Senator the Hon Mathias Cormann

FRAN KELLY: The pressure is coming from all sides on the Morrison Government to amend the $130 billion JobKeeper payment scheme, its signature policy to help keep workers in jobs during the pandemic shutdowns. A growing number of Coalition MPs are now calling for the wage subsides to be withdrawn before they’re schedule to end in late September. While Labor and the Greens will move in the Senate this week, yes Parliament is sitting, to extend the payment to some workers who are currently ineligible for the support. This push to modify JobKeeper comes amid criticism that the Treasurer’s economic statement to Parliament yesterday contained no plan for the economy once the COVID crisis is over. Mathias Cormann is the Finance Minister and Government Leader in the Senate. Mathias Cormann, welcome back to Breakfast.

MATHIAS CORMANN: Good morning, Fran. Good to be back.

FRAN KELLY: Minister, can we talk about JobKeeper first. A number of problems have surfaced with the payment, no surprise I suppose given the haste it was put together. Will there be changes to the scheme? It’s schedule to be reviewed next month, will it be changed?

MATHIAS CORMANN: As we flagged from the outset, halfway through, in June, there will be a review. Treasury will make some findings and recommendations. I am not in a position to pre-empt what if anything, they might suggest. But let me also just say … interrupted

FRAN KELLY: Let me not ask you to pre-empt it…

MATHIAS CORMANN: …we are six weeks into a six-month program. It is a six-month program. We want to ensure that the program is working as intended. If there are sensible suggestions on how it can be improved, of course we would consider that.

FRAN KELLY: Okay, let’s look at some of the suggestions being put forward from within your own colleagues. Liberal MP Jason Falinski wants JobKeeper turned off, quote, as soon as possible, as soon as the schools are back then it should go. That is a signal for business to be cracking. Craig Kelly and Warren Entsch, they have called for an early end to payments if businesses are back on their feet. It’s an enormous cost this scheme, $130 billion. Does that make sense? If a business is up and going again, JobKeeper should be withdrawn?

MATHIAS CORMANN: A couple of different issues here. Firstly, we did need to provide the certainty to business that we would be providing this sort of support over a six-month period in order to give them confidence to hold onto their employees. We wanted to keep as many Australians connected to their employers as possible and JobKeeper has been overwhelmingly successful with that. Like those colleagues of mine, we all want businesses to return to profitability again as soon as possible and to be able to stand on their own two feet and pay for their own employees. We all want to see that as soon as possible. But we did make a commitment for a six-month period. When we set this program up, when we designed this program and put it in place, we did not know how long this coronavirus crisis was going to last and to what extent. We made an assumption at the time that there was at least an initial six-month period. We are winning the fight against the virus. It looks as if we are getting on top of the health threat. We are very hopeful that the economy can return back to normal sooner than we might have thought at some point. But this is a six-month program and while there might be some adjustments to make sure that it works as intended after a review halfway through that we always flagged, this remains a six-month program.

FRAN KELLY: Okay, so just to be clear, does that mean that even if, not all businesses will open up and get back to where they were, fair enough and that’s what this support payment is for. But if the books show that the door is open and for some sectors things are back where they were, you won’t consider cutting it short?

MATHIAS CORMANN: No. This is a six-month program, but we do want to make sure that it is working as intended. That is why it is entirely sensible to have that review halfway through.

FRAN KELLY: Five and half million workers are involved in the scheme. About 1.7 million of them are estimated to being made more under JobKeeper than they were earning with their regular shifts before the pandemic. Labor wants that loophole closed. Do you?

MATHIAS CORMANN: It is not a loophole. We knew that that was an unavoidable feature of the scheme. Given the speed with which it had to be put in place, given the system requirements and the logistics involved in putting a scheme of this magnitude in place that quickly, we had no choice but to accept that that was one of the features of the program. We went into that with our eyes wide open.

FRAN KELLY: Yeah, but given that now we have more time, do you think it should be tightened up?

MATHIAS CORMANN: We have not made that decision. But again, as part of the review halfway through these are things that can be considered.

FRAN KELLY: Okay. Just finally on JobKeeper, Labor and the Greens will move this week to disallow some of the rules to extend the payment to university staff and local workers who are employed by companies owned by foreign entities, like some of the airport workers because currently they can’t receive it under the rules. Apart from fairness, it will have the added bonus of helping the economy, keeping more people in jobs, more people with money in their pockets to spend and more people off the dole queues.

MATHIAS CORMANN: It seems that Labor wants us to extend the payment to businesses that are owned by foreign governments. That is not something that we are proposing. We are not providing JobKeeper to… interrupted

FRAN KELLY: Even though that is the ancillary workers at the airports keeping the airports going?

MATHIAS CORMANN: We are not providing JobKeeper payments to governments or government employees in Australia. We are not going to start making JobKeeper payments to businesses that are owned by foreign governments.

FRAN KELLY: And just on universities. The Government stipulated that they have to count their losses over six months, not just one month like all other employers. That was a change that occurred later. That means something like 30,000 university staff have not been eligible for JobKeeper. Why did you decide to make it so much harder for the tertiary sector?

