Interview on ABC Radio Adelaide, Mornings, with David Bevan
David Bevan: And a big welcome to Simon Birmingham, Minister for Trade and Tourism. Good morning to you, sir.
Simon Birmingham: Hello, David. Good to speak to you again and thank you for the opportunity.
David Bevan: Before we get- take calls — and Philip’s already there and another Phil has called in — you don't have to be Phil, to be called Phil to speak to the minister, that might help. Before we go to those calls, you are the Trade and Tourism Minister, in your specific area you have made an announcement this week regarding support for exporters. Can you explain who's getting the subsidies? And what's the aim here?
Simon Birmingham: So what we've focused on is our premium fishing and agricultural producers who, of course, produce far more food and products than Australia possibly eats — we produce enough food in Australia for around 70 or 75 million people and our businesses rely upon being able to export those goods.
Much of the premium stuff that is fresh and needs to get to market quickly goes out by airfreight, but around 90 per cent or more of Australia's airfreight is traditionally carried in the bellies of passenger aircraft. Obviously, those passenger aircraft aren't flying anymore and that’s created a real crisis point in getting that food out to the rest of the world so we have put in place a mechanism — budgeted up to $110 million — to coordinate and underwrite additional freight services out of Australia. We're going out to the market to find out which airlines can best meet our needs, giving priority where we can of course to the Australian carriers. And from that we're not giving those businesses, those farmers, a free ride — they will still have to pay for their freight as they usually would — probably a premium on top of what they usually would — but we've got to make sure the flights are available, that they're available at affordable rates for those farmers and fishers to be able to access so that we don't lose those businesses, jobs, and markets for the future.
David Bevan: So how quickly will this kick in? And how long will it last?
Simon Birmingham: Our first service we expect to get off to Japan possibly as early as next week — so we are moving quickly. I had a hook up, yesterday I think it was, with many major agricultural producers around the country and their representatives to take them through the process.
We have appointed Michael Byrne as the freight co-ordinator — he's a former CEO of Toll Holdings and Linfox, so he comes with a fair bit of experience in logistics and freight movement. He's going to work through, with my team in Austrade and the Department of Agriculture, to do the contracting with the airlines.
And any farmers out there or agricultural producers or those in the fishing sector who need information, they can register through the Commonwealth Agriculture Department's website. They can also give my office a call for details if they need to.
David Bevan: Okay. Phillip has called. He wants to speak directly to Senator Simon Birmingham, Minister for Trade and Tourism. Good morning, Philip.
Caller Philip: Good morning. How are you?
David Bevan: Very well, what's your question?
Caller Philip: My question is about the capitalisation of interest on loans that have been suspended for six months.
David Bevan: Yes?
Caller Philip: So effectively, the banks have come out and said well we'll suspend your mortgage payments, but I'm not so sure that people realise that the cost of doing that is going to be relatively significant and added to the loss of the loan. We've always sort of had to put our shoulder behind the wheel in relation to making a lot of changes and adapting and working harder and taking a hit. Do you think it not relevant that the banks could essentially freeze the mortgage rather just the payments?
David Bevan: Simon Birmingham?
Simon Birmingham: Well, thanks Phil for calling in. It does depend a little bit on some of the circumstances. So in a number of cases banks are providing for small businesses and the like loans that have been underwritten by government up to the value of $250,000 which have no repayments and indeed longer, potentially, repayment terms — depending on what's being negotiated there. So it's a little hard to speak generically across the board.
Of course, ultimately loans do need to be repaid, and that is the intention of them although the government is providing a massive degree of underwriting, you know, some of those mortgages [indistinct].
David Bevan: Yeah. But Simon Birmingham, Philip raises a good point. And we discussed this with Anna Bligh from the Bankers Association earlier in the week, and it became clear that Philip’s exactly on the money — that while the banks are suspending your loan, they're calculating the interest that they've foregone during that six month period and they're putting it on top of the loan when it reactivates. So they're not missing out, they're not missing it anywhere near the- to the degree as the landlord because the landlord might not get anything from his tenant — not zip.
Simon Birmingham: It's not always the case. As I said a number of business cases there are interest-free periods being provided as well. But where they are simply deferring payments, then yes, in those cases, interest may still be calculated and discussion then might be about extending the period of the life of that loan so that there isn't additional cost in terms of the repayments, but simply a longer period of time to be able to do so once circumstances recover.
Banks have stepped up in a reasonable way there, though. So many cases there are interest-free periods that the banks are providing in different circumstances. Because interest rates are at significant historical lows as well at present, so that any interest it is accruing it will be quite low compared to what would seem to be some interest rates sitting down at just .25 per cent .
