Topics: Financial Assistance; JobKeeper; COP26




Hamish Macdonald: Businesses that can’t open because of COVID restrictions will lose federal support payments within weeks as the Morrison government moves to wind back COVID support despite ongoing lockdowns, with case numbers spiking in Victoria and Queensland battling to avoid a snap lockdown, the federal government has declared it will taper payments once they hit the states, hit their 70 per cent double vaccination targets and stop soon after they reach 80 per cent. Simon Birmingham is the finance minister and the leader of the government in the Senate. Good morning to you.


Simon Birmingham: Good morning, Hamish. Good to be with you again.


Hamish Macdonald: Why remove these payments when many of these businesses are still not going to be able to be open?


Simon Birmingham: Well, Hamish, what we’re doing is providing notice in terms of the implementation of the plans to taper out of the type of extraordinary emergency financial assistance that we’ve been providing and providing notice aligned with hitting the vaccination targets that we’ve been driving the country towards. And so this is about giving everybody time, certainty and time to be able to plan in that regard. We’ve currently provided some $13 billion in support across New South Wales, Victoria, ACT predominantly, and by the time we hit those targets, that support is estimated to be sitting around $20 billion. It runs well in excess of $1 billion a week, and ultimately there are limits to how long the government can continue to provide that. And that’s why we’re giving that notice and aligning it with those vaccination targets.


Hamish Macdonald: But to be clear, hitting those vaccination targets does not necessarily mean those economies can open back up in full and stay open.


Simon Birmingham: Hamish, it certainly means that we expect to see these sorts of long term widespread lockdowns come to an end, that the modelling is very clear that that as we get it, these quite high rates of vaccination across Australia, it will enable us progressively to treat COVID-19, in manners more analogous to other infectious diseases without seeing the type of loss of life and devastating impact on health that would occur if we didn’t have such a heavily vaccinated population. So these are the times we have to start to make that transition. Yes, there will be-


Hamish Macdonald: I’m just curious about that, though, with respect, Minister. I’m curious about that because I mean, what we’re talking about in terms of these vaccination targets, we’re going to be reaching those in most parts of Australia within the next month or so. But Victoria is experiencing this pretty significant jump in cases 1400 new cases yesterday. We’re talking to the medical profession this morning. They are genuinely terrified of what lies ahead. The Burnet Institute says that the numbers could go beyond the top end of their modelling in terms of peaks. You’re pulling this money away as Victoria goes through what could be its worst phase of this crisis.


Simon Birmingham: Well, Hamish, I think it’s important we’re all very careful about how we describe the virus moving ahead that obviously sheer focus on case numbers is not acknowledging the fact that many of those individuals increasing proportions of those individuals will not face such severe health consequences.


Hamish Macdonald: Well, with respect, I think the emergency ward doctors are not talking about case numbers only. They’re talking about the number of people in ICU, the number of people dying.


Simon Birmingham: And Hamish, if we look at the impact of COVID through the course of this year under the delta strain, the health consequences in terms of deaths and indeed serious hospital treatments and so forth have not been running anything like the rate they were last year when we had the prolonged Victorian outbreak because we have such a more highly vaccinated population. Now we’re talking about these supports, these economic supports remaining in place to get the populations right through to 80 per cent double dose vaccination. They’re not being pulled out next week or tomorrow. There is a tapering effect there as well that continues to provide some transitional support in the couple of weeks that follow thereafter. So and remembering that in addition to that, 80 per cent of the 16+ population, we are seeing very strong take up amongst 12 to 15 year olds, who will add further to the vaccinated scale of population that we’re talking about.


Hamish Macdonald: It’s very clear that you do want to rein in the spending, and that’s understandable. There are reports today that a federal review of the $89 billion JobKeeper program found that 31 per cent of recipients who were checked for compliance were not eligible at all for the payment. 30 per cent of $89 billion. That’s about $30 billion. Are you going to try and get that money back?


Simon Birmingham: Well, Hamish, certainly the Australian Tax Office has been pursuing businesses who were in breach of eligibility criteria. So clearly, people had to be breaching the guidelines that were in place for government to go and seek to pursue funding back overwhelmingly. Jobkeeper was extraordinarily successful and was implemented at a time when every single state and territory across the country was implementing lockdown type restrictions-


Hamish Macdonald: But how can the federal government give out that much money to that many businesses that weren’t eligible?


Simon Birmingham: Hamish, this is a program implemented when there was enormous uncertainty and with enormous speed, clearly, as the pandemic has gone on, we have refined the type of payments that are made because there’s been time to be able to do that. But if everybody takes themselves back to March of last year, when every single state of Australia was shutting down, when there was that huge uncertainty facing pretty much businesses in every sector as to whether they were going to operate, implementing JobKeeper at that time with speed, with ease in a manner to make sure that we didn’t have massive stand downs of employees was essential and is estimated to have saved some 700,000 jobs across the Australian economy. There are people who may well have faced quite long term unemployment if their employment relationships had been severed at the time.


Hamish Macdonald: Okay, but are you saying you’re going to get this money back? I mean, we could be talking about $30 billion here.


Simon Birmingham: Hamish, I’m saying that we’re eligibility criteria has been breached, where the tax office has evidence of that. They have been and continue to pursue money back. There are other businesses who have voluntarily repaid JobKeeper, who had met all of the technical eligibility criteria but has still made a decision to repay. That’s to be welcomed in relation to those who saw later growth in their business conditions. But if somebody is in breach, then certainly the tax office has been and continues to undertake that work.


Hamish Macdonald: Okay, but this was a review of a proportion of those that were receiving it. This was a compliance check. Are you now instructing your department to go through and check all of the payments that were made for eligibility?


Simon Birmingham: The Australian Tax Office has quite a strong compliance program. The ATO will go after people who are identified as breaking the rules, and of course, if they identify patterns of non-compliance in relation to eligibility, then they extend out their compliance programs in relation to the chasing down companies or individuals who were who break rules following that analysis.


Hamish Macdonald: Okay, we’re now one month out from the COP 26 climate talks in Glasgow. The New South Wales government has set an emissions reduction target of 50 per cent by 2050. They’re speeding up their reduction targets in the nearer term. The Minerals Council of Australia is now supporting net zero emissions by 2050. Why can’t the government reach a conclusion on this?


Simon Birmingham: Well, Hamish, there will be a conclusion and a position taken to the Glasgow climate change conference. Australia will take the strongest position we possibly can, and as the Prime Minister has indicated for some period of time now, he wants to see us strive towards net zero. We are doing all of the appropriate analysis in terms of where Australia’s out in our projections and trajectories and emissions reductions. We know that we’ve reduced them by some 20 per cent since 2005. They’re at their lowest ever levels and that are reduction in emissions to date has been faster than many other countries will be at the Glasgow conference.


Hamish Macdonald: Is the Prime Minister going to go to Glasgow?


Simon Birmingham: That matter in a decision will be taken over the next couple of weeks. It’s only a few occasions since 2007 that Australia’s Prime Ministers have attended these annual talks, so it’s not common. In fact, it’s more often than not that the prime minister of the day has not gone. Prime Minister Jacinda Ardern of New Zealand, I understand, is not attending, but Scott Morrison will make that call based on juggling the challenges we were just discussing in Australia and the pressures here. Versus obviously the importance of the discussions in Glasgow.


Hamish Macdonald: Simon Birmingham, always appreciate your time. Thank you very much.


Simon Birmingham: Thank you, Hamish. My pleasure.