 Thank you all for being here today. Thank you, Matthias, for coming along, as Bride says, in the middle of a busy campaign. When I've said to a few people, especially when I was in the Press Gallery last night, so that today I'd be interviewing Matthias Corman, the Finance Minister with the author of the infamous 2014 budget, the Coalition Finance Minister with the European accent, machine-like, relentlessly on message, and I said I'd be interviewing here today, they said, well, good luck with that, because he's renowned for being, as I said, relentlessly on message. This is modern politics where you have a few words, the message is jobs and growth, and that's what we say relentlessly over and over again in the modern campaigning. So hopefully we can have a conversation where, you know, we get a bit more relaxed, and then by midway through Matthias will really start to open up and we'll get way beyond the jobs and growth mantra. But as well as giving you that introduction for being relentlessly on message, I think we should also celebrate the fact that it is 20 years since a 25-year-old Belgium, migrated to Australia, Belgium had only recently learnt, really learnt English, migrated to Australia, initially after, well, I think it was a love interest that brought him here at first, and ended up settling in really our most remote capital city of Perth. 20 years ago arrived as a young law graduate, started up really from nothing in terms of your background in Australia, and 20 years later he's become the finance minister of a coalition government. So I think that's quite a achievement and worth early round of applause. And I think in an extended introduction as well, Matthias, I think I'd like to say to the crowd, to the audience here, that your personal story and the story of your family, and we were talking with Brian Schmidt before and everyone, Brian's got a bit of a German background as well, Brian Schmidt and Matthias has one as well, and Matthias' family story, in a way, goes to some of the key fault lines in all of European's history over the past century. Himself, he grew up in, I should have checked the spelling of the pronunciation, Rayeron, say that again, small town in East, in Eastern Belgium. Now, this is a German-speaking part of Eastern Belgium. It was one of the regions annexed to Belgium under the Treaty of Versailles after World War I. And of course then it became one of the first regions to be retaken by the Nazis and cleansed, so to speak, of Jews leading up into World War II. And of course the source of fierce fighting around this Eastern Belgium area, and the area we've known as the Battle of the Bulge, for example. A lot of Australian blood was spilled in all these areas, so Matthias' family background, a modest family background in an area which had a critical part of World War I and World War II, is sort of, I think, etched in his character today. And I think even more so where it's in another one of the great fault lines of 20th century European history was in 1989. November 1989, Matthias is 19, he's a law student, and of course we're approaching one of the great moments, and maybe you can explain what happened in November 1989. Well, you're doing such a good job, I thought you could just keep going. Look, in 1989 I was a second year law student at the university in Namuio, and a couple of friends of mine and I, we decided that we should be part of history. I mean, the wall had come down a couple of weeks earlier, so in a European context, the distance from Namuio to Berlin was about 600 kilometres, which is an eternity away, but in an Australian context it's just down the road. But yeah, so we went to Berlin December 1989, and I guess for me that was probably the first time that I had a real, I guess, political sort of revelation, and that is that political values and principles, systems of government, actually really matter and have a pretty dramatic impact on people's quality of life, because you had the ultimate case study there, where in a small geographical area, you had about 3 million people after the Second World War, starting with the same conditions, the same challenges, the same opportunities, the same climate, the same background, the same everything. But on one side, you had a system based on freedom and free enterprise, reward for effort, encouraging people to stretch themselves, social safety net, democracy, and on the other side you had socialism, lowest common denominator, dictatorship, and you know, I mean people, what was really quite striking is that if you are on a bad trajectory over an extended period, it is quite unbelievable how dramatic the impact is on the quality of life of individuals, families, and communities, compared to the beneficial impact of being on a good trajectory over an extended period of time. And you know I mean, so for me as a 19 year old, that was sort of, that was when I sort of thought that well, right of center, free enterprise freedom, reward for effort based policies are the way to go if you want to ensure that people have the best possible opportunity to get ahead and be successful. So by then, by background coming up in Belgium, it's a socially conservative Catholic area, which I think had a big influence on you, so by then, in your late teens, early 20s, the fall of the Berlin really stamped you as being socially conservative, but economically dry would be, would that be a sort of character terminology? That's a fair description. So Matias, you came out to Australia, as I say in 1994, you're 23, you're coming out initially, I think there's a love interest evolved, but by a couple of years later, even though that love interest may not have unfortunately continued, that's that- Lucky for her. That still, you were so impressed by Perth in Western Australia and Australia that yourself as a young man came out here just really decided to start a new life. What was it like for you as a man in mid-20s in such a different environment and why did you do that fundamentally? Well, I