Patricia Karvelas:
I’m joined now by Michael Sukkar, the Assistant Treasurer and Minister for Housing. Welcome to the program,
Minister Sukkar:
Hi Patricia. Good to be with you.
Patricia Karvelas:
The six week shutdown in Melbourne and the level three restrictions in regional Victoria, is expected to cost up to $12 billion in the September quarter alone. What does that mean for the national economic recovery?
Minister Sukkar:
Well there’s no doubt, Patricia, that it slows the national economic recovery. As you highlighted in your introduction, the cost nationally is $12 billion. We expect, the Treasury expects, that Victoria will wear about 80 per cent of that total cost and the broader costs outside of Victoria are to do with confidence but also the supply chain impacts. We’re not just parochial Victorians when we say this but Victoria is an economic powerhouse in this country. So much of the economic activity that occurs, not just on the eastern seaboard but nationally, does to some degree, filter through Victoria. So, the impact more broadly than Victoria is in the billions and that is also going to have an impact on unemployment and as the PM said earlier today, we now expect unemployment to peak rather than at 9.25 per cent, but closer to 10 per cent, as a result of moving into these additional restrictions.
Patricia Karvelas:
20 per cent of that cost will be outside of Victoria. Which state is expected to take the biggest hit?
Minister Sukkar:
I don’t have a breakdown of those numbers, Patricia. I think that it’s probably fair to say that the two biggest areas that will be hit will be New South Wales and Queensland but having said that, you’d also expect our island neighbours in Tasmania, who are heavily reliant on Victoria, to be heavily impacted too.
Patricia Karvelas:
Real unemployment could now peak at 13 per cent. Does that change your calculations around the tapper dates for the JobKeeper and JobSeeker programs, or should it? Given now that the economic situation is so different, should those tapper rates be delayed?
Minister Sukkar:
Well I don’t think that they will and I don’t think that they should. I mean the changes to the JobSeeker and JobKeeper arrangements have taken into account what have been fairly variable projections. Whilst no one could have foreseen Victoria or metropolitan Melbourne, moving into stage four lock-down, there is a general level of flexibility in the program. So, for example with JobKeeper, we’re expecting that more than half of all JobKeeper recipients will be based in Victoria, and that’s just a normal function of the scheme in that it will obviously be there to help those areas of the country that are suffering more economically and Victoria will no doubt be in that position. The JobSeeker program operates in the same way so it will provide additional support to the places with higher unemployment. In that sense, I think that the broad parameters and tailoring of the program are right. But having said all of that, Patricia, as I say to you all the time when we chat, is that there’s no set-and-forget here and we’ve got to maintain maximum flexibility with our policy responses, depending on the curve balls that come out of left field.
Patricia Karvelas:
All right so if the curve ball gets even worse, will the case be made for changes to those programs because the changes that were announced to JobKeeper and JobSeeker were before we saw stage four being announced so it was really announced under a different premise?
Minister Sukkar:
Well not entirely although I would just say that I’m trying to avoid making definitive statements…interrupted.
Patricia Karvelas:
Because you’ve done that before, haven’t you?
Minister Sukkar:
Well I make that mistake far too often, Patricia. But I think that it’s wrong to make definitive statements at times like this because it is very, very difficult to predict anything. We’re doing a huge amount of work in the lead up to the Budget in delivering a Budget that will take into account what we expect to be the economic reality but it is moving very, very quickly. So I’m not trying to be evasive but I think that it would be foolish to make really definitive statements.
Patricia Karvelas:
Look I know that some of your Victorian colleagues are concerned that this stage four lock-down is too oppressive or too much. Do you share that view?
Minister Sukkar:
Well no, I think that where we find ourselves with over 700 cases on multiple days now, that a significant response is required. I think that there’s no doubt that there’s issues today with a huge amount of uncertainty in the business community – small businesses, medium businesses, large businesses – on what the state of play is for them. I have no doubt that the State Government is working very hard to try and clarify those arrangements but I think that it’s fair to say that the uncertainty out there is quite crippling for many areas of the economy. I think that the bigger source of frustration for people is the fact that Victoria is the one State in this whole country that finds itself in this position because of what have clearly been some catastrophic failures – hotel quarantining being the major one – that has put us in a position where we’ve had to respond or where the State Government has had to respond with these very, very oppressive arrangements. But I think that after those mistakes were made, that put Victoria – unlike the rest of the country – in this terrible position, that the only real response that was available to get the numbers down was a very, very hard lock-down.
Patricia Karvelas:
Can you confirm reports that the October budget will contain measures to boost housing construction but it won’t include investment in social housing?
