Q&A, National Press Club

26 May 2020
Prime Minister

SABRA LANE: Prime Minister, going to the last part of your speech there, it sounds like an accord version 2.0, if you like. Has the government already communicated to key groups like the Business Council, the Small Business Council, the ACTU, to say, "We'd like you to sit in a big circle, smoke the peace pipe, and get this thing done and dusted in the next four months"?

PRIME MINISTER: Yes, we have.

LANE: What's their response been?

PRIME MINISTER: Well, I’ll allow them to explain their own responses. I think one of the keys when you bring people together is you don't speak for them, you let them speak for themselves. We've booked the room, we've hired the hall, we've got the table ready. Whether the chairs will be as rickety as the ones I saw in Auckland a few years ago, I don't know. But our job is to bring people together and we've been doing that through this crisis. And though I've got to say, it's been one of the greatest privileges to work with people across the spectrum. The National Cabinet has been a great example of that, and I thank the premiers and chief ministers again for the good faith in which they've engaged. Sure, we haven't agreed all the time, but the relationships are stronger now than they have ever been, despite those disagreements. I hope to see something of that nature replicated in this process. But it's not for the government to stick their nose in here and start predefining what these outcomes are. We need people to get together and sort this stuff out. As I say, they've been caught in grooves for too long, and grooves going in parallel lines and not coming together. And that's why I'm hoping this process will achieve. It may succeed. It may fail. But I can assure you, we're going to give it everything we can and I'm very grateful of the engagements that I've had with the sectors that you've nominated. It's been in good faith and it's been honest, and it requires everybody to leave a bit aside. I acknowledge and respect that as well. I think the government has led by example in the announcements I have made today.

LANE: To my colleagues, I have a long list today, more than 20 journos. Please, one question per person in order to get through as many people as we can.

PRIME MINISTER: Andrew, and then Katharine.

LANE: Brett Mason.

BRETT MASON: Brett Mason from SBS. I'll be very quick. Given the warnings about the downward spiral of protectionism, what role do you see migration playing in Australia's economic recovery?

PRIME MINISTER: Oh, it's a very good question, Brett, and it's one of the concerning economic figures we have. And if you've got a job in the residential construction industry, and Michael Sukkar's here, and Josh I know have been working on some plans here. It's an issue that has been a key topic of discussion amongst the premiers and chief ministers and myself. We're looking at net overseas migration, I think, falling to about 34,000-odd I think, Josh, next year. When you think that, you know, it was the great Professor McDonald who set a figure of between about 160,000 and 210,000 as being what you need in this country to maintain a GDP per capita growth, then there's obviously a big gap there. Now, that's a short-term gap, but it's going to be one of the real impacts of this crisis, because our borders aren't opening up any time soon. Sure, we'll be working with the higher education sector, but I note 80 per cent of the international students that come to Australia are here. They're here. The way it's talked about, you'd think they weren't. But about 80 per cent are here. We'll work constructively with that sector. As I say, I was speaking with Prime Minister Ardern this mornin and we'll continue to have our discussions about the trans-Tasman safe travel zone, and it may well be that Sydneysiders can fly to Auckland before they can fly to Perth, or even the Gold Coast, for that matter. But I can assure you I won't be holding back on expanding the size of our markets for our goods and our services to wait for some other borders to clear.

LANE: Chris Uhlmann.

CHRIS UHLMANN: Prime Minister, you said - Chris Uhlmann, Nine News - you said you rejected protectionism. How important is the multilateral trading system to the world and given the United States seems to have abandoned it and China wants to change it, what role do you see for Australia in trying to make sure that system continues to work?

