Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Friday, 24 April 2020
LAURA JAYES: The Prime Minister is also warning the big banks need to lift their game. Australia’s biggest banks had been rejecting business applications for loans to pay their staff. Businesses have reportedly laid off staff because they can’t afford to wait for JobKeeper which doesn’t actually flow until next month. The Australian tax commissioner delivered the message to the chief executives of each bank and since agreed to fast track applications. Joining me now is the Finance Minister Mathias Cormann. Thanks so much for your time Minister.
MATHIAS CORMANN: Good to be here.
LAURA JAYES: Have the banks been too slow to provide this cash flow to business or have they been unwilling?
MATHIAS CORMANN: I do not think that they have been unwilling. I think the banks, like everyone, have been perhaps somewhat logistically overwhelmed. Let me just say that overall, in this crisis, the banks have been very good. I think the Prime Minister, the Treasurer and others have noted that as well. They have been very good at supporting business and individual borrowers in the early stages of this crisis in particular. But when it comes to JobKeeper, it is very important, given the time required to set the system up, to get people to apply, to get people to start receiving those payments, there is clearly certainty that this payment will flow. There is certainty that the Government will follow through in making those payments. So it is a very low risk bridging finance requirement here. As the Prime Minister has said, it is very important we really do need the banks to do the right thing here. Over the last twenty-four hours they have made arrangements to set up hotlines and to improve their administrative processes so that they can deal with all of these applications that we do need to be processed.
LAURA JAYES: Yeah it is pretty much a government guarantee. Does this perhaps highlight that there’s problems at the other end? Cash flow problems and how the JobSeeker payment was set up. Is this a flaw of the ATO rather than the banks?
MATHIAS CORMANN: No it is not a flaw of the ATO. The ATO has undertaken a massive task in setting up payments which ultimately will go to about six million Australians. Nearly a million businesses expressed interest. Hundreds of thousands of businesses are now going through the application process. The ATO has had to change processes across a whole range of areas, cash flow support to businesses, early release of superannuation and here the JobKeeper payments which will go to about six million working Australians. These are huge logistical exercises. In all of the circumstances as a nation, I think we have done extremely well getting this in place so quickly. The same for the banks. We do understand that these are huge logistical exercises. But we did need them to very much focus on this from the most senior levels of the banks, in the same way as the most senior levels of the ATO are totally focused on rolling this out as efficiently and as effectively as possible.
LAURA JAYES: I think there is a broad expectation, an acceptance that there would be some unintended consequences with the speed in which this $130 billion is needed to be spent. But I guess the dust has settled. We have been given a bit of breathing room at the moment. Have you had any feedback about any unintended consequences in JobKeeper that you might be able to tweak and fix?
MATHIAS CORMANN: The Tax Commissioner has discretion to deal with any unintended consequences where it is appropriate to do so. He is able to make these judgements on a case by case basis or perhaps on a relevant category basis. But overwhelmingly, this has landed very well. We do now have the overall architecture in place to support the economy through this period. To support as many businesses as possible to remain in business, with as many Australians working for those businesses remaining in their jobs, while also through the JobSeeker program providing support to those Australians who through no fault of their own are losing their job through this period. The fundamental architecture is in place. We will continue to monitor the situation as this rolls out. We will make adjustments at the edges, if and as required.
LAURA JAYES: Okay, so you are willing to make adjustments. I wonder if you had some feedback, that I too have had. Is that some small to medium businesses are restricted in hiring new staff because of the timeline. Would you consider perhaps a business that gets JobKeeper getting it for the same cohort of employees they had back in March, but not necessarily having to keep the same employees on?
MATHIAS CORMANN: We are not considering these sorts of changes. Clearly, this was about making sure that those working Australians who were working for those businesses before the crisis hit in earnest remain connected to those businesses wherever that is possible. In terms of supporting businesses to hire more Australians beyond that, that is going to be part of our economic plan for a strong recovery on the other side. We will want to encourage business to invest in their future growth and their future success. There are some measures in our packages now that are targeted at that. For example our instant asset write off, which has been substantially boosted and our accelerated depreciation arrangements and the like. The JobKeeper program fundamentally is in place now. There are practical issues that can arise from time to time. The Tax Commissioner has appropriate discretion to deal with those.
LAURA JAYES: Okay. I know you do have half an eye, well you do have the focus on the recovery and what that might look like on the other side. Is it fair to say that nothing is off the table?
MATHIAS CORMANN: We have got an open mind. But you also have to be very clear on what it is you are trying to achieve. What we are trying to achieve is we want to make it easier to do business, to reduce the cost of doing business, to encourage business to invest so that more successful, more strongly growing businesses, will start hiring more Australians again. That is the objective. So when you say nothing is off the table, well tax increases are off the table, because we do not want to make it harder for business to be successful. We want to deliver lower taxes because we want to make it easier for business to be successful. We want to work with the States to ensure that we get aggressive deregulation measures through the process, making it easier for business to obtain approvals and the like, reduce the cost of doing business, making it easier to be successful. That is the broad focus that we will be pursuing.
LAURA JAYES: When you say tax increases are off the table, are you talking about the overall tax burden or individual measures?
MATHIAS CORMANN: Our focus is on delivering lower taxes rather than higher taxes. All throughout this week, a number of people have put to us various measures that the Labor party took to the last election, which whatever way you want to technically describe them, are all increases in taxes. Labor’s tax increases would have had an anti-growth effect before this crisis. That is why people voted against them at the last election. They would be even worse in terms of their anti-growth effect now and even less desirable now. We will continue to pursue a pro-growth, pro-business, lower taxes, less regulation, less red tape agenda that is designed to encourage business to boost their investment in their future growth and success so that more successful, more strongly growing businesses can hire more Australians and, hence, bring that unemployment rate down.
LAURA JAYES: Okay, just before I let you go. The good news is that the curve is certainly flattening. The number of infections every day is getting down to single digits in individual states and it’s only a couple of dozen nation-wide. Might we have surpassed the need for this virus tracing app?
MATHIAS CORMANN: If we want to genuinely ease restrictions, and all of us would like to see restrictions eased as comprehensively as possible, then without a capacity to manage the risk of fresh breakouts or fresh areas where the virus could spread, we would expose ourselves to the same problem again. Some countries around the world have eased restrictions and seen a reacceleration of the spread of the virus. The truth is, the virus is still with us. It is still very much there in other parts of the world. This app is there to help us save lives by doing in a more efficient way, using digital technology, what would be happening in a manual way as we speak anyway. Right now, with anybody who is infected now, there is a contact tracing exercise that is done. This app would essentially do the same thing with the same purpose. That is to ensure that we can protect the health of the Australian people in the context of infections.
LAURA JAYES: Mathias Cormann, appreciate your time. We’ll see you next week.
MATHIAS CORMANN: Always good to talk to you.