Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Tuesday, 17 March 2020
QUESTION: Minister how serious are the measures that you are currently considering as part of this extended tranche of support for business?
MATHIAS CORMANN: Clearly the situation in relation to the coronavirus, both the public health and the economic impact, has been rapidly evolving in Australia and all around the world. As we indicated last week, our stimulus package is both proportionate to the challenge and scalable. In light of what has been happening in recent days, we will be scaling it up. Precisely how that will be done is something that we will decide over the next day or so.
QUESTION: Minister how can you possibly put a floor under it. Two million casual workers, 1.3 million sole traders, how do they survive? Not for weeks, but for months without income.
MATHIAS CORMANN: That is the challenge. There is no question, that is the challenge. Some sectors in our economy are going to be very severely impacted, businesses will close and Australians will lose their jobs. But some sectors in the economy are doing incredibly well. Just to pick a very high profile one, shopping centres right now are doing extraordinarily well, better than in the lead up to a Christmas period. There is some capacity to try and channel workers from less well performing areas into better performing areas, but there is a limit to that. We recognise that as well. We are carefully considering how we can best, in the most appropriate fashion, provide support to businesses and workers through this transitional period, because we do know that there will be a strong recovery on the other side. We want that recovery to be as strong as it possibly can be. But there are some judgements in the intervening period.
QUESTION: Australians now have a debt to income ratio of 200 per cent, they will be indebted by their mortgages, they will see massive defaults.
MATHIAS CORMANN: We are aware of the challenges. We are aware of what is in front of us. That is why we are very carefully considering how we can best provide the necessary support to get Australians through this period in front of us. There is a broad spectrum of issues. We have been engaging with people across business and the community widely over the last few days. We will continue to make the necessary judgements.
QUESTION: Do you have any industries in mind?
MATHIAS CORMANN: Some industries are clearly on the front line when it comes to the direct economic impact. The tourism, hospitality sector, events management companies and the like, they are particularly severely impacted because from one day to the next demand dried up. There are others. But again, there are some sectors in the economy that are either unaffected or are doing better than normal. So it is not a uniform picture right across the economy. The key is to ensure that we get as many Australians who lose their jobs because of the coronavirus into jobs in other sectors that are doing better. To the extent that we cannot, we need to ensure that we can provide the appropriate levels of income support through the transition, and perhaps other related measures to ensure that people get safely to the other side.
QUESTION: Your home state of WA has frozen electricity prices, water prices and also public transport fares. Do you think other States should do the same? And would the Federal Government provide assistance to that approach?
MATHIAS CORMANN: There clearly is a role for the States. The reason that we have the national cabinet chaired by the Prime Minister is to coordinate the national effort from across Federal and State and Territory governments. Some State governments have already made announcements in terms of their own stimulus packages, including providing payroll tax relief and other measures. We certainly encourage all States to continue to do what they can to support business and individual Australians through this period.
QUESTION: Minister, you said today that people will lose their jobs, wouldn’t that be a way of trying to help those that bear the brunt of this economic pressure?
MATHIAS CORMANN: We want as many Australians as possible to remain in their job, to remain connected to their employers. For those Australians who do lose their jobs to find employment elsewhere in sectors in the economy that are doing better than before. But there will be a limit to that. That is why we are very conscious of the fact that we need to provide the appropriate levels of support through our income support system.
QUESTION: The French Government has suspending rent, taxes and household bills. At what point would Australia consider something like that?
MATHIAS CORMANN: I have seen the reports overnight out of Europe. Clearly Italy, France, Germany and other countries across Europe are quite a bit further down the track when it comes to the spread of the virus. We will continue to make judgements as appropriate. We will make announcements as we have made those decisions.
QUESTION: Minister, you’ve got airlines that are going to be seriously struggling financially due to this. There are going to be small businesses racking up business debt because the circumstances they are going through. What options are open to the Government try and prop up and keep these businesses, these companies, these industries going at this time of crisis?
MATHIAS CORMANN: The first thing to remember is that this is because of an external event beyond our control. These businesses that you are talking about were otherwise profitable going concerns. So the key here is to find ways to provide the necessary transitional relief, transitional support to ensure that those businesses have the best possible chance to still be there on the other side for the strong recovery. That is what we are focused on right now. These are the discussions that we are currently having. As soon as we have finalised those discussions, in good time before Parliament returning next week, we will be making relevant announcements.
QUESTION: What does it mean to businesses out there who are trying to pay staff, to keep staff on? What message is that sending to them?
MATHIAS CORMANN: We are engaging with those businesses. We are engaging with businesses in the aviation sector. We are engaging with businesses and representatives of business organisations from right across the board as we are considering how best to respond, how best to provide support. That is all feeding in to decisions that we are making this week.
MATHIAS CORMANN: Our focus is on supporting the economy. Keeping economic growth going. That was the focus of our package last week. There is no doubt that that the challenges that we are facing are very significant. Australia did go into this challenging period in a stronger position both economically and fiscally as a result of the reform effort that we have pursued over the last six years. But there is no question that we are going into a very challenging period.
QUESTION: But as of right now, what is the dollar value of financial support that has actually happened? Or is it just at the stage of words?
MATHIAS CORMANN: The legislation will not be able to pass until next week. We announced a $17.6 billion package last week to be legislated next week. We are currently working to add to that. As soon as the package is legislated, for example the $750 payments to Australians on income support will be paid from between the end of March and the middle of April, thereabouts. The support to business is already underway in terms of both incentives to bring forward investment but also once the cashflow support for small and medium sized businesses is legislated that will come into effect straight away. We are acting as swiftly and as quickly as we can.
QUESTION: How many more billions is this second wave of stimulus expected to be? Will it beyond the $17.6 billion that has already been announced? Is it going to be an equal amount?
MATHIAS CORMANN: I am not going to put a number on it here this morning. We will continue to have the discussions and make the assessments, taking advice from the Secretary of Treasury and others on how best to design and frame and put forward that package. As soon as we have made all of the relevant decisions, we will be making those announcements.
QUESTION: Minister you are not talking about a shock that lasts weeks though are we? The only experience we have was 1919 with the Spanish Flu. It came in two waves and wasn’t done until October. So there are months and months ahead of us aren’t there?
MATHIAS CORMANN: A lot of learnings since that period. A lot of learnings since 1919. This is a very significant challenge. There is no question. But we are working as hard as we can to protect Australians health, to slow down the spread of the virus to save lives, so that we can have a more constant flow of patients into our health system, so that we can ensure that the most vulnerable patients can be appropriately prioritised. But we are also continuing to make the necessary decisions to support our economy to support jobs. This is a challenging period. There is no two ways about it. All we can do is do the best we can.
QUESTION: Is there any clarity yet on what shape Parliament would take next week, if it does proceed?
MATHIAS CORMANN: The Prime Minister will be engaging with the Leader of Opposition in relation to sensible arrangements for Parliament next week, in the context of the public health crisis that is in front of us. As soon as these conversations have taken place, these things will be announced. The Presiding Officers have already made a series of announcements in relation to the operation of the Parliament next week. But there are a whole range of other matters yet to be settled. We will make sure that we engage appropriately with the Opposition before these things are announced.