PRIME MINISTER: Well, the role we've been playing, Chris, as you'd know, I mean there's been a lot of difficulty in dealing with the appeals system in the WTO and we've actually worked together closely with China to actually pull together an alternative system that can get us around this current hurdle. So, Australia's for trade and so we'll work with people in the multilateral fora that are for that as well. I mean, in Europe, our focus is very much on the free trade agreement we're seeking to put in place with the European Union. And of course, the gun is fired, effectively, on the arrangement we're seeking with the United Kingdom. They'll be very important for Australia. But the global multilateral trading system rules are incredibly important for Australia and they have to work. So you'll continue to see us advocate for them, seek to reform them, and to work with those who want to achieve those same ends. And that's what you can expect. because we're an open trading nation and we always will be.

LANE: Rosie Lewis.

ROSIE LEWIS: Thanks for your address, Prime Minister. Rosie Lewis from The Australian. Just to expand on Chris's question, do you believe China has become a riskier country for Australian businesses to invest in, especially given recent actions taken against barley and beef?

PRIME MINISTER: I think that's a judgement Australian businesses can only make and, like any business, they have to weigh up the security of the markets in which they sell to and the risks that are associated with those and those risks will move, from time to time. They'll ebb and flow and we would like to see stable, reliable, dependable markets all the time for our products and services. But those are not decisions that governments make for businesses, be they primary producers and exporters or be they resources companies or industries or, indeed, service companies working in the aged care area on training or things like this. 

I think one of the most exciting parts of the China Free Trade Agreement - China-Australia Free Trade Agreement - was the ability to actually sell aged care services into China. I've said that on many occasions before. But, you know, businesses have got to weigh up their own risks and make those assessments. Austrade can assist with those things on the ground. What I'm pleased to see - Mathias and Josh and I this morning reviewing those iron ore trading figures this morning and we're very reassured by what we're seeing on those patterns compared to what had been around in the past. Australia has a very bright trading future and businesses will make their judgements about how they participate in that.

LANE: Business does look to government, though, for guidance on travel. There is a website saying do not travel. If they want to do business with China, for example, they do look to you for clues.

PRIME MINISTER: And as I said, that sort of advice is applied by Austrade, in particular. But it's very unique and specific to the sector you're working in. There's not a general position that applies right across any one market. But we always work to ensure that those markets can be as viable and sustainable and profitable for our businesses as they can be. Ultimately, they'll make their own calls based on all of that advice, including what they hear from the government.

LANE: Andrew Probyn.

ANDREW PROBYN: PM, Andrew Probyn from the ABC. Katharine couldn't join us today so you’ve just got me. All the best to Katharine as well. One of the secrets, Prime Minister, of the accord in the '80s was that the Hawke government greased the wheels with a social wage - things like Medicare, superannuation, higher family payments, childcare payments too. When you come to the table on pushing for industrial relations reform, what are the sorts of things that you can offer the employees and the union movement?

PRIME MINISTER: Well, all of the things you've just talked about are all central features of our government services delivery. All of the things you've talked about. We have reformed childcare. We have increased the subsidies that are available, particularly to the most disadvantaged workers. We have got record funding for schools, record funding for hospitals. We do have a social security system which is the envy of the world. That is the product of the last 20 or 30 years and it's something, I think, we will have an absolute commitment to maintaining. 

This is why I keep coming back to the point about the economy and what we've learnt about it during the course of this crisis. When you've had consistent economic growth for almost 30 years, it can be taken for granted. And as Treasurer, I used to warn about this as well. But I think no one has any doubt now that if you don't look after the growth in your economy, then you can't guarantee any of the things you've talked about. You can make big, bold promises about them, and you can talk about how important they are. But you can't fund them. And so that's why my point today has been that unless we focus on the success of that business that is going to employ someone, then there's nothing really to offer. Because there's no economy to offer it from. And so that's why we've got to get our priorities right. That's why we've got to get the order right. Now, if we can make that work on those supply-side reforms, as they're sort of known technically, then all of the things Andrew has just talked about will be able to be guaranteed. I can guarantee hospitals, schools, the aged pension, childcare, one of the world's most generous pharmaceutical benefits schemes, on the basis of a strong economy. And if you don't put businesses at the centre of that economy, you can't make that pledge.

