Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Wednesday, 7 October 2020
LARRY EMDUR: The Federal Government's most important Budget since the Second World War will bring tax relief and encourage job creation. But it will also send the country towards record debt of almost $1 trillion.
KYLIE GILLIES: Finance Minister Mathias Cormann joins us live from Parliament House this morning. Good morning, Minister. Welcome back to the show. Let's get straight into it - Budget forecasts are based on a coronavirus vaccine becoming available some time in 2021. That’s what we’re hoping. What happens if there is a delay, or no vaccine at all?
MATHIAS CORMANN: Budgets are always based on the best available information at any given point in time. We take advice from the experts in relation to these things and certainly the expert advice is that the most realistic assumption is that there will be a vaccine available by the end of 2021 for mass distribution. If that was not the case, there are two alternative scenarios; a vaccine could be available sooner, in which case we will have a positive variation on the upside, or if it is available later or not available at all, and we have to maintain all of the risk minimisation methods and systems that have been put in place in recent times. We have to keep the testing and tracing and rapid response to outbreaks and the COVID safe work practices in place all around Australia so we can continue to restore economic activity and jobs to the greatest extent possible.
LARRY EMDUR: Alright, let’s talk about jobs. The jobless rate has blown out across 2020, of course JobSeeker has already been scaled back and is said to return to its pre-pandemic rateon December 31. The Budget has been criticised for failing to deliver more certainty to the 1.1 million Australians currently relying on JobSeeker. What do you say to that?
MATHIAS CORMANN: Well, firstly, the unemployment rate is well below where we feared it would be when this crisis first hit. Treasury had advised that by the end of June, we could expect an unemployment rate of about 10 per cent. The most recent update, it was down to 6.8 per cent. Our focus clearly is on getting as many people back into work as possible as soon as possible by continuing to save as many jobs as possible, restoring as many jobs as possible, creating as many new jobs as possible. When it comes to JobSeeker support, it continues to be substantially higher than what it was before this crisis to the tune of $250 a fortnight. On top of that, we have lifted the amount of money people on JobSeeker are able to earn before they lose any of the JobSeeker support payments from $105 a fortnight to $300 a fortnight. In terms of the criticism that we haven't provided advice on the ongoing arrangements moving forward beyond the end of this year, we have been quite transparent about this. We want to see how the economy continues to recover, what the data is going to be in terms of employment and unemployment numbers, closer towards the end of the year and we will make the judgements of that point in time. The additional JobSeeker support has been important but it has also created some distortions in the economy, with businesses reporting they are finding it at times comparatively difficult to encourage people back into work that are on those elevated JobSeeker payments at the moment.
KYLIE GILLIES: Okay, if we shift focus now to working families. Thousands of working mums will benefit from changes to the paid parental scheme. Another criticism has been surrounding the lack of new initiatives for child care, especially given that fees will rise, or are expected to rise?
MATHIAS CORMANN: We are providing record funding support childcare, more than $9 billion this financial year. And we have substantially reformed childcare funding arrangements in recent years. We have a very fair and equitable system with tax payer funded subsidies provided on a means tested basis. The higher your income, the less support you are able to draw from the taxpayer, to the point when you are making so much income that you no longer qualify for any support. But we are investing record amounts of money into providing childcare, affordable access to childcare but in an appropriately targeted fashion, prioritising those on lower and middle incomes.
LARRY EMDUR: Minister, we are in the first recession in 29 years. A lot of our viewers are experiencing this for the very first time. There is still so much uncertainty ahead. What is your forecast? Do we need to brace for more economic pain would you say?
MATHIAS CORMANN: Across many parts of Australia, the economic recovery is underway. We have been hit with a one in 100 year crisis event, a global pandemic with severe consequences for the economy and jobs. But in Australia, while it's been tough, we are in a comparatively stronger, better position than in many other parts of the world, in many other comparable advanced economies around the world. We just have to continue to do everything we can to get ourselves in the strongest position from here. The Budget last night is our plan to help get Australia out of this COVID recession, back into the strongest possible economic and jobs recovery moving forward.
LARRY EMDUR: We can only imagine how busy your day is, we thank you for taking the time to talk to us this morning.
MATHIAS CORMANN: Always good to talk to you.