Transcript, E&OE

Topics: Fire affected businesses assistance fund; Auditor’s report on sports grants; US-China trade deal.
20 January 2020

Norman Swan: As we’ve been reporting the Morrison Government is announcing cheap loans and cash grants to help small businesses hit by devastating bushfires across the country. It follows last week’s roundtable between the Prime Minister and industry groups amid concerns the fire emergency has affected more than 190,000 small businesses and sole traders. Under the package small businesses will get access to the loans of up half a million dollars and one-off grants of up to $50,000. Simon Birmingham is the Minister for Trade, Tourism and Investment. Welcome back to RN Breakfast, Minister.

Simon Birmingham:     Hello, Norman. Great to be with you.

Norman Swan: So, is that really the number, 190,000 small businesses?

Simon Birmingham:     Well that is the estimate, Norman. Of course how many need to and choose to access these assistance measures is to be determined and we will work through that as those applications come forward. What we do have is, of course, an acknowledgement that there is significant rebuild effort required on the ground, we know that. We’ve already announced similar types of measures to support farm businesses and farmers in terms of their rebuild effort, significant assistance in terms of cleanup, significant assistance in terms of critical areas such as mental health support and this package of small business assistance is now about making sure that the long term recovery to keep jobs in those communities by supporting small businesses is there and that, of course, compliments the tourism announcements that I made yesterday.

Norman Swan: What is the support? Because I, you know, as an avid radio nationalist as you would know that about half an hour ago I spoke to the Mayor of Kangaroo Island and Alison Miers from Batemans Bay. And the issue that emerged was that the biggest problem is not so much building a new shop front or putting new furniture in the cafe, it’s actually, apart from marketing, it’s actually cash flow, it’s keeping the business open. I mean, are you up for actually supporting the cash flow of a business indefinitely?

Simon Birmingham:     Well, indefinitely is a different question perhaps, Norman but the…

Norman Swan: But they don’t know when it’s going to come back, you’re going to spend money on marketing when, you know, you don’t know when it’s going to come back.

Simon Birmingham:     And this is about making sure that we push all of the necessary buttons, we’ve been very clear in terms of the measures we’ve announced that they are all interim measures because we’re going to continue to assess the impact on the ground as and when required. But, yes, in terms of supporting cash flow and dealing with these uncertainties the no and low interest loan components of the financial assistance for small businesses do allow for working capital as support for small businesses. And that’s being applied at the same time as, yes, we are investing and trying to get customers back into those businesses and that’s why, very much, the message of the tourism campaign is partly directed at Australians. Tourism Australia doesn’t historically direct tourism activity in the domestic market, it’s all about getting international tourists to Australia. But, we have broken from that practice by appealing to Australians to say, tourism businesses in these regions and, indeed, right across Australia where they are internationally facing tourism businesses are doing it tough at present, and we implore Australians to think about if they’re going to take a long weekend this year, if they’re going to get away in future school holidays or have another holiday break at some point, then please think about doing that with an Australian tourism business, especially those in fire affected regions.

Norman Swan:             How are businesses going to know what to apply for? And this is the- I’m just getting a sense here of how you administer this efficiently. I noticed Andrew Constance was saying it’s got to be quick in New South Wales for the Minister in- who’s on break at the moment to actually help his local community from New South Wales. You know, it’s got to be fast but then you’ve got to temper that against businesses knowing actually what they need. Because they could be, even at a very low interest loan, they could get themselves into a debt spiral.

Simon Birmingham:     So we’re establishing a new national hotline for financial advice for businesses, it will have new financial counselors who will be there to talk and walk through small businesses the options that are available to them, to talk to them about those questions around financial viability. That’s on top of the fact that many of the recovery centers that are already in operation. I, for example, visited one the other day in the Adelaide Hills that is shifting from a relief center, providing those emergency supports, into a recovery mode. And that’s a really important thing because on the ground there you also have, therefore, additional services that are available to help small businesses to talk them through the different types of options that are available. Whether it’s rebuilding a vineyard, rebuilding a facility, rebuilding a packing shed, rebuilding a cafe, any of these types of options, certainly the advice will be there and the assistance will be there so people understand the options and the implications of what’s available to them. But importantly, in all of this, it’s not about letting the insurance companies off the hook either, they have to fulfill their responsibilities and obligations and we’ll be making sure we help businesses through that in tandem with these additional areas of Government support.

