SKY NEWS AM AGENDA
WEDNESDAY, 8 JULY 2020
SUBJECTS: Loan deferrals; JobKeeper after September.
ANNELISE NIELSEN, HOST: Now joining us live is Shadow Assistant Treasurer Stephen Jones. Stephen Jones, thank you for your time.
STEPHEN JONES MP, SHADOW ASSISTANT TREASURER: Good to be with you.
NIELSEN: It’s a significant day in the economic response to the coronavirus with the announcement that the banks are extending their deferrals by another four months. Do you think this is going to be a significant help?
JONES: This is really welcome news. Good to see that both the banking regulator APRA and the banks have collectively reached a response. It will be welcome news to thousands of households and small businesses who have been relying on that deferral but who are still not yet out of the woods. And if we can see anything from the flare up in Victoria this week, we can see that there's still a long way to go. All the more reason, Annelise, why we need to see the Government step in and provide some certainty about what the future of its JobKeeper program is going to be. Nobody in their right mind thinks that the economy is just going to snap back at the end of September. So businesses will welcome the fact that they've got a little bit more wiggle room with their loan deferrals. Households will welcome the fact that they're going to get a bit more wiggle room as well. But crucially now, we need to get a signal from the Government about what the future of their support programs are going to be.
NIELSEN: The question though for so many businesses is; will they survive even beyond that extra four-month deferral? This is going to be a much tougher test to pass for these businesses, to get these extra four months out of the banks. Should the Government be wary of keeping businesses in business, if they're not going to survive this?
JONES: Oh, look, there's some hard conversations that have to go on between banks and their customers and I think for the most part banks have dealt with this quite well. We need to ensure that every business that is viable, every business that is going to have a future in to 2021, has the best opportunity can and that's why support from the credit markets and support from the Government, in terms of their wage subsidy program, needs to be ongoing. Nobody is saying, nobody is saying the JobKeeper should go on forever. But what we are saying is where there are some obvious problems with the program, tighten it up, make sure that it's better targeted and that way it becomes more affordable to be extending into the longer term to ensure that those businesses, that are still going to need some support and particularly I have in mind businesses affected by shutdowns, travel bans, whether that's tourism or entertainment, they have the opportunity to readjust their business models and keep their staff on until we get through the worst of this crisis. We're not there yet.
NIELSEN: But for those businesses that can't readjust their business models, I mean insolvency is have been down since the coronavirus pandemic began. That's a real red flag, the idea that we're keeping businesses artificially alive is costing us money in the meantime and could really see that cliff be even worse. So is this the time for the Government to be tougher and say; look your business simply isn't going to survive, and withdrawal that support look?
JONES: I don't think it's the role of either government or myself as an opposition Treasury spokesperson to be inserting ourselves in the relationship between the business and the banks. Those conversations need to go on between businesses and their credit holders to ensure that if they have a viable business plan, if they are able to stay alive a little bit long to get through the worst of this crisis, then we help them through that process. We want to keep every business open. We want to see every Australian in a job. If that requires a bit more government support, so be it. But we're not kidding ourselves for one moment, Annelise. There are going to be businesses that aren't going to make it. There is going to be a kick up in unemployment, which is all the more reason why the Government needs to provide more security more certainty around its JobKeeper and its JobSeeker programs.
NIELSEN: The Treasurer, Josh Frydenberg, said Labor is hypocritical in calling for JobKeeper to be expanded and then also criticising the Government for the size of the deficit. Is Labor being hypocritical?
JONES: Absolutely not. What we want to see is the best outcome for Australian workers and Australian businesses, and we've been saying right from the very beginning it's unrealistic for us to assume that the economy is going to snap back to the way it was pre-COVID-19 at the end of September. Everybody knows that this isn’t going to occur. So we need to ensure that there is an ongoing program. What is the government's role going to be, what is the role of the banks and the financiers and what have business is got to do to adjust those conversations? Here's where it's critical, Annelise, conversations are occurring between banks and their creditors, between businesses and their banks today, and they'll continue over the next three months to see where the deferrals are warranted or needed, and a crucial part of that discussion between the banks and their businesses is what's going on with your wages bill, what's going on with you employment, what's going on with your ongoing government support? That is why the Government needs to move sooner rather than later in providing some certainty, some security, about what's going to go on in terms of future wage support. If we've learned anything from the Victorian crisis this week, we know that we have not got this virus beat yet and we know that ultimately it's going to take a vaccine and a health response before we have the sorts of economic security that's going to take us into a full recovery. So more certainly, more support, there's nothing hypocritical about that. We've been calling on the Government to do that all along and if anything the Government should be picking up some of the suggestions that Labor is put to them right of the beginning of this process. A bit more flexibility in their programs is needed.
NIELSEN: Well on the case in Victoria, I mean, the Treasurer has been out this morning saying these shutdowns now going to cost the economy a billion dollars a week. How can you ask the Government for more certainty when the situation is so uncertain, who knows what the world is going to look like in two months?
JONES: There's a couple of things that I've been calling on the Government to do right from the very beginning. I've said, for example, and Labor has been calling the Government out on this, we could be actually redirecting some of the existing spend on JobKeeper, it makes no sense, for example, that you've got some workers under the JobKeeper arrangement have got a wage rise. They've got more money now than they had pre-COVID-19 and you've got other workers who've got no support from the Government whatsoever. That makes no sense. We can tighten some of those rules up to ensure that that money is redirected to where it is most needed. If there are businesses out there who are claiming JobKeeper when they're not entitled to it, then we should be clamping down on that and redirecting that money into where its most needed. But it is simply not tenable, it is simply not tenable and the banks know this and the banks know that they've got an obligation to their shareholders, it is simply not tenable for the Government to be cutting all support off at the end of September. The banks have done their done their bit, it's now time for the Government to do its bit.
NIELSEN: Shadow Assistant Treasurer Stephen Jones, thank you for your time
JONES: Good to be with you.