David Bevan: Cornelius is next. Hello, Cornelius.
Caller Cornelius: Hello, David. How are you?
David Bevan: Very well. What's your question?
Caller Cornelius: My question for the Minister is, my employer is saying that they will not apply for the JobSeeker payments on behalf of their employees. And I'm just wondering, what is the process that an employee should take to ensure they actually get access to that JobKeeper payment?
David Bevan: Now Cornelius, why has your employer said: I'm not going to seek the JobSeeker allowance for you?
Caller Cornelius: Okay, so they said that they- if they register their interest, they will just be a dole payment service and that they don’t- in principle they don't believe that the government should be actually paying this to the employees. So I’m in a bit of a bind that I don't know where to go. I rang business- the government business department, they told me to ring the ATO or Fair Work. I rang the ATO and they understood my problem, they suggested I call Fair Work. I rang Fair Work and then, like Business and the ATO, they said they understood but they couldn't help me. So then I called Treasury,, and as with the Business, ATO and Fair Work, they said they said they understood but they couldn't. But they have a hotline number, they gave me the hotline number which put me back to Business.
David Bevan: Simon Birmingham?
Simon Birmingham: Cornelius, firstly — for your specific personal case — let's get your details off air, and I- my office can have a chat with you and work through your personal circumstances.
Caller Cornelius: Thank you, Minister.
Simon Birmingham: For the general point you raise, we can't force businesses to register for the JobKeeper payment. The JobKeeper payment is indeed about getting businesses to keep people on their books and continue to make those payments, so they’re based on what the government will pay through to that business.
Separate to the JobKeeper payment is the JobSeeker payment which the old NewStart and with additional support that’s being provided in terms of the coronavirus supplementary payments. That is there, obviously, to cater for circumstances like yours or circumstances of short-term casual employees who were not eligible for the JobKeeper payments. And in all of those cases there where we make sure that they're processed as quickly as we can through those Centrelink processes.
And the decision this week to put in place that huge JobKeeper payment that is to keep potentially 6 million Australians employed through their businesses with that payment is going to take a lot of the pressure off of Centrelink that we had seen and make their processing times much faster.
David Bevan: All right. Well, Cornelius, we’ll get your details and give them to the Minister's office. Let's go to McLaren Vale at 19 minutes past nine. Good morning Jane.
Caller Jesse: It's Jesse-Jean, David. Good morning David, and Minister. My question is in relation to the JobKeeper payment as well. We have a cafe and we have about 15 staff who may be eligible for the JobKeeper payment, but I've got a dilemma that I'd like some advice on. Some of these people are young people who've maybe worked 10 hours a fortnight. Some of them are in their 20s and they've been working, say, 50 hours a fortnight. How do I roster those people if everyone's going to be getting $1500 a fortnight?
Simon Birmingham: Hi Jean. Well thanks and these are some of the things we've had to decide to do just for the simplicity of putting in place a brand new scheme like this, that a simple flat payment for everyone who's eligible is the only way government can make it work in a quick and efficient way and get the help out the door, though it does create circumstances in terms of those long-term, part-time or casual employees who are eligible but have differential hours. But they're all going to receive, from a government payroll perspective, that flat $1500.
The rostering decisions from there are very much up to you as the business manager and owner. If you have additional work still, and that depends on whether you're running takeaway, or catering, or other services that you might still be able to do, if you have additional work beyond the $1500 worth of work that Government is paying, well then of course, presumably, you’d give those additional hours to those who have traditionally worked longer hours. But that the expectation is that in terms of the government money, that $1500 goes at a flat rate with consistent terms to all of those employees.
David Bevan: Jean, thank you for your call. Lots of text coming in. One person says: Minister I’m a sole trader, a tradesman, and my work is drying up with a lot of cancellations. Now, as I can’t find work it runs out, and I'm only eligible for about $225 a week. But my drug addicted neighbours that have never planned on working, they've had their wages doubled to $550 per week and a $750 bonus. Nothing has changed for them and now they're partying 24/7. I just don't get it.
Simon Birmingham: David, a couple of things there. Firstly, for sole traders, they are absolutely eligible for the JobKeeper payment, so they could be receiving up to that $1500 that we were just talking about — it clearly depends on what their income stream still looks like. So they’ve got to be able to show that there has been that downturn of at least 30 per cent in their overall business turnover and the impact then on the wages that they can essentially pay themselves. But if they qualify, they'll receive the same flat payment just the same as a business would for their employees — so, that help is there for sole traders.
