Sunday 24 August 2014
Video: Finance Minister Mathias Cormann joins Insiders (Insiders)
Photo: Finance Minister Mathias Cormann says there is no rush to address the "budget emergency". (AAP: Alan Porritt, file)
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Finance Minister Mathias Cormann said the Government will be forced to increase taxes if the Senate blocks its proposed spending cuts.
According to figures released by the Government, Labor and the Greens are opposing $20 billion worth of savings measures.
Senior Government ministers are negotiating with cross-bench Senators to secure support for key measures including the $7 GP co-payment, fuel excise increase and higher education changes.
Senator Cormann said those structural savings are needed to bring the budget back under control.
"If we stay on a spending growth trajectory that takes us to 26.5 per cent of the share of GDP, when tax revenue on average over the last 20 years was 22.4 per cent of the share of GDP and you don't want to balance the books by reducing spending, then the only alternative to balance the books is to increase taxes," Senator Cormann said.
This week, Senator Cormann said there was still ample time to pass key budget measures, given that they are not due to take effect immediately.
But the Opposition said the comments are at odds with the Government's previous warnings of a "budget emergency".
Senator Cormann told the ABC's Insiders program the Government is "working in an orderly and methodical fashion" to implement its planned measures.
"As we work through the implementation of the budget, inevitably there is going to be noise, a level of conversation seeking to scrutinise the decisions the Government has made and why and that is appropriate," he said.
"About half of all of our budget measures have gone through.
"Indeed, our biggest saving ... the reduction in the funding growth in foreign aid to the tune of $7.6 billion over forward estimates – that went through."
Senator Cormann said spending and debt growth does need to be addressed, but in an orderly fashion.
"There is no rush to deal with specific structural reforms, which do not apply until July 1, 2015 [or] early 2016," he said.
"It's always been thus, that in relation to structural, medium term reforms, that you deal with them sequentially and in a prioritised fashion in the Senate."
Meanwhile, Education Minister Christopher Pyne said he is confident at least some of the Government's controversial higher education proposals will pass, as he continues negotiations with cross-bench senators.
Mr Pyne will this week introduce a bill to deregulate university fees, and reduce course funding by around 20 per cent. Labor, the Greens and the Palmer United Party say they are opposed to the measures.
But Mr Pyne said he is determined to find savings and notes cutting research grants would not require legislation.
"The worst case scenario is cuts without reform and I think the university sector gets that," he said.
Coalition needs to be more sensible, moderate: Government MP
The defence of budget measures by senior ministers comes as debate continues within the Government's ranks on some key points of the budget "repair plan".
Liberal Senator Ian Macdonald, who opposes the fuel tax increase and the GP co-payment, said the Government needs to adopt a more sensible and moderate approach to some of the measures.
He told ABC Weekend Breakfast the Government needs to have another look at its paid parental leave scheme until the budget bottom line improves.
"I have this view, that [in] being perfectly pure in the budget, fixing the budget up and [will mean we become] so unpopular in doing it that Labor will come back," he said.
"Labor will have no qualms about racking up a $600 billion debt again. So it seems to me that we need to be a little bit more sensible and a little bit more moderate."
Senator Macdonald said it was a tough budget to introduce.
"There is a few issues on the side people have concerns about," he said.
"Things like the paid parental leave, like the co-payment, the fuel excise. These are measures which I think need more thought. That doesn't mean to say the whole budget strategy is being put in jeopardy."
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