Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Wednesday, 8 April 2020
FRAN KELLY: A special sitting of Federal Parliament will vote today on the Government’s COVID-19 economic response package. The deal the Coalition has done with the ACTU will usher in major changes to our workplace laws that would allow up to six million employees access to $130 billion in wage subsidies, delivered via the JobKeeper payment. With the Prime Minister warning that economic support measures, quote, can’t go on forever, attention is starting to turn to some kind of staggered lifting of the shutdown restrictions once the virus is contained. Mathias Cormann is the Finance Minister, he’s in our Parliament House studios. Minister, welcome back to Breakfast.
MATHIAS CORMANN: Good morning, good to be back.
FRAN KELLY: The JobKeeper legislation will pass today with Labor’s support. That’s a given. But two million employees will still miss out. Visa workers, many casuals including teachers, local council workers. Would you accept any amendments to include some of these employees in the scheme to make it fairer?
MATHIAS CORMANN: No, we won’t be accepting any amendments today. The scheme that we have put forward is very fair. It will provide support to six million working Australians. Some of these people you mention, council workers, are the responsibility of the states. The states, we believe, should do what is required and what is appropriate in their jurisdictions. In terms of visa workers, our welfare system and the support systems here are residency-based. For those visitors who are not able to support themselves either through work, through savings or through accessing their superannuation, we strongly encourage them to go home.
FRAN KELLY: Yes, but that’s not possible at the moment, you understand that? There aren’t flights, borders have closed, places aren’t safe. It’s not as simple as just go home, is it, right now?
MATHIAS CORMANN: There have been options for some time and this has obviously been coming for some time. This is a situation, as we have said, that will remain under review. Our advice to temporary residents in Australia is the expectation as a temporary resident is that you are able to support yourself while in Australia either through work, through savings, or we have facilitated access to superannuation. If that is not possible, they should explore options to return home.
FRAN KELLY: Can I just come back to local council employees? The whole point of JobKeeper was to keep people in work, to keep people off the dole queue so economies and society can restart again after the so-called hibernation period. Why isn’t the Government keen to support the staff of municipal offices, the staff in libraries, the staff who run the swimming pools, the staff who run the many council-run childcare centres? They have all been left out of consideration. Why?
MATHIAS CORMANN: The objective is to keep as many businesses in business as possible through this difficult period and as many Australians… interrupted
FRAN KELLY: Council-run childcare centres would be central to that, won’t they?
MATHIAS CORMANN: If I may. The economic mission is to keep as many businesses in business as possible through this difficult period, as many Australians working for those businesses in those jobs connected to those businesses. We have expanded it to the not-for-profit and charitable sector, but councils are very much creatures of state governments. They are organisations that are entirely subject to the jurisdiction of state governments and state governments do have responsibilities in this space. That is very much the message that the Prime Minister has directed towards Premiers and Chief Ministers at the national cabinet. I believe that state governments understand that councils and council workers are very much in their purview.
FRAN KELLY: So are you calling on state governments to give some kind of hardship fund for councils so they don’t have to cut back these services and leave these people on the dole queue?
MATHIAS CORMANN: State governments will make their own decisions, but we have consistently said that state governments also have responsibilities to ensure that the appropriate arrangements are put in place to assist Australians through this period. State governments, to be fair to them, are making significant efforts across a range of areas. When it comes to councils, that is not something that the Federal Government has direct responsibility for. That is very much a matter for state governments.
FRAN KELLY: Okay, let’s go to those who are covered. The legislation today will clear the way for employers to change workers hours and duties, but only for those businesses eligible for the JobKeeper program. Larger companies aren’t eligible unless their turnover falls by 50 per cent. The Business Council today says many larger firms can’t wait for that moment to happen, for that threshold. They need to change rosters and leave arrangements, too, urgently in order to survive this virus-led downturn. Will you allow firms who aren’t eligible for the wage subsidy to also vary their enterprise agreements?
MATHIAS CORMANN: Not through this legislation in the Parliament today. Clearly, the BCA needs to work with their members and relevant unions and others to work through those arrangements as appropriate, using our existing industrial relations laws. The amendments in the Parliament today, when it comes to the Fair Work Act, are about facilitating the payment of the $1,500 JobKeeper payment by businesses in financial distress in a way that is efficient and doesn’t put them in breach with our industrial relations laws. They are temporary laws. They have some safeguards in them. It is, as you say, to enable those businesses in financial distress to vary hours and in reasonable circumstances, vary the type of work and the location and the like, but it is very much focused and directed towards facilitating the payment of JobKeeper payments in a way that doesn’t put employers in breach with industrial relation laws.