But I take the point that some people who might have been long-term recipients of Social Security and safety net arrangements will receive the increase in payments and support that we're applying for everybody else. Again, and that is partly the price of a simplicity across the system; partly about the fact that here we are still trying to stimulate economic activity where we can by encouraging people – noting the difficulties of getting out and spending money — but encouraging people to get online, support local small businesses and spend that funds that the Government is giving them to see them through these times.
David Bevan: Your South Australian Liberal colleague, Alex Antic, says Australia should seek compensation from China for damage done by the pandemic. You’re the Trade Minister, is that feasible?
Simon Birmingham: They’re questions that I'm sure countries will take a long hard look at once we've gotten past the peak of the crisis and -
David Bevan: But is it even a reasonable question?
Simon Birmingham: Look, I think the compensation question is probably a long shot — too farfetched. The question of transparency and accountability and all of those matters, I fully anticipate will be the subject of any global discussions, any inquiry when we get to the other side.
David Bevan: Yeah. But is it an idiotic suggestion that you could somehow sue China for damage done to the Australian economy?
Simon Birmingham: There are some provisions in international health regulations that suggest that countries could take a claim against another country. I think, yeah, we would all have to work very closely together around whether that extends in the type of way that Alex has suggested there. I think what's going to be far, far more important for the future is making sure that we get to the bottom of questions about transparency, questions about accountability, to make sure that there are never such questions raised should another such virus come along again in the future.
David Bevan: Heather Ewart has written a piece for the Australian Financial Review this week, saying your government was elected on strong border control, yet where has Peter Dutton been in these last few weeks? And I appreciate he's had the COVID virus but he's been making a regular appearance, I think, on Ray Hadley's radio program. And where were- where was this tough border control when it came to cruise ships?
Simon Birmingham: So we have really clamped down progressively over time on cruise ships. There was the one very notable failure in terms of the cruise ship coming into Sydney, where there was a failure between New South Wales Health officials and the Border Force, and I expect all of that to be properly investigated later on as to how those people were allowed off of that ship without adequate testing of those individuals. But that's seen a serious clamp down from here on in. It doesn't matter whether you're coming by ship, by plane, by any other means, people are now into forced government regulated mandated quarantine for 14 days to make sure that there’s no repeat of that.
David Bevan: Yeah, but do you acknowledge there’s a gap between the Government’s rhetoric and action on asylum seekers compared with what you’ve managed to do with people on cruise ships?
Simon Birmingham: Well I don’t, David, in the sense that we were one of the first countries in the world — as the coronavirus outbreak occurred — to put travel restrictions in place. That was against the advice of the World Health Organization at the time, but we did it anyway. We put travel restrictions for people arriving from China in place ahead of countries like the United States and that is one of the reasons why Australia’s rate of transmission appears to be lower and better than many comparable Western nations at present — because we put some of those tough border control measures in place.
Now, cruise ships are a really wicked dilemma at present.. You know, today we’re going to have a plane land back in Australia coming in from South America, full of Australians who have just managed to get off a cruise ship there. And we've got about 120 plus Australians getting off a cruise ship, hopefully, in Florida who've been stuck on that for weeks.
My office has been getting plenty of representations from people worried about their loved one, their family members, Australians who are stuck on cruise ships around the world. And so, we've been working hard to try to get those Australians off wherever they are, repatriate them back here; put them firmly in quarantine when they do get here. But of course that also means that there's an obligation that we have to deal with the cruise ships in our waters too.
David Bevan: Chris has called to speak directly to Senator Simon Birmingham, South Australia's most senior member of the Federal Cabinet. Good morning, Chris.
Caller Chris: Good morning all and thanks for taking my call. It's a bit of a joke, Simon, when you’re talking about transparency when you won't even let us see our doctor's advice. But what I rang up about was the one in five Australians who this government’s kept in poverty for the last half a dozen years who have no access to the Internet. You keep telling us: stay at home, keep contact, just go on Scott family. Hey guys, there's no internet, we've got no internet — that's a luxury for one in five Australians.
David Bevan: Simon Birmingham, what do you say to Chris?
Simon Birmingham: Chris, well look, during these- during these times, we've seen both increase in payments for Australians on social safety net payments that we were just talking about before including those who've been on for a long period of time. Plus we've seen Telstra and- and other Internet providers step forward with more concessional generous arrangements for people to be able to access those- those online services during these tough days.
David Bevan: Minister should people take it for granted that these measures which have been announced over the last few days; free childcare, job seeker allowances, increases then the old Newstart, the old dole? Should people take it for granted that these measures will continue beyond the pandemic?