MATHIAS CORMANN: We have not made it so much harder for the tertiary sector. We have … interrupted

FRAN KELLY: Well yes you have.

MATHIAS CORMANN: I completely disagree with that. The JobKeeper program is working on a consistent basis across the economy. Different businesses have different business models. In many ways, the tertiary sector is in a better position than other businesses.

FRAN KELLY: Why?

MATHIAS CORMANN: Because they have ongoing funding from Government. Their main funding sources in many respects, other than what they secure through the international students market is … interrupted

FRAN KELLY: Which is billions, which have disappeared.

MATHIAS CORMANN: There is significant certainty around the core funding sources for universities. 

FRAN KELLY: Alright, let’s move on to the economy. You have emphasised that while measures like JobKeeper are significant, they are also temporary. And you said that the Budget on a structural basis should be able to return to surplus once we have worked our way through this. When do you expect that to be? We are no longer talking snap back, so when? When?

MATHIAS CORMANN: We will be providing updates in terms of our forecasts and our projections over the forward estimates and the medium term, in our economic statement and in the Budget, which is delivered in October. We deferred the Budget … interrupted

FRAN KELLY: It’s a long way away now though. So if it is not snap back, the Prime Minister said it won’t be that. What are you looking at?

MATHIAS CORMANN: I will leave the commentary to you. We are working on a strong economic recovery on the other side. It would not have been sensible to deliver a Budget update at a time when there is still significant uncertainty around. This has been a rapidly evolving situation. We need the dust to settle somewhat to ensure that the forecasts and projections that we make in the Budget in October are credible. Right now, nobody is really in a position to make appropriately credible forecasts and projections about the forward estimates periods and the medium term.

FRAN KELLY: Well nevertheless there are projections being made. There are forecasts in some numbers. We are getting some from Reserve Bank, some from Treasury, some from private forecasters. Why didn’t we get any, or very few new numbers yesterday. When are we going to see some kind of economic plan from the Government to give people some hope we will pull through this. We will cross the bridge then what?

MATHIAS CORMANN: We have been making decisions all the way through. Initially there was a crisis response required to save lives to suppress the spread of the virus, to put economic support measures in place. As we have indicated the next Budget will be in October. That will be the next instalment of our national economic plan to maximise the strength of the recovery on the other side. In the intervening period we have continued to make decisions to put us in the best possible position for a strong bounce back on the other side. That is what we do want to see. That is what we continue to work on. There will be an economic statement in June after the March quarter national accounts data has been released. That can help inform our forecasting and projections. I release monthly financial statements providing an update on the state of the Budget compared to our most recent update.

FRAN KELLY: The Treasurer made it clear in the breakdown of figures yesterday exactly what the impact of opening up the economy or not doing so would mean to the various States. He went through it State by State. The total estimate for Australia is easing the restrictions will add $9.4 billion to the economy each month. And as you drill down on that each State not doing so is a big hit to the economy. Is the Government now signalling it over to the Premiers and the Chief Ministers to do the heavy lifting and get moving on opening up the economy? Is that where you are trying to put the pressure?

MATHIAS CORMANN: It is our responsibility, all of us. The Federal Government, State and Territory governments have been working together very well in particular through the national cabinet. We are all in this together. We are getting on top of the virus. We have put in place measures to make our economy COVID-safe, the increased testing capacity, the COVIDSafe app, which enables the more efficient tracing in the context of any new infections and an increased capacity to deal with localised outbreaks. So all of that is helping to return the economy back to as much as normal as possible. We would want to see that happen. We need to make that happen for the benefit of all Australians. We want Australians to be able to get back to life as normal as soon as possible.

FRAN KELLY: Just a quick one on trade if I can. China has now had two strikes against Australia. Barley and some of our meat processors. Dairy fears it could be next. Does the Government still believe this has nothing to do at all with Australia’s push for an international inquiry into COVID-19.

MATHIAS CORMANN: These are things that you would not even pick up on if we were not in this current climate. I … interrupted

FRAN KELLY: Really? Four meat processors have been closed.

MATHIAS CORMANN: Anti-dumping inquiries in relation to barley, these are things under the World Trade Organisation rules that happen between countries all the time. These are regular occurrences and something that started eighteen months ago, long before anyone had ever heard of the coronavirus … interrupted

FRAN KELLY: Yes, but it’s come to a head right now. You think that’s a coincidence?

MATHIAS CORMANN: That was always the timetable. There is a normal timetable which is prescribed in the rules under the World Trade Organisation. This was always the time when this process was going to come to a head. Let me just say that we will take all of these issues, we will deal with all of these issues one by one, on their own merits. Our relationship with China is an important relationship. We value the relationship. From time to time we will have issues on which we disagree. We have to work through these issues as constructively and as pragmatically as possible. 

FRAN KELLY: Mathias Cormann, thank you very much for joining us.

MATHIAS CORMANN: Always good to talk to you.