Minister Sukkar:
Well, again, I won’t be announcing what the Budget will contain on your program. I think that what you can expect from us is consistency in a number of objectives. Firstly, home ownership is, I think, a hallmark of the Morrison Government – whether it’s the First Home Loan Deposit Scheme, the First Home Super Saver Scheme or the HomeBuilder program – but not just home ownership but the hundreds of thousands of Australians that are employed in building those homes. The tradies onsite, the timber mill-workers who make the frames and trusses. The manufacturing workers who make the bricks and the tiles and the glass – protecting those jobs will be very important. But of course, ensuring that, to the greatest extent possible, every Australian has a safe and secure and stable roof over their head. That’s an objective in every Budget.
Patricia Karvelas:
But you’ve argued that social housing is a state responsibility but the Federal Government is doing all kinds of things that it doesn’t usually do right now. Isn’t this a smart area to invest in given the kind of dividend you get, bang for your buck that you get, when you put it into social housing?
Minister Sukkar:
Well a couple of points. Quite to the contrary, I’ve never argued against the Government invested in social housing because I think that the Morrison Government federally has probably stepped into this space more than any Federal Government before. When we established the National Housing Finance and Investment Corporation, which has channelled $1.2 billion into social and community housing…interrupted.
Patricia Karvelas:
Okay, but that’s borrowed money – but I understand at a low rate…interrupted.
Minister Sukkar:
No, no. Some of its grant funding but yes, a lot of it is concessional…interrupted.
Patricia Karvelas:
It is. I know a bit about the program but I know that it’s your portfolio area but it is, a lot of its borrowed, concessional money, right? But I’m talking…interrupted.
Minister Sukkar:
I just use that as an example to say, Patricia that we are heavily in the space. What I think that a fair point to make is that if you look at the HomeBuilder program, for example, it has an estimated Treasury cost of about $700 million. What it does is it unlocks anywhere from between $12 to $15 billion of economic activity because of that private co-investment that that money unlocks and that’s why the HomeBuilder program, we felt, was so important – to protect hundreds of thousands of jobs. Social housing, as a worthy policy objective, we don’t disagree with at all. But…interrupted.
Patricia Karvelas:
Okay but the Master Builders Australia and the Property Council of Australia are calling for investments in social housing. Do you accept that the recession means that there will be a need to build more?
Minister Sukkar:
Well we do invest in social housing…interrupted.
Patricia Karvelas:
Yeah, I’m asking the ‘more’ bit. That’s the key word in my question. The ‘more’ bit.
Minister Sukkar:
Well, Patricia, we have already invested more in the last two Budgets and some of that money still has to be spent. So we’ve just recently approved $116 million out of the National Infrastructure Facility which sits within the (National) Finance and Investment Corporation but there is still more than $700 million there to be spent.
Patricia Karvelas:
But are you looking at different options? Is that on the table?
Minister Sukkar:
In this Budget, probably to a greater extent than others – and it’s consistent with what the PM has said in the past – we’re looking at a number of these things with fresh eyes and I think that the ambition, just generally speaking, for a Budget like this is obviously greater in tough economic times than normal because we are going to have to do some pretty inventive things to try and get as many people back into jobs and get the economy firing up again.
Patricia Karvelas:
Will you travel to Canberra for this month’s sitting of Parliament and will you quarantine for two weeks?
Minister Sukkar:
I think that it’s really important that I be there, particularly as a Minister and being accountable to answer questions in Question Time but also for a myriad of other things that we do in Parliament. So, yes, I do intend to be there and I will of course follow all of the quarantine requirements that are attached to that.
Patricia Karvelas:
Are you hoping that Parliament goes virtual so that you won’t have to do that anymore?
Minister Sukkar:
To be honest, with a young family, yes, I would probably like that. But we’re trying to do these things in short time and…interrupted.
Patricia Karvelas:
Make it happen.
Minister Sukkar:
Well, Patricia, if you can beat the drums and make it happen, my wife and my two young boys would be very grateful.
Patricia Karvelas:
Well, I’m not the Prime Minister, Michael, although I should be, probably.
Minister Sukkar:
You have a lot of power though, Patricia, so that’s why I say that.
Patricia Karvelas:
Me?
Minister Sukkar:
Of course you do. But I’ll be there and of course I’ll follow the rules to make sure that I can attend in a way that ensures that I maintain the safety for everybody else.
Patricia Karvelas:
Michael Sukkar, thanks for joining us.
Minister Sukkar:
Thanks so much, Patricia.