MITCHELL
I spoke earlier to Assistant Treasurer Michael Sukkar about the stimulus plan. He was on a plane so I recorded the interview. Question from me is: If you get all this money, if you get $700, what do you do with it? Will you spend it or just stick it away and pay the bills? What will business do? What does business need? 96 900 693, 131332. Assistant Treasurer Michael Sukkar.
SUKKAR
Good morning, Neil. Good to be with you.
MITCHELL
I believe it's as big as $20 billion if you put in the $2 billion in health costs as well and most of it will be rolled out by the end of the financial year. Is that right?
SUKKAR
Yeah, that is right and then the Prime Minister's made clear, Neil, that this package, which is just under 1% of GDP, you know, just shy of $20 billion, is a package that is to be highly targeted, to be delivered quickly. We see this as a health crisis with significant economic consequences that needs strong action and targeted action but we want to ensure that assistance gets out the door very quickly and that's what we're ensuring happens.
MITCHELL
Well, it's an enormous amount of money to pack in to the economy in a short time. Now, who gets what? Who gets the one-off cash payment of $700? Where does that go to?
SUKKAR
Well, Neil, the Prime Minister and the Treasurer will announce some further details today which includes some direct payments what we have announced are payments, essentially, a wage subsidy for 120,000 apprentices to make sure that businesses can keep on their apprentices. We know, Neil, that in difficult economic times often it's the people with the least experience that are the hardest to keep on the books, so to speak, so payments of up to $21,000 or wage subsidy to ensure those 120,000 apprentices stay in the workforce. $25,000 or up to a $25,000 payment to small businesses and nearly 700,000 small businesses, we estimate, will be eligible, to ensure that they can get through their workforces through this quite tough period and $25,000, you know, we think is a proportionate and not insignificant payment to help those small businesses keep those employees on the books and, finally, we're increasing the instant asset write-off to businesses with a turnover of up to $500 million and individual items of $150,000 so, Neil, you know, really trying to ensure that small businesses have the capacity and the ability to continue to invest in their plant and equipment which we know does so much for the economy.
MITCHELL
We've got a lot of small business people listening; what do they have to do to get this assistance? How do they go about it?
SUKKAR
Well, the payment in relation to the $25,000 payment will be something that they are entitled to through their BAS so they'll either be a quarterly BAS submitter or a monthly BAS submitter and depending on their PAYE over either the last quarter and the next quarter on a monthly basis, that will be automatically entitled to an equivalent payment, so it's it's essentially based on their PAYE for the last month or the last quarter to ensure that they get the payment of up to $25,000, so we're trying to do it through existing delivery systems. We're not trying to create new processes and bureaucracy and systems. We want to do is as efficiently and as effectively as possible so small businesses don't have to go about filling out reams of paperwork to access this payment.
MITCHELL
That's the important thing I kept coming back to, the first dollars will be out there very soon.
SUKKAR
That's right, Neil. Our point and this has come up a lot in recent times when the Labor Party particularly trying to compare and contrast their approach; during the GFC we had.
MITCHELL
No, let's not let’s not go down that path.
SUKKAR
No, no, no
MITCHELL
Let's leave politics out of it.
SUKKAR
I'm not making a partisan point, what I'm saying is what we saw during that time is a lot of those payments bled over many, many income years and I think they would accept that that was a failing so what we're trying to do is make sure it hits the economy quickly, deals with the immediate issue and when we get through it we'll be in much better shape to come through the other side.
MITCHELL
What does that mean, the cash payments that people get will be and we're assuming its going to welfare recipients, will be immediate, all of it?
SUKKAR
Well, again, Neil, the PM and the Treasurer will announce it. I don't want to steal their thunder but it's fair to say we want that money flowing into the economy very quickly.
MITCHELL
That's what I was going to ask you.
SUKKAR
And to be on the right track.
MITCHELL
That's what I was going to ask you. Where do you hope that money will be spent? If your give $700 or whatever it is to a pensioner, what do you want them to spend it on? What is the best benefit for that money?
SUKKAR
Well, I mean, I suppose, Neil, we once we make the decision to make such a payment, we entrust that to the individuals who receive it and we don't want to give them too much direction but really what it's intended to do is to underpin some consumer confidence so people are able to do those things that they may not otherwise be able to do, that support jobs in our economy, whether it's through retail, through hospitality, through you know, any manner of their own, sort of, personal consumption.
MITCHELL
Part of the problem here is in this environment, with the public mood at the moment and the warnings they're getting, even with $700 in the pocket they probably won't want to go to a restaurant. They probably won't want to go shopping. I mean, the streets of Melbourne was like Christmas Day yesterday. Nobody there. So you give them all the money, it doesn't mean they're going to spend it.
SUKKAR
Neil, look, you make a very good point. This is very different to other circumstances in this in the sense that this a significant health issue that has corresponding economic ramifications but it's primarily a health issue, you're right. I suppose what we've been trying to do from the beginning is get out in front of this early, try and provide the Australian public with as much assurance as possible whilst also being really up front and honest with them about what the challenges are but I don't disagree with you, Neil. There are certainly big issues with the confidence of people getting around freely and, you know, I've seen it on the roads and in the airports as well, Neil.
MITCHELL
OK, will there be more if needed? If necessary. Is this the beginning?
SUKKAR
Neil, look, the Prime Minister's made very clear this is what we believe is necessary to get us through this short-term challenge but, you know, this is moving quickly, it's not a stagnant challenge and, you know, we wouldn't rule anything out as far as trying to achieve the objectives that I said at the beginning of this interview which is to keep businesses afloat, to keep people in their jobs and to keep the economy ticking over and that will guide us in any additional, if necessary, responses.
MITCHELL
We'll hear direct from the Prime Minister and the Treasurer when they make their announcement mid morning but I was talking yesterday about economic patriotism. It's time for economic patriotism where big business will give people a bit of latitude if their bill is due, where the unions stop campaigning, where everybody gives a bit. Do you think we can go down the path where the banks give us a mortgage holiday, that sort of thing? Do you think we can go down that path?
SUKKAR
Neil, I think you make a very good point and someone like yourself, you know, will be an important person in, sort of, carrying that flame. I think the PM has spoken about patriotism in a time when we pull together and that means pulling together isn't just, sort of, a nice slogan for businesses or for individuals, but it means that where in our own lives, or from a business perspective, we're able to give a break to a customer or a supplier and, you're right, whether it's a bank or an insurance company or whoever it might be, now is absolutely the time to do the utmost to see each other through what we think is going to be a short-term issue which means everybody not just the strong amongst us but everybody gets through this gets through to the other side in a shape that means they are able to recover bigger and better because we know the fundamentals of our economy, the fundamentals of our country are good and we want to make sure that we get everybody to the other side as unscathed as possible. So, Neil, I commend you and I agree and it's certainly something that the Prime Minister has spoken about and I hope will continue to do.
MITCHELL
So in colloquial terms, cut each other some slack?
SUKKAR
Absolutely right.
MITCHELL
Thank you. Sorry?
SUKKAR
Absolutely right, Neil. I couldn't agree more.
MITCHELL
Thank you very much for your time.
SUKKAR
Thanks, Neil.
MITCHELL
The Assistant Treasurer Michael Sukkar.