Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Wednesday, 7 October 2020
SYLVIA JEFFREYS: An eye watering deficit, early tax cuts and wage subsidies to get Australians back to work. They are some of the major headlines from last night's Budget.
DAVID CAMPBELL: It has been described as one of the most important budgets in our nation's history. This morning we're joined by Finance Minister Mathias Cormann in Canberra. Minister great to have you on. $1.7 trillion in debt. I mean this sounds like we are playing with monopoly money - that is a huge amount!
MATHIAS CORMANN: Well what was the alternative? We were hit with a one in a hundred year pandemic with massive consequences for our economy, for businesses, for jobs. One million Australians lost their job in one month. We did have to step up very quickly, boost support for our health system to protect people's health and to make sure we could deal with the inflow of patients, to support the economy, to support business, to support jobs, to provide support to those Australians who lost their job through no fault of their own and now to invest in maximising the strength of the recovery. Last night's Budget is our plan to get Australia out of this COVID recession, back into the strongest possible economic recovery moving forward, where all Australians have the best possible opportunity to get ahead. Our debt is going to be high now by Australian standards but if you compare our position to the position of just about any other advanced economy around the world we continue to be in a very strong fiscal position, including with comparatively low levels of debt.
SYLVIA JEFFREYS: The JobMaker wage subsidy is one of the key elements of the Budget. It's targeted at people aged under 35. There are more than 900,000 people aged over 35 who are right now out of work and in need of a job. Are you concerned, firstly, that they are going to fall through the cracks and why have they been left out of this?
MATHIAS CORMANN: Well, no. Firstly I don't agree that anyone has been left out. The different age cohorts face different challenges…interrupted
SYLVIA JEFFREYS: …but there's no wage subsidy to employ someone who is over 35…interrupted
MATHIAS CORMANN: … you have asked me the question please let me answer. Young people were particularly heavily impacted by the coronavirus pandemic. They lost jobs in a disproportionate fashion and the experience from previous recessions has been that if you're not careful, younger Australians or those that have either not yet got into the labour market or were only just in the labour market will find it harder to get back in. If they remain disconnected for an extended period and on welfare support over an extended period, it becomes more and more difficult for them to find their way back into the labour market. Those Australians over 35 with a longer track record of performance in the workplace or with a much higher track record of work readiness are a number of steps ahead already. But we are providing supports to them in terms of retraining and being able to refocus into different areas and getting subsidies and getting taxpayer funded support in order to support that retraining effort to get them into another job. But the challenges for different age cohorts are different. The programmes that we've put in place are different as a result so that we can best support Australians at all different levels to get back out of this crisis moving forward.
DAVID CAMPBELL: And as you said it’s a once in a century crisis what were your options here, but it is still an optimistic Budget. It relies a lot on things going right, like a COVID vaccine. So are there any other circumstances under which we would revive JobKeeper, revive JobSeeker and is there, can you leave that door open for people out there just in case there's a second wave again?
MATHIAS CORMANN: Well we can't keep JobKeeper going forever and a day. The reason being, it was a very important crisis response when we were hit with an unexpected event and we needed to give ourselves the tools to pause and for people to pause safely while we were figuring out how best to move forward. But if you keep something like JobKeeper in place on an ongoing basis you’ll end up keeping businesses in business that aren't viable and aren't able to survive without that taxpayer-funded support. Ultimately, we need to ensure that viable, profitable businesses start hiring more Australians again and that is why we are gearing the support through things like the hiring credit, the JobMaker hiring credit towards those businesses that are backing themselves to be viable and profitable into the future.
SYLVIA JEFFREYS: There’s no new spending in this Budget on child care - why not?
MATHIAS CORMANN: Well that is just not true. We are spending record amounts on child care this Budget - more than $9 billion. The policy settings are in place and child care is a demand-driven program. The stronger the demand, the more demand there is for access to affordable child care, the more funding will be provided by the Government and in 2020-21 we expect to spend more on child care than ever before - more than $9 billion dollars in that one year. But it is a means tested subsidy so it goes towards those on low and middle incomes. The higher your income, the less support you're able to attract and to the point, eventually, if your income is too high, you no longer receive any taxpayer funded support at all. But that is as it should be.
DAVID CAMPBELL: You’ve set aside $1.6 billion for 23,000 at home care packages for the elderly but there is still 100,000 people currently on the wait list. Surely everything that 2020 has shown us we need more help for aged care.
MATHIAS CORMANN: Well we have tripled the number of home care places during our period in Government - tripled. And yes there's always more to do. There’s $2.7 billion dollars in additional funding into the aged care sector in this Budget which builds on additional funding for the aged care sector in previous budgets. But you're right, this is an area that we will continue to focus on to make sure that it has all of the resources it needs to provide the important services it provides in the appropriate fashion.
SYLVIA JEFFREYS: Mathias Cormann, we really appreciate your time this morning. The weight of the nation has been on yours and Josh Frydenberg’s shoulders in the past 24 hours, so we really are grateful that you can find the time to speak to us, thank you.
MATHIAS CORMANN: Thank you so much for having me.