mean, when I first came to Australia, I very much thought it was going to be for a limited period. I mean, I was very focused on pursuing a career in Brussels, perhaps at NATO or the European Union headquarters or something of that sort of nature and I spent my whole life learning languages to be as competitive as possible in the European context and as you say, I came on holiday to Perth in 1994. I mean, Perth is just amazing. I mean, whether it's obviously the great countryside, the beach, the weather, the people. And I mean, at the time, it was pretty amazing how quickly somebody like me who came from the other part of the world was able to get opportunities to contribute and I guess the sense I got very quickly is that Australia is a country where you've got people coming from all corners of the world and if you have the right attitude and if you want to make a contribution and help make our country a better place then there really is no limit to what you can achieve in whatever you chose and feel of endeavour. I mean, initially my sense was, well, let's see how it goes for a while and then one thing leads to another and the rest, as I say, is history. And so you made an effort, obviously you're a law graduate, but you made a real effort then to get into politics and to get in through the Liberal Party and you had a goal, yes, I'm going to end up as Finance Minister of Australia and how did all this happen? That's not quite how it happened. I wish it was that easy. No, I mean, it was essentially out of weakness, pursue opportunity. So when I came to Australia with a Belgium law degree, that law degree wasn't immediately recognised and I sort of went to the legal practice board in Perth and I found out what I needed to do in order to be able to practice law in Perth and having spent six years at university in Belgium and the UK for a year that told me how to go back for another year and a half and at the time that didn't seem like a good idea and believe it or not that the most immediately transferable skill I had coming to Australia was having worked for politicians as a student in Belgium was to do some work for politicians in Australia because there is no qualification that you particularly have to have for that sort of job. I hesitated saying what I was saying there. But look, having worked for politicians in Belgium I sort of essentially started door knocking, selected politicians in Australia to see whether one of them would give me some volunteer work and there's a guy called Chris Allison who was a recently elected back bench senator at the time who was the chair of the treaties committee and I had spent a bit of time in the United Kingdom studying public international law and so that was my pitch, that was my angle. I can do some work for you and through him I sort of got involved in the Liberal Party and again I mean sort of one thing leads to another and again the rest is history. Thanks and I will say that I will open it up to questions after we have a little chat here so please think of some questions and I'll turn to you in a little while. Fast forward, you've built a career, you've obviously done very well in terms of technical expertise and of being of use to a political party and no doubt playing the political power game if you like because with the election of the Abbott government you become the finance minister over some other fancy candidates such as Arthur Sinodinas who we had here last night so that was quite an achievement. Now in 2016 we're obviously a couple of weeks out from an election we're in election campaign election mode and you are the spokesman, the official campaign spokesman for the Liberal Party or for the coalition, is it for the both or is it for the coalition? For the coalition and so you'll base yourself in Canberra and you're the spokesman, can you give us, give the room here an idea of what does that involve, what is being spokesman for the campaign involved? Well it involves talking to the Australian people about our plan for jobs and growth through the intermediary of the Canberra press gallery and to try and obviously make sure that they see the world the way they should see the world that they are very conscious of the risks of the alternative which doesn't have a plan for the economy which doesn't have a plan for jobs and growth which has a plan for higher taxes and bigger deficits and should hurt jobs and growth and I know every day, so you've been doing this I think every day since the election was called on May the 8th so every day you get up and around about can I ask a personal question, what time do you... I sort of get up around about 5 and sort of try and get myself into the office between 5.30 and 6 and then off we go and so there is a, no doubt there's a, as I understand there's a group that sort of runs the campaign and someone's got to run it can you lead us through who that group is the key players in that group? Well, you know, the person that runs the campaign is the National Campaign Director Tony Nut that he's the Federal Director of the Liberal Party but I mean obviously beyond that there is, as you would expect a level of coordination involving the Prime Minister and the leadership team So you have the Prime Minister is in the small group and what do you have, a phone hook up at say 6am, 6.30 or how does that go? I'm not going to go into the forensic detail of our tactics and processes but what I would say is that obviously this is a team game we've got a plan for Australia that we believe is the right plan for our future and we've got a team that is out there promoting the plan and as you'd expect us to do as part of a competent effort there's a level of coordination that goes on in order to ensure that we get our message across and in order to ensure that wherever our competition seeks to mislead people we point that out very clearly So you have some sort of early morning hook up and then you decide presumably you decide what the message of the day is I know you've got your overall