RAFAEL EPSTEIN:
Michael Sukkar is the Assistant Treasurer and Minister for Housing, part of the Prime Minister’s team. Michael Sukkar, good afternoon.
MINISTER SUKKAR:
Good to be with you, Raf.
EPSTEIN:
The Prime Minister spoke about the economy being addicted to subsidies. Are you worried that the economy is too reliant on JobKeeper?
SUKKAR:
No but I think he made the point that he didn’t want the economy in the longer term to become addicted to subsidies and I don’t think any Australian would want that. Your editorial was spot on, we are spending an unprecedented amount, whether it’s JobKeeper, JobSeeker, cash flow for businesses, household support – but you can’t do that forever. What it’s there to do is to cushion that blow in the short term, it’s there to make sure we’ve got as many of our businesses through to the other side of the pandemic in as good a shape as possible and also to keep people connected to their employers during that period. So, these are all short term and we hope they are as short term as possible.
EPSTEIN:
Can I ask how short term? Is it possible to fine-tune JobKeeper before September? There are a lot of suggestions that if maybe a business is doing better, you wind it back before you said it would and maybe if a business is really smashed by the health restrictions you keep it going for longer than you said it would? That seems intuitively to make sense. Is that possible?
SUKKAR:
They are all reasonable points to make, Raf. I think the National Cabinet made the point early on that this was likely to be a six-month proposition from a health perspective and we are now six weeks into that. The point I have made publicly on a number of occasions this week is that we are six weeks into a six-month sort of ordeal, so to speak, and I think it’s a bit premature. We’ve ticked over 6 million employees that are now enrolled in JobKeeper. That’s about 860,000 employers who cover those 6 million employees, so it’s been taken up at a rate of knots…interrupted.
EPSTEIN:
Can you tell people what fine-tuning might be possible? I mentioned that broad idea, I think people do want to know, especially around the casuals…interrupted.
SUKKAR:
I don’t want to speculate, the JobKeeper programme that the PM, the Treasurer and I and others put together was deliberately designed for a six-month period and there’s a three-month review. As you highlighted earlier on, with a $130 billion programme that we literally put together in a very short period of time, we felt you needed that review at the midway point. So, Treasury will conduct a review to see how it’s travelling, is it doing what we thought it would do? Now I’m more confident that the JobKeeper scheme as it’s broadly put together, is doing the job because as I said, we’ve sort of hit the milestones that we thought we would as to 6 million employees covered. Now you and I would perhaps be having a different conversation today if you said to me ‘Michael, there’s only 3 million employees who are covered, it’s half what we expected’? In that case I would be saying to you ‘yeah, look there’s more of a likelihood of wholesale changes but given where it’s tracked, I think it’s largely tracking in a substantial way…interrupted.
EPSTEIN:
I don’t want to ask about a wholesale change. I think broadly people are pretty supportive and I think they support the idea that it was ‘get the money out the door fast, the focus was the economy and not equity’. Now people are turning their minds to equity…interrupted.
SUKKAR:
Raf, I’ll pull you up there. Equity was at the core of this scheme. I mean, we had commentators, we had the Labor Party and others saying, ‘well look at the UK, you should do what the UK’s done’, which is essentially a wage subsidy based on a percentage of your salary, 80 per cent of your salary. Now, the PM’s strong view was an Australian response to this was that we should have a flat payment for everyone because…interrupted.
EPSTEIN:
Can I ask you a question about the flat payment?
SUKKAR:
Yes, certainly.
EPSTEIN:
There are quite a few casuals…interrupted.
SUKKAR:
Sorry, Raf, would you agree that from an equity perspective that is…interrupted.
EPSTEIN:
Doesn’t matter what I think, I just ask questions, you can answer them…interrupted.
SUKKAR:
The most equitable, so equity is at the heart of the JobKeeper payment.
EPSTEIN:
So, can I ask an equity question then?
SUKKAR:
Sure.
EPSTEIN:
There are people who are working that have got kids relying on them, they might be single, they might be in a relationship but they’re casual. They’ve got kids relying on them, there are tonnes of industries like trucking where you don’t stick with an employer for more than a year, they’re not getting the JobKeeper. Then on the other hand, there are people for whom the part-time job is beer money. They go to university; they’re getting $150 a week before the coronavirus crisis and now they’re getting $750 per week. That doesn’t seem fair to a lot of people. Is that the sort of change you might look at?
SUKKAR:
Look Raf, I’d caution against allowing the exception to become the rule. I think that the $1,500 flat payment, yes, it was important from an equity perspective. We didn’t think people on really high salaries should be getting a much higher payment than people on lower salaries, we thought everybody should receive the same payment so from an equity perspective, that was important. We extended the scheme much more broadly than most other jurisdictions by including long-term casuals so people who have been casual employees for 12 months or longer. Now, most schemes around the world don’t even extend to casuals. Ours does, long-term casuals.
Now for those people who fall on the wrong side of that line – I can understand someone who has been a casual employee for eleven months and fifteen days and saying ‘well I miss out by two weeks’ – but those people, Raf, are entitled to the JobSeeker payment, which again, I think we rightly focus on JobKeeper because it’s the largest cornerstone of our response but JobKeeper is just one aspect of the entire economic response that we’ve put in place. JobSeeker, which is effectively a doubling of the old Newstart payment with the Coronavirus Supplement, now has 1.6 million people receiving about $1,100 per fortnight…interrupted.
