Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Friday, 27 March 2020
LAURA JAYES: Mathias Cormann joins us live now from Canberra. Mathias Cormann, thank you for your time.
MATHIAS CORMANN: Good morning.
LAURA JAYES: What is the Government’s modus operandi at this point? What is the next stage of the support package? Is this entirely triage?
MATHIAS CORMANN: We are focused on the next wave of support. As we have always said, our economic support package was scalable and as the situation and the economic impact continue to evolve, our response continues to evolve. We have already provided significant support to many businesses around Australia. We have provided significant support to those Australians who lost their jobs through no fault of their own by doubling the level of income support available through this period. We recognise that there is more that needs to be done given the enormity of the economic impact right around Australia.
LAURA JAYES: It certainly is enormous. The Government has been trying to keep up with the rapid escalation of this crisis, but in terms of getting that support that you just mentioned to people, are you somewhat relying on people to use whatever savings they have to get them through?
MATHIAS CORMANN: There is going to be a mix. A lot of people will have some leave saved up and certainly as we can see, a lot of people are using up some of their leave. Some people will rely on some savings to a degree. But all Australians who lose their job or otherwise under certain circumstances lose significant income are able to access income support. We have waived waiting periods. We have waived liquid asset tests. We have waived all sorts of requirements and essentially are working to facilitate the easy access to that income support through this period. We are looking at how we can make further adjustments to better target and to ensure that those Australians who need support can have access to that support.
LAURA JAYES: How quickly do you need that third package and what will you be talking about in particular in National Cabinet today?
MATHIAS CORMANN: National Cabinet is going to be a matter for National Cabinet.
LAURA JAYES: Of course.
MATHIAS CORMANN: We are continuing to focus on the necessary response across a whole range of areas. Protecting people’s health, saving lives, slowing down the spread of the virus as well as providing the appropriate supports to the economy and jobs and where people lose their jobs or lose significant income, finding solutions to help Australians through this transition so that we can altogether be in the best possible position on the other side for the strong recovery.
LAURA JAYES: Are you talking about rental relief?
MATHIAS CORMANN: We are talking about the issue of both commercial and residential tenancies. These are matters that are regulated at a State level in Australia, but there is a conversation happening in relation to these matters at a national Cabinet level and I am hopeful that there will be announcements very soon. In the end, for many businesses, they are facing the perfect storm – a significant drop off in revenue at the same time that fixed costs continue. One of the big fixed costs obviously is the rental obligations. We have to continue to come up with sensible pragmatic solutions, spreading the pain to a degree to ensure that we all have the best possible chance to get through this.
LAURA JAYES: Is part of that pragmatism when you look at rental relief, the Government, as you see it, it’s your jurisdiction to look at small business, look at retailers, but the States should be looking at the other side – individual rental relief?
MATHIAS CORMANN: Our jurisdiction is that we are able to bring everyone together. It is essentially the convening power of the Commonwealth, bringing all of the States together to work through these issues. But also, governments, state and federal, are themselves landlords and I think there is an opportunity for governments, state and federal, to lead by example in terms of the way we conduct ourselves in relation to our business tenants. That is certainly part of the conversation. There is a range of options of what can sensibly be done. This is being worked through as swiftly as possible.
LAURA JAYES: So one of those options would, you are the landlords as you say, what kind of buildings are you talking about?
MATHIAS CORMANN: Governments, state and federal, own property around Australia and some of that property is leased to business. I don’t have a list of property here in front of me.
LAURA JAYES: Fair enough.
MATHIAS CORMANN: It is just a reality that governments, state and federal, around Australia are the owners of a lot of properties and some of that property is leased out to business. I think that there is an opportunity for governments to lead by example in the context of landlords all around Australia in terms of what is required over the next few months.
LAURA JAYES: You’ve announced $84 billion worth of support and stimulus. It has passed Parliament. Do you know how much of that money has actually reached the pockets of individuals and gone to business?
MATHIAS CORMANN: It was never all going to go out in one hit. It was always going to be phased over a period. That is also necessary. We are looking at a period of at least six months of significant challenge and we have to ensure that there is the appropriate level of support spread across that whole period. When it comes to the $750 stimulus payment, that will be paid in the period from the end of March to the middle of April thereabouts. In terms of the income support payments, they will be paid on a fortnightly basis. When it comes to the cash flow support to eligible businesses and not-for-profits, there will be a payment in this next quarter and there will be another payment in the following quarter. That support is necessarily phased over the expected period of hardship.