Simon Birmingham: No. They should not. The Government's additional spending has deliberately been structured in all cases to be temporary. One of the mistakes- and I don’t want to make this a political point — but one of the mistakes around some of the measures that were put in place in response to the global financial crisis was that the spending went on for years, if not indefinitely, after the global financial crisis had passed and it made the task of getting the budget back into the balance that much harder.
What's allowed Australia to be able to invest so heavily right now is that the budget was scheduled to come back into balance, but our debt was not as bad as many other countries, but we want to make sure that we're well prepared for future crises whatever they may look like. And so the spending measures are all deliberately temporary measures that will come off as the as the crisis abates just as the social distancing requirements will come off as the crisis abates. And we want to get things back to normal as quickly as we can and that includes the budget back to normal as quickly as we can too.
David Bevan: How are you going to claw back free childcare during an election year?
Simon Birmingham: Well, I would anticipate that it will be done well before we get to an election year. Here we're looking at a crisis that is certainly going to last for months, not weeks but it’s not, we hope, going to last for years and we're still more than two years away from the next federal election.
David Bevan: Nigel has called from Marino. Good morning, Nigel.
Caller Nigel: Good morning. Large companies such as Virgin are placing calls on governments for either loans. What- what's the likelihood of the loans not being given out but the Government taking action on the company? And what are the pluses and minuses of that?
Simon Birmingham: Well thanks- thanks for that. You're probably asking me to pre-empt the decisions of Government a little bit there. You know, there have been some of those big asks made. That said the Government has not only put in place things like the JobKeeper payment that will provide enormous support to companies like the airlines, we've also put hundreds of millions of dollars of support into the airlines by repaying certain fees and payments and charges they'd had to make since the start of the year to help them with their viability.
Now, in the case of big companies they also have a range of solutions available to them in terms of raising further equity themselves from their existing or other investment partners. Virgin has some big investors in it from overseas like Singapore Airlines, and Emirates, Chinese investors and it will be their decision as to whether they stump up extra equity. Government will consider the proposals that come to us but we also want to make sure that we treat businesses as fairly as possible and don't get unnecessarily into additional exposure for taxpayers.
David Bevan: Minister, we've got to let you go. But just to reinforce the point that Cornelius made earlier about trying to get the JobKeeper allowance, which he says he's entitled to but his employer won't apply for. Just leave you with one more text from a listener — a similar situation. My granddaughter, just 18, has worked as a Hills Hotel and waitress- table cleaner and full waitress since turning 18. The pub has new owners, they are reluctant to apply for the job save allowance — she is still getting one or two shifts a week. We believe she is entitled to and needs the $700- I think $750 to keep her commitments. If an employer won't apply on her behalf, where can she apply?
Simon Birmingham: So look, 560,000 Australian businesses have registered already for the JobKeeper payment. So firstly, listeners know the take up is- is enormous, businesses is firmly embracing and doing the right thing. Because one of the things that helps out with businesses is if they're not having to make a worker redundant, that means they're also not having to pay out the entitlements — the leave and other entitlements of that worker when they make them redundant.
So it helps businesses to essentially go into hibernation by accessing this payment and using that to pay their workforce and to keep them engaged, whilst also clearly helping the employee with the money. Happy to hear from any individual who finds himself in this circumstance, so please contact my office as we’ve said with Cornelius. But beyond that, that is why we have the JobSeeker payments.
David Bevan: Yeah. If your boss just won't come at it, you might end up on JobSeeker — which has been increased but it's not as generous as JobKeeper, and there's not much you can do about it if the employer won't play ball.
Simon Birmingham: Then that ultimately is- is the case. We can't force employers to keep people on the books when the business is essentially shut — this is an option for those businesses at least.
David Bevan: And later today we'll hear something regarding landlords, perhaps just on the commercial sector and the residential landlord tenant arrangements which are so complicated — perhaps next week?
Simon Birmingham: They are very complicated but the Victorian Government on behalf of the National Cabinet has been working up proposals that are being discussed by the National Cabinet today. That’s part of the sort of sharing of responsibilities each of the states has taken on board and clearly those residential tenancies matters are all legislated at a state and territory level. So it's appropriate that, in this format, where we’ve brought all the states together and put aside those party divisions across the states — they're collaborating and the PM is chairing those discussions pretty much as we speak.
David Bevan: Senator Simon Birmingham is from South Australia and Minister for Trade and Tourism for the federal government. Thanks for your time.
Simon Birmingham: Thank you very much, David. All the best to everyone. Stay safe.
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