SUZAN HOURANI:
On the line joining us is Assistant Treasurer and Minister for Housing, Michael Sukkar, to talk about the Government’s response to Coronavirus including the support available to for Australian workers and businesses. Good morning, Minister. How are you?
MINISTER SUKKAR:
Good morning Suzan, nice to talk to you again.
HOURANI:
Thanks for your time. Minister, let me first congratulate the Australian Government on this latest initiative to keep employees connected to businesses by announcing our own hibernation strategy which is of course, $130 billion worth of subsidies. But, Minister, there are many business owners that run their family business under a family trust. They do not draw a wage, they pay all the bills and see what is left. Are these people eligible for JobKeeper?
SUKKAR:
Well, Suzan, the way that JobKeeper is being structured is that, provided you have an employee-employer relationship regardless of the structure – whether it’s a partner or a company or a trust or whether you’re a sole trader – it’s the employer-employee relationship that’s important as far as the JobKeeper goes. Provided that that was in place on the 1st of March, you are eligible. In addition though, we are providing – quite separate from the $130 billion of support through JobKeeper – spate support through the tax system. Grants of between $20,000 and $100,000 for businesses as well. So, we’re trying to do everything that we can to provide direct support for businesses and as you said in your introduction, Suzan, with the hibernation strategy, we’re also trying to remove as many of the fixed costs that businesses might have. So, whether that’s freezing repayments on their loans, freezing all tax obligations and there are no payments due to the ATO between now and the 30th of June so we’ve put a freeze on all tax obligations and of course we’ll be announcing shortly, some measures to assist with tenants and landlords who are struggling to pay their rents.
HOURANI:
When is that?
SUKKAR:
We’ll announce that this week. There’s obviously still some work to be done but we’ll be announcing a position on how we can help tenants who are in trouble, without making landlords bear all the costs of that because landlords just like tenants, also have their bills. If a landlord has a tenant who is unable to pay their rent, that obviously cascades and effects the landlord so we’ve got to be very sensitive as to how that happens.
HOURANI:
Yes, that will be on the weekend?
SUKKAR:
I think it will be this week, to be perfectly honest.
HOURANI:
Fair enough, fair enough. What happens if someone has multiple jobs? What are they supposed to do?
SUKKAR:
Well if you’ve got multiple jobs, you nominate one employer who is your nominated employed for JobKeeper. So, you only get one payment, you don’t get two but you nominate the one you want for the purposes of JobKeeper provided that the employer nominates you as well as one of their employees that is the person. I had a phone call from a good friend of mine whose got a couple of part time jobs and they asked me that exact same question and they will have to pick which of those two or if you’ve got more than that, pick which is your nominated employer for the purposes of the JobKeeper payment.
HOURANI:
We understand that the Government is paying a salary of $1,500 per fortnight for eligible JobKeepers. Do employers have to make superannuation payments on top of the JobKeeper subsidy?
SUKKAR:
That’s a very good question. No they don’t. So, the $1,500 per fortnight excludes the super guarantee. We felt that for the purposes of the distress that the economy is facing as a result of COVID-19 that we didn’t want to put that additional obligation on to employers. This is a $1,500 taxable payment, but there’s no superannuation guarantee.
HOURANI:
So it’s taxable?
SUKKAR:
It is taxable to the employee, absolutely, live every other amount but employers do not have to remit superannuation guarantee on top of that.
HOURANI:
Are sole traders able to get access if they meet the criteria? Sukkar? Absolutely. So, we’ve designed this very deliberately to ensure that sole-traders, people who are self-employed are also able to nominate themselves. So, if you’ve got a small business and it’s just you and you’re operating on your own, I’d encourage them to get on to ato.gov.au. All you need to do is put some details in including your ABN to claim an intention for JobKeeper and then that will get the process started with the ATO.
HOURANI:
What is the comparable period with of reduced revenue of at least 30 per cent?
SUKKAR:
So, it’s year-on-year, whichever period you’re using – say we’re using March, for example – the comparable period is March 2019. Obviously there are lots of season businesses that have seasonal income so it’s perhaps not accurate to compare month-on-month so it’s a year-on-year comparison. So, March 2019 to March 2020. If you didn’t apply until April, then it would be April ‘19 vs April 2020 and so on and so forth.
HOURANI:
Some businesses might think that that this is complicated especially the ones that started to work recently?
SUKKAR:
If a business is less than twelve months old, they obviously can’t use the year-on-year basis so they’ll have to use some other measure but the way that we’ve structured this programme is that, in a sense, the employer will declare, they will self-assess, that they have had the requisite drop in income. It’ll be up to them to prove that that’s the case but if they can prove it and if they’re a business that isn’t yet twelve months old but they’re able to establish that there income has dropped from the period that they began or from a month-on-month, then they will be entitled to use that. There are still some details, Suzan, that we need to finalise in the final legislation, which we’re drafting at the moment and what we’re trying to do is make sure that the legislation is as flexible as possible to make sure that we deal with some of those sorts of cases.
HOURANI:
Do you have a figure of how many businesses have registered so far?
SUKKAR:
We’ve had about 355,000 businesses register so far, since the announcement.
HOURANI:
How many are you expecting?
SUKKAR:
We’re expecting – and Treasury have forecast that it will cover about six million employees – so how many businesses that is we don’t exactly know but we think that – broadly speaking – this will be taken up by six million employees. I must say the numbers of businesses registering for this have been growing by the thousands by the hour. So, even though it’s at 355,000 at the moment, I expect that by the end of the day it will be much higher.
HOURANI:
Minister Michael Sukkar, there are around 1 million people employed in the not-for-profit sector. Are charities and not-for-profits eligible for the JobKeeper as well?