LAURA JAYES: Do you accept that people just simply don’t have the savings or much leave to rely on at the moment? One of the first payments for unemployment benefits doesn’t go out until the 27th of April – that is a month away. Is there a case to expedite that?
MATHIAS CORMANN: Of course we understand that this is a very difficult, very challenging situation. Making payments of this magnitude to that many people is quite a significant logistical exercise and Stuart Roberts and the team at Services Australia are working as fast as they can, but we also have to make sure that we get this right so that… interrupted
LAURA JAYES: Sorry to interrupt you there, Mr Cormann. Logistics aside, in your package you said that first extra payments wouldn’t roll out until the 27th of April. Is there a case to expedite that now given what we’ve seen in the last two weeks?
MATHIAS CORMANN: Logistics is what is driving the timetable, that is my point. I was directly answering your question. We are working as fast as we can and we are working to the tightest possible deadlines.
LAURA JAYES: Okay. Your support measures, you’d have to say, have only gone a small way in incentivising business to retain staff. Businesses have simply had no choice. Government can’t always make up the gap that is there. Will you look at a UK style wage subsidy?
MATHIAS CORMANN: No, we will not look at a UK style system because in an Australian context that just would not work. We are looking at a period of six months and you have just mentioned how it is important to get the support to people as quickly as possible. That is why it is important that we use our existing systems architecture. If we came up with a completely different system, a completely different approach and had to start up a system from scratch, it would take us way too long to get that into the community in an appropriate fashion. We are continuing to assess how we can provide improved levels of income support to make sure that all those Australians who are facing hardship and who need support can get access to that support. We are looking at ways to further expand that, yes. And we are looking at ways to further expand the support and the incentives for business to hold onto their staff through this period. We would expect to be making relevant announcements over the next few days.
LAURA JAYES: Okay, so just to be clear on the wages side of things, is Treasury modelling, having a look at how something can happen here that is more broader scale? If you’re not using at the same kind of components and system as the UK, is there another way we can do it here? Is that what Treasury is looking at?
MATHIAS CORMANN: Firstly, our response so far is very broad scale. We are providing double the level of income support to every Australian who loses their job. The costing for that is based on a million additional people in unemployment, but even if it is more than that, every Australian who loses their job will get about twice the rate of income support compared to what was available before. But we are looking at ways to further boost the spread of the level of income support and how we can better support business to try and hold onto their staff, perhaps not having them employed in the usual way doing the things they did in the past, but keeping them connected to the business so that on the other side of this crisis those staff are still connected to the business and available to immediately get the business back underway.
LAURA JAYES: And Minister, can you give us a timeline on this third support package when we might see an announcement on it at least?
MATHIAS CORMANN: As I said just a few moments ago, we would expect there to be an announcement over the next few days.
LAURA JAYES: Okay. Just finally, there has been some criticism that the Federal Government and the State government aren’t working together when it comes to stopping cruise ship passengers coming from the cruise ship to the mainland. Is that true?
MATHIAS CORMANN: You are talking about the cruise ship in Western Australia?
LAURA JAYES: In Western Australia, absolutely.
MATHIAS CORMANN: No, that is not true. The Federal Government and the West Australian State Government have been working together very closely. I have been in constant communication with the Premier, Mark McGowan. I have also been speaking to the German Ambassador. There are about 832 passengers on this cruise ship off the coast of Western Australia, most of them German. It is a German company. By the end of the weekend, nearly all of them will be evacuated on three planes back to Germany. In relation to those on the ship, there are about seven I believe who are infected with coronavirus, showing mild symptoms. Some appropriate arrangements will be put in place locally, again in close coordination and consultation between the Federal and State Governments. The Australian Border Force Commissioner Michael Outram has been working closely with the WA Police Commissioner Chris Dawson. There is close coordination at all levels and we are all working very hard to resolve this in the best possible way.
LAURA JAYES: Mathias Cormann, appreciate your time this morning. That National Cabinet meeting will be underway this morning. Thank you.
MATHIAS CORMANN: Always good to talk to you.