Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Tuesday, 21 April 2020
CARRIE BICKMORE: Finance Minister Mathias Cormann joins us now. Minister, you have the ability to end this right now by stepping in and saving the airline. Why won’t you?
MATHIAS CORMANN: I do not think that is right. Virgin clearly had some serious issues before the coronavirus hit and it carries a lot of debt. If we had provided another $1.4 billion loan without having any guarantees at all that this ultimately would lead to a viable and profitable business on the other side, all that we would have done is put taxpayers’ money at risk without any guarantee of success on the other side. So what we now have with the administration is the capacity for the business to be appropriately refocused on the performing parts of the business. There is an opportunity to test the market on whether and to what extent there is private sector interest to buy the airline, to help recapitalise the airline, to be part of the restructure and be part of a profitable and successful future.
WALEED ALY: So that’s all opportunities, but no guarantees. Maybe let’s talk about the end game then and work backwards. Is the Government prepared to ensure that we have at least two major airlines in Australia at the end of this somehow?
MATHIAS CORMANN: We would like to see two major airlines at the end of this. So yes we will be engaging in the process now with the administrator. We have appointed Nicholas Moore, a very experienced financial services and investment professional to advise the Government in relation to all of this. He will engage with the administrator and Virgin on behalf of the Government as they work through all of these issues.
WALEED ALY: I understand that, but I am just talking about what you’re prepared to put up at the end of it. There may be no credible bidders that come forward. There may be no one who wants to start an airline at a time when you have got a pandemic and it’s not that easy to get aviation going again. We could end up with a situation where, but for Government involvement, we have one major airline. Is that a position the Government would be prepared to tolerate?
MATHIAS CORMANN: The worst thing that we could do right now is to start speculating about what we may or may not be prepared to do without any proper information. Clearly there were some serious issues that will need to be resolved. The administrator now will have the opportunity to get to the bottom of all the facts and information.
ANDREW ROCHFORD: We heard from the former COO of Ansett and something that he said that shook all of us was that there was just such a huge human cost associated with when Ansett folded. Is there anywhere for the Government to specifically help in this scenario when it comes to mental health?
MATHIAS CORMANN: Firstly, you can’t compare the situation to Ansett. We are not in a situation of liquidation, we are in a situation of administration. Importantly, Virgin continues to be eligible in administration for the JobKeeper program. So we will continue to pay through the JobKeeper program to contribute to those wages through the wage subsidy. We of course understand that this is an anxious time for employees, but what we would say to the employees of Virgin is that this is actually the best possible opportunity to have a viable and profitable second airline in Australia on the other side of this period. That is why we will be engaging with this process and that is also the best opportunity for those employees to have a safe job on the other side.
PETER HELLIAR: Mathias, we’re going to change topics just slightly. You may have seen that Malcolm Turnbull has got a book out. Not sure if you’ve caught that. He says in the book that you told him to give in to the terrorists and after the coup, your treachery was worst and the most harmful. He took it most personally. This morning, you said that was Malcolm’s version of history. What’s your version of that period of history?
MATHIAS CORMANN: That period of history has well and truly been dissected in some great detail some years ago. We are dealing with some very serious issues right now. We are in the middle of a pandemic with serious public health and economic consequences for Australia. I am just not going to get distracted by this. It is exactly as you have just said, Malcolm presented his version of history. It is substantially different to the events as I clearly recall them having unfolded. I have given extensive interviews ad nauseam about this some years ago. This is not the time, quite frankly, to be distracted by this sort of stuff.
WALEED ALY: We can walk and chew gum at the same time. We’ve spoken about Virgin at length. I don’t think that answering this question would mean the Government suddenly can’t respond to the pandemic. If there is an alternative version of events it would be good to have it on the table, surely?
MATHIAS CORMANN: I have talked about this ad nauseam some years ago and I am just not going to continue to go over it again and again. It is a complete distraction. I wish Malcolm well. I wish his family well. I am not going to continue to engage with what is now some time in the past.
CARRIE BICKMORE: Alright, Mathias. We’ll let you get back to it. Thanks so much for your time tonight.
MATHIAS CORMANN: Always good to talk to you.