theme but say for example when we've had the mediscare that's come out that was bubbling up since late last week now you might have between the leadership group and the campaign group you decide on well how are we going to counter the mediscare? Bill Shorten has been trying to get this pretty dishonest and deceptive scare campaign up for months what it shows in our view is that clearly Labour doesn't have a plan for the economy they haven't got anything else left to talk about so what they're focused on now is essentially running what they know is a deceptive and quite frankly hypocritical scare campaign There was a case though that seems to be a totally reasonable thing that the government had been planning to take all the processing of I think it's about 30 billion dollars worth of mediscare claims each year and to get a private provider to do it that seems a totally reasonable thing to be planned for You shouldn't believe everything you read in the newspaper even if it's the financial review it is not right to say that the government was planning to do that I would say that the government of both political persuasion including the Labour government when Chris Bowen was the human services minister explored a series of options on how we can best modernize the mediscare payment system no decision was taken at any time to contract out any services and certainly no decision was ever taken to privatize mediscare there is no such thing as a mediscare privatization task force so the sad thing in this campaign is that not only misled the Australian people he misled Bob Hawke into believing that there is this thing called a mediscare privatization task force which there isn't so I mean I go back to where I started clearly they haven't got anything to talk about in terms of their plans for jobs and growth so they come up with a scare campaign or two So I don't think you've seen there the way in the political art of things that in an election campaign you have to really bring it back to there's no wiggle room you can't sit here and sort of discuss this that and the other thing you've got to come relentlessly back to it well I'm answering all your questions but how do you steal yourself and even outside of an election campaign so well to avoid answering the question I thought that I was giving you the best possible answer to your questions Well let's say as I say at my door stops in the morning if you keep asking me the same question I will keep giving you the same answer So say for example the budget you're the finance minister you've got a government which is near record levels of spending must be a little bit uncomfortable for a dry coalition finance minister to be head of a government which has got near record levels of spending as a proportion of GDP it would have been if we had not changed the policy settings that we inherited I mean I talked in the context of Berlin I talked about the importance of the forward trajectory and what people who ask questions like that always ignore is what the situation would have been if we hadn't changed trajectory when we come into government look no further than the national commission of audit report that was put out by Tony Shepard and his team it showed that within the decade at the time when we came into government spending as a share of GDP it was on track to go to 26.5% and rising beyond that we've been able to stop the increase at 25.5% as a share of GDP and we're now projected to reduce that down to 25.2% as a share of GDP so our opponents are trying to have it both ways they're trying to criticize us for having cut too much and they're trying to criticize us for having spent too much so I mean you can't have it both ways the truth is that the net effect of policy decisions when we come into government have improved the budget bottom line that yes there has been a deterioration the budget bottom line which has been caused by external factors that would have happened irrespective of who was in government I mean the global prices for our key quality exports going from 120 dollars a ton in the kinds of iron ore down at some point to 39 dollars a ton in our budget now at 55 dollars a ton that would have happened irrespective of who was in government the important thing is to ensure that the things that you control the policy decisions that you make you know improve the situation the important thing is that we're now heading in the right direction and that we're making progress and obviously you know we are looking forward to make more progress in the future and as you say you can't control everything and everything it's unrealistic to think you can and so the budget projections project that you'll get into you'll limp into a balance or surplus 19, 20, 20, 21 but there must be a chance that requires continued economic growth that it would be a string of 30 years of unbroken economic growth something of course we'd never seen there must be sort of a non-trivial chance that something goes wrong and in China or the growth here and knocks the budget off course between now and then well the budget is based on the best of verbal information at this point in time and it was given a tick of approval independently about the secretaries of Treasury and Finance so the economic assumptions the parameters, the forecasts, they're all based on the best of verbal information and obviously the trajectory is there for all to see we are expecting to reduce the deficit both in dollar terms and as a share fee but surely people should be prepared that something could go wrong and that's quite a reasonable possibility something could go wrong and more serious action would be required that is why it's so important that we decide that we continue to implement our plan for jobs and growth because we are and the thing is, and I'm really pleased that the message is starting to get through with you but there's a very serious point here Australia is an open trading economy what happens in the rest of the world does matter to us, a lot of things