Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
SABRA LANE: For more on this, I’m joined now by Mathias Cormann, the Finance Minister and Leader of the Government in the Senate. He joins us now. Good morning.
MATHIAS CORMANN: Good morning.
SABRA LANE: The four crossbenchers say that they’re going to support the package. How significant is that?
MATHIAS CORMANN: That is great news for millions of hard-working Australians who will get to keep more of their own money in their pocket. That will be good for the economy. It will help create more jobs, because that will help stimulate the economy. It helps ensure that the Government can keep faith with what was a central promise that we made at the last election, a core part of our economic plan to build a stronger economy.
SABRA LANE: The newly re-elected Senator for Tasmania, Jacqui Lambie, says that she wants the housing debt that her state owes to the Commonwealth abolished. That’s about $157 million and more money for the homeless and pensioners. Will they get anything?
MATHIAS CORMANN: We had very good discussions with Senator Lambie. We have had very good discussions, indeed, with Senatosr Rex Patrick and Stirling Griff. As we have always said, we sought to persuade non-Government Senators of the merits and the importance, the economic importance and fiscal responsibility of our plan for lower income taxes. We have also always said we are prepared to listen to their policy issues … interrupted
SABRA LANE: Let’s get back to those things.
MATHIAS CORMANN: …, the issues that they want to raise with us. These issues have to be dealt with on their own merit and those decisions have to be dealt with on their own merit. So today it is about tax cuts. We have been very clear … interrupted
SABRA LANE: Let’s get back to those things because she made a big deal of this. Stuff for homelessness, the debt wiped.
MATHIAS CORMANN: You are quite right. Senator Lambie has been a very strong advocate for Tasmania and Senator Patrick and Griff have been strong advocates for South Australia … interrupted
SABRA LANE: Sure. But to the question…
MATHIAS CORMANN: If I can finish my sentence, please. We will continue to work through these issues and when we are in a position to make announcements on issues that are important to those Senators then we will make those announcements. The point that I would make is this. While the Labor party was out there playing political games to the point where they were moving amendments to the title of our income tax cut bill, they were wasting time on moving an amendment to the title of the bill. During that period, Senators Lambie, Patrick and Griff were working with the Government on important public policy issues. As we have said to them and as we say to everyone, we are absolutely prepared to work with them in good faith through the issues that they have raised with us.
SABRA LANE: Alright. This is horse trading. Have you got a handshake deal on all of this or is there stuff on paper? And some voters will be uncomfortable with all of this.
MATHIAS CORMANN: I completely disagree with that characterisation. We have not engaged in horse trading. What we have done … interrupted
SABRA LANE: What is it? What would you describe it as?
MATHIAS CORMANN: We have persuaded four crossbench senators to support the Government’s key economic reform which we want to see passed this week, which is good news for millions of Australians. And as we have always said, we have been prepared to engage in good faith with those Senators about issues, public policy issues that are important to them. They will be decided on their own merits. They will be announced when we are in a position to do so.
SABRA LANE: Sure. They want things in return. What do you call it?
MATHIAS CORMANN: We are working in good faith with Senators in relation to public policy. Let us just take energy for example. The Government has a long-standing policy commitment to bring energy prices down. We have a long-standing policy commitment to boost the domestic supply of gas, in particular in the east coast electricity market. We have sat down in recent weeks with Centre Alliance. We have sat down with Senator Lambie. We have talked through these policy issues. We have talked through the measures the Government has already announced. We have talked through the measures the Government is developing at present. That is just normal parliamentary process, engaging in good faith with elected Members of Parliament.
SABRA LANE: Alright. The Reserve Bank Governor Phillip Lowe appealed to the Government this week to borrow more money while it’s cheap to build more infrastructure. Will the Government do that?
MATHIAS CORMANN: The Government has a record $100 billion investment in infrastructure including in the Budget. We have a $100 billion infrastructure investment pipeline. Our Budget is a pro-growth Budget. Our Budget was put together in the context of the economic information that also was in front of the Reserve Bank.
SABRA LANE: Let’s talk about what the Reserve Bank Governor had to say because he could have pointed to your current infrastructure program like he noted the Government’s plans for tax cuts. He said they could be stimulatory. Analysts have interpreted this as pleading with the Government for more infrastructure spending.
MATHIAS CORMANN: I leave the commentary with you and with analysts. What I can say from the Government’s point of view is that of course we will always review the economic data. We will always make an assessment of the challenges that we are facing in terms of global economic headwinds, downside risks in the domestic economy. We will make judgements on what is appropriate and sensible in terms of other measures that might be required if that is necessary. In between every Budget and Budget update every year, it is always the same. There are policy measures that are considered by Government and decisions are made if that is in the public interest.
SABRA LANE: Sure, and he dropped a really big hint by saying the Australian Government can borrow for 10 years at around 1.3 per cent, the lowest rate that it’s been since Federation. It’s able to borrow for 30 years at an interest rate of less than two per cent. He was telling you.
MATHIAS CORMANN: He is making a statement of fact. The same way as the Reserve Bank … interrupted
SABRA LANE: He’s trying to put a big spotlight on it
MATHIAS CORMANN: That is your interpretation. The Reserve Bank obviously has independent responsibility for monetary policy. We take responsibility for the policy settings of the Australian Government … interrupted
SABRA LANE: He’s clearly very worried about the economy. Are you?
MATHIAS CORMANN: As we have said very candidly in the lead up to the election, we do face a series of global economic headwinds. We do face some downside risks in the domestic economy, which is why it is so important for the Parliament to swiftly pass $158 billion in income tax relief for hard working Australians. Which is why it is so reckless for the Labor party to stand in the way try to block … interrupted
SABRA LANE: OK. You’ve made your point about Labor earlier in the interview. The Governor is clearly very, very worried about the economy…
MATHIAS CORMANN: I will let you run the commentary. We are very focused on making all of the decisions required to keep building a stronger economy into the future to ensure Australians today and in the future have the best possible opportunity to get ahead. Our income tax relief plan to be considered by the Senate today is a very central part of that. The fact that crossbench Senators have decided to back us in, in relation to this is very good news for millions of hard-working Australians.
SABRA LANE: OK. You keep saying you’re not a commentator on these things. The Reserve Bank’s not commentating either, it’s stating fact and a lot of people are interpreting this as a big alarm bell for the Government.
MATHIAS CORMANN: I will say it again. We have been very candid in the lead up to the election that our economy is facing global economic headwinds. We are facing some downside risks in the domestic economy, which is why Labor’s agenda in the election of higher taxes and the politics of envy was the wrong way to go because that would have made our economy weaker. We have gone to the election with a plan to make our economy stronger, to create more jobs and our plan for income tax relief, building on the income tax relief which we legislated last year was a very important part of this. Today we are in a position to keep faith with the commitments we made to the Australian people at the election. We are very grateful to Senators Lambie, Griff and Patrick and Bernardi for having come on board to support our plan.
SABRA LANE: Alright. Finance Minister Matias Cormann, thank you for joining AM this morning.
MATHIAS CORMANN: Always good to talk to you.