Transcripts → 2020


Sky News - Afternoon Agenda

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

KIERAN GILBERT: Let’s go live now to Perth. The Finance Minister Mathias Cormann joins me. Minister by two o’clock this afternoon there were 234,000 businesses registered for the JobKeeper payment. It shows you just how much it was needed.
MATHIAS CORMANN: Yes. Business from around Australia are embracing this opportunity. It is exciting to see. It is heart-warming to see. Because of course the reason why we are doing this is because we want to keep as many businesses as possible in business and we want to keep as many Australians as possible in jobs and connected to their business. We did have to make some very tough decisions as a nation to protect people’s health, to save lives, to slow down the spread of this virus. We had to close down large sections of our economy. Yes, a lot of businesses and a lot of Australians, working Australians, had a very, very negative impact on their livelihoods as a result. This is something that we need to do in order to help support Australians through this transition, so that all Australians have the best possible opportunity to be successful on the other side, to participate in the strong recovery on the other side. 
KIERAN GILBERT: You used the term heart-warming, it really is. I saw it at a very small level this morning. But a carpenter, a good friend of mine showed up this morning with a young apprentice. He had laid him off yesterday. Said yesterday was his last day. After the announcement, the young kid, eighteen years old back at work today. It is heart-warming. 
MATHIAS CORMANN: I have to say, in politics it is not often that you get friendly, positive, supportive messages. But I have been getting a lot of feedback from businesses, large and small, from people working for businesses, large and small, right around Australia, who really have embraced this. Businesses actually do want to hold onto their employees through this period. Businesses overwhelmingly want to do the right thing. They understand that they need their employees on the other side if they want to bounce back strongly. This really has given business around Australia the confidence. Even though it will still take until early May for some of these payments to be able to flow, it has given business overwhelmingly the confidence to hold onto their workforce, to hire, to re-hire perhaps workers that had already been let go since 1 March. It is great to see how this has been embraced. 
KIERAN GILBERT: Yeah and I have got to say it is encouraging as well to see the Labor party welcoming it. They are not trying to pick holes in it. I think that most Australians want to see that level of bipartisanship right now. This is as the Treasurer puts it is a Team Australia moment. We have all got to get on board and not just the social distancing, but whether it is the banks and their role in terms of loan relief and so on. It is not going to be easy to get through it. 
MATHIAS CORMANN: We are all in this together. We do have to pull together. We are facing a significant health challenge and we are facing a significant economic challenge. We want to save lives. We want to save jobs. We have to work on all of this together. We are very grateful that the Opposition, the same as they did last week when we legislated the first stimulus and safety net package, that they have again come on board and joined with us in a very unified way to support this necessary package. 
: And given their support, I know the ATO can already get going, get cracking in terms of getting the mechanisms in place, but given the Labor support, how soon would you like to see it passed in Parliament. Can it be done by next week?
MATHIAS CORMANN: These conversations are happening now between the Government and the Opposition and also will take place with representatives of other parties in the Parliament. But certainly, we believe that we will be able to finalise the legislation certainly over this next week. Hopefully sometime next week, on a day to be determined after some further consultations, we will be able to bring the Parliament together in a much reduced form and get this dealt with. 
KIERAN GILBERT: Just a few weeks ago, those in the Government were saying that we are not going to go down the UK path in terms of the subsidy program and so on. Things change fast. I think the Government has got a lot of credit for reacting and being flexible to this situation, with this particular package. 
MATHIAS CORMANN: We have not gone down the UK path. I would say, I am not sure how far advanced the UK is in implementing what they said they would implement. What we have always said is, that in order to be able to deliver these sorts of supports like the JobSeeker payment, and now the JobKeeper payment, efficiently, effectively at the scale required, you need to be able to do so using your existing systems and architecture. That is what we are doing. The JobSeeker payment is being provided through our social services portfolio, our welfare system. The JobKeeper payment is being provided through the tax system. Yes, the tax office is working furiously and making sure that all of the processes and practical arrangements are in place. There are significant logistics involved in organising these sorts of payments for up to six million working Australians. All of that is underway now. But you are right, when this whole process started we did not expect that we would be where we are today. This has been a rapidly evolving situation, both in a health sense, but also in terms of our assessment of the economic response required, given the evolving nature of the economic impact. I would never have thought that I would be involved in putting together a package of this size to support the economy, to support business, to support jobs. But here we are. It was required. It was required to ensure that we are in an appropriately strong position on the other side. 
: Yeah well I don’t think many people at Rushcutters Bay would have thought a few weeks ago that they would be moved on by the police. But that is what we are seeing there. These are extraordinary times. Most Australians though are heeding these warnings aren’t they and staying home. That is the reality right now. Even though we see these extraordinary images of police moving people on in the park.
MATHIAS CORMANN: I think that people understand that the health mission is to save lives. That we need to slow down the spread of the virus. We might not be able to stop the spread of the virus. But we have to slow it down to ensure that the flow of patients into our health system is manageable and that in particular those most vulnerable Australians are able to be appropriately prioritised and get the appropriate high levels of care. The economic mission is to ensure that all Australians are supported, appropriately supported, through the transition and that we can be in the best possible position for a strong economic recovery on the other side. 
: In that context, are you open to Virgin’s request for a $1.4 billion loan to get to the other side?
MATHIAS CORMANN: We are not going to talk about individual businesses. But what I would say in a general sense is that we have provided industry-wide support to the aviation industry sector. About $1 billion worth of competitively neutral industry-wide support through fee waivers and the like. The aviation sector was one of the first sectors most severely impacted. Both Qantas and Virgin will benefit from the JobKeeper payment. That will, I believe, be providing them with significant additional support. But I cannot see, I certainly cannot see as I am speaking to you here right now, it is not our plan to take equity in an aviation business. That is not where we are at. But we are continuing to assess what appropriate supports, in a competitively neutral basis might be able to be provided moving forward.
KIERAN GILBERT: But not that equity status, because it is interesting, Qantas as soon as they heard this Virgin request. Qantas said that they would want a loan of more than $4 billion.
MATHIAS CORMANN: We do not take sides. We make judgements on an economy-wide and industry-wide basis. We do not pick winners. We do not pick sides. We make judgements based on what is good policy. That is what we will continue to do here. We do want competition between two strong and viable airline businesses on the other side. What that will look like on the way through, we will have to see how that plays out.
KIERAN GILBERT: Finally, I know you have a busy afternoon, one last question on the debt scenario. As Finance Minister, obviously we’re in extraordinary times, give us a sense of your thinking on this. The whole notion of a surplus has completely gone out the window now. We’re facing debt now for the foreseeable future. Is it manageable, is it still comparable to other developed nations, not bad?
MATHIAS CORMANN: It is manageable. Let me just say, I have a great sense of relief that over the last six and a half years all of my colleagues have been so supportive and so focused and so engaged with the Prime Minster, the Treasurer and I in repairing our Budget. We always said over that six-year period that we needed to ensure that our Budget was in a stronger, more sustainable position to ensure that we could deal with any headwinds and external challenges coming our way. We never would have expected anything of this sort of magnitude. But we did go into this challenging period in a comparatively stronger economic and fiscal position than we otherwise might have and in a stronger economic and fiscal position than others. We are in a position to afford what we are doing now. If we did not make these sorts of judgements now, we would be putting ourselves in a weaker economic and fiscal position over the very long term. We are absolutely convinced of that. There is really no alternative to what we are deciding to do here.
KIERAN GILBERT: They are extraordinary times. Minister, I appreciate your time. Thanks so much.
MATHIAS CORMANN: Always good to talk to you.