happen in the world that we don't influence so right now we're facing a series of global economic headwinds we have to deal with slower global economic growth risks and we've got to make sure that with the things that we control we're putting ourselves in the most resilient position possible to deal with challenges and headwinds and in the best possible position to take advantage of opportunities coming our way because the truth also is we're part of the Asia Pacific this is a part of the world where most of the global economic growth will be generated for years if not decades to come and we've got to really ensure that as a nation and as an economy we are as competitive as possible and we're in the best possible position both in the context of challenges and opportunities we had a big dinner here last night where we had Arthur Sididinas and Chris Bowen Chris Bowen up on stage but the Prime Minister of course was also on Q&A and some would have seen the end of that and with the business tax cuts which is the centre piece of your program for jobs and growth Prime Minister seem to be sort of backing off the idea that you ever deliver actually the tax cuts for if you like the big end of town there should be three elections time you have to elect me and others three times before we get it and by doing that is the government because it's facing a bit of a scare campaign and a few things we're getting down to the end by suggesting that well you know we've got to get another three elections and Labor's running a scare campaign does there run a danger of really increasing the level of uncertainty around that the tax cuts would ever be delivered and therefore reducing the chance that they will deliver some benefit early by business having the confidence to say yes I can invest in Australia because I know the business tax corporate tax rate is going to fall is the government sort of backing away from this a bit? I don't accept that interpretation at all the statement that the Prime Minister made last night was a statement of the obvious pointing out that as part of our 10-year enterprise tax plan we have deliberately prioritized small and medium-sized businesses in the first instance and of course if you put forward a plan over a 10-year period you know self evidently there are going to be three elections during that during that 10-year period because in Australia parliamentary terms are for three years now why are we pursuing a more competitive company tax right because we know and every every incredible economist will tell you that a more competitive company tax right will help boost investment will help boost productivity it will help generate stronger growth and over time will lead to higher real wages I mean you know don't take my word for it that is what a conga liners Mark Lysen would say of libo luminaries have said in the past I mean from Paul Keating to Bill Shorten to Julia Gillard to Chris Bowen I mean they have all said it and I mean Ken Henry who was the Treasury when Wayne Swan was Treasurer you know he said it very succinctly when he said that the principal beneficiaries of a more competitive or lower company company tax rate would be the workers so if the coalition has returned on July 2 will you then seek to when you seek to legislate the tax cuts company tax rate will you seek to legislate the whole 10 years in one go that is precisely what we would intend to do but of course again I mean as the Prime Minister clearly pointed out you know if we were if people decided that that was no longer what they wanted they could throw us out at the next election we hope they don't we hope that they stick with our plan for jobs and growth for a very long time given just moving just a little bit before I open up to questions the what's going on in Europe with your European background we've got the Brexit vote on Thursday and obviously the whole Euro project is under massive pressure and one of the I think the whole themes of this conference is systems under pressure in Europe is one of the prime examples what's your interpretation of what's gone wrong with Europe is it the exchange rate regime was just not an optimal exchange rate area and they're paying the price for that or they can't get rid of the welfare state or what's wrong with Europe my focus is on doing everything I can to help put Australia on the strongest possible economic and fiscal foundation for the future give advice to the Europeans on how they make decisions on how to put Europe on the best possible foundation for the future obviously people in Britain will make a judgment on Thursday that is a matter for them it is an issue that potentially could have implications for Australia it could potentially create a level of uncertainty depending on what the outcome is and as we always have to do as an open trading economy we've got to make sure that we deal with whatever comes our way and the best possible way you think the Brexit vote if it does if the it is a Brexit vote that that could have some sort of financial market instability that you have to sort of deal with you know over the period until the dust settles and then it will be onwards and upwards again but like look I mean there's no doubt that it will for a period until the markets have figured out what it all means there would be likely to be a level of uncertainty for a while okay well I'll open up for questions and I might take one from Graeme Samuel to begin with and please just just give me a little bit of a nod and then I'll check Thanks Dutch minister Graeme Samuel and thanks Dutch for treating the minister as appropriate to a very nice comfortable interview but if we could just tighten up a little bit Mediscare Mediscare has obviously worked in that the government has backed off or the prime minister has backed off on any consideration even of the potential issuing of outsourcing the payment system for Medicare does that make the Productivity Commission inquiry at present into human services a redundant inquiry particularly as