Interview with Thomas Oriti, ABC AM
12 March 2020
THOMAS ORITI: Prime Minister, good morning. As the virus spreads, one critical issue is the uncertainty. I think it's spreading beyond any initial expectations. It's now a pandemic. Will this stimulus package be big enough, given that no-one really knows when the outbreak will end?
PRIME MINISTER: Well, we've made this decision two weeks ago that this would be necessary and that we knew that it would move to a pandemic phase. We called that two weeks before the World Health Organization did. Just like earlier in January, we also made the move on declaring the virus under our relevant statute provisions in terms of our response. So we've been quite awake to this for some time, and the fiscal response today has been designed around the type of situation people are seeing right now and extending out into, you know, more than 100 countries. And we understand the impacts of that have been particularly hitting the cash flow of small and medium sized businesses. And so our objective here is pretty straightforward to keep Australians in jobs, to keep businesses in business, particularly small and medium sized businesses, but importantly, positioning us to bounce back strongly on the other side. I mean, viruses have finite lives to them in terms of how they run their course. Now it's true, at this point in time we don't have a fixed position on how long that is, whether it's six months, nine months or whatever it is, but it is a finite life and there will be a bounce back on the other side. And we need to have -
ORITI: But could this be. Sorry to interrupt, but could this be then the start of a bigger response? I mean is there any cap in your mind in terms of how much the Government's going to spend as this virus spreads?
PRIME MINISTER: Well what we're doing today is just shy of 1 per cent of the economy, and that is a significant injection into the Australian economy. And we'll obviously watch it very closely. One of the principles I set out for this package that I said earlier this week was that it must be scalable and this is a scalable package. Importantly, what we're doing today is using all existing mechanisms. People don’t have to fill out forms, it's an automatic way that we will get these these investments into the economy. The ones that particularly we've talked about this morning is up to $25,000 for small businesses and medium sized businesses who employ people. There’s the instant asset right up that will go up to businesses of half a billion dollars turnover on individual items of 150,000. That's to drive investment. That's the sort of investment that you need to be in place, and so on the other side our businesses are well positioned to take advantage of the bounce back. And apprentices, paying 50 per cent or thereabouts of their apprentice wages for small businesses of less than 20 employees. That's 120,000 just under that actually.
ORITI: A lot of elements there, but can you, can you give us, because when you look at the coverage of this today, there doesn't seem to be an agreement about how much his package is going to cost. Can you confirm the total cost so far with a dollar figure?
PRIME MINISTER: Well I'll be doing that later today when the Treasurer and I announce the full package.
ORITI: Ok.
PRIME MINISTER: Like I said, this is just under 1 per cent of the GDP.
ORITI: Will it keep Australia out of recession?
PRIME MINISTER: Well that will be, I mean, I don't speculate on those things. What I do is I take actions and what we're doing is taking action on this economic plan. I was pleased last night that S&P confirmed that Australia's AAA credit rating and the work that the Government had done to put the Budget back into balance means that we can make this response. I mean, that's an, that's an important factor here. We worked incredibly hard to get the Budget back into balance, that is [inaudible] right now to enable us to give this type of response. We, you know, we kept our heads, we kept building the Budget back, and now we're in a position to deploy that just when Australia needs it.
ORITI: Now in terms of those in terms of those measures, let's look at that cash flow boost for employers. That payment’s going to go to employers to boost the cash flow for businesses. Now in our coverage of this virus, we've been looking at vulnerable Australians and thinking of casual employees for example. How can the Government guarantee that those businesses will use those cash payments to support their most vulnerable workers?
PRIME MINISTER: Well, it's up to $25,000, as I say, to people, businesses, small businesses and medium sized businesses that employ people. And what we're saying to those businesses, you've got to do the right things about your employees because you're going to need them on the other side. And I recall that, you know, when we went through the Global Financial Crisis, those same small and medium sized enterprises did just that, because they know that on the other side they will need their team to be able to take advantage of the opportunities that will be there on the other side. The welfare system more broadly has safety net provisions, which through what is currently called the sickness payment and things like that, that can support people who might find themselves in that situation. And so there will be elements of what we'll be doing, which are directly related stimulus to boost the economy. And that's what that up to $25,000 grant payment does.