LANE: Mark Riley.

MARK RILEY: Mark Riley from the Seven Network. Prime Minister, in your speech, you observed that the industrial relations culture in the country has been typified by tribalism, conflict, and ideological posturing. What's your message to those elements of your own party who might see this as an opportunity to finally neuter the trade union movement?

PRIME MINISTER: Well, that is not the objective of this process. That is not the government's policy and never has been. I think everybody's got to put their weapons down on this. Everyone does. And that's what I'm hoping for and that's what I'm seeking to achieve. And I think that's what Australians demand. And I think Australians will take a very dim view of anyone, or any group, or any organisation, that isn't prepared to come and sit down on this table and give it a go at the Prime Minister's and ministers' invitation.

LANE: Phil Coorey.

PHIL COOREY: G'day, PM. Phil Coorey from the AFR. On enterprise agreements, you said we've got to get back to basics. There's a general agreement amongst both sides of the argument on that, whether it's the labour movement or the business community. One of the villains that has been singled out by the business community is the Better Off Overall Test, which people say sort of violates the spirit of Keating's original no-worse-off test. Do you want to see the BOOT either removed or replaced with the original Keating model, or at least the industrial umpire given wider powers of discretion when interpreting agreements and applying the BOOT?

PRIME MINISTER: I want to see employers and employees sit down around a table and talk about those very issues and find a way forward, Phil. I'm not going to prescribe it for them. Because whatever they agree is more likely to be sustained and maintained into the future. But what I want them to focus on is an understanding that, if there's no business, there's no job. There's no income. There's nothing. And the success of the enterprise is what all those involved in it need to be committed to and in return for that commitment, there must be a sharing of the benefits and the success of that organisation back to employees, back to the shareholders in that business and those who are running it. And so, Phil, what I'm trying to do differently about this process is not run out there with an IR shopping list. I haven't seen that work in my political experience in the time I've been in the Parliament. All that's tended to do is force people away from the table, not draw them to it. So I think, you know, the issues you're talking about are obviously very important to business, and the concerns that employees have are also important to them. But we're only going to get through it if they can work this through. Now, sure, we'll take an, I think, active role in this process and try to take those discussions forward. But at the end of the day, I'm asking everyone to focus on getting that business back on track, making money, so they can pay employees and they can employ more of them. It's really that simple. Thanks, Phil.

LANE: David Crowe.

DAVID CROWE: Thank you, Sabra. Thank you, Prime Minister. David Crowe from the Sydney Morning Herald and The Age. PM, every year, the Mitchell Institute does a study of spending or investment in skills and training. Now you've highlighted a reform plan there. But we have seen total investment in VET fall from, I think, $9.3 billion in 2013 to $7.7 billion in 2017. Now, that's total national investment, it’s not just the federal money. But you’ve set out your ambitions - in order to achieve them, do you need to commit more funding, and is money the problem here?

PRIME MINISTER: I don't think money's the only problem here, David, but you're not going to invest money in a dud system. That doesn't fix it either. And that's why I'm saying that we need to have this system more focused on what it's actually supposed to do, and that is that someone who's looking for training can get trained with skills that an employer might actually want. Now, that's not happening to the degree it needs to for our economy to grow again in the way it needs to. That's why I made it pretty clear - I'm very, very interested and very committed to investing more in a better system. And if we can achieve a better system, where we can have some confidence that the investment that we make turns out more people with more skills that businesses need, great. Because there's a return on that investment. And you rightly say that there has been that fall. Because, notwithstanding the fact that the Commonwealth is legally obliged to spend an indexed amount every year on skills - which is around $1.5 billion - that is not the case for the states and territories. And as I noted, we've seen that taper off. So the Commonwealth spending money, doesn't mean the states will. And so what - I mean, Jay Weatherill used to talk about, when he was Premier, he used to have this idea that skills education should actually transfer to the Commonwealth. That effectively, states should look after everyone from 0 to 18, and the Commonwealth looks after it from 18 onwards. That was a very interesting idea. I talked to Jay about it when he was Premier. But that's not what we're proposing because, like in the hospital system and the education system there is a partnership between the Commonwealth and the states in supporting and delivering these services. And I think the Australian people believe that is how it should be too. But I wouldn't say it's a very effective partnership at the moment. That's not, I think, necessarily a fault of the participants. But it is a fault of the design of the system we're working to. So, in faith, I hope we can redesign that system and it will see greater investment. But investment that goes somewhere.

