Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Wednesday, 10 June 2020
FRAN KELLY: Prime Minister Scott Morrison warned his party room yesterday that difficult decisions lie ahead as the Government starts to rein in its pandemic stimulus spending, starting with the $70 billion JobKeeper program. With the PM keen to keep the focus on jobs, Treasury yesterday confirmed it now expects our unemployment rates to peak at just eight per cent. That’s down from the 10 per cent Treasury was forecasting less than two months ago. Despite this more optimistic outlook, Labor has stepped up its attacks on the Government for stripping 120,000 child care workers of JobKeeper payments. Mathias Cormann is the Finance Minister and the Leader of the Government in the Senate. Senator Cormann, welcome back to Breakfast.
MATHIAS CORMANN: Good morning Fran.
FRAN KELLY: Labor is accusing you of breaking a promise that JobKeeper would run its full course until September. Child care was the first cab off the rank in this. Will other industries be booted from the JobKeeper program before the Government’s July economic update?
MATHIAS CORMANN: JobKeeper is running its full course… interrupted
FRAN KELLY: Not for everybody.
MATHIAS CORMANN: In relation to the child care sector, on the basis of representations from that sector, we have put forward a fairer, more equitable, better way to provide transitional support to that industry in the context of significant growth or return in attendance rates across child care centres. The issue with child care is that yes 120,000 workers were eligible to receive JobKeeper payments, but 80,000 were not. So what we have developed here is a way to provide transitional support to the sector as a whole to ensure that all 200,000 child care workers are able to benefit from the support provided by the Government. Also, in the context of a return of children, in excess of 70 per cent of children have returned compared to the initial attendance rates, there is a capacity now for parents at higher income levels to contribute to the cost of the child care for their children again and we also switched on the child care subsidy again as well as making $708 million worth of transitional payments. In the context of a return of high levels of attendance rates, there was a better, fairer, more equitable way to provide transitional government support through this period and that is what we are doing.
FRAN KELLY: My question was will you find other industries and other sectors eligible for transition payments? Are you planning to take other sectors off the JobKeeper program?
MATHIAS CORMANN: The direct answer is no we are not planning and we are not considering any other sectors to be switched over to another form of transitional payment. But there is a review by Treasury that is currently underway in relation to the operation of the JobKeeper program, as we have flagged now for some time that was always scheduled to take place halfway through. As soon as Treasury makes its findings and provides its recommendations to the Government we will consider those and make judgements accordingly and that will be announced in the context of the economic statement due on the 23rd of July.
FRAN KELLY: Should you be releasing that as soon as you get it? We do have the Eden Monaro by-election in this time. Isn’t it fair that the JobKeeper review recommendations are released before then?
MATHIAS CORMANN: We will release them as soon as the decisions are made.
FRAN KELLY: So if that’s before the economic update in July, if it’s before Eden Monaro, you’ll release it?
MATHIAS CORMANN: The decisions will be made prior to the 23rd of July and as soon as the decisions are made and we are in a position to make announcements we will make them, absolutely.
FRAN KELLY: So you give that commitment now that if you have those decisions in hand before the Eden Monaro by-election, you’ll release them?
MATHIAS CORMANN: Again, you are making assumptions here… interrupted
FRAN KELLY: I’m not making an assumption, I am just asking a question.
MATHIAS CORMANN: Our timetable is that we expect we will be making decisions in July in time for an announcement by the 23rd of July, which is when the economic statement is to be released.
FRAN KELLY: What about before September? You told the Senate inquiry that there will be changes in the July JobKeeper review. Does that include some sectors losing the payment earlier if they return to business?
MATHIAS CORMANN: Let me correct you there. I have said there may be changes. There may not be changes. I can’t speculate on what the findings and recommendations of the Treasury review into the operation of JobKeeper may or may not be. That is the point that I made yesterday. At this stage, JobKeeper is operating on the basis as we announced it and adjusted slightly along the way. Now there is this review by Treasury, which assesses the scheme halfway through. Once we have received the findings and the recommendations out of that review, we will make judgements accordingly based on the economic data and information and advice in front of us at that time.
FRAN KELLY: But you would be open to a recommendation that some sectors should lose the JobKeeper payment earlier than September because they don’t need it anymore?
MATHIAS CORMANN: That is not something that is in front of us. I am not speculating about what Treasury may or may not recommend. That is you speculating… interrupted
FRAN KELLY: I am just wondering if that is a recommendation, will you be open to that because the Prime Minister has said it would be there until September?
MATHIAS CORMANN: The JobKeeper program will be there until September. That is very clear. It has been legislated for a six-month period. The Prime Minister is absolutely right, it will be there for a six-month period. In relation to the child care sector which is causing this conversation, it is the child care sector that made representations to the Government that there was a better, fairer, more equitable way to provide transitional government support to help the sector… interrupted
FRAN KELLY: Not all of them. We have spoken to some members of that sector who are not happy with this, who were surprised by it and are not at ease with it at all.
MATHIAS CORMANN: Again, 120,000 employees out of 200,000 were eligible for JobKeeper. 200,000 now are able to benefit from the transitional support that Government is providing. Beyond that, in March/April, we saw significant drops in attendance rates which seriously threatened the viability of child care centres all around Australia. The Government stepped in to provide support to ensure that centres didn’t close. But right now, in the circumstance where attendance levels are well above 70 per cent, where parents on comparatively higher incomes are able to contribute as well as the capacity for the Government to bring back the child care subsidy on precisely the same terms as it operated prior to the COVID crisis, where people on lower incomes get higher subsidies also, there is a capacity… interrupted
FRAN KELLY: That’s an anomaly. Are you keen for that anomaly to be fixed?
