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Transcript of interview with Leigh Sales: ABC TV 7:30: 9 March 2016: Budget; tax reform; Tony Abbott

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Senator the Hon Mathias Cormann Minister for Finance Deputy Leader of the Government in the Senate

Transcription: PROOF COPY E & OE Date: 9/3/2016 Topic(s): Budget, Tax reform, Tony Abbott

LEIGH SALES The Finance Minister Mathias Cormann joined me earlier from Perth. Senator Cormann, thank you very much for coming in.

MATHIAS CORMANN Good to be back.

LEIGH SALES As Finance Minister, you would be deep in the weeds in preparing for Budget day. It's a big undertaking. Would it even be ready to go on May 3 if necessary?

MATHIAS CORMANN The Budget is scheduled for the second Tuesday in May, the 10th of May. That is the date that the Treasurer and I are working towards. That is the date that the Prime Minister is working towards. That is the date that all of us in Government are working towards.

LEIGH SALES Let me ask you to respond to something the former Liberal Premier of Victoria Jeff Kennett had to say earlier today. "This talk about an early election is an indication sadly that the Government does not have a plan for the future of the country and they're trying to use this talk of a double dissolution, an early election, simply to cover up their own failings."

MATHIAS CORMANN We are not talking about an early election. We are expecting the election to take place, in the ordinary course of events, in the latter part of the year. As the Prime Minister has indicated in August, September, or October. That is when the three years are up. That is what we are working towards.

LEIGH SALES You say we're not talking about it. Where then do you think this speculation has come from?

MATHIAS CORMANN For as long as I have been involved in public service through the Parliament, every year as we get closer to the election there is a lot of speculation in the media, there is a lot of speculation from commentators. It was the same in 2013. It was the same in 2010. It was the same in 2007. It is the same this year. That is not something that we control. All we control is the job that we are doing. We

are focused on providing good government for Australia. We are focused on making sure we are in the best possible position to win the next election, in the second half of this year and to provide good government over the next term.


GH SALES Just to return to the point Mr Kennett made when he said that the Government didn't have a plan for the future of the country, for example, the Prime Minister's been talking about releasing a tax Green Paper shortly, since the start of October, and we're still yet to see it.

MATHIAS CORMANN I don't agree with that characterisation by Mr Kennett. We do have a strong plan for the Australian economy, an economy in transition from resource investment and construction driven growth to broader drivers of economic activity. That is why, before Christmas, the Prime Minister released the innovation statement. That is why we are working on reforms, reform proposals, to make our tax system more growth friendly. That is why we continue to pursue an ambitious free trade agenda and... interrupted

LEIGH SALES Just on the tax, though, sorry to interrupt ...

MATHIAS CORMANN ...that is why we are continuing to pursue an ambitious infrastructure investment program.

LEIGH SALES Just let me pick up on the tax because it goes to my question. How come in November he was saying the Green Paper would be released shortly and then here we are in March and it's not here yet?

MATHIAS CORMANN We are in March and the Budget every year is delivered in May. There is always a lot of speculation in the lead up to any Budget …interrupted

LEIGH SALES I'm talking about the tax Green Paper that he said would be ready shortly in October?

MATHIAS CORMANN We have done a lot of things to improve our tax system since we got into Government. We got rid of the carbon tax and the mining tax. In last year's Budget we delivered tax cuts for small business, investing in the success, the future success of small businesses across Australia, helping them to generate more jobs. In the lead up to this year's Budget, as in the lead up to any Budget, we are looking at the expenditure side of the Budget, we are looking at the revenue side of the Budget and we are looking for opportunities to make our tax system more growth friendly, to raise the necessary revenue for Government in the best most efficient least distorting way in the economy, building on the progress that has been made since we came into Government in September 2013.

LEIGH SALES But nothing you said in the past two answers, Senator Cormann has addressed what I actually asked, which is why in October was the Prime Minister saying a tax Green Paper would be released shortly and now here we are in March and it hasn't been released? What's gone wrong?

MATHIAS CORMANN I actually don't think that that is what he said in October. What the Prime Minister said ... interrupted

LEIGH SALES I'm quoting directly from an interview.

MATHIAS CORMANN What the Prime Minister said in September, October, was that we would consider all of the opportunities to improve our tax system. That is we would go through an orderly and methodical process in doing so. We have been going through that process. As we went through that process we are making decisions that ultimately will all be reflected in the Budget on the second Tuesday in May.

LEIGH SALES Today one of your Cabinet colleagues Peter Dutton said the election would be fought over Labor's negative gearing policy. Isn't it somewhat extraordinary that the Government is allowing the opposition to dictate the battleground for an election campaign?

MATHIAS CORMANN There are always many parts to an election campaign. In the lead up to the next election we will be standing on our record of achievement in this first term of Government. We will be putting forward our positive plan for stronger growth and more jobs in the second term of the Turnbull Government. We will be pointing out the flaws in the alternative approach.

LEIGH SALES But Peter Dutton said today that if Labor's negative gearing policy were passed the economy will come to a shuddering halt and the stock market will crash. That's an exaggeration at the very least, isn't it?

MATHIAS CORMANN Labor's negative gearing policy will drive down the value of established properties, it will drive up the cost of... interrupted

LEIGH SALES Causing the economy to come to a shuddering halt?

MATHIAS CORMANN You've asked me the question. If I may answer.

LEIGH SALES As long as you address the question.

MATHIAS CORMANN I am addressing the question. Labor's absolutely reckless and irresponsible negative gearing policy will drive down the value of established properties which is bad for the economy. It will push up the cost of rental accommodation across Australia, which is bad for the economy. It will make it harder for families to get ahead which is bad for the economy, because it will remove a basic economic freedom from people across Australia. That is to use their existing income and their existing personal assets to leverage into additional investments generating additional income, helping them to get ahead. That is ... interrupted

LEIGH SALES Will it cause the economy to come do a shuddering halt, yes or no?

MATHIAS CORMANN It will be bad for the economy if Labor's negative gearing policy were to be implemented by a future

Labor government. That will be very much part of the conversation that we will be pursuing in the lead up to the next election.

LEIGH SALES You said the other day that Tony Abbott is not Kevin Rudd at this stage. But he's heading down that same street, isn't he?


LEIGH SALES But how do you explain then the constant interjections by Tony Abbott into the public debate that are somewhat at odds with the Prime Minister’s position in various areas?

MATHIAS CORMANN I'm not going to provide a running commentary. Tony Abbott as a former Prime Minister is absolutely entitled to express his views on the issues as he sees fit. The Government is focused on the job at hand, which is to do everything we can to strengthen growth, create more jobs, to help the Australian economy transition as successfully as possible from resource investment and construction driven growth to broader drivers of economic growth and activity. We're not getting distracted by commentary on these sorts of issues.

LEIGH SALES Thank you very much for your time.