Epstein:
Michael Sukkar joins us, he is a Liberal MP here in Melbourne. He’s the Minister for Housing and the Assistant Treasurer so he’s part of the Prime Minister’s economic team to try and save what parts of the economy that can be saved. And we’re joined by all of you on Facebook Live as well. Michael Sukkar, thanks for joining us.
Sukkar:
G’day, Raf. Good to be with you.
Epstein:
Before I get into some examples, Minister, do you have a good sense of how bad this is on the economy? People have said to me, it’s sort of a budget’s worth of revenue with something like a quarter of the economy grinding to halt. Do you have a sense of how bad it is?
Sukkar:
Well Treasury does have, and we regularly update where we think things are going. It really is deteriorating and has deteriorated at a rate of knots. If you look back at the first stimulus package which was announced on 12 March, $17.6 billion, it got worse pretty quickly which meant that we followed up a few days later with a $66 billion package and in between that, a $105 billion package to strengthen the banking system. So, it’s pretty bad, Raf. I think that’s probably saying the obvious…
Epsitein:
A quarter of the economy bad?
Sukkar:
It’s a very fluid situation. We all know that forecasting and budgeting is very difficult at the best of times, let along when it’s moving this quickly. We are, at this point in time, more heavily focussed on, rather than assessing where we think things may necessarily be in six months’ time, focussing our best efforts on helping get people through this period and as the Prime Minster said, building an economic bridge so people – and businesses – can get to the other side as unscathed as possible. That’s where our energy and focus is going but, we are looking at the macro situation but it is moving very quickly and when I say that, Raf, I mean on a day-to-day basis it’s changing.
Epstein:
I’m sure it’s hour-by-hour. Look, maybe – I know there’s a range of things you’ve done – if we can break it down into these two areas. I want to play you a little clip of Daniel who called us earlier, I’m sure this happens to a lot of people. You’re a business two weeks ago, you’re employing, I don’t know, six to a dozen people. All of a sudden, you’ve got no employees and very little business. I know there’s a tax holiday but if you’re okay to have a listen to Daniel. His issue isn’t the tax holiday it’s that they’re not actually getting any extra money coming through from the Government. Here’s Daniel from the café in Kyneton.
Guest:
I don’t have any money but I’m paying my fixed costs, I’m paying my rent, I’m paying my electricity, I’ve stood down fourteen beautiful staff, I’ve cancelled all my orders from my suppliers going forward – which is obviously a massive issue for them as well, and I feel for them because they’ve stood by me since day one.
Epstein:
Michael Sukkar, he is getting the tax holiday, he’s not getting a financial injection from the Government. How can the Government help?
Sukkar:
Well Raf, thanks and obviously I thank Daniel for calling in. What Daniel’s business will get will be a range of measures. Firstly, he will be able to vary his withholding tax obligations so that any tax that he’s paid for the first half of the financial year will be refunded to him because obviously his circumstances have changed so drastically, so that’s cashflow in the door. Admittedly it’s just tax that he has pre-paid but rather than what would ordinarily happen, he wouldn’t be refunded that for a very long time…interrupted.
Epstein:
Is it okay if I interrupt, Michael? He might’ve been paying PAYG or GST to say, July to December last year. That tax, he can get that back?
Sukkar:
Yeah, and the reason he was paying that is what the ATO does is that it almost makes an estimate of what your tax would’ve been. If Daniel was running a successful business that was making profits, he would’ve been withholding tax, remitting it to the ATO in the expectation that he’s a taxpayer. Now, when obviously circumstances like this occur, he won’t make a profit for the year, so therefore, he’ll get refunded all of that. So that’s a short-term, cashflow injection. You’ve spoken about the tax holiday. Yes, there’s absolutely no requirement for any taxes or charges to be paid. What though, he will get, as an additional amount – and you’ve said, I think Daniel said he had about 12 employees – he will receive in his two BAS statements, he will receive refunds – now it depends what he pays his staff, but assuming he’s paying them appropriately which I’m sure is the case – he should receive up to $100,000 refunded but that’s not his money being refunded that’s a grant from the Government, again, to give him some short term cashflow…interrupted.
Epstein:
He’s not employing them anymore; he’s getting that even if he’s not employing them anymore?