it flowed on from the Harbour Review Well I don't again I mean I don't agree with that interpretation at all the coalition never made a decision as I have said in my answer to Michael we never made a decision to privatise Medicare we never made a decision to outsource various aspects of the Medicare payment system what we have done and what we are continuing what we are committed to is to modernise the payment system to ensure that the user experience is user friendly as possible for patients and indeed for doctors now as you would expect the government to do we assess various potential options and potentials forward and then you make decisions on the best way forward we do believe that there is a need to modernise for example the IT system when it comes to Medicare we do believe that there is and I mean Labour has recognised that too incidentally but we believe that on balance that is best done when it comes to Medicare in-house and that's what we will be doing Bill Shorten has really tried to put the knocker on the whole PC report on the broader human services area which flows out of Harper which seems to be the next wave of microformal lifting and productivity growth what Bill Shorten did was actually much more devious and dishonourable than that I mean he was trying to play on he was deliberately trying to play on creating confusion that somehow the government was going to sell Medicare there never ever was any proposition of the government selling Medicare ever so it was a complete it was a complete invention there was never such a thing as a Medicare privatisation task force, complete invention and the reason he did it is because I mean I've got union people ringing little old lighties around the country the government if they get re-elected they're going to sell Medicare and you're not going to be able to get access to your Medicare payments I mean this is a cynical political exercise and obviously we're not going to let Labor get away with that so over here and then we'll go there we'll go there and then we'll go there Stephen Bodlemy A&U Law School Minister I heard you mentioned jobs and growth good one of the one of the conversations that we've been having at this forum is about the fundamental way in which work is changing and the very nature of what we understand to be jobs is shifting the impact of technology significant changes in many different professions and industries legal profession for example impact of globalisation so what we understand from the past to be the idea of jobs is not what the jobs will be in this future and I'm wondering what your thoughts are about how that factors into the campaign about jobs and growth I mean that is precisely there are side why we need our national economic plan for jobs and growth I mean if you look at the six points it's a ambitious innovation agenda to attract additional investment into start-ups and the like and to really generate a new wave of economic development across Australia we've got our defence industry plan which is all focused on leveraging our very significant investment in defence capability to support local high-end manufacturing which goes to the question you asked about our export trade deals I mean in the end it's all about Australia's success is based on selling as much as many Australian products and services overseas you're not a technological pessimist on jobs and employment in the labour market things always change they have always changed in the past they will always change in the future as the Prime Minister would say as agile and as nimble as possible and to be able to grasp the opportunities that present themselves but there is always going to be change and we've always got to make sure that as an economy we're in the best possible position to take an ever-growing share of that pie that is available in the world and we've got to focus on competing in those areas where we can be the best in the world at providing high quality products and services in a competitively priced way and I'm Robert Johansson of Bending Own Adelaide Bank so one of the things that's changed around the world is the lack of government's capacity to spend given the amount of depth that they all have which has led to central banks undertaking this wild experiment of reducing interest rates to where they are which has had the consequence of huge swings in asset values and flows looking forward that will have its implications and I think already does have substantial implications for where people are putting their money and where they're going to be earning money from that will have its consequences for your forward projections when do you start having to grapple with those sorts of issues of what we're seeing in Australia in domestic housing pricing for example tax advantaged assets like domestic housing suddenly becoming out of reach of lots of people your government needs to do more than think of it a three year sort of issue at some stage well I mean there's a range of issues there I mean taking them in turn, the best way to improve housing affordability is to supply of housing the price of anything is a function of supply and demand if supply is higher than demand prices will go down if demand is higher than supply prices will go up and over time the market will get itself into balance now in terms of monetary policy we would say that our efforts to get our budget back on a credible path will rank in Australia more room to make its decisions independently in relation to the monetary policy settings I mean if you contrast that and this was our critique during the Rudd-Gillard Labour government period I mean Australia was quite unique where our official in the wake of the global financial crisis went from 7.25% to 3% and then went back up to 4.75% so at the same time as the Rudd government was pumping fiscal stimulus into the economy which everybody recognises is inefficient it's got all of the flaws that's been much talked about at the time the Reserve Bank was putting the foot on the brakes and 