to us that this was not going to go through. Well it did go through. We will be putting this to the Parliament on the back of the endorsement of the Australian people. 

PATRICIA KARVELAS: Okay fair enough you are going to do that. If it fails and they say no, we will not pass this all. Given there is a sense of urgency to get the first stage passed, will you split it to ensure the taxpayers get the tax break that you promised them? 

MATHIAS CORMANN: We will not split it. With the greatest of respect, I do not accept the premise of your question. I have had precisely the same questions back in 2018. Precisely the same questions and you know what, the Senate passed the income tax relief plan of the Coalition in full. We will be working to ensure that we secure passage of our whole income tax relief plan for all working Australians in full again on this occasion. 

PATRICIA KARVELAS: Okay, now there has been some speculation that you may hold it back because you want to deliver a surplus, you are saying this full package, all of the tax cuts, all of them will be legislated? 

MATHIAS CORMANN: All of them will be legislated. 

PATRICIA KARVELAS: Even if it puts at risk a surplus? 

MATHIAS CORMANN: I completely disagree again with the premise of that question. As you can see, our 2019-20 Budget shows a surplus for 2019-20 and every year over the forward estimates, indeed every year over the next decade. That was independently verified by the Secretaries of Treasury and Finance in the Pre-Election Economic and Fiscal Outlook. That is after we have accounted for all of that income tax relief over the next decade. That is after we have accounted for the increased funding for schools and hospitals and infrastructure and our national security. We have put forward a plan for our economy and a fiscal plan, which shows that not only is our Budget projected to return to surplus as of 2019-20, but to remain in surplus with surpluses building to one per cent as a share of GDP after we have accounted for the full plan to provide income tax relief to all Australians and after we have accounted for all of the additional funding that we are putting into schools, hospitals and so on. 

PATRICIA KARVELAS: I was told by colleagues of yours that you were certain that the Coalition was going to win the election, whereas some of the others weren’t. They told me you told them this throughout the campaign. Is that right? 

MATHIAS CORMANN: I have been very confident for some time that when it was all said and done and when the Australian people had to make a decision between our plan for a stronger economy and Labor’s agenda for higher taxes which would demonstrably weaken our economy and leave people worse off, that when it was all said and done, I was quietly confident that a majority of Australians in a majority of seats would opt for Scott Morrison and our plan and reject the high taxing, class warfare alternative. I have great confidence and great belief in the Australian people. Australians are fundamentally aspirational. They want the best for themselves and for their families and they want to know that their kids have the best possible future. I think that Australians understand that you do not build a stronger future by targeting a section in the community, by sneering at them as the top end of town. We are all more successful if we encourage every single Australian to be the best they can be. I was quietly confident that that is what Australians would vote for and not for the alternative. 

PATRICIA KARVELAS: Do you want to stay on as Finance Minister? 

MATHIAS CORMANN: I have thoroughly enjoyed doing this job. It is entirely a matter for the Prime Minister. I will serve in whatever capacity the Prime Minister would like me to serve in his Government. 

PATRICIA KARVELAS: How about Leader of the Senate, do you still want to do that? 

MATHIAS CORMANN: Again, I have given it my absolute best in whatever job the Prime Minister has asked me to do. I will continue to give it my best in whatever job the Prime Minister asks me to do in the future. 

PATRICIA KARVELAS: Who would you prefer to go up against as Opposition Leader, Chris Bowen or Anthony Albanese?   

MATHIAS CORMANN: That is entirely a matter for the Labor Party. I am not going to provide commentary on choices that are entirely a matter for the Labor Party. 

PATRICIA KARVELAS: I ask because I interviewed Tim Wilson a little earlier in the ABC News channel and he said he wants Chris Bowen to be the Leader because essentially he was the architect of the franking credits policy and it would be easier to go up against him. 

MATHIAS CORMANN: He is entitled to his views. I am not going to provide a commentary on decisions that are entirely a matter for the Labor Party. 

PATRICIA KARVELAS: Okay, sounds reasonable. Thanks for coming on the show. 

MATHIAS CORMANN: Always good to talk to you.