Senator the Hon. Simon Birmingham
Minister for Finance
Leader of the Government in the Senate
Senator for South Australia
Date: Friday, 10 September 2021
Laura Jayes: It's interesting to look at this data, Minister. Does the government feel under pressure over the recent focus on companies getting JobKeeper and still giving huge dividends?
Simon Birmingham: No, Laura, we've always been confident that JobKeeper was resoundingly successful policy. The Reserve Bank estimated that it saved some 700,000 Australians from losing their jobs and from finding themselves in long term positions on the unemployment queues. We know that it helped so many Australian businesses to not have to stand down their staff, to sack their staff. We know that it helped the economy in terms of rebounding faster from that first wave of COVID than anybody had really predicted or anticipated. And what this data demonstrates is that JobKeeper overwhelmingly benefited small businesses, medium businesses, charities and not for profits. Yes, it also benefited big businesses, but across all of those sweeps, it benefited those businesses by keeping their staff on the books because none of those businesses got to keep a single dollar of JobKeeper money. Every dollar flowed through to the employees who were the designated recipients of that money at the time. Now today we've got a slightly different mix in terms of support payments because we've managed to evolve the program over time. But way back at the start of last year, when JobKeeper had to be created, we didn't have time to work out a niche program targeted to different hot spots or the like. We just had to respond to a national crisis and we did, and it worked.
Laura Jayes: That's true. The speed of it was really important the stimulatory effect for the economy as well last year. But it still begs the question, fair enough, you make the argument that that money shouldn't be clawed back from some of these businesses that turned out to make a profit. But you are seeking to get money back that was paid erroneously in JobSeeker and JobKeeper to individuals. That doesn't seem right.
Simon Birmingham: We are also seeking to get money back from businesses that wrongly claim JobKeeper, too. So what we make sure is that the rules are enforced. Now some, particularly the Labor Party, seem to want to say that we should go back and change the rules. This is the same Labor Party that called for us to keep JobKeeper going longer and criticised every step down in it. But nonetheless, you know, they now say that we should actually go back and change the rules in other ways. Whereas you know, what we are doing is simply enforcing the rules as they existed at the time. And so businesses who wrongly claimed do have the tax office going after them to get the money back. Individuals who have done the wrong thing, be it in JobKeeper, JobSeeker or any other payments, should also expect people to go after them. That's about making sure that people claim within the rules keeping integrity around these programs.
Laura Jayes: Ok, we're looking at New South Wales now. We have a roadmap to start to reopen at 70 per cent. It means businesses will be able to again be able to operate under a four square metre rule, as we know, so perhaps reduced capacity. Now, Dominic Perrottet said this morning that he's in discussion with the federal government about the future of these business support payments. Should all that support end once businesses do start to reopen at 70 per cent, or might you need a different mechanism to keep some of those payments going?
Simon Birmingham: Well, certainly will work closely with the states and territories, as we've done during these recent lockdowns. What we've put in place for individuals who lose hours of work is the COVID disaster assistance payment that's being incredibly effective, providing billions of dollars in support to individuals, households, families to help them get through the loss of work. Then with the states and territories targeted programs that enable us to adapt state by state the different circumstances the states are in supporting businesses with direct payments and assistance. Now, as a state reopens, the need for those will become less and less and ultimately, when the national plan is fully implemented, the need for that sort of assistance is completely removed. But there are transition points and we will work with the states through those transition points to make sure that we don't completely abandoned businesses too early. That's certainly not our intention. We've been there every step of the way from the start of the pandemic with financial assistance will continue to deliver that. But of course, it will be scaled down as restrictions are scaled down and people get back to work and businesses get back to earning their income from normal trading operations, which is where we ultimately want to get them to.
Laura Jayes: So do you anticipate that once businesses do reopen at 70 percent, they start earning an income, they're standing on their own two feet. Will that scaling down begin straight away?
Simon Birmingham: Well, some of it is just automatic in terms of the fact that as businesses recover their revenue then the thresholds that trigger assistance are no longer triggered in that regard. So what we can do is work with the states and we will see as businesses get back to normal operation they get back their revenue. They no longer have those sort of 30 per cent reductions in revenue, they're no longer eligible for assistance and that will just take them off. Then eventually the need for those sorts of programmes at all becomes non-existent, so it will be a tapered effect. Some of it using the trigger points that are already built into it. But then as time goes on, looking at how we remove the residual of those programs so that we go back toward the normal supports in the economy operating, knowing that of course, we're a country with strong social safety nets in place to support individuals where they need it.
Laura Jayes: And that's fair enough. But Dominic Perrottet has acknowledged that once all these, these business support payment jobs saver does taper off and is not needed anymore. These businesses will still need a package, a stimulatory package. So while you don't get a direct wage subsidy, there might be expansions of Dine and Discover program or something that you know I don't even know about yet. Do you see that there is a federal government role in that post-pandemic recovery package? Would you see another 50-50 split on something like that?
