Topics: JobKeeper and JobSeeker payments; NZ-Australia travel bubble; finance minister position

21 July 2020

Kieran Gilbert: Let’s bring in live now from Adelaide the Trade and Tourism Minister Simon Birmingham. Minister, thanks so much for your time. The Prime Minister says when it comes to JobKeeper it’s too early to say whether it’s going to be needed beyond March. I understand why he wants to keep it on the three-month planning phase in terms of what’s being spent, but in terms of your area of responsibility, tourism, you would have to admit it’s going to be needed well beyond March isn’t it?

Simon Birmingham: Kieran, we’ve always acknowledged that tourism is one of the hardest hit sectors and is a special sector, and, yes, it was one of the first to face some of the impacts of the COVID crisis, and it will probably be some of the last in certain ways. But we also have now made a dramatic decision today in terms of deciding to extend JobKeeper, doing it in a well-thought-out, carefully targeted way. But prior to today, businesses were at the three-and-a-half-month stage of a six-month JobKeeper program. They’re now at the three-and-a-half-month stage of a 12-month JobKeeper program, and it really is a bit early to be talking about, what about after March next year?

We, as the Prime Minister outlined, will consider the circumstances carefully when we get to the end of this year and when we start to be looking into next year as to the circumstances of the economy overall, individual businesses, the necessary COVID restrictions that remain in place, and also the adjustment that we will see taking place in the economy.

I know many tourism businesses right now are pivoting to try to take advantage of opportunities in the domestic market. Australians spend $65 billion a year on travel outside of Australia, usually – that’s what they spent last year – whilst visitors to Australia spent $45 billion. So if we can harness enough of that traditional outbound expenditure of Australians going overseas, then we can actually manage to get a lot of additional support into many tourism businesses, meaning that hopefully, they won’t be needing JobKeeper so much into the future.

Kieran Gilbert: This next stage is more modest, as the Government had said it would be. It’s going to cost about 16 billion according to Treasury forecasts, as opposed to about 70 billion for the first six months, so more modest. Is part of that trying to also keep a few shots in the locker, so to speak, in fiscal terms if we see more outbreaks, more second waves, like we’re seeing in Melbourne?

Simon Birmingham: Well, whilst the budget outlook and estimates will all be detailed on 23 July, this remains a demand-driven program. It will respond to the needs in different parts of the country and different segments of the economy as necessary. If we see further lockdowns or further instances of economic turndown for certain industry sectors, well then that will help to increase the eligibility of those businesses to be able to receive the JobKeeper payment. So, it’s built in a way to deal with the different scenarios and different situations that we face across different states of Australia, tragically, at present, as well as across different industry segments, by targeting the program to need.

But we also are doing and sticking by the same principles that we’ve said all along – that our response to this crisis would be proportionate, would be targeted, and would be temporary. And what we’ve done today in announcing the extension of JobKeeper is give a lot of certainty to Australian businesses and to many employees, but we have also made sure that it is better targeted through an eligibility criteria that really focuses on those businesses who need it most and that it is indeed more proportionate by addressing the different wage scenarios of employees and their own eligibility for it.

Kieran Gilbert: On JobSeeker, the payment has been reduced by 300. The Prime Minister made it- made the point that JobKeeper had been reduced by 300, so JobSeeker will be brought down in a commensurate way, but do you accept that it can’t go back to what it was?

Simon Birmingham: Kieran, I think the Prime Minister addressed those questions in his press conference today. We have made those commensurate changes to JobSeeker, as we did to JobKeeper, but also, importantly, made other changes too to increase the incentive and the ability for people to undertake whatever work is available to them at present. We know that the economy is not functioning as it was before. We were so proud, as a government, to have helped Australian businesses build 1.5 million extra jobs across our economy and the opportunities that created for so many Australians. Sadly, COVID is having the reverse and a very destructive impact on those jobs. And what we now need to make sure is the incentives are there. Where there are just a few hours of work available, we want people to be able to undertake that. That’s why we’ve structured JobSeeker in that way. And in terms of what is required for Jobseeker looking beyond the end of the year, well, once again we’ll consider those steps in the appropriate way looking at all the evidence at the time.

Kieran Gilbert: Because it’s not just about equity, is it, it’s about the demand element to it. And you’ve got economists, the Business Council of Australia, the biggest companies saying the Newstart allowance, or now it’s known as JobSeeker, needs to be more than what it was in terms of demand, in terms of consumer demand because those individuals with not much to speak of spend everything.

Simon Birmingham: Well, we weigh up all of that evidence that comes before us and we’ve made the decision in terms of extending a JobSeeker supplement through until the end of this year that is providing, yes, some of that additional stimulus and economic support in terms of demand in the Australian economy, and that’s an important element of the assistance that that provides. But crucially we’ve done it in a way so as to try to minimise the disincentive that anyone may see to actually go out and work by changing other elements of this program so that we can hopefully see people take those few hours of work where they become available. And as we pursue our other reforms across the economy, whether they be other stimulatory measures such as the HomeBuilder program or whether they be the training measures to try to reskill people into other growth segments of the economy, we want to make sure that people are well placed to do that work and to take on those other jobs when- wherever they become available too.

Kieran Gilbert: My colleague Andrew Clennell reports today that you are the hot tip to be the next finance minister and leader of the government in the Senate. Would you be keen to take that position once Mathias Cormann wraps up in a few months from now, by the end of the year?

Simon Birmingham: Well, Mathias has done an extraordinary job as Australia’s longest serving finance minister right throughout the duration of our coalition government. He’s indicated that he is serving until the end of this year. I congratulate him on all that he has achieved, and anybody who knows Mathias knows that he will work flat strap right until the very day that he leaves that office, and so we have a finance minister who is 110 per cent committed to the job that he is doing at present. It will be up to the Prime Minister when Mathias leaves that office to determine who takes on that role, and I like all other members of the government serve very much at the pleasure of the Prime Minister.

Kieran Gilbert: We’ll watch with interest. Now finally, I’ve got to ask you about this other story which is of great interest to people across the ditch as well. New Zealand-Australia travel bubble, is this- has this been put on ice basically because of these outbreaks in Victoria and New South Wales?

Simon Birmingham: We have been working hard behind the scenes both at the New Zealand end and the Australian end to put in place COVID-safe practices through airports, border force arrangements, all of the different things that you would expect to be able to enable this travel arrangement between Australia and New Zealand to occur. But obviously, factors such as the outbreak in Victoria, concerns to make sure that New South Wales gets on top of the spread from Victoria, of elements of that outbreak, no doubt would weigh on the minds of New Zealand officials in their assessment of circumstances. This will take both countries to make a decision to move ahead. New Zealand is about to go into caretaker mode as well, so look, we want to see it open up where and when it can.

But right now, the priority in Victoria in particular is just to apply all assistance we can to turn around the devastating situation there, and in New South Wales, try to help the New South Wales Government ensure that the spread from Victoria doesn’t result in further growth in New South Wales.

Kieran Gilbert: Minister for Trade and Tourism, Simon Birmingham, joining me live from Adelaide. Appreciate it. Thank you.

Simon Birmingham: Thank you Kieran.