Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Friday, 22 May 2020
PETER STEFANOVIC: Well joining me now is the Finance Minister Mathias Cormann. Minister, good to see you. Thanks for joining us.
MATHIAS CORMANN: Good morning.
PETER STEFANOVIC: So what do you make of this argy-bargy between all the Premiers at the moment?
MATHIAS CORMANN: We are on an easing trajectory now when it comes to the restrictions on the economy. The health threat from the coronavirus is being managed. The number of infections is extremely low. The number of community infections and the number of active cases is extremely low. The sooner we can remove those State border closures the better for the economy, the better for jobs in Western Australia, in Queensland, in South Australia and all around Australia. We want to see those State border closures removed as soon as possible. In particular, given the advice from our Chief Medical Officer and Deputy Chief Medical Officer that there is no medical case for these State border closures to be maintained. They do come at a cost. They come at an economic cost, at a jobs cost. If there is no health justification for them, then they should be lifted.
PETER STEFANOVIC: When should the borders reopen?
MATHIAS CORMANN: State borders? As soon as possible. The Chief Medical Officer, the Deputy Chief Medical Officer have both indicated very clearly that there is no medical case in favour of these State border closures maintaining. The level of active cases is extremely low. The level of new infections is very low. The sooner we can open them the better. The sooner we can open them the better for the economy, the better for jobs in all of those States, as well as all around Australia.
PETER STEFANOVIC: But you are getting one message from Federal health authorities and then you are getting different messages from State health authorities. So to be fair, does Mark McGowan have a point when he says that the messaging in inconsistent?
MATHIAS CORMANN: I think that you have to be careful that you do not make political decisions here, that we make decisions that are genuinely based on the health and wellbeing of people in Western Australia, in Queensland, in South Australia and all around Australia. There is no question we did face a very serious health threat when the coronavirus started spreading and the spread was accelerating. But right now that risk is being managed. We have given ourselves the tools to stay on top of it from a health threat point of view. We do owe it to the people all around Australia, including in WA, Queensland and South Australia to enable the economy to start growing again, to enable jobs being created again, to ensure that people in all of those States have the best possible opportunity get ahead, to have job security, job opportunities moving forward.
PETER STEFANOVIC: Just onto the issues of trade at the moment Minister, if you wouldn’t mind. So it has been well documented the issues with beef and barley over the past few weeks. There was an issue initially, some nerves surrounding iron ore yesterday. But they have since calmed down a bit. But now there are claims that Australian coal exporters will have tougher restrictions selling into China. How concerned are you about that?
MATHIAS CORMANN: I think that everybody needs to settle down a little. We have a very important trade relationship with China. It is a mutually beneficial trade relationship with China. I think we are currently in the phase where in Australia we are perhaps over interpreting, over analysing and over commentating every little move. The iron ore example is a case in point. China made the very welcome decision to ease customs processing arrangements to simplify and lessen the burden for Australian and other exporters of iron ore into China, when it comes to customs processing of iron ore. Some of the initial commentary took the precise opposite perspective. When it comes to coal, over the years China at various times has imposed a level of informal quotas to help protect their local coal industry. The industry here out of Australia has managed these developments effectively in the past. We will continue to monitor this situation. China’s action will need to be compliant with World Trade Organisation rules and compliant with our China Australia free trade agreement. So we will continue to monitor this. But this is not something that has happened for the first time. It has happened in the past. It happens from time to time depending on local requirements in relation to their own domestic coal industry. We will just have to continue to manage it. But my overall point though is, we have to take a bit more of a considered approach with some of these things and not try and jump on every little move and every decision as if it is the end of the world. We have a strong, mutually beneficial bilateral trade relationship. That will continue for a very long time to come.
PETER STEFANOVIC: Okay. So this report in the Nine newspapers today, it basically says that the Chinese government has started to warn state-owned power utilities not to buy new cargos of Australian thermal coal. Is our Government aware of that? Is that true?
MATHIAS CORMANN: We are aware of informal quotas being imposed from time to time locally in China. That is not a new development, it has happened in the past. It has been managed by Australian exporters in the past. We will continue to manage it into the future.
PETER STEFANOVIC: Okay, just onto a few more quick ones before we go, Minister. The Federal Government [sic] ruling on these extra entitlements for casual workers yesterday. So casuals can get annual leave and sick leave and all the rest of it. I know this is probably outside of your portfolio in a legal sense, but from a business sense what are your thoughts on this?
MATHIAS CORMANN: It is very bad for business, in particular small and medium sized businesses who are most likely to employ casuals, because it imposes a significant hit onto their budget bottom line at the worst possible time. When jobs are already under pressure because businesses are trying to survive, this is a potentially significant additional burden, which is likely to lead to job losses if not corrected. There is the potential that this decision will be appealed. If it is appealed certainly the Federal Government would intervene in that process as the Attorney-General has indicated. But we are also considering whether this needs a legislative fix. This is a matter of what is fair. When you are on a casual arrangement you get a higher pay as a trade-off for some of these other entitlements. What is being said here is that you should be able to double dip and have both the higher casual rate as well as some of the entitlements that come with being a permanent employee. That just does not pass the fairness test, let alone the economic viability test right now.
PETER STEFANOVIC: And just finally, the Treasurer is making an announcement today to crack down on class action profiteers. Do you think this will put a brake on the industry?
MATHIAS CORMANN: What we want to ensure is that litigation funders are subject to appropriate regulatory terms and conditions the same as any other financial services provider. Right now, litigation funders are not subject to the Australian Financial Services Licence regulatory regime. We believe they should be, to ensure that appropriate professional and ethical and transparency requirements are imposed on them like on every other financial services provider. We do believe it will improve the quality of decision making in that sector.
PETER STEFANOVIC: Okay. Minister, also, Steven Kennedy he yesterday said that he wasn’t expecting a V-shaped recovery, it was going to be more a squeezed ‘U’ which I guess is better than an ‘L’. What letter are you looking at at the moment when it comes to our economic recovery?
MATHIAS CORMANN: Whether it is a squeezed ‘U’ or a ‘V’, the important thing is that on the other side of the bottom the line goes up. I, and I think all Australians, want the line to go up as far and as fast as it possibly can. We do not want a ‘W’, I can tell you that. We do not want a ‘W’. Whether it is a squeezed ‘U’ or a ‘V’, I will take either.
PETER STEFANOVIC: Okay. Finance Minister Mathias Cormann, appreciate your time this morning. Thanks for joining us.
MATHIAS CORMANN: Always good to talk to you.