Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Friday, 31 July 2020
PETER STEFANOVIC: Joining us live now is Finance Minister Mathias Cormann. Minister good to see you. Thanks so much for joining us.
MATHIAS CORMANN: Good morning.
PETER STEFANOVIC: First of all on to Victoria. Are you expecting a New Zealand style shut down?
MATHIAS CORMANN: I certainly expect that restrictions will be further tightened in order to ensure that we effectively ring fence the areas of outbreak. The Prime Minister and the Premier continue to work closely to do what needs to be done in order to get on top of this crisis.
PETER STEFANOVIC: The numbers continue to rise though and that would suggest that what’s happened so far has failed.
MATHIAS CORMANN: Clearly until such time as the numbers start coming down again we need to continue to work on finding better ways in getting on top of this. That is what we will continue to do.
PETER STEFANOVIC: So would you support that New Zealand style shut down?
MATHIAS CORMANN: I am not going to make prescriptions here on television. I will let the Prime Minister and the Premier and relevant authorities continue to work through this methodically. Everybody wants to ensure that we get on top of this as soon as possible. We are going to just have to go through the orderly processes to make sensible decisions that are effective.
PETER STEFANOVIC: As you know, Queensland shutting its border to Greater Sydney from 1:00am tomorrow morning. What is the cost of that going to be the economy?
MATHIAS CORMANN: It is not going to be good for the economy when we have to shut down areas or when you have to impose additional restrictions, but the priority ought to be the health of our population. We want to protect people’s health. We want to ensure that we contain the threat of the virus. So in those circumstances where you have outbreaks of community transmission of course you have to take these measures. But does it come at an economic cost? Of course it does.
PETER STEFANOVIC: And do you have the numbers? We talked about Victoria closing its borders costing a billion a week. What’s Queensland’s numbers?
MATHIAS CORMANN: We made an assessment in the context of putting the economic statement together in terms of the cost in Victoria, which was $3.3 billion over that six week period of the shut-down. This is a rapidly evolving situation. This is fluid. We have not got an updated estimate in terms of the cost of decisions that are in the course of being taken in the context of Queensland. Suffice to say this is going to have a negative impact, but in the context of seeking to protect people’s health, seeking to save lives by containing the spread of the virus from areas where there is community transmission that is entirely appropriate.
PETER STEFANOVIC: Is last week’s economic update already out of date?
MATHIAS CORMANN: Yes it is. We said that at the time. We said at the time that there was significant uncertainty in terms of the domestic and global health and economic outlooks. We explained very clearly that this was a rapidly evolving, fluid situation and that there would be further changes as we move forward. That was always transparently on the cards.
PETER STEFANOVIC: So how many more jobs do you expect will be lost because of these shut downs?
MATHIAS CORMANN: The next update will be provided in the Budget on 6 October. We delayed the Budget because there is such difficulty in making credible forecasts in the context of a situation that is evolving. Earlier this year, in March, the advice was that by the end of June the official unemployment rate could be as high as 10 per cent. It was only 7.4 per cent, because in the period from March to the end of June the easing of restrictions was able to be done faster in large parts of Australia than had been anticipated. Clearly, the situation in Victoria, in parts of New South Wales and the fallout for other States is going to have a negative effect. We will quantify that next in the context of the Budget.
PETER STEFANOVIC: And there may well be more shutdowns before then.
MATHIAS CORMANN: Things could be worse or they could be better. These things are very hard to predict from where we are now.
PETER STEFANOVIC: Even over where you are, would you be supporting Clive Palmer’s bid to open up the border with the West?
MATHIAS CORMANN: No, we do not any support any specific litigant. There is a High Court Case underway that we did not initiate. We certainly want to see hard borders and protections in place in relation to areas where there are outbreaks of community transmission. In relation to other parts of Australia, we believe that we need to work together, the Federal Government and the State Government, to make sure that whatever protections are put in place are ultimately Constitutionally sustainable. Nobody is going to be protected if there are arrangements in place that are ultimately removed by the High Court. We have to make sure that we have arrangements in place that protect people’s health, that protect us from the risk of spread from areas where there is community transmission. Those protections have to be put in place between governments, governments working together in a way that ultimately will not run foul of the Constitution.
PETER STEFANOVIC: The number of super withdrawals has doubled expectations. Are you worried about that?
MATHIAS CORMANN: No. The number of super withdrawals continues to be quite low as a proportion of the overall funds saved. Before we went into this crisis, super funds had about $300 billion worth of cash at hand. The withdrawals represent about 1.5 per cent of all funds saved for people’s retirements. This is one of a multitude of options that people who have lost their jobs or who have had significant reductions in income have to manage their financial affairs. We trust people to be able to make sensible judgements in relations to their money. It is their money that they are using to help manage a financial challenge during a very difficult period.
PETER STEFANOVIC: So you do not have any concerns about how they are spending it, either putting it on their mortgages or whatever? You are not worried about how they are spending it?
MATHIAS CORMANN: We trust people to make judgements in relation to their own money and how to allocate their own money. It is their money. People putting it on their mortgages, clearly is a very sensible thing for them to do, reducing their interest costs. In the end, people who have lost their jobs, people who have lost hours or significant parts of their income have this opportunity on top of a range of other support measures the Government has put in place to manage their financial circumstances through a very challenging period.
PETER STEFANOVIC: And just finally Minister, I know it is not your portfolio but we had some friends of Kylie Moore-Gilbert on the show a short time ago. They are saying now that the efforts, the Government efforts to free her in Iran are not working. Quiet diplomacy is not working. Do you agree with that?
MATHIAS CORMANN: Dr Moore-Gilbert’s case is one of our highest priority consular cases right now. Our whole team in Tehran is working very hard to do everything we can to help resolve the situation. We are aware that Dr Moore-Gilbert has been shifted to Qarchak, women’s prison east of Tehran. We are seeking urgent consular access. This is a difficult situation, but we are doing everything we can to provide the appropriate support and hopefully a resolution.
PETER STEFANOVIC: Are you worried about her?
MATHIAS CORMANN: Of course. It is a terrible situation to be in. Absolutely we are worried. We are doing what we can to provide the appropriate levels of support. As I said, this is one of our highest priority cases around the world right now.
PETER STEFANOVIC: Okay, Finance Minister, Mathias Cormann as always, appreciate your time. Thanks for joining us, we will talk to you soon.
MATHIAS CORMANN: Always good to talk to you.