Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
BRAD FITZGERALD: Senator Mathias Cormann the Finance Minister joins us this morning. How are you going Mathias?
MATHIAS CORMANN: I am going really well. Good morning.
CARMEN BRAIDWOOD: Good to have you here in your adopted home state radio. Good to talk to you. We understand that this is the biggest night of the year for folks like you guys. For the rest of us we are just trying to sift through and find something good in it. We like the whole Metronet thing. Thank you for keeping that money in there for us. Was Mark McGowan in your ear every day since March?
MATHIAS CORMANN: We had some good conversations with the State Government, including Mark McGowan, but principally Ben Wyatt and Rita Saffioti. It was good to reach a good landing. $2.3 billion for road and rail infrastructure in Western Australia.
BRAD FITZGERALD: The extra money for the road and rail is really good as well. The $1.2 billion for Metronet though, I think that is just a nice understanding. That money hasn’t come from this budget, it’s a previous budget, you have sort of shuffled it to the side.
MATHIAS CORMANN: Well, no, we re-allocated money previously going to the Perth Freight Link. The important announcement coming out of last night’s budget is that we actually last night announced another $10 billion for a national rail program. Western Australia, and the State Government in Western Australia, will have the opportunity to apply for more funding towards Metronet in the months ahead.
BRAD FITZGERALD: I think it is nice to see a $6.2 billion tax on the banks. I think most ma and pa families sitting at home at are like “yes, the banks take a fair bit, we are sick of record profits from them”. But how are you going to stop them passing it on to us, Mathias?
MATHIAS CORMANN: Firstly, the way we have designed it, there is no reason for the banks to pass it on. It doesn’t focus on day-to-day bank deposits. It doesn’t focus on mortgage accounts. It is designed in a way that banks after their $30 billion in after-tax profits can afford to make a $1.5 billion contribution per year, which, as you say, over the budget period comes to $6.2 billion, and it is their contribution to budget repair.
BRAD FITZGERALD: Do you think they will? Come on, banks are pretty smart. They are pretty savvy. Governments have tried this stuff to nail them down before and they always manage to post a record profit.
MATHIAS CORMANN: Well this is a levy that is targeted at the major banks. It doesn’t include the smaller banks. The small banks will have a better opportunity to compete with the bigger banks. If the bigger banks misbehave, the smaller banks will no doubt hold them to account by providing better value propositions to their customers.
BRAD FITZGERALD: You have given us $226 million as a top-up for our low share of the GST. I think previously we got $400 million as a top-up. But it still pales in comparison with what we should be getting. We are currently getting back 34 cents on the dollar that we pay in the GST. We see states like Victoria and New South Wales pulling in closer to 90 cents in the dollar. Mathias, honestly it doesn’t matter what you put in this budget for Western Australians, they are not going to be happy until you guys fix this GST problem.
MATHIAS CORMANN: Well, we stopped the drop in GST from the 2014-15 level, which was 37.6 cents in the dollar. In recent years, the reason it was about $490 million was because the Commonwealth Grants Commission put it down to 30 cents. This year it was 34 cents. To keep it up at the 2014-15 level that’s another $226 million. But you are right, there has got to be obviously some medium term reform. The top-up payments from the Federal Government are short-term fixes. In the end, through the Council of Australian Governments, they have to find a way to agree a floor, how that floor can be set. The Prime Minister has set out a process on how that can be done. We also have a Productivity Commission Review underway at the moment that is looking at how the GST sharing arrangements are impacting on national productivity and growth, and that is to report in January.
BRAD FITZGERALD: All right, thank you very much Senator Mathias Cormann. Thanks for the update there.
MATHIAS CORMANN: Always good to talk to you.