Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Friday, 7 August 2020
PETER STEFANOVIC: The Morrison Government will spend an extra $15 billion on Victorian workers and businesses as part of a major expansion of JobKeeper payments during Victoria’s state of emergency. Treasurer Josh Frydenberg will announce the emergency fiscal response today allowing hundreds of thousands more workers to access JobKeeper. It will be the third extension of the scheme. And will bring the total cost of the scheme to $101.6 billion. It has also been revealed the cost of economic devastation caused by the second stage of the coronavirus is heading towards $12 billion. Well now we are joined by the Finance Minister Mathias Cormann. Mathias good to see you. Thanks so much for joining us this morning.
MATHIAS CORMANN: Good to be back.
I am sure this is not something that you want to be doing but you have to be doing. How much of a fix do you hope this will be?
MATHIAS CORMANN: You are right. We continue to make pragmatic decisions on the way through to ensure we support Australians, support businesses to survive and keep as many Australians connected to their jobs as possible. As the health situation evolves, we continue to respond to the need to provide appropriate levels of economic support. We will continue to do that moving forward.
PETER STEFANOVIC: So this extra package here, so businesses only have to report one negative quarter of growth right. So if that is the case, is it rort proof?
MATHIAS CORMANN: Clearly with what has been happening in Victoria, there was a need to provide more ready access to the JobKeeper program on a more ongoing basis. That is why we have eased the eligibility requirements for the extension from the end of September onwards. Instead of requiring two quarters of falls in turnover for the extension beyond the end of September, we are now just saying they need to show one. Instead of showing three quarters into the end of December, we are now just saying it should be one.
PETER STEFANOVIC: So is that rort proof though? If those eligibility requirements have been eased so much?
MATHIAS CORMANN: We believe it is what is required in the circumstances. In the end these are the judgements that we have had to make.
PETER STEFANOVIC: If things are so bad, I know you are going to drop the $1500 down to $1200 by the end of September. Why not just keep it $1500 beyond September.
MATHIAS CORMANN: In terms of the stage four restrictions, it still keeps going at $1500 until the end of September, which takes us beyond the current six week period of stage four restrictions. What I would say, if it was required to make further judgements down the track as we have done in the past and as we are doing today, we will continue to make further judgements. But at this stage, we believe that the phasing out of this crisis level, historically unprecedented support, is appropriate. But we will continue to review and assess the developments and make judgements moving forward.
PETER STEFANOVIC: So it is a possibility that that $1500 JobKeeper payment, which is scheduled to drop to $1200 at the end of September, it is a live option that that can continue at $1500 beyond September?
MATHIAS CORMANN: Currently the arrangements are as they are. But as we have demonstrated and as we are demonstrating again today, we will continue to make judgements based on how this situation continues to evolve. If further decisions have to be made down the track they will be made. I would say the $1200 from the end of September still represents a subsidy of about eighty per cent of the minimum wage. We all want to see Victoria get on top of this outbreak in community transmission as soon as possible. We want them to get on top of this virus as soon as possible. We are all helping. We hope that the current settings when it comes to the phasing out of the JobKeeper support to the end of March next year will be able to be maintained. But if the situation changes, we will continue to make relevant judgements at that time.
PETER STEFANOVIC: What I mean, and if recent time has taught us anything, it is that the situation does continue to change. Is it time to do away with economic forecasts at the moment?
MATHIAS CORMANN: That is why we shifted the Budget from May to October because it was nigh impossible to provide credible forecasts in a rapidly evolving situation. That is the case in both directions incidentally. At the end of March we had certain views as to how bad things could be and made certain assessments on what the cost of JobKeeper would be based on what we thought would happen. Things ended up somewhat better towards the middle of May, June than we had anticipated with the easing of restrictions across the country as a whole happening faster than anticipated. Clearly the situation in Victoria is having a devastating impact in Victoria and it is having a very bad impact on the economy nationally.
PETER STEFANOVIC: We are looking at three quarters of negative growth. Is a depression starting to enter your mind Minister? Is there a chance that Australia is heading towards a depression? Can you rule that out?
MATHIAS CORMANN: I am not going to start talking in those terms. We are focused on providing the best possible support to the economy through this period. A key challenge is to get on top of this virus outbreak, in particular in Victoria, as soon as possible. In the meantime, we are making sure that we provide the best possible support to business and to people who lose their job through this period.
PETER STEFANOVIC: Is it fair to say that this security firm, who was responsible for the hotel quarantine fiasco in Melbourne just cost the country $15 billion?
MATHIAS CORMANN: It is not for me to get into the finger pointing at this point. There will be a time when there is going to have to be a proper review as to what happened and why. But right now we are focused on the crisis response. We are focused on making sure that we work with Victoria on getting on top of that virus outbreak in Victoria as soon as possible and to provide the necessary supports into the economy to make sure that Australians can get through this period in the best, least bad way possible.
PETER STEFANOVIC: Michael Sukkar mentioned on Sky News yesterday, he was quite critical of Victoria’s handling of the stage four restrictions. What do you make of the Premier’s handling of stage four restrictions?
MATHIAS CORMANN: All through this period, I have avoided political commentary. This is a difficult situation for all involved. Everybody is trying to do their best to get on top of this. There will be a time to look back and assess and make judgements on what worked and what did not work. But right now I think it is very important for the Federal Government and State Government to work closely together and get on top of this issue as swiftly as possible.
PETER STEFANOVIC: You would have to admit though that there have been pretty glaring mistakes and now you have got unemployment in the State that is kind of hurtling towards 30 per cent, I mean people must have a right to be miffed.
MATHIAS CORMANN: This is a terrible situation. This is a terrible virus, a highly infectious, terrible impact on people’s lives and livelihoods. Of course I understand that this is an awful period for many Australians, in particular many Victorians to go through, no question.
PETER STEFANOVIC: Should Annastacia Palaszczuk have closed the border?
MATHIAS CORMANN: I am not a commentator on individual State judgements. Clearly with what has been happening in Victoria it is absolutely understandable and the Commonwealth understands and accepts that individual States will have to make these sorts of judgements.
PETER STEFANOVIC: Okay, are you going to be going to Canberra in a couple of weeks, or are you going to be heading there next week? What is your plan there?
MATHIAS CORMANN: I have just come back from Canberra. Yes, I do plan to go back to Canberra for when Parliament resumes. Out of Western Australia, I am sure that people in the ACT will be comparatively relaxed.
PETER STEFANOVIC: Okay, so what are you going to head there on Monday then?
MATHIAS CORMANN: No.
PETER STEFANOVIC: So will you have to do the two weeks of quarantine?
MATHIAS CORMANN: I am not in Victoria.
PETER STEFANOVIC: So it is a different rule for WA, so you can go straight through?
MATHIAS CORMANN: The medical advice that has been released publicly yesterday has put in place certain arrangements for Members and Senators that intend to attend Federal Parliament in Canberra out of Victoria. These arrangements that apply to Members and Senators out of Victoria do not apply to Members and Senators from other jurisdictions, that is right.
PETER STEFANOVIC: Alright Finance Minister, Mathias Cormann, good to have you with us. We will chat to you again soon.
MATHIAS CORMANN: Always good to talk to you.