ORITI: Do you acknowledge though that it will still leave some casual workers vulnerable? And in turn, how do you stop them from going to work if they're sick?
PRIME MINISTER: Well, the virus will have a significant impact on the Australian economy, and that's why we’re boosting the Australian economy with just under a half, just under 1 per cent of the size of our economy being injected in as a result of this package today - that is the most important thing - we can protect Australians jobs.
ORITI: Aside from businesses, who will be receiving cash payments and how much will they get?
PRIME MINISTER: We'll confirm that later today when we make those announcements, when I make those announcements with the Treasurer.
ORITI: So you can't confirm the reports of the one-off cash bonuses at this point?
PRIME MINISTER: Well, people are speculating around that, but I have said all along that there needs to be a demand side component to the stimulus. And that's, and there will be, and we'll confirm those details later this morning. But importantly, this stimulus package is one that is heavily geared towards supporting businesses to keep people in jobs and to keep them in business, to invest, to build back for the other side of this virus. So that the economy, and the Budget can bounce back strongly on the other side and not have weighed down for a decade as we've seen on previous occasions. This is a targeted stimulus that is designed to do a job and that is to keep Australians in work, and particularly those young apprentices. I mean, if you're an apprentice today going off to work or, you know, one of your kids or grandkids, know that the Government is going to if they work for a small business like that. And you know, people in my own family, my nephews they’re apprentices, and you know that they’re the ones who are vulnerable in these situations. And I'm pleased that we've been able to provide that support to keep them on the tills.
ORITI: So we still haven’t got a going to specific dollar figure there and there is this uncertainty, but does it come at the cost of a Budget surplus, and not just in the coming year, but in the years to come?
PRIME MINISTER: I will be dealing with that later today.
ORITI: Do you think you've acted quickly and decisively enough in the face of the threat?
PRIME MINISTER: Yes, I do. I mean two weeks ago the World Health Organization wasn't calling this a pandemic, we did. Earlier in January, it wasn't calling it out as something happening more broadly than in China, we did. And we've been acting to get ahead of it right from the outset. And we've got just over 100 cases here in Australia. But of course, we expect that to change based on the medical advice. But the $2.4 billion we put in yesterday to support our health system response, I mean, this is a health crisis, this is not a financial crisis. It has very serious economic implications. But at its heart, at its cause, is a health issue, a virus. And that's why we've put the additional investment into our health system, supporting our states, and then addressing the economic impacts, and that is predominantly about supporting people to stay in work, and to ensure that those businesses can remain in businesses that will be most vulnerable. And that it really goes to their issues of cash flow, and that's why the measures we're talking about this morning are designed to address that cash flow.
ORITI: Certainly tough times, and then we've seen some Australians doing some pretty extreme things in recent days in terms of the stockpiling of goods, for example. In your view, I mean, is it too late to stop the panic?
PRIME MINISTER: Look I think Australians, and I would hope they continue to moderate their behaviour on these sorts of things. I don't think that's, I mean, there's been a bit of a social media frenzy about those sorts of things, and there's been quite a bit of excitement, and even in the mainstream media. But the vast majority of Australians, I think are taking a far more sensible approach. And one of the key things we announced yesterday is getting more information out to people. You know, go to trusted sources of information, medical experts, not Twitter, not Facebook, not rubbishy reports in the media. That's not the way you look after your kids health or your own health. You actually talk to people and get information from people who know what they're talking about. And that's very important. And that's why the Government will be investing in getting more of that information out to families, out to households, to individuals. But it's also important to understand that, as the Chief Medical Officer said yesterday, I mean for most Australians who might be affected by this virus, but they will have a very mild health problem. For those who are most at risk here, obviously the more vulnerable, the more frail, and those who have what they call comorbidities. Those we’ve particularly put funding into the health support for those remote Indigenous communities, because we fear that they may, if there was an outbreak in those communities, that would be more severe. So we've put plans in place to deal with that and we’ve committed funding to deal with that. So it's a very comprehensive plan dealing with both the health and the economics here. And that's why we will get through this. But all Australians have a role to play - governments, business, individuals - we've all got to do our bit, and we've got ahead. We’re going to work hard to stay ahead together, but it's important that everybody keeps their head too.
ORITI: Prime Minister, thanks very much for your time.
PRIME MINISTER: Thanks a lot, Tom.
