Transcripts → 2020


5AA - Mornings

Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia


Date: Tuesday, 31 March 2020

Coronavirus economic response

LEON BYNER: I must say that yesterday’s announcement by the Prime Minister and indeed the Treasurer was ground breaking stuff. $130 billion as a JobKeeper payment to keep Australians in a job. What we will do is go through with Minister Cormann some of the important points, so that you are well appraised of what is going on. Let’s talk to Mathias Cormann. Mathias, thanks for joining us this morning.

MATHIAS CORMANN: Good morning Leon. Good morning to your listeners.

LEON BYNER: First of all, is it likely that some people on that $750 a week will actually get a pay rise.

MATHIAS CORMANN: Potentially yes, because it is a straight payment which applies to permanent fulltime and part time employees, as well as casual workers who have been with the same employer for more than twelve months. Any business which claims it for an employee is legally obliged to pay the full amount to that employee. The amount chosen represents seventy per cent of the national median wage. But for those workers in those industries that were most heavily affected, the accommodation, hospitality and retail sectors, this equates to one hundred per cent, or a full median replacement wage.

LEON BYNER: Alright, I want to go now to the fact that you have already had, what 60,000 applications. It is going to be much more than that …

MATHIAS CORMANN: It is more than 110,000 now.

LEON BYNER: 110,000 businesses. They go to the tax office and they register for this?

MATHIAS CORMANN: Any business owner who is listening, on you are able to register with your ABN number to receive JobKeeper payment updates. The tax office is working furiously to get all of the systems and processes in place. If businesses register there, they will receive all of the information about next steps in the next few days.

LEON BYNER: Alright, now so far, let me give you a few questions that the public have asked me to ask you. Anybody stood down, their employer can apply for this?

MATHIAS CORMANN: Any worker stood down since 1 March, their employer can apply for this, if the business is still going. A business which has gone into insolvency, if the business no longer exists they will not be able to apply. But any business who has stood down workers since 1 March is able to apply for this on behalf, of those workers, yes.

LEON BYNER: So if you were stood down before 1 March you go to Centrelink.

MATHIAS CORMANN: You go onto the JobSeeker payment, indeed.

LEON BYNER: Alright.

MATHIAS CORMANN: Which we have doubled.

LEON BYNER: Yes. So what about, let’s look at some of the groups of businesses that have had to stand down thousands. Do you think Qantas and Virgin are going to register for this? They have stood down so many people. I know…

MATHIAS CORMANN: We have had to make decisions to protect people’s health, so we closed down significant parts of our economy. Aviation was one of the first industry sectors which was very heavily impacted. Yes, Qantas has stood down about 20,000 out of 30,000 workers. Virgin I think about 8,000 out of 10,000 workers. Yes, they are eligible to apply. For businesses with a turnover of more than $1 billion, they have to be able to demonstrate, or they have to assess that they have had a drop in turnover of fifty per cent or more to be able to access this, which in the context of Qantas and Virgin, I suspect that sadly is where they are at.

LEON BYNER: Alright, so anyone that’s currently got a job, if their boss has seen a turnover go down thirty per cent or more, they can apply to the ATO and get this payment.

MATHIAS CORMANN: Any business with a turnover of less than $1 billion, if they self-assess that their turnover over a one month period compared to a comparable period last year has gone down by thirty per cent or more they can apply for this. For businesses with a turnover of more than $1 billion it is if the turnover has reduced by fifty per cent or more.

LEON BYNER: Mathias, a lot of people asked the question, the important thing is I think what the Government has done yesterday is super. No question. I think overwhelmingly people think that. But there is one point this $130 billion has got to be added to all the other amounts of money which will also be spent. We are going to borrow huge amounts. What kind on interest repayments are we going to be stuck with for many years to come?

MATHIAS CORMANN: Interest rates are very low at the moment and for the foreseeable future. But it is true, there is no question, we are incurring very significant expenditures. This will add to the national debt. But the question is what is the alternative. We are facing a very significant health challenge with massive economic implications. We are wanting to support business and worker through what will continue to be a challenging period for probably another six months or so. Because we want every Australian to have the best possible opportunity to be successful and to be part of the bounce back on the other side. If we did not do what we are doing, it would be much more difficult for our economy and jobs to bounce back on the other side. The good news is that as a result of the work we have done over the last six or so years to repair the Budget, we go into this in a much stronger fiscal position than we otherwise might have. We have the capacity to afford this. Does this impose a significant burden into the future, yes. But if we did not do this, the burden in terms of economic cost, in terms of people’s livelihoods and in terms of our capacity to sustainably fund all of the services Australians rely on into the future would be more negatively impacted. So we have made a judgement that in all of the challenging circumstances is the best way forward.  

LEON BYNER: Mathias, it appears to many and indeed to me, that whenever we can reboot and start getting back to some degree, some degree of normality one of the key factors is going to be that the lessons we should have learned out of this, surely would be that Australia must be a lot more self sufficient. We need to make more things, particularly in the essential category. And that in and of itself will be a major fillip of employment. Does the Government acknowledge this?

MATHIAS CORMANN: There are going to be a lot of lessons to be learned out of this. I heard your introduction before. You are right. Clearly, across a range of essential items we have been dealing with supply chain challenges. When it comes to masks and tests and medical supplies in general, we are facing significant international competition driving up costs. Some countries are putting restrictions on exports of certain items that they want to keep for their own populations. Greg Hunt has done an amazing job in making sure that we maximise the medical supplies we need, just to pick one area, over the next six months or so. But the broader point is right. To the extent that we can, we should always work on being a self-sufficient as we can be in relevant areas that are of particular importance.

LEON BYNER: So one other point Mathias Cormann, and that is when is the next meeting of not only Cabinet, but also of the other interstate players and medical representatives. When is that going to occur?

MATHIAS CORMANN: We have literally daily meetings either of the expenditure review committee or the national security committee. The national cabinet, where the Prime Minister chairs a meeting with Premiers, met as recently as yesterday. We have a meeting of the Federal Cabinet tomorrow. So there are meetings literally on a daily basis. The Prime Minister, the Treasurer and I we are getting regular economic updates. We are getting regular updates in terms of how the public health situation is evolving. We are constantly making judgements. We are engaging with stakeholders on an ongoing basis to continue to make judgements. We have Nev Power now as well, as the executive chairman of the COVID19 coordination commission. His job is to engage with the business and the community stakeholders right across the board to identify problems and find solutions and provide advice to us on what else we can do to fix issues.

LEON BYNER: Just quickly I have got to let you go because I know you have got a lot of other things to do and more meetings. When will this be in place? It is backdated until 1 March…

MATHIAS CORMANN: The first payments will be processed in early May. I know people say that is a little while still, but the truth is the logistical challenge of managing payments of this volume and this magnitude, it does take a little bit of preparation… interrupted  

LEON BYNER: Have you hired a lot of people to give the tax office resources to do this?

MATHIAS CORMANN: We have hired more people in both Services Australia and in the tax office as required. But there is some physical realities that we just have to work through. But the feedback from business is that, now that they know that this is coming, it gives them the confidence to keep going. Maybe not for one hundred per cent of businesses, but this is something that will benefit six million working Australians. That is half of the national workforce. We do believe this will provide a significant boost. It tells businesses to continue to hang in there. That they will be able to see this through hopefully.

LEON BYNER: Mathias, thank you for making some time for South Australia. I will certainly keep very close. I know you will. Thanks so much. Federal Minister for Finance, Mathias Cormann.