Simon Birmingham: Well, there's a lot of economic growth still built into the budget that we handed down this year. Things such as the full expensing measures that encourage business to make investments and bring forward those investments in that spending. And indeed, we've seen that in the national accounts figures to date that have seen a real lift in relation to business investment and those policies have been working and they're some of the things that have triggered the very strong economic growth rates and the strong employment data we've seen, notwithstanding the dent of these lockdowns will have created. We know that across households and businesses there remain very high savings rates as a result of things like JobKeeper and other supports put in across the economy so there's some residual capacity there right across the economy-
Laura Jayes: But essentially, you see any kind of recovery package firmly in the state's remit?
Simon Birmingham: I think niche things again, such as targeted payments for hospitality incentives and so on, as you said, are more about state operations because we've got very different situations across the different states at present. You know, you've got restaurants and pubs trading almost as normal in some parts of the country, whilst lockdowns are in place in New South Wales and Victoria. Now, that means as they implement the national plan, they're all coming from different starting points and there'll be different needs in different regions. And that's why, as I say, we've worked in terms of business supports state by state to give some targeted assistance in different ways. But the more granular you get and the more appropriate it is for a state government to lead that part of the response whilst obviously as a federal government, the nationwide policies such as those big tax levers around full expensing that we can deploy are the sensible ones. As well as remembering the loss carry back provisions we have in place, which are incredibly important for businesses now, having gone through this longer period of lockdown to know that they can carry those losses back and average them out against past year profits.
Laura Jayes: I don't know whether you've been watching Lord of the Rings, but the New South Wales treasurer has have a look at this.
Dominic Perrottet: Mark McGowan is the Gollum of Australian politics. You can just picture him over there and in his cave with his little precious, the GST, and he's been caught out by his own budget. I mean, yesterday he's lashed out at the other premiers across the country before they've even said anything. And the reality is what transpired in terms of the GST revenue with WA is exactly as what we predicted those years ago, when treasurers like Tim Pallas and Victoria and myself and the other treasurers fought very hard for this no worse off clause.
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Laura Jayes: Does he have a point? Gollum in Western Australia?
Simon Birmingham: Well, look, it's an entertaining analogy. But can I say to all of the state leaders, state premiers, state treasurers, Labor, Liberal, that you know, keep the parochial banter to the footy finals. What isn't going to help the country is constant sledging of one another across state borders, whether it's from Mark McGowan to other premiers or from the New South Wales Treasurer to other leaders. In the end, what we need is for everyone to really focus on how we work through implementing the national plan, how we do it in sensible ways. Of course, as I said before, each state's coming from a different starting point. And so that means there will be certain points of difference in terms of how they go about achieving it. But the Doherty Institute modelling is quite clear in terms of the fact that the risks to the community diminished markedly once you hit those 70 per cent total vaccination thresholds and then even more so far, more significantly, even when you get to the 80 per cent vaccination thresholds. That's why we've set that out. The states can then work through as they should, like New South Wales has given certainty to their businesses to their populations about the different steps that will occur in relation to the step downs of restrictions and the opening up that occurs as we get through those vaccine levels. We are getting so close to seeing some of that realised across the country. 22 million doses now administered and you take a look at our over 70s population pushing right into the 90 per cent range of first doses, setting a great example for the rest of the country to follow. And so I hope we can really see states perhaps step away from the slanging matches and actually just focus on the policy of reopening, giving business, households, individuals certainty.
Laura Jayes: Ok, let's finally talk about home quarantining and the trial is and a pilot program is going on in your state. How is it going? And are we getting close to having a firmer date on home quarantine? Will it be the start of December?
Simon Birmingham: Look, I think the trial is going well from what I understand. You've got the trial that SA is running with lots of openness in terms of sharing that information to the national cabinet and the other states and territories. WA themselves have run a home quarantine app as well that has potential to be expanded elsewhere, too. In terms of dates for a broader rollout of that, that does remain a bit of a work in progress, getting the states to move from the limited trials to a broader take up of home quarantine, particularly those states-
Laura Jayes: Does it have to be uniform? Could New South Wales, move ahead with home quarantine before the others?
Simon Birmingham: They definitely could. That is entirely possible. And indeed, some states may choose to use it more broadly for interstate arrivals for a period of time, noting that states like WA or SA, Queensland, Tassie have restrictions on arrivals from New South Wales or Victoria, so they could use these apps to facilitate more residents who are just stuck interstate, coming home to these states and deploying the apps in that way. But then I would expect internationally-
Laura Jayes: But do we really need these big quarantine centres that you will jointly build in some of the states like Queensland and WA and does Annastacia Palaszczuk really need the Wagners?
Simon Birmingham: Well look, the decision we've made there is that they provide a long term resilience capability. That whether it is for, you know, what comes post the Delta wave, you know, we didn't expect the Delta variant to happen this year. We don't know what will happen next year. Whether it is for other future health crises, whether it's responding to bushfires, natural disasters, emergencies. Whether it's responding to future humanitarian crises like we've just had in Afghanistan. Having these sorts of facilities like Howard Springs duplicated in Brisbane, in Melbourne, in Perth will give the nation greater capability, greater resilience to respond to a whole range of different circumstances in the future. So we see it as a no regrets investment regardless of what happens with the current COVID pandemic, that there will be different cases, different circumstances that they can be deployed for in years to come.
Laura Jayes: Ok, no regrets investment, Minister. Thanks so much for your time.
Simon Birmingham: Thanks, Laura. My pleasure.