Sukkar:
Well because he’s employed them to date, he’ll get the maximum it sounds like based on his circumstances. I’ve always got to put that caveat but based on what I understand, he should get the maximum for his April BAS which is $50,000 and we designed it that way so that he doesn’t have to fill out a form, he doesn’t have to ring the ATO, that will just be automatically credited as part of that process and then if no longer has staff then obviously he won’t receive more after that but the payment has been designed to support those employers who are able to hold onto employees for the next quarter. It’s – in a sense – a recognition that they will be doing that – probably – eating into their own cashflows and their own reserves. So he will, at the very least, receive – as I said – a refund for his pre-paid tax, up to $100,000 as a grant from the Government, a full tax holiday and one thing that we negotiated – which was almost the first job that the Treasurer really threw himself into – was to get a complete holiday for small business for any of their debt from the big four banks.
Epstein:
But that’s separate, this is about the banks giving you a break on your loan.
Sukkar:
But the reason that the banks were able to do that was really because of the $105 billion injection into the banking system. So we’ve tried to press pause on as many of the bills – Daniel referred to fixed costs in his call – we’ve tried to press pause on as many of the fixed costs that he would have and in other instances, for other small business, they’re obviously negotiating pauses on their rental payments. So trying to press pause on the fixed costs, get refunded tax credits, get a grant from the Government to provide short-term cash flow to encourage them to hold onto their employees to get through this period, and finally, we’ve provided a 50 per cent wage subsidy for those who employ apprentices or trainees and I assume for the café that that’s not the case but it may be, so we are paying half of the salary of employers who keep an apprentice of a trainee.
Epsitein:
Michael Sukkar is with us, he’s the Assistant Treasure. So he, Josh Frydenberg, the Treasurer, the Prime Minister, Scott Morrison are trying to do what they can to stop parts of the economy grinding to a halt. My words, not theirs. Michael Sukkar, if you lose your job – the unions think 2 million people will, the Treasurer’s estimate on Monday was that 1 million people will – there’s a boosted job seeker payment. People aren’t getting that money for more than a few weeks. There’s any number of people posting online that they finally got through, went through the application process but they’re not getting any money for more than a fortnight. What do you say to those people?
Sukkar:
Well we’re trying to get money out the door as fast as we can, Raf. There’s no doubt that we’ve seen a set of circumstances that have meant that, no doubt, that all of the agencies have been overwhelmed. It’s sort of a 1 in 100 year event of whole industries being shut down and people thinking that they were going into work the next day and then not going into work. But luckily, that was timed with the second package, which has provided a whole heap of additional payments.
So, if you lose your job, Raf, or if you’re a sole trader or even – when I speak about the Coronavirus Supplement – even if you haven’t lost your job but you’re on indefinite unpaid leave, there’s a range of payments that will be made to you. So if you’ve lost your job, you are immediately – we’ve waived all wait periods – you are immediately entitled to the JobSeeker payment, $565 per fortnight. That will enable you – automatically, you won’t have to do anything – to receive a $750 payment…interrupted.
Epsitein:
But you do need to wait some time for that, don’t you?
Sukkar:
No, no. That’ll start next week. So from the 31st March.
Epstein:
That’s the supplement not the JobSeeker payment?
Sukkar:
The JobSeeker payment you are entitled to receive it immediately. So if you’ve lost your job, you’re entitled to the JobSeeker payment from the day that you lose your job. All of those waiting periods have been completely waived. That’s $565 per fortnight. You then receive, starting next week, the one-off payment, then the Coronavirus Supplement of $550 per fortnight which starts in April. So by that point in time, you’ll be receiving – give or take and I’ve always got to say that because there’s always different circumstances – but about $1,100 or $1,200 a fortnight is what you’ll be receiving as a fortnightly payment. You will have also received the $750 one-off payment and that is about twice as much as what you would normally get.
Eptein:
Michael, just a message on Facebook. “I’ve applied for JobSeeker, had a phone appointment. They tell us to stay home, but now I’ve got to go to an employment agency in person to sign paperwork and have been advised processing of at least fourteen days. Why aren’t we being told this?”
Sukkar:
I think those have been waived, Raff. I think those requirements have been waived certainly in the short-term because obviously that is not feasible. My understanding is that…interrupted.
Epstein:
Clearly, they’ve been told that. Is that a mistake?
Sukkar:
It sounds like it because the entire requirement, the mutual obligation requirements have been waived.
Epstein:
For everyone?
Sukkar:
Yes, for this period, yes.