MATHIAS CORMANN: How is that an anomaly? People on lower incomes get higher subsidies. That is what means testing is all about… interrupted
FRAN KELLY: I’m sorry, I was thinking JobKeeper. You’re listening to RN Breakfast. Our guest is the Finance Minister Mathias Cormann. Mathias Cormann, Treasury confirmed yesterday that women and young people have been the worst hit by job losses so far. The Australia Institute says that for every one million dollars spent on the construction industry, just one woman gets a job which compares to 10.6 women if the money is spent in an area like education. Are the Government’s decisions making the gender imbalance of this crisis even worse?
MATHIAS CORMANN: No. The first point I would make is that before the COVID pandemic hit, female workforce participation had reached record levels under our Government as a result of our economic plan… interrupted
FRAN KELLY: Yeah, but that’s now been hit, that’s been defeated.
MATHIAS CORMANN: If I may. The gender pay gap had reduced to its lowest level. What we are focused on now is to maximise the strength of the economic recovery on the other side of this crisis. That is the way that we can maximise the opportunity for all Australians, including women, including young Australians, to get back into work, to get a better job, to pursue the best possible career prospects moving forward, to get ahead.
FRAN KELLY: It looks as through, from some of the decisions made so far and the spending made so far though, women are missing out in the spending and if we just look at the child care decision, cutting support to early childhood education is a double whammy for women. They lose most of their jobs that come in the sector plus they pick up most of the child care responsibilities if they can’t afford to send their kids to child care anymore. Are you worried we might see a dent in the numbers of women in the workforce?
MATHIAS CORMANN: There were so many errors in these assertions just now. Firstly, the condition for transitional support to the child care sector includes a condition of maintaining employment levels at current levels. So I don’t know where your assertion of job cuts across the child care sector comes from.
FRAN KELLY: Jobs have already gone though.
MATHIAS CORMANN: We provided JobKeeper in order to save jobs at a time of significant drops in demand and right now, the transitional support that we are providing comes with a condition that child care services have to maintain employment levels at current levels in order to access that payment. We will continue to make judgements across the board to maximise the strength of the economic recovery, because we know that that is the best way to get back to where we were before the crisis, including the record female participation rates in our workforce.
FRAN KELLY: Minister, we heard earlier on the program from foreign students who were stuck here and starving. They can’t get home because the borders are shut. They are queuing up for food handouts. As the Finance Minister of this country, are you easy about that?
MATHIAS CORMANN: Firstly, we have always had temporary visas in Australia on the basis that they can look after themselves. That is the arrangement… interrupted
FRAN KELLY: But they were here and they have got hit by a pandemic, so they can’t work.
MATHIAS CORMANN: What we have said to those who can’t look after themselves, they should return home. The proposition that somehow they can’t travel back home is not true. There are… interrupted
FRAN KELLY: It is true, we heard from some people this morning who couldn’t travel home.
MATHIAS CORMANN: It is not impossible for non-Australian residents to travel back home. That is just manifestly not true.
FRAN KELLY: At the same time, we have got China’s education bureau now telling their students to reconsider coming to Australia. They say it’s not safe. Does this treatment of foreign students just feed into China’s warnings to its students?
MATHIAS CORMANN: I completely disagree. Welfare support in Australia has always been residency based and for very good reason. In relation to international students, Australia is a very popular destination for international students. We have a very high quality, a world-class higher education sector, we are an open, tolerant, successful multicultural society, we are a very welcoming society and overwhelmingly, international students who come to Australia have a very good experience here… interrupted
FRAN KELLY: They’re not having a good experience at the moment many of them and they’re not feeling welcome at the moment. That’s the point.
MATHIAS CORMANN: That is your opinion. I disagree with you.
FRAN KELLY: Alright. Just the other day you dubbed protestors who went along to the Black Lives Matter demonstrations in Australia as selfish and self-indulgent. They turned out in their tens of thousands to object to Aboriginal deaths in custody. South Australia has now confirmed that 2,000 footy fans will be allowed to attend a football match on Saturday night and now the Deputy New South Wales Premier John Barilaro wants 40,000 footy fans at the NRL game in 10 days’ time. Are football fans being selfish if they go along?
MATHIAS CORMANN: Millions of Australians have made significant sacrifices. Lots of people have lost their jobs, people haven’t been able to attend funerals of their loved ones, people have died in isolation from their loved ones in order to help suppress the spread of the virus. In that context and at that time to have a mass protest of that kind was imposing an unacceptable level of risk on the community, because it was in breach of the rules. That does not… interrupted
FRAN KELLY: So will the same go for football matches?
MATHIAS CORMANN: If I may. That does not take away from the importance and the legitimate issue that of course we need to continue to deal with and deal better with moving forward. The important point here is, the big risk that we are dealing with as a nation now is the need to avoid a second wave. If we were hit with a second wave of coronavirus infections, what it would mean is people would lose their life and people would lose their jobs again as restrictions in the economy would have to be re-imposed. If moving forward restrictions continue to be eased, these are decisions that are made in an orderly fashion and in an appropriate fashion. These mass protests last week were not authorised in the appropriate fashion. They were not consistent with the rules. They were putting the community at an unnecessary and unacceptable level of risk and I think that any reasonable Australian would accept that this was not the right way to go about pursuing what is a legitimate and an important issue.
FRAN KELLY: Alright, well obviously a lot of Australians didn’t agree with it because they went out to March. Mathias Cormann, thank you very much for joining us.
MATHIAS CORMANN: Always good to talk to you.