SUKKAR:
They are eligible. We’ve been very, very sure to include charities and not-for-profits in all of the programmes so whether it’s the cash flow boost for business of $20,000 to $100,000 payments and including JobKeeper, we really wanted to make sure that the charities and not-for-profits are included because you’re right, there are a million Australians who are employed in those businesses and they perform a very crucial role in our community, in our society and in some parts of our economy as well.
HOURANI:
Yes. A businesses such as ours is a free-to-air service that employs many people and has been a contributing business for over 18 years. It’s a commercial entity, not taxpayer funded that is critically important to its listeners and viewers as well. It profits from advertising. JobKeeper helps the employees but this business in particular, survives and profits from advertisers. This business and many like it are made up of dedicated staff but also has electricity, rent, communication bills, land tax and other expenses. Advertising has dried up for, we don’t know how long. The Federal and State Governments are not advertising at the moment, so far. What help is there for businesses like us?
SUKKAR:
Well you are absolutely eligible, it sounds like, for the JobKeeper support for your employees. You’re also, it seems to me, would be eligible for the cash flow boost for business of between $20,000 to $100,000 boost that you can apply for from this month. You may also be entitled to all of the other deferrals that I spoke about. Whether it’s deferrals on any of your tax obligations, whether it's deferrals on your loan obligations. As far as advertising revenue goes, you know your business much better than I do but what we have done by putting a floor under the strength of the economy through the JobKeeper payment - $130 billion into the economy – we are hoping that that underpins some strength that means that you have more advertisers, more healthy businesses that are likely to want to advertise as well. So there’s a range of support there for organisations such as Radio 2morrow, you do a wonderful job. I know that most of my family are very avid listeners of yours.
HOURANI:
Thanks for that, my regards to them. After the dust settles and we get through this crisis, do you think that Australia can afford to fund not one but two public broadcaster? We are the only country in the world that funds two public broadcasters. Of course the ABC should cater for all Australians. Do we really need SBS with all the digital options that we have available today?
SUKKAR:
Well look, Suzan, what I would say is that what we don’t want out of the COVID-19 economic crisis is less voiced in the media and what we don’t want is just to be left with two public broadcasters because everybody else has gone out of business. That is absolutely the worst situation and you’re right, we have the ABC and SBS who are both publicly funded which means that they are largely unaffected by issues in the economy whereas organisations like Radio 2morrow as you’ve pointed out, you rely on a strong economy because you rely on people to advertise with you and what my assurance to you is that we are very keen to ensure that we don’t have fewer voices in the media and that we’re left with just public broadcasters. That would be a terrible situation for us. I know that Minister Fletcher, the Communication Minister, is working hard to see what the Government can do to assist.
HOURANI:
You announced a few days ago that Australians in financial stress due to COVID-19 can access up to $20,000 in superannuation. How is this done? Is there an eligibility criteria for this?
SUKKAR:
So, you need to be in financial distress…interrupted.
HOURANI:
I have to prove that?
SUKKAR:
Yeah, you have to have lost your job and have had a significant drop in income. But again, you self-assess that so the criteria is quite simple there. You can apply for up to $20,000, so $10,000 this financial year and $10,000 next financial year. So, you could draw out $10,000 from the end of April because the scheme will open in a couple of weeks’ time and then you could pull out another $10,000 after the 1st of July, so that’s $10,000 in each financial year. What we’re saying to Australians is that that’s your money and money that has been put away for a rainy day, so to speak, should be able to be called upon by Australians because I think that today is that rainy day.
HOURANI:
Yeah, especially the most vulnerable maybe, low paid families might use it and then this will impact their ability to live in dignity in their retirement.
SUKKAR:
Well we trust people, we trust that people can make decisions about their finances better than the government and this is one of the fundamental aspects I think, of Coalition Governments and that is that we believed that people are smarter enough and wise enough to make decisions in their own best interest and if it is their money, to the greatest extent possible, the government shouldn’t tell people how and what to do with their own money. If you’re in financial distress now and you aren’t given this lifeline, your retirement could be much worse because something could happen to you now that is financially much more destructive than if you were to draw that money out and it was to really provide relief at the moment so we trust that people can make sensible decisions about their own finances. We have fundamental faith in people’s ability to do that and let’s remember that we’ve capped it at $10,000 for each financial year, we’ve not said that you can pull out all of your money, we’ve said that you can pull out $10,000 and $10,000, a total of $20,000 which we think strikes the right balance.
HOURANI:
Fair enough. Minister, a lot of my listeners are asking how long will these lockdowns last? I said to them that I’ll ask this question, I will refer it to Minister Sukkar.
SUKKAR:
Well I honestly can’t answer that question. It seems, and I don’t think that we should get too excited, but it seems that we’re starting to see some of the benefits of the restrictions so far with the rate of growth of new cases having somewhat slowed. Of course, and it goes without saying, our view is that we want these restrictions to be in place for as short as possible but at the same time, we have an overwhelming obligation to protect people’s health and that’s what we’ll do. But I can assure you that the National Cabinet, I don’t think would be having these restrictions in place for a minute longer than they need to.
HOURANI:
Any final messages to our listeners from the Arabic community?
SUKKAR:
Well I would just say that as someone with a very proud Lebanese background and to everybody in the Arabic community, that the Morrison Government views you as some of our best citizens. Entrepreneurial, family orientated people who contribute so much to our country and we want to assure you that we will get through this. This is a very hard time but we’ll get through to the other side and we will be relying on the wonderful Arabic community to keep doing what they do which is create jobs, create prosperity and create wonderful communities and we’re here to work hand-in-hand with each and every one of you to make that happen.
HOURANI:
Assistant Treasurer and Minister for Housing, Michael Sukkar, thank you so much.
SUKKAR:
Suzan, thank you.