Epstein:
Understood. Michael Sukkar, is with us. I do want to ask a bit more about the general approach to shutdown but some people are very concerned that the banks – now you mentioned the $105 billion, which I think is significant from last week…interrupted.
Sukkar:
It hasn’t gone to the banks it’s just firming up the whole system.
Epstein:
No, I understand that. People are concerned though and I’ll read the message. “Banks who are offering home loan customers a six-month period of grace, will capitalise the interest which means that you still have to pay the interest on the interest, in the future and the only winner is the bank”. How do you respond to that? Do you think that that’s correct?
Sukkar:
Well it’s about getting a repayment holiday, absolutely. At the end of the day, most Australians through our super funds, own the big four banks and you get a holiday, of course you do. The repayments are capitalised but you are not required to pay them during the period that you are in financial hardship. I think that that’s – particularly if we look around the world – no doubt it’s something that the Prime Minister and the Treasurer impressed very strongly upon the banks but credit where it’s due, they’ve come to the plate.
But the time value of money means that that’s very valuable to people to have that holiday and if as we hope, that we can get on top of that health issue and are able to bounce back on the other side and that means hopefully that people, particularly in industries that have been completely decimated, are able to get back into the workforce quickly then I think that they would be very grateful for that holiday and would be again, quite happy to be back in a job and to resume their ordinary existence and repaying their mortgage as you normally would. So, I don’t think there’s anything surprising about them being capitalised. I think having that holiday is something that is so important. I call it the pressing pause on these obligations that are very difficult for people to meet at the moment.
Epstein:
Unions want an 80 per cent wage subsidy. Is there any chance that the Government is going to look at that?
Sukkar:
We are providing direct support to small businesses and medium sized businesses as I’ve described. We’re providing a very, very strong social welfare safety net for people, even people who haven’t lost their job, as I’ve said. People who have been stood down are entitled to the Coronavirus Supplement. Sole traders, who might still be earning some income, they might be earning 80 per cent less income than they were previously who aren’t technically unemployed, are also entitled to the Coronavirus Supplement…interrupted.
Epstein:
So you’re not interested in a wage subsidy are you? You’re not going to go down the path that the unions want?
Sukkar:
We’ve gone down the path of a wage subsidy for trainees and apprentices because of the devastation of losing your job half way through a traineeship or apprenticeship. But the support that we’re providing in a different mechanism has been designed for this reason, Raf. We were very cognoscente of some of the mistake that have been made around the world and by previous Australian Governments which says that if you try to create new payment systems, if you try to create an entire new payment system, in order to deliver some form of relief…interrupted.
Epstein:
Well you don’t need to. The unions are saying that you could do it through the PAYG system.
Sukkar:
Our advice is clear, you would need to create new payment systems. That, I think, you know we only have to look at the experiences of MyGov and other things, you could see just problematic that could be so we’ve been very focussed on how you can provide the support through existing channels. Remember earlier I said that with Daniel, in order for him to claim his up to $100,000 grant from the Government, he doesn’t need to do a thing, not a form…interrupted.
Epstein:
Can I return to Daniel because he is listening. I’m just getting a message; I think that he’s been speaking to the producers. “There are no reserves, I’ve got nothing left. I need something now. It’s a small business. Tell him to call me and I’ll explain reality”. So, he’s clearly angry, I guess the message is…interrupted.
Sukkar:
I’m very happy to talk to Daniel. I suppose I’ve taken you through a range of measures that we think will provide that short-term relief. Is it going to provide short-term relief in every single instance, well I can’t put my hand on my heart and say that but in Daniel’s case, from what I’m hearing, he is at the very least, entitled to a $50,000 refund in his next BAS statement.
Epstein:
I’m not sure if you covered it but when would that money come?
Sukkar:
The next BAS is due on the 28th April I believe.
Epstein:
So six weeks or so?
Sukkar:
That’s the date, yeah. So that’s the existing schedule of payments but his refund of tax paid from June to December last year, that should be remitted immediately and the ATO has got some very good payment systems.
Epstein:
Within days as opposed to five or six weeks, I hear what you’re saying.
Sukkar:
Raf, most people I speak to get their tax return refund within three or four days these days so I think it would be within that timeframe.
Epstein:
Michael Sukkar, I’m really grateful for your time. I do want to address the broader significant issue. I know that you’re very focussed on the financial package. There’s clearly a debate between Victoria and other governments, I think actually the New South Wales Government, is also keen to shut the country down harder and faster than we have. What’s your concern about that?