Norman Swan:             There’s not going to be much of your surplus left.

Simon Birmingham:     Well Norman look, that’s a consideration that we will work through once we have dealt with these emergency circumstances. So you know, the government is in a position where we are able to be able to provide this type of assistance to small businesses, to our tourism industry. In terms of the fire affected communities, all of the other support services like mental health services; we’re in a position to give that extra funding without having to apply new taxes or levies because we’ve strengthen the budget position, because we were coming into surplus conditions and that is something that we are pleased to have been able to build that resilience in the budget allowing us to deploy this $2 billion in initial assistance into fire affected communities.

Norman Swan: Simon Birmingham, last week, I think voter – the Australians’ faith in politicians was rocked by the Auditor’s report on sports grants; Bridget McKenzie, being the Minister at the time. In a situation like this where you’re trying to do the right thing, you’re trying to help people in the bushfire [indistinct] quickly, can we trust politicians with the money in what’s going to be an environment where it’s almost, by necessity, not going to be that accountable?

Simon Birmingham:     Absolutely, Norman. This money is getting put out the door as quickly as we can and as responsibly as we can as well …

Norman Swan: But what’s the [indistinct]?

Simon Birmingham:     … now, of course, we have to make sure that it gets on the ground. We’re working very closely with state and territory governments who are often the delivery partners for these grants and funds. So for example, in my space in the tourism portfolio where we’re stepping up with these additional marketing activities and the like, the overwhelming majority of those funds will be deployed with state and territory governments, with industry partners, to really focus in on simply selling product that drives bookings into the regions who are affected. But elsewhere, grants, allocations to education or health services are usually again directed through those state and territory government partners; we set the umbrella framework of those policies, their operations at a Commonwealth level but then the state and territory deliver partners are the ones who make sure they get precisely to where it’s needed.

Norman Swan: Last week, the US and China are going into trade now. You agreed to the first stage of the trade deal; China’s committing to about $200 billion of US goods over two years. You actually welcomed this step but the pundits are saying this could be devastating for Australian agriculture; that; LNG’s probably okay, coal’s probably okay, but agriculture is where it’s really going to hit. 

Simon Birmingham:     Norman, what we see is that the US achieved a commitment from China that they will purchase some $200 billion extra of US imports over the next two years. Now, that is unconventional in trade policy terms; there’s no denying that. But if we have a look at China’s economy, the growth in Chinese imports from around the world in 2018 was around about $260 billion. 

So this two-year commitment of the US has achieved from China amounts to significantly less than half of what you would anticipate China’s import growth volume to be over the next two years. So in a sense, it’s a slice China’s growth not necessarily any substitution of existing purchases that China makes. Now, we’re going to monitor that very closely. We have some other elements of the agreement that we hope will apply to all countries not just giving favorable treatment to the United States and that’s something that we, and I have no doubt others, will be raising with Chinese authorities too. 

Norman Swan: I noticed you’ve asked China for the same status as the Americans have got, we’re not exactly flavour of the month in China at the moment. Do they think to be [indistinct]? 

Simon Birmingham:     Norman, the point that I’ve made there is that where administrative processes for licensing and approvals and those sorts of things are streamlined, those sorts of non-tariff barriers are removed, will that ought to apply to all countries. I’m not asking for a special deal there for Australia but if you’re going to streamline your approvals or your licensing standards, then as long as any nation can meet those approvals and licensing standards, they’re exporters ought to be able to participate under those terms. I have no doubt that many of my trade counterparts from around the world will be making the same point and I trust and hope that China will ensure that all of their partners are treated equitably in that sense rather than giving preferential terms to the United States. 

Norman Swan: Well, we’ll watch that one closely. Simon Birmingham, thanks for joining us on Breakfast.

Simon Birmingham:     Thank you, Norman. My pleasure.

Norman Swan: Simon Birmingham is the Minister for Trade, Tourism and Investment.