Fiona Wyllie:
Good afternoon.
Minister Sukkar:
Hi Fiona. Good to be with you.
Wyllie:
Thank you so much for your time. Let’s run through it, there is $17.6 billion dollars where is it going?
Sukkar:
So in essence Fiona we have got $750 payments that will go to around 6.5 million Australians, including over 2 million pensioners, people on disability support pensions, NewStart, in order to get a bit more consumer confidence into the market quite quickly, and that will start flowing from the 31st of March.
Wyllie:
What about Youth Allowance are they included in that?
Sukkar:
They are, yeah, payments of up to $25,000 for employers with a turnover of up to $50 million, we expect that will assist nearly 700,000 small businesses.
Wyllie:
How big a business do I have to be to get $25,000?
Sukkar:
In terms of turnover, you can’t have turnover greater than $50 million.
Wyllie:
So if I’m if not making much of a profit, and I am sole trader or have one person working with me?
Sukkar:
The way the payments will be determined is essentially through your PAYE obligations, so the tax that you withhold on salary and wages for employees. So provided you employ someone you will be able to, be eligible for a payment, for up to $25,000 that will occur instantly and directly, depending on whether you are a quarterly BAS remitter or a monthly. So that’s for businesses with a turnover of up to $50 million.
Wyllie:
So it’s up to that, what’s the minimum then, say a sole trader with one person working for them, what are they going to be given?
Sukkar:
If you employ somebody, and you have PAYE obligations the you’re entitled and you will receive a minimum of $2,000, so that’s the absolute minimum, for a business that’s employing two or three or four or five or more people you will get the full payment of up to $25,000. So, again, provided you’re employing someone and you are paying them and you are required to withhold tax for them through the PAYE system you will be entitled to that payment. We are also increasing the instant asset write-off from $30,000 to $150,000 and that’s available to businesses with a turnover again of up to $500 million.
A 50 per cent accelerated depreciation deduction and will flow through not just for the remainder of this financial year, but also next financial year, so essentially ensuring that if you are able to invest in plant and equipment or other things that make your business more productive or grow, you are able to write those things off much more quickly. And really the last large part of the package, is a $1 billion fund to help sectors who are particularly, and disproportionately, impacted by the coronavirus, and the PM and the Treasurer, you know, have today spoken about things like tourism, agriculture and education being those sectors, including geographic communities that are particularly hard hit, and in that respects you are sort of thinking about things like tourism and agriculture where export markets have been impacted.
Wyllie:
What about the cost to individuals who have to self-isolate or if they are quarantined with the virus? How do you ensure business will keep paying them that they will use the money on wages?
Sukkar:
Well, I think the whole point of this package is to ensure that small, medium and in some cases large businesses have the firepower they need to get through this tough period. The reality is most businesses have a great incentive to hold on to their workforce if they can because we think this is an economic issue which has flowed on from a health crisis, but it’s our hope that its short term and we will come through the other side stronger for it. So it’s really about giving those businesses the ability to hang onto those people in the interim period, get them through to the other side stronger for it. So it’s really about giving those businesses the ability to hang onto those people in the interim period, get them through to the other side, and these payments are not just the direct payments to the businesses but also the tax concessions and the cheques that will be flowing out to millions of Australians. We think that in combination, those factors will give those businesses the best ability to do that because if they’re employing them today, in a reasonably healthy economy and we get through this on the other side, they will need those employees and we are trying to get them to hold onto them in the interim.
Wyllie:
Barbara sent us this text. “Fiona, could you please ask your guest if aged pensioners are eligible for stimulus payment?” That’s true. “If so, per person or per household?”
Sukkar:
It’s $750 per pensioner so, yes Barbara is entitled to the payment and as I said, we are very keen to get these payments out the door as quickly as possible so whilst they’re commencing on the 31st of March, we will be seeking to get those paid to people like Barbara very quickly after that data.
Wyllie:
Is the government hoping through this $17.6 billion getting through to our economy that we will avoid a recession?
Sukkar:
Well of course. It’s intended to keep people in jobs, keep businesses afloat and the consequence of that you of course hope, Fiona, is that avoids a recession. But the objective here is about supporting people. Supporting businesses and doing it a way that is highly targeted. We don’t want the hangover. Once the health impacts and effects of Coronavirus are under more control and we get through to the other side, we don’t want to pay for this bill for the next ten years. So it’s highly targeted, its significant, it’s designed to be effective now, but then when the economy bounces back, the payments and the concessions, they dissipate at that point in time because the economy, we are confident, will pick up on the other side of this crisis.
Wyllie:
A few questions coming in. Paul says “my boss has three employees. Does he pocket the $25,000 or does he pass it onto his employees?” What is the idea of giving money to employers?