Sukkar:
Firstly, I think that it’s always good to emphasize hear that decisions of the National Cabinet are consensus decisions of all the governments so there’s no ‘our position and other states positions’. There’s a unified, consensus position that is adopted and that means that in our case in Victoria, the Prime Minister and the Premier of Victoria, they are agreeing on whatever it is that is the outcome of that meeting. That is joint decision so I think that it’s very important for us to emphasise that, putting aside all the argy-bargy – and I can tell you that I’ve been as critical of the State Government as anyone of the years and they’ve been as critical of me over the years – we are absolutely unified in the decisions of the National Cabinet.
One important thing though that came out of last night’s meeting that sort of touches on your point, Raf – and I think it’s a very fair point – and that is that yes, there has to be unified national decisions but where the COVID-19 is manifesting itself in different ways in different states, it might mean that you need a tailored approach in one state or another. So, everyone knows that New South Wales and Victoria are the hardest hit and so…interrupted.
Epstein:
So, do you expect Victoria to go harder, sooner?
Sukkar:
Slightly more difficult measures in those jurisdictions would be completely understandable. In fact, we’ve already seen it. The Northern Territory very early on closed their borders. Why? Because they have very, very vulnerable, remote indigenous communities, for example, and I can assure you that one of the first things that the Health Minister did was to employ teams of people to make sure that they were protected to the greatest extent possible. So different approach for different states. It doesn’t mean that we’re disagreeing, it actually means that we’re just accepting that there’s a slightly different circumstance…interrupted.
Epstein:
So, if Victoria goes into lockdown, into a complete lockdown, you’re not concerned that other states might say ‘well hang on, why aren’t we?’
Sukkar:
Well I think that we should always make decisions that are based on the health advice and we know that that’s where we’ve been and I think that’s been an accepted position. I know that there are many medical professionals and other people who have different views like any profession but we’ve got the best medical professionals giving the advice to our governments and, you know, we don’t want to be caviller and you’ve got to put health and lives first and that’s what we’ve done. We were one of the first countries to put in a ban on travel from China. People said we were nuts, our biggest trading partner, what are you doing? We didn’t hesitate because we’re putting health first. However, we can never be caviller, Raf, about doing things that destroy somebody’s job and I can tell you the decision to shut one industry or another, you know our Treasury Department can say, ‘well, Minister, if you do that, here are the hundreds of thousands of jobs, almost within a number, that will be lost’. That’s not a decision that you take lightly. Again, we take those decisions where the health advice require it.
So, hospitality, all of those people who lost their jobs have because, sadly, those venues and places were seen to be the highest risk of transmitting COVID-19. But we can’t take these decisions lightly about saying that, and I know it’s been said on Twitter and on Facebook ‘just shut it down, just shut it down’. Well there are literally millions and millions of jobs that could be lost in doing that. And let’s not be caviller about what shut down means. Does shut down mean that the person that stacks your shelves, that delivers the food to the supermarket, that drives the train, that delivers the mail, where does it end? If people think that we can just lock everything down but I’ll just be…interrupted.
Epstein:
I think that people are just worried because if you overwhelm the health system, you overwhelm the social order if you get mass death. That’s the concern.
Sukkar:
And what we’re doing is very, very draconian. I have civil libertarians writing to me on a regular basis saying, ‘my god, the powers that you’ve got under the bio-security act are extraordinary’. Essentially, we’re advising and strongly telling people not even to have large gatherings in their own home. I mean, Raf, what we are doing is really significant. I have been in Canberra because we have been working on these economic packages but I understand from my wife that there are no cars on the road. People are now adhering to a set of circumstances that are extreme. So, we have moved a very, very, very long way but I don’t think that we should ever be caviller and say ‘lock it all down’ because if the health advice doesn’t say that, then I don’t think that that’s a prudent position to take. If the health advice ever changed, then the position would change.
Epstein:
Can I ask how you’re going? How are you finding this?
Sukkar:
Look, Raf, It’s not about me. It’s hard on so many Australians.
Epstein:
Are you sleeping well? Sleeping much?
Sukkar:
No, I’m not sleeping much. There’s obviously a lot of work to be done and there’s a lot of people counting on us to make the right decisions so that does weight very heavily on all of us.
Epstein:
Strength to you, Michael. Thanks for your time.
Sukkar:
Thanks so much, Raf.