• Transcript, E&OE
Topics: Economic stimulus package.
17 March 2020

Laura Jayes: Let’s go live to the Tourism Minister, Simon Birmingham, he joins us from the Gold Coast this morning. Minister, thank you for your time.

Mathias Cormann has just been very frank in telling us this morning that we need to brace for businesses to close and significant job losses. You’re really at the coalface of all of this, aren’t you?

Simon Birmingham: Indeed Laura. Look, these are unprecedented and incredibly difficult times for Australia’s tourism industry. One in 13 Australian jobs rely on the tourism and hospitality sector and those employers, those businesses and those jobs are all on the line right now. I spent yesterday, up in north Queensland speaking with dozens of businesses in Cairns who tragically are already laying off staff, are feeling the viability of their businesses threatened and I expect the same story to be heard here today on the Gold Coast as well. These are very much the centres of Australia’s international tourism activity, in particular they are communities who are heavily reliant and dependent upon international visitation as part of that visitor mix.

And yesterday I spoke to the Prime Minister multiple times to relay to him news from on the ground the impact to those businesses and I know that that is being taken into consideration for the Cabinet discussions that we will all be having later today.

Laura Jayes: And in last week’s stimulus package you did emphasise the need, and part of the package billions of dollars was thrown at business to try and help them get through this, this valley of death if you like and give them wage subsidies and support in that area. But as you’ve just said you’ve been in Cairns, people are already laying off workers — it simply wasn’t enough was it?

Simon Birmingham: Well Laura, certainly what we saw was that last week, and stepping up with $17.6 billion package that provides for small and medium sized businesses to receive payments of between 2000 and $25,000, depending on the size of their payroll. Had a $1 billion fund attached to it specifically to get out there to really heavily affected regions such as the ones I’ve been travelling through — that’s very welcomed by businesses and it’s making a difference in terms of their planning.

But clearly the impact and scale of this has just gotten even more severe as the last week has gone on. The additional travel restrictions imposed over the course of the weekend clearly have a profound impact as now basically all parts of the Australian tourism industry assume they’re not really going to see any degree of international visitation for the foreseeable future and that is a huge multi-billion dollar hit on those businesses and on our economy. And naturally that’s what threatens their viability and puts pressure on their desire to help their employees.

I’ve got to say, and the businesses I’ve spoken to very much the first thing they speak about is the care and welfare of their employees. They want to know that if they can’t keep hold of them, as much as they desperately are trying to, that ultimately the welfare, the social services and social security support that we have will kick in quickly. And we’re working hard as a government to make sure that people find the process of accessing Newstart and those essential benefits, that social safety net is there as quickly and effectively as possible.

Laura Jayes: Well, it is clear that you do need to scale up this stimulus package. How significant will that scale up be? And what more can you offer, particularly the tourism industry and those trade exposed industries?

Simon Birmingham: Laura, we’ll make decisions today and over the coming days about what are further needs to be done and we’ve always been clear that our measures are scalable in terms of seeking to provide additional support to business, we’re always clear that there was a budget to come, where we expected that further consideration may need to be made and that may well still be the case on top of anything done between now and the budget.

But ultimately we’re not going to be able to save every single business or every single job either. This is a terrible, terrible event that we’re dealing with, it’s something that has never been encountered before in terms of the type of economy we have now facing the scale of disruption that occurs. And those one in 13 Australian jobs very much are on the line here, and it’s not just in the tourism sector but of course right across events into arts, to sports, a whole range of services sectors as well.

So we’re trying to scale the response as effectively as we can to get support to ensure that critical businesses in particular are still there for the recovery stage. Because tough though the current times and circumstances are, there will be an end to this crisis, there will be a time where we want to come out of it and make sure the recovery is effective, swift and that we rebuild businesses and jobs and opportunities as quickly as we can. And that’s a key part of the planning we’re doing too and that will ensure that we main- that will require us to ensure that we maintain the viability of core businesses on the way through too.

Laura Jayes: Critical for the tourism industry is of course the airline industry. Is this government prepared to bail out the airlines, Qantas and Virgin, if necessary?

Simon Birmingham: So I’ve been speaking with both of the airlines and they both assure me at present of their viability that they each have significant cash reserves. Of course they are under immense pressure right now and they’ve been taking decisions to wind back routes, to be careful about the decisions that they make in terms of support for their employees. They’ve been responsible often in terms of providing credit to customers to be able to reschedule flights for later dates which will be important when we hit that recovery stage.

But importantly they both assure me of their viability, they both assure me of significant cash reserves at present. But we do need to note that when it comes to that recovery stage airlines are a critical piece of our national infrastructure as well and so of course, we will continue to engage closely with the airlines to ensure that we have them, for that recovery, in a condition where they are able to scale up as necessary too.

Laura Jayes: Cash reserves, but have they told you for how long?

Simon Birmingham: Those cash reserves are clearly under pressure at present and that’s why they’ve been taking decisions to scale back the degree of their operations and making difficult decisions in terms of the hours that their staff work and I anticipate sadly that there’ll be more of those difficult decisions from the airlines. But people should have confidence in both of our major national carriers.

But we are closely monitoring them and our regional carriers as well. There’s of course the need to make sure those airlines are there for the recovery phase but there is also critical requirement to make sure that we maintain connectively between key cities and key regional centres around Australia.

Airlines aren’t just important in terms of the tourism and travel sector, they’re also important in terms of the provision of critical social services into particularly remote communities. I’ve been speaking as well with the Transport Minister, the Deputy Prime Minister Michael McCormack, about those important issues as well. So not just the two big ones, but also making sure the regional carriers who service those regional centres are monitored closely.

Laura Jayes: Minister, the bottom line? Will you do everything you can to stop Qantas from going under?

Simon Birmingham: We need to have, and it is essential that we have, effective carriers able to service Australia through these tough times in terms of keeping key routes open but crucially, then able to scale up again when it comes to the other side. So not having airlines in Australia is not negotiable, but the airlines at present tell me and assure me they are viable, they have cash reserves. People within the constraints of the public health advice should book with confidence, should engage in those airlines with confidence. It’s important we maintain that public confidence in them and of course the Government in monitoring them closely.

Laura Jayes: But you would consider a bailout if it came to that?

Simon Birmingham: As I said, not having airlines in Australia is not negotiable for a country like us and would cripple our recovery so of course we have to be ready to respond as and when necessary. But the airlines, as private enterprises, are doing everything they can at present to protect their balance sheets, to respond to these emerging circumstances that are putting enormous pressure upon them. And in credit to them, Australia’s airlines are clearly far better placed than many others around the rest of the world who are already facing crisis situations in terms of their financial viability.

Laura Jayes: Minister, thank you for your time this morning live from the Gold Coast.

Simon Birmingham: Thank you Laura.

Laura Jayes: … and that beautiful beach behind you. So if you’re thinking about a holiday, not a bad place to be. Thanks so much for your time.

Simon Birmingham: Thank you very much.