4.75% official cash rate at a time when we had record terms of trade the I&O price peaking at $180 a ton was clearly having an impact on the value of our exchange rate which was making large parts of the Australian economy less competitive so what you can see now with the official cash rate in Australia having gone down to 1.75% it's actually still high by international standards but much better than the 4.75% in the wake of fiscal stimulus pursued by the previous live government in Australia our economy is performing comparatively well we're growing at 3.1% the most recent 12 months period that is better than any of the G7 economies not as good as we would like it to be we would like it to be better moving forward but that's why there is more work to be done we are transitioning to an actually unprecedented period of record capital investment and construction activity in the resources sector to broader drivers of growth in a more diversified economy and various different things have helped us achieve that transition so there is the floating exchange rate which was one of the great achievements of the Hawke & Keating period in government that certainly has helped cushion of the significant fall in our terms of trade the fact that the Reserve Bank sets monetary policy independently that is an important feature but beyond that we would say when we came into government in 2013 our first job was to take some of that lead out of our saddleback that the previous government put in where we would say that was making us less competitive internationally whether it's the carbon tax or the mining tax or whether it's our effort to pursue a pretty ambitious deregulation agenda which is our efforts to get more competitive access to key markets in our region like with our export trade deals and the like but like so our first you know our first push was very much taking some of the burdens out of the economy and then we sort of progressively build on that to take that further you know through our enterprise tax plan we started in last year's budget by an initial rive of tax cuts for small business and we've built on that with our 10 year enterprise tax plan that we are committed to that we're not walking away from but that hopefully people will endorse that three elections to come I think we've got time for two more questions over here first George Williams from the University of New South Wales Law Faculty and if you'd like to finish your law degree in Australia I'm sure we can help you with that but my question's actually about a different type of finance political finance I thought you were going to ask me about Senate voting reforms or something I think we've done that one but in terms of political finance which relates to your other ministerial hat as special minister of state as you know there's a very large number of stories around that cut across all political parties around disclosure and a number of concerns in fact there seem to be more concerns and stories this election than I can remember for any recent federal election I just wonder given your responsibilities do you see the system as working adequately do you see any room for tightening the system such as even regard to small things that at the moment no disclosure is required until eight months after the current election so there's no capacity for voters to know now who is donating money do you see some room for reform here well the first point is obviously the system as it currently exists is the system that applies for this election and it applies equally to everyone and everyone has to comply with the law as it is after the election as there always is there is a review which is conducted by the joint standing committee on electoral matters as a matter of course in the context of the conduct of the election and I review the matters that you rise as well my own view is it's very important in a democracy like Australia to properly balance the need for disclosure and the need to facilitate participation and you know sometimes so sometimes you know people forget the bit that involves participation in the democratic process and you know I mean the difference between the Labour Party the Labour Party has got an institutional funding source which helps it substantially to compete in an election the Liberal Party doesn't have that same institutional funding source it's often harder for business to put themselves out there in a court of public opinion as donating to the democratic process and you know ending up on the receiving end of quite frankly various uncivary practices from the union movement so you know there are different things to balance to balance here I mean I think that the system the way it currently works works pretty well but there will be a review on the other side of the election as there always is and let's see what they come up with thank you finally Well something completely different again I was intrigued to hear that you cut your political teeth working as an advisor to the West Australian Liberal Senator Chris Ellison I remember Chris Ellison very well very good man the post-Marbeau debate in 1993 is being by far the most civilised of my Tory interlocutors on that particular bill genuinely trying to improve it rather than to destroy it outright do you think in retrospect the coalition Root and Branch opposition to the native title act was a mistake well obviously we support the system as it currently exists and it's very hard to revisit decisions that were made at the time I'm sure that the opposition we've got Robert Hill here who might be able to offer an opinion here but I'm very confident that the opposition at the time might the judgements as I felt the judgements that I felt were in the public interest I was very deliberate in saying Chris Ellison was the most civilised Robert was the opposition I'm sure we can continue this debate I think we've had a terrific discussion can you please put your hands together to join me to thank him for his comment and then we'll job them growth