LANE: Katina Curtis.

KATINA CURTIS: Katina Curtis from AAP. Thanks for your speech. You've talked a lot about the importance of getting people together in a room to come to an agreement. We have seen an example of that in the last few weeks with the universities and the union getting together in a room to come to an agreement that workers would take pay cuts in order to keep their jobs. But some individual universities aren't sticking to that agreement, and they've cut jobs instead. So, how can you guarantee that by bringing people together in these five working groups, that what is done, the deal that's done in the room will actually be stuck to, including in parliament?

PRIME MINISTER: Well, no one can give you guarantees on everything. The only way you're going to get the strength of an outcome through this process is if you engage in it seriously and in good faith and you seek to build the cooperation that is needed for these agreements to stick. That's true in any relationship. A business relationship, an employer/employee relationship, in any partnership. It's about the relationship you build. And what I'm saying is the relationships have got pretty sick. And they need a bit of counselling. And that's what this process, I hope, will do. It'll bring people together again, and they can rediscover why they're together in the first place. And that they depend on each other for their success and their shared success. And I think there has been a real disconnection along these lines. Employers have felt that their investments and their sacrifices and risks aren't always appreciated, and employees can often feel ripped off and feel like they're not getting a fair share of how the business is going. Well, you've got to start there. And let's see how we go from there.

LANE: Michelle Grattan.

MICHELLE GRATTAN: Michelle Grattan from The Conversation. Some issues inevitably have been pushed to the side during the pandemic crisis. So I just wondered if you could give us an update on a couple of those. Do you still aspire to have an Indigenous recognition referendum next year? And what's your timetable now on the religious freedom legislation and the anti-corruption body?

PRIME MINISTER: Well, we haven't had the opportunity to revisit those latter two points because of the crisis, and it's not something the Cabinet has considered now for some time. And when we do, then we'll make any announcements that we might make on those matters. When it comes to the Indigenous recognition, what the Minister for Indigenous Australians has continued to do is conduct his process. The timetable for that will depend on when and if that sort of consensus is able to be achieved for it to be successful.

LANE: Kieran Gilbert.

KIERAN GILBERT: Prime Minister, close to a million workers have gone on the dole through the crisis. A lot of them because they didn't qualify for the JobKeeper, one of the parameters set by the government and Treasury. What's your message to them today as to why they're not getting JobKeeper, particularly when you've got a now a $60 billion mistake? What is your message to those people who otherwise might have received a bit more?

PRIME MINISTER: Well, first of all, I don't buy into the demonisation of JobSeeker. I don't. JobSeeker and JobKeeper - and it was actually the JobSeeker changes we announced first - we announced them as a priority. Because the JobSeeker measures is the ultimate social safety net for all of those who are affected. That is what is intended to catch everyone who finds themselves out of work. JobKeeper was designed for those who worked in businesses, who have full-time jobs, part-time jobs, or what were effectively full-time casual jobs. That's who it was designed for. It was not designed to pay the bills of state governments or local governments. That is their responsibility. Nor was it designed to pay the bills of foreign governments. And those policy designs were put in place and everyone who falls within those designs is getting JobKeeper. That's who is intended to get those payments. And JobSeeker was set at a commensurate level. Because, remember, JobSeeker is not the only benefit you get. JobSeeker, when you're on JobSeeker, you get access to a range of other benefits which includes rental assistance, Family Tax Benefit payments, and a whole range of other benefits and allowances and that has meant that those, in fact, on JobSeeker, in many cases may well be getting more than those on JobKeeper. So I don't accept the argument particularly put by the Labor Party that JobSeeker is some sort of second-best option for Australians. 