FRAN KELLY: So your message to big business is if you want to make changes, if you can argue you need to make changes, you have to do it through the Fair Work Commission?
MATHIAS CORMANN: Through the existing system, exactly right. Essentially, pick up the phone, talk to the unions, talk to the employees and reach agreements on how best to manage through this period. The legislation in the Parliament today will not provide a blanket exemption from our industrial relations laws for everyone. It is very much focused on facilitating the efficient operation of the JobKeeper payment framework.
FRAN KELLY: It’s 19 minutes to eight. Our guest is the Finance Minister, Mathias Cormann. The Reserve Bank has issued a fresh warning, quote, of a very large contraction in the June quarter and the unemployment rate to increase to its highest level for many years. Minister, how much of a difference will JobKeeper make to that pretty gloomy outlook? How many jobs and businesses have you calculated this $130 billion package will save?
MATHIAS CORMANN: We are going to be providing direct support through the JobKeeper initiative to about six million working Australians. That is our expectation and that is about half of our usual workforce. That is obviously a very significant number of Australians. We will obviously see the June quarter results later this year when they come through. I am not going to put a number on it now. We have deferred the timing of the Budget because it is nigh impossible to make realistic and credible economic forecasts in this current environment. We have to see where things settle as the JobKeeper and the JobSeeker, the enhanced JobSeeker, arrangements come into effect. This is all designed to help ensure that all Australians have the best possible opportunity to get safely to the other side when we want to secure this massive bounce back.
FRAN KELLY: And of course the view is shifting to when that might be. The coronavirus curve has been flattening for a number of days now. There is a view or hope that we might have already hit the peak infection rate. When will national cabinet look at lifting some of the economic and social restrictions so life can start to get back to a bit more normal and can we stagger an opening up again ahead of a vaccine being found, which is a year away at least we’re told?
MATHIAS CORMANN: I don’t want to speculate on this. Right now, we have to continue to put our foot firmly on the brake to slow down the spread of the virus because we know that saves lives. We want to ensure that our hospitals are able to deal with whatever inflow of patients into our ICUs in particular they have to deal with. We have to very much keep our foot on the brakes to slow down the spread. We will continue to act on the medical advice of the chief medical officers from around Australia in relation to when and how some of these adjustments might be able to be made at some point. These will be judgements that will be very much based on medical advice.
FRAN KELLY: Are you hopeful it would be within six months, earlier than six months?
MATHIAS CORMANN: The Prime Minister has said from the beginning that this is likely to last for about six months. Obviously it would be great if it didn’t have to. We don’t want to gratuitously harm the economy. We are only closing and restricting activity where that is required to slow down the spread of the virus based on medical advice. If the medical advice is that there is an opportunity now to ease some of those restrictions, of course we would love to be able to do that. But we won’t act in the absence of such advice.
FRAN KELLY: Yesterday when the Prime Minister was asked about how the Australian economy would change following the pandemic, he said we need to, quote, look carefully at our domestic economic sovereignty. What did he mean by that? Is he talking about tightening trade barriers again or boosting local manufacturing, which has really moved mainly offshore, mainly to China?
MATHIAS CORMANN: I think he meant what he said. Australia will continue to be an open trading economy, a globally focused open trading economy, which will seek to sell as many Australian products and services into markets all around the world. But it has become apparent that there are some items, specifically, for example, some of the personal protective equipment, when there is global competition and strong global demand for access to these products, then obviously we were somewhat exposed. Greg Hunt did an outstanding job with his team in securing large amounts of masks and other personal protective equipment for Australia, but it was a challenge and we are exposed to increased prices and so on. It is a conversation to be had, to what extent and in what areas we need to maintain domestic sovereign capability to look after our own requirements in this sort of circumstance.
FRAN KELLY: Minister, just briefly and finally, I know you have got to go, but every time I have a politician on lately I get listeners writing in, saying ask when politicians should take a pay cut to support the economy. Is that even being considered?
MATHIAS CORMANN: Some time ago, I wrote to the Remuneration Tribunal to freeze our pay to ensure that there are no pay rises through this period. I would say to those listeners that write in to you, right now, politicians are probably working harder than they ever have.
FRAN KELLY: Okay.
MATHIAS CORMANN: This is the most intense period in my working life that I am going through and I think it is the same for most, if not all, of my colleagues.
FRAN KELLY: Mathias Cormann, thank you very much for joining us.
MATHIAS CORMANN: Always good to talk to you.