Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Tuesday, 17 March 2020
LAURA JAYES: Welcome back to First Edition, let’s go live to Canberra. The Finance Minister Mathias Cormann joins us now. It’s less than a week since you announced a $17.6 billion stimulus package. Minister, is a second one required urgently?
MATHIAS CORMANN: This is a rapidly evolving situation in Australia and around the world. As we have always said, our stimulus package that we announced last week was proportionate and scalable. It is clear that we do need to scale it up. The Prime Minister chaired a series of meetings with relevant Ministers from right across the board yesterday. We will have an expenditure review committee meeting and a Cabinet meeting as well as a national security committee meeting later today. In good time before the Parliament is asked to vote on the stimulus package next week, we will be making further announcements.
PETER STEFANOVIC: Scale up by how much?
MATHIAS CORMANN: I am not going to be able to put a number on it today. We are still having a whole series of discussions. It is clear that the economic impact of the coronavirus continues to worsen in Australia and around the world. That is why our response to it needs to strengthen accordingly. We are very conscious that as we are looking at things today, that many businesses will close and many Australians will lose their jobs. We will need to provide the appropriate support to them through the transition, but also to ensure a maximum strength recovery on the other side, a maximum bounce back on the other side.
LAURA JAYES: Do you now concede that Minister, that this thing is moving so fast that you simply won’t be able to save jobs and you won’t be able to save businesses from going bankrupt?
MATHIAS CORMANN: We have always been very conscious of the fact that the coronavirus is having a very significant economic impact beyond the public health impact. That is why we announced a very significant stimulus package last week. But with everything that has been happening and with all of the data and information coming through, it is very clear that we need to do more. We will do more as we said we would.
PETER STEFANOVIC: Will this include more cash handouts?
MATHIAS CORMANN: I am not going to speculate now on what the adjusted response will be. That will be announced as soon as all of the decisions have been made. Suffice to say that, yes we will consider how we can best provide support to the most severely impacted businesses and workers around Australia, most severely impacted by the downturn from the coronavirus. There are some sectors that are very much on the front line. In particular, the tourism and hospitality sectors, but there are others. There are some sectors who are doing really well. If you are running a shopping centre right now, you are experiencing record demand, stronger than during the Christmas lead up. So it is not a universal impact across the economy, but some sectors of the economy are particularly badly affected.
LAURA JAYES: Can you give us a broad idea of what you need to focus on here? Is it just right across the board? Do you need to do more on the consumption side? Or do you need to throw everything at just saving some of these jobs, perhaps more focused on casual workers, more relief for small business?
MATHIAS CORMANN: We need to ensure that those Australians who are negatively impacted by the coronavirus, in particular those that are more severely impacted, are receiving the appropriate levels of support through the transition to the other side of this challenging period. We do know that there will be a significant bounce back on the other side. There will be a strong recovery on the other side. But we need to get to the other side. We need to ensure that businesses who are well performing businesses if it wasn’t for this, are able to manage the transition to the other side of this. That is very much our focus. How can we support as many businesses as possible through this transition. How can we provide the appropriate levels of support in the circumstances where that is not possible. How can we ensure that those workers working in sectors that are negatively impacted are able to perhaps participate in those areas where there is significant strengthening of demand.
PETER STEFANOVIC: One of those sectors that has been negatively impacted in a very, very big way is as you would know, the airline industry, Minister. Qantas and Virgin in Australia have suffered greatly in recent weeks. If needs be, is the Government prepared to bail them out?
MATHIAS CORMANN: I am not going to start speculating. I certainly understand that Qantas in particular has a very strong balance sheet. There might be some other challenges in relation to other parts of the aviation sector. These are all things that we are carefully considering. But, I say again, yes companies like Qantas and Virgin are under significant pressure. But companies like Coles and Woolworths are dealing with significant demand and significant logistical challenges to meet that demand. So there might be opportunity here to very pragmatically try and channel workers from one to the other.
LAURA JAYES: You now concede that many will lose their jobs. Do you have any idea of how many? There is speculation the unemployment rate could be near seven per cent through all of this.
MATHIAS CORMANN: Again, I am not going to speculate. Our focus is on keeping the economy as strong as it possibly can be in the context of a significant challenge. Of course we want to support as many jobs as possible. But we do understand that through this period ahead, the grim reality is that some businesses will close and some Australians will lose their jobs. We will ensure that they have got the appropriate levels of support through this transition to the other side when there will be a strong bounce back and a strong recovery.
PETER STEFANOVIC: How do you support someone who has lost their job?
MATHIAS CORMANN: In the end, you support somebody who has lost their job either by getting them into a different job, or by providing appropriate levels of income support through the transition. These are the sorts of things that we are currently working through.
LAURA JAYES: Are there lessons here from the GFC here is that you need to move quickly and accept that mistakes will be made along the way? Are you allowing the perfect to be the enemy of the good here, or is it the speed that is the top of your mind at the moment?
MATHIAS CORMANN: We are trying to do both, to act quickly but also act appropriately in a manner that clearly meets the target. That is what we will continue to do. That is why we are having meeting after meeting, day in day out at the moment, to ensure that we have the best possible package in place for the consideration of Parliament, when the Parliament resumes next week.
PETER STEFANOVIC: Minister, do you envisage the widespread shutdown of pubs, clubs, restaurants and even schools?
MATHIAS CORMANN: I am not going to start speculating on these things. We will continue to act on the medical advice in relation to these matters. When it comes to schools, certainly our advice and the unanimous position of the national cabinet, so that includes all of the Premiers and Chief Ministers, is that schools should remain open for good reasons both from a public health and an economic point of view. We respect the right of parents to make their own decisions in relation to their children. But by the same token, right now we do not have any medical advice suggesting that in Australia it would be appropriate to close schools. You have to remember that Australians that are observing what happens in other parts of the world, some of those countries like Italy, Germany, France, the US even, are quite a bit further down the track in terms of the spread of the virus in those jurisdictions. So we will continue to make decisions that are appropriate for Australia, in an Australian context, very mindful of what is happening in other parts of the world. We will continue to make the public health related decisions based on the expert medical advice.
LAURA JAYES: Mathias Cormann, it is a busy time. Thanks so much for giving us some of it this morning. We appreciate it.
MATHIAS CORMANN: Always good to talk to you.