Sukkar:
Well of got a very clear example. Someone that I was speaking to today that employs eight people, he’s got a business that basically supports marketing and other productions for his customers. He employs eight people. He said to me that he was looking like he’d have to let three people go next week but because of the $25,000 payment he fully expects that – depending on how long this lasts – he will certainly be able to keep those three that he was thinking of letting go, for another three months as he gets those payments because again, it’s in his best interests to do so because again, when we get to the other side of this crisis, these businesses are going to need those great employees that they’re employing today. They employ them today for a reason – because they need them and this is about supporting them to hold onto those people in this difficult time and then when we get through the other side, those individuals haven’t suffered all the issues associated with losing their job. And the business also gains quite significantly because they don’t have the dislocation of having, on the other side of this crisis, having to re-employ people, re-train people, they’ve got a workforce who they’ve stuck with, they’ve been loyal to. I think that most small businesses in particular, will see the benefit of that.
Wyllie:
John from Young has been doing some mental arithmetic and is saying “does this mean that 20 per cent of the population is on some sort of benefit? His comment then is ridiculous.”
Sukkar:
I’m not exactly sure what that means.
Wyllie:
The $750 is going to how many million? Six million? And our population is 24 million?
Sukkar:
Yeah it will go to about six and a half million people so that includes people who receive any form of payment so that’s aged pensioners, Newstart, people on Family Tax Benefits. They tend to be the segment of the population who we know, given their financial circumstances, are likely to spend it. It’s their choice at the end of the day but they’re likely to spend it and that will have the flow-on impacts into the broader economy which we are hoping for.
Wyllie:
Ok, this is another questions:
We are a family farm business, we have no employee as such we do engage contractors for fencing, sheering etc. could you ask why our business would not be eligible?
Sukkar:
Well this is about supporting those who have an obligation to pay an employee every week and if you employ somebody you’ve got to pay them their salary whether you’ve got any customers or not and that employee employer relationship is one of great obligation as an employer.
You’ve got to find their salary every week no matter what’s going on. A contractor is obviously a different relationship. This is about keeping people in their jobs keeping them employed. As for a farming business that is engaging contractors, what we’re trying to do through the instant asset write-off or accelerated depreciation, is encourage those sorts of businesses to make those sorts of investments. Whether it’s the new fencing, whether it’s some form of plant and equipment that makes their business more efficient, more productive or more effective.
Because they will be able to write that off immediately rather than having to wear that deduction over a number of years.
Wyllie:
Ok, on fencing – I can understand that the star pickets and the wire, barbed wire or whatever you’re use, would be buying material, but would the contractors wages putting up the fence come in that same category?
Sukkar:
No they don’t but again, I don’t think anyone, and I’m certainly not going to do this on your show Fiona, a package like this, or the government cannot shield every single aspect of the economy from some of the issues that are going to be associated with the coronavirus. What we’ve tried to do is help small businesses and medium sized businesses.
We’ve tried to help those business ‘a’ with their employee’s ‘b’ with continuing to invest in their business. We’ve tried to help individuals by providing them stimulus payments to improve the economy we’ve also putting in place a fund, which I was remiss for not mentioning, a wage subsidy for 120,000 apprentices because we know that typically when a business gets into tough times, the employee’s that are in the most danger, so to speak, of losing their jobs are those with less experience.
So a wage subsidy to support 120,000 apprentices.
Wyllie:
Is this for new apprentices or existing apprentices?
Sukkar:
No, existing apprentices – to keep them in their apprenticeships because if you’re half way through your apprenticeships it would be devastating to have done that hard work.
The point I’m making Fiona is, you, I’m sure would not suggest and I don’t think anyone would suggest, that the government is able to shield absolutely every single aspect of the economy but this will go a long way.
Wyllie:
alright, just two last things, you’ll like hearing this. Actually three.
Greg says he’ll spend all of the $750 on groceries so I guess you’re happy there.
Penny from Old Bar says – what about self-funded retiree’s who’ve had thousands wiped off their superannuation funds, what do they get?
Sukkar:
Self-funded retiree’s and everybody, anybody that have invested in the property market or the share market, what they in the end get out of this package is a broader economy where the biggest issue and you look at the reaction of most industry groups today, the biggest issue we face is actually one of confidence.
It’s understandable because this is such a significant health issue. This package, I believe and the government believes, puts a little more confidence back into the market. That benefits all of us who in some way, shape or form. Whether it’s invested in Australia in self-managed super funds in the share market or whether it’s in property or in any other way.
That is the best thing we can do for self-funded retiree’s and indeed anybody who in some way shape or form invested in our country.
Wyllie:
And just lastly, I really appreciate you giving us your time to talk through the stimulus package.
Casual workers, the Attorney General Christian Porter earlier this week seem to think they would have already made provisions for a crisis because they get paid extra to cover sickness benefits and holidays and stuff but have you got anything to offer them in the package? Do casual workers get anything?
Sukkar:
Well the two big things for casual workers are the payments we’re providing to small business is to ensure they remain employed and they remain getting hours. Secondly, the PM made clear today the waiting times in respect of social security benefits if you were ill and unable to work that all of those waiting periods would be waived and you would be eligible for those payments immediately. Between ‘a’ trying to keep your job and ensure you keep getting hours and ‘b’ if you were to get sick being able to access those benefits and our social safety net immediately are the two ways we are supporting those employee’s.
Wyllie:
Thank you so much for your time.
Sukkar:
Thanks Fiona