I mean, the Labor Party like to accuse us often of saying that we demonise the former Newstart. Well, that's basically what they're doing now, by sending that message to Australians. My message to Australians and that of the Treasurer and the entire government is that we designed a system, through cashflow allowances for businesses, for JobSeeker, for JobKeeper, and the myriad of other payments and benefits, to get them through and that's what it is doing whether it's in any of those different programs. And it's been very successful in that 5 million Australians are benefiting. Now, you raise the point about the JobKeeper estimates. When JobKeeper was designed and first costed, the uncertainties were extreme. And it's always been my practice and, indeed, the Treasurer's, and I always like it when Treasury does it too, that they are cautious in their forecasting. It's been said to me, if you're going to miss the mark, it's better to miss the mark on the right side of the line. I can't say that about when the Labor Party was in government. They missed the mark often, and on the wrong side of the line. Forecast revenue, didn't turn up, spent it anyway. That's not what's happened here. What Treasury has done is made an estimate of what they thought could be the case. It was the worst-case scenario, effectively, that they were forecasting, estimating. We are now in what is their best-case scenario and that is something we should welcome. We acknowledge that over at the Tax Office there was a tracking mechanism that was put in place that wasn't leading to anyone getting a payment they shouldn't. Everyone that was entitled to that payment was getting that payment they should. But the tracking mechanism made it look like we were heading to the worst-case scenario. But, thankfully, we weren't. And I see this as a relief. And, as I said the other day out in Murrumbateman, if your builder comes to you when you're building your house and they say, "This is going to cost 350 grand or worse still 500 grand" and you go, "That's a lot of money I've got to borrow.” Then they come back to you and go, "I got that estimate off - it's actually going to cost you $350,000 or $250,000." I tell you what, you don't get disappointed with the news, and you don't borrow the rest of the money to put a heated swimming pool on the roof, I think as Barnaby recently said. You don't do that. So what we have done is acted responsibly. The estimates were provided to deliver a program that is doing its job. And for those for whom that program isn't designed to assist, JobSeeker is there for them, and they're getting that support at record levels.

LANE: Prime Minister your speech went a little bit over. Are you happy to take a couple more questions?

PRIME MINISTER: Always happy to.

LANE: Excellent. Clare Armstrong.

CLARE ARMSTRONG: Thank you Prime Minister, Clare Armstrong from the Daily Telegraph.

PRIME MINISTER: I have spent a lot of time with these guys over the last couple of months.

CLARE ARMSTRONG: You have flagged tax reform as another important part of the recovery agenda, states are now lining up with their ideas. New South Wales today flagged fringe benefit tax as an area that could be considered. What is your timeline for reviewing those established revenue mechanisms and broadly what do you see the burden that the state should be taking in this new era of consensus and collaboration?

