SKY NEWS AM AGENDA
FRIDAY, 29 MAY 2020
SUBJECTS: JobKeeper; loan deferrals; economic stimulus.
TOM CONNELL, HOST: Our next guest, Shadow Assistant Treasurer Stephen Jones, joins me now. Thanks very much for your time. This warning from Philip Lowe on government assistance, he seems to be advocating a sector specific approach to any assistance beyond, sort of, September/October, when a lot of industries, we hope, will be back on their feet. Is this the right approach?
STEPHEN JONES MP, SHDAOW ASSISTANT TREASURER: I think all the evidence to Parliament yesterday, whether it was APRA, the banking regulator, chair Wayne Byres, whether the Reserve Bank Governor, they're all saying the same thing. It’s completely untenable for the JobKeeper payments to fall off a cliff in September, for the JobSeeker payments to be wound back in September and the 260 billion dollars worth of loan deferrals, which have been granted by our banks to households and small businesses, to cease and we don't have one almighty crash. So to give certainty to Australian consumers, to households, to give certainty to businesses for them to be able to want to offer jobs to their existing employees and plan opening their business for new employees, they need a plan from the Government. If the fiscal disaster happens, it will be because the Government hasn't provided the plan and the security, which may include an extension of JobKeeper, it may include a bunch of other things that we've been talking about, but no plan is just not tenable.
CONNELL: Just on JobKeeper, sector-specific. Would that be a smart approach? I mean if you extend it full-stop you can easily get anyone applying for it's still, you know a barrister that's slightly down on their wages, any given white-collar employee. I mean there's only so much the Government can spend, so you need a tailored approach. Would you agree with that?
JONES: Tom, good point. There's some obvious anomalies with the system right now. I've been saying for some time that it makes no sense that somebody can get a pay rise out of JobKeeper and somebody else can be excluded. There are whole sectors of the economy that are excluded, whether it's the entertainment industry, industries exposed to overseas tourism, for example. Nobody's assuming that they're going to snap back in September/October. So we need a plan for those industries, particularly those intermittent casual workers. So extending JobKeeper, extending JobKeeper to these workers in these industries makes absolute sense and the Government should be integrating that into its plan.
CONNELL: Well Labor is clear on that. What about the deferred loans you mentioned? So these are people and businesses that have been able to go to their bank, get agreement to defer the loan, the interest accrues, so it's not an ideal situation. We don't know how many will still be in this situation. You mentioned the total amount of loans. What should happen to these people? Because loans are deferred or in arrears or people, you know, default every year. What should happen to this group, do they get special treatment? What's a solution?
JONES: I think we need a coordinated approach. This means the regulator and the Government need to work together on this. If you just take the small business sector alone, 60 billion dollars worth of loans have been deferred until September October. If all of those payments, come on at the same time, as the perhaps the rent deferrals that they've negotiated with their landlords, utility bill deferrals that they've negotiated and the end of JobKeeper, they just simply going to close the door. They'll throw their hands in the air and say to their workers; sorry, we can't keep you on. So we need an integrated approach which has the banks working in hand with their regulators to ensure that if those businesses are going to be viable that they need some support working through. And this gets back to my point, Tom, you can't have 60 billion dollars worth of loans reassessed in a one-week period at the end of September. Banks are going to have to have some certainty from the Government about what sort of support is going to be available to some of those industries.
CONNELL: What is available? Let's talk about the small business loans. First of all, I mean, how do you even decide who's viable? Any given year, as I said, you can have a downturn you, can have something a long way short of a recession, businesses can't pay loans, they go broke, that happens. So, how do you decide? Are you saying we save some of them, the so-called viable businesses and how do we do that?
JONES: Can I get back to the point? When a bank is sitting down, talking to a small business, they're going to be looking at what their plan to get out of this crisis is. Some of the things they're going to be assessing; what their existing liabilities going forward, particularly for the next six months are going to and whether they can trade out of this one of this. One of the things they're going to be looking at is whether the Government's wage subsidy and other like assistance is going to continue. If it's not going to continue, the answer from the bank manager is going to be; I'm sorry, I can't see how you're going to get out of this, we're not going to be able to continue with a loan deferral. However, if there's a different arrange of support in place from the Government, then that discussion with the bank manager and the small business is likely to be very, very different.
CONNELL: But you get the issue here. Obviously, every business can't be saved. It's a difficult choice. Are you saying it's up to banks to make these decisions? You hope there's some extra support, you get another six months and that will save enough of them. We will lose businesses, people will lose homes during this crisis. It's about you think the Government can minimise that number?
JONES: Look if we can save a viable business and if we can ensure that a viable business has a plan to get out of the crisis, then we should do everything we can to ensure that we do that, because every business we save is a job we save. Every business we save is half a dozen employees who are otherwise on unemployment benefits. So I think it's worth the effort. I think it's worth the investment to have governments working together with the banking sector and the small business sector to put in place and integrate a package. You're right, Tom, some businesses are going to fall over, but I think the success here is the measure of the number of jobs we can save and new jobs that we can create. Of course, in the area that I look after down here on the South Coast of New South Wales, a lot of businesses were adversely affected by bushfires and by drought going into this crisis, so they are struggling. So I think a region by region, sector by sector approach is going to be needed and I think ongoing support, as I've said before, ongoing support is going to be needed in some of those regions which are increasingly have a concentration of reliance on universities and foreign students or on international tourism. And I just don't think we can have a drop off of support in September.
CONNELL: How does that work, in a particular region there's extra assistance available to households, as an example, if they're in arrears on their home loan and you live in a particular area and it all gets linked up, they get extra systems compared to the rest of the country?
JONES: I think we should have some support that operates across the economy as a whole. And the sort of support that we've had up to now includes the JobKeeper arrangements, includes the loan deferrals, includes the rent deferrals. I think moving forward will need some regionally specific arrangements in place to deal with those regions that are more harshly impacted. That may include special packages of infrastructure and stimulus support. We've done that in the past, where we've had regionally specific economic stimulus packages for parts of regional Australia and I think we're going to have to do that again. In fact, I'm certain we are going to have to do that again. Otherwise these regions are going to fall over.
CONNELL: Interesting call we're out of time. Stephen Jones, will talk again soon. Thank you.
JONES: Great to be with you.