EPSTEIN:
That’s something like double the number of people that were on Newstart, isn’t it?
SUKKAR:
So, those people who miss out on JobKeeper because they fall on the wrong side of that line – and you’ve always got to have a dividing line somewhere, Raff – they will get JobSeeker. You’ve also had over $5 billion go out in household support via direct, $750 cheques and there will be another round of those coming in July. We’ve had nearly $10 billion go to help small businesses with their cash flow boost to help not just those small businesses to stay alive but also to help those small businesses keep employing many of their employees, some of whom will be casual. But finally, for a lot of the people that you’re talking about, we really wanted to include sole traders, so people who…interrupted.
EPSTEIN:
A lot of sole traders still don’t know if they qualify. I’m sure that you’re aware of those information issues? There are tonnes who still aren’t clear if they qualify. Could you do more to help people understand whether or not they qualify?
SUKKAR:
Well look I promise you, Raf, through the ATO which has flexed up to an unbelievable level – we’ve pulled people from the Australian Public Service and from everyone into the ATO – is communicating very directly. Payments are taking about two to three days from application, so these are for sole traders too. Now, do I deny that there might be some sole traders out there who have to provide the ATO more information? Of course there are but the instruction that I’ve given the Commissioner is to err on the side of making the payment. So, if someone applies and they might have missed one question or one document but it looks legitimate, make the payment, and that is the way that the Commissioner is operating, and secondly, if someone makes a mistake and it’s a genuine, honest mistake, then that’s fine. The ATO is clear on that instruction from the Government.
EPSTEIN:
Universities. They argue that they’re technically eligible but not practically. A lot of employers in fact most employers calculate their loss of revenue over a month. Universities have to calculate their revenue loss over six months. What would you say to someone at a university? How would you explain to them that you don’t think that their jobs should qualify for JobKeeper?
SUKKAR:
Well no, we’ve been very agnostic as to the sectors here. So, we’ve said that if a business turnover of over $1 billion, it’s got to demonstrate that it’s seen a 50 per cent reduction. If it’s under $1 billion, you’ve got to demonstrate a 30 per cent reduction. So, the rules are pretty hard and fast…interrupted.
EPSTEIN:
But the rules changed for universities from one month to six months. They argue that that eliminated them from the scheme.
SUKKAR:
Well no, as for how you determine whether you’ve met the requisite reduction in turnover, yes, it depends on how you book your revenue, it also depends on the industry. So, if for example a university has lumpy revenue because you’ve got enrolment revenue that hits in one month or another…interrupted.
EPSTEIN:
But they’re smashed for the long-term, aren’t they? They’ve lost international students. How do they cope?
SUKKAR:
Having a different measurement point between industries is, I think, completely understandable. Our universities have received huge support, though. We’re funding them for pre-COVID-19 headcount as far as enrolment, so that’s the government subsidy that is provided. Now that’s a huge amount of money that we’re providing universities to make sure that they still get the government funding for that student headcount. That is not support that the Government is providing to any other sector, that is specific support for the universities sector. So, we’ve tried to set up a system, Raf, that is as agnostic as possible as to which sector that you come from but it’s obviously a very large and generous scheme…interrupted.
EPSTEIN:
I want to move on but only because I’ve got one of the top doctors that advisers your Government, I want to get to him. There’s a broad philosophical dilemma for the Government, I know that you’d rather spend less so that future generations are in less debt. What do you do about the cliff in September when a lot of that government support just stops? When do you start telling people about how that tapers off?
SUKKAR:
We’ve been really clear from the beginning, Raf, that these are all temporary schemes. What we’re working very hard to do, as you know – and you and I have spoken about this offline – is to get on top of the health issue as soon as possible and I think that we’ve exceeded every expectation there, I don’t think you’d want to be in any other country than Australia.
EPSTEIN:
That’s true.
SUKKAR:
Now that means that we can start meeting those economic time-frames in a much more reasonable way. We’ve been very clear that it actually gets to the point where it’s almost impossible for governments to keep funding these sorts of schemes at these sorts of levels.
EPSTEIN:
There are people like Jason Falinsky in your party that want to taper off JobKeeper for businesses that don’t need it, before September. That would make a lot of sense to people if the business is okay. Is that a possibility?
SUKKAR:
My sense, Raf, is that this programme will need to run its duration. We set it up for six months, that was our expectation. My sense is that every day those six months will be needed but there will be a review and if things change drastically and all of a sudden we go back to business-as-usual – which I think would be quite a heroic assumption – and the economy re-opened and international travel started again, then fine. But I don’t think that’s the world we’re in, I think the world we’re in is that we’re looking at staged easing of restrictions which means I think businesses are going to need this support for what the National Cabinet and the PM and all of the Premiers agreed was really a six month horizon.
EPSTEIN:
Really appreciate your time, Michael Sukkar. Thank you.
SUKKAR:
Thanks so much, Raf.