PRIME MINISTER: Well I think their contribution so far has been great. Now of course they haven't been providing the same sort of fiscal supports to the economy like the Commonwealth has. I mean, Josh, we're some, I think we’re over $150 billion, they would be around about $30 billion - combined. So, the Commonwealth is certainly doing its share and five times over on those things but, of course, the states have significantly greater health expenditures, which we're meeting 50-50 when it comes to COVID and so on. So we have got a good partnership I think and a great example of this was when we took the decision at National Cabinet, a very important one, which was that incoming Australian returning residents and citizens would be quarantined in hotels. And the states immediately agreed that wherever they come in, that state would meet the bill. Knowing that New South Wales, in particular, was probably going to bear the biggest burden on that. But there wasn't a quibble about it. And the - I suppose the solidarity of that group was we just got to solve the problem. And I think the states and territories have been in very good faith as we have worked through this and it's been a privilege to work with them along those lines and I hope, and I will have more to say about this after we’ve had further discussions about it as a National Cabinet how that may translate into future arrangements for that body. And issues around tax will certainly, just like the skills issues I've identified today, will be important topics for them. But the way I think National Cabinet works best is it's got a mission, it has a purpose. It's just not a broad agenda of whatever happens to be thrown up by the various state bureaucracies or federal bureaucracies. It is actually designed to, in this case, manage the crisis. And the health and the economic impacts of that going forward, creating jobs, I think, is the issue that we've all got our minds now focused on. 

Now on issues of tax that will come through that process, it will come through other channels that the Treasurer will work on. There is a Budget in October. But I would simply say that our focus, as I said in the speech, is on what generates investment and what creates jobs. You ask someone for their opinion on tax, and they can give you volumes. But I'm interested in the stuff that's going to create jobs and create investment. And I believe they are two, and if we can agree some ways forward there, I suspect more of it is at the federal level certainly on income tax. I don't mean specifically personal income tax. All those issues, I mean that's the mix. We know what the mix is. I'm not dropping bread crumbs there or anything like that, I'm just saying tax is big. It is a complicated issue. We will work our way through it.


LANE: Peter van Onselen.

PETER VAN ONSELEN: Peter van Onselen for Network Ten. Prime Minister, so many Australians have lost their jobs or taken significant pay cuts to be able to try to help their businesses survive. You say we're all in this together, but you won't follow Jacinda Ardern's lead and take a temporary pay cut. You're the third highest paid world leader. Your Cabinet earns twice what the UK Cabinet does. I know the go to response is to point to the wage freeze for this year, but freezing an increase in the wage just isn't the same. Would you reconsider just to show all those Aussies doing it so tough that it's true - we really are all in this together?

PRIME MINISTER: Well, Peter, I have no plans to make any changes to those arrangements. We will follow the same practises that we're applying to public servants right across the board. We're not singling anyone out when it comes to those issues and I will just keep doing a good job. That's my plan and I will be accountable to Australians for that job.

LANE: Shalailah Medhora.

SHALAILAH MEDHORA: Shalailah Medhora from Triple J. Prime Minister, you have said we can't keep borrowing against future generations, but young people now are at the coalface of this crisis. Youth unemployment and underemployment is skyrocketing. Young people are overwhelmingly working casually, overwhelmingly dipping into their super to make ends meet. Unfortunately, there are predictions that this will lead to dire mental health impacts for young people going forward. So my question for you is - is it time for older Australians, who have benefited from some of the peak times and from the policies, such as franking credits, for example, to accept that they will need to take an economic hit now in order to protect their children and their grandchildren?

PRIME MINISTER: The answer to coming out of this crisis is not setting one group of Australians against another. All Australians are in this together. I remind you of that fellow Andrew who was married to his wife for 50 years and couldn't give her the send off that she wanted. I had another letter, one I didn't read out, from a daughter. She would have been in her probably 60s. And she didn't get to see her mum in the aged care facility before she died. To suggest that any one group is not feeling the impacts of this one way or the other and to set it up as some sort of generation conflict, I think, is very unconstructive. It's not the approach of my government. We've all got to do what we've got to do. And I agree, it is hitting young people much harder. That's why we have invested in additional services on mental health. The biggest beneficiary of the process I've outlined today, if employers and employees can come together and get this sorted, will be young people. They will be the biggest beneficiaries. The jobs that we will create will go first and most rapidly to young people. That is the most important thing I think we can do to help them.

LANE: Prime Minister, on that note, thank you. Everybody, please join me in thanking the Prime Minister.

PRIME MINISTER: Thank you. Thank you very much.