Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

My question is also to the Minister for Finance, Senator Cormann. Can the minister further update the Senate on the economic challenges facing Australia as a result of the global coronavirus pandemic?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

The national accounts released today show what Australians already knew: our economy has been hit hard, very hard, by the COVID-19 pandemic. The Australian economy contracted by seven per cent in the June quarter, which is indeed the largest quarterly fall in real GDP on record, since records were kept. This was driven by large drops in household consumption, dwelling investment and business investment. The largest contributors to the decline in consumption were hotels, cafes and restaurants, which were down 56.1 per cent, and transport services, which were down a staggering 85.9 per cent.

But the numbers today show that Australia is performing comparatively well when compared to other countries around the world facing precisely the same challenge. The IMF is expecting that 157 economies will contract this year, with unprecedented falls in many. COVID-19 has been a wrecking ball through the global economy. The impact in the June quarter has been staggering, with GDP falling by 20.4 per cent in the UK, 13.8 per cent in France, 11.5 per cent in Canada and 9.1 per cent in the United States.

Opposition Senators:

Opposition senators interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Order!

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

The decisions our government made prior to this crisis improved our budget position by more than $250 billion over the 10 years to 2022-23. That put us on a better, more sustainable fiscal trajectory for the future as we went into this crisis. It has enabled us to provide record levels of crisis support into the economy—to business and to working families. If we had not done what we did in our first six years in government, we would have had less fiscal capacity to respond and our economy would have been less resilient—

Opposition senators interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Order on my left!

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

and today our economy would have been weaker. It is because we repaired Labor's—

Opposition senators interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Order on my left!

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

mess in our first six years in government that Australia is in a better position today than we otherwise would have been.

Scott Ryan (President) Share this | Link to this | Hansard source

Order on my left! I will call Senator Brockman when I can hear him.

Senator Wong interjecting—

Order! Senator Wong! Senator Brockman, a supplementary question?

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

Minister, can you inform the Senate how the government's historic level of support is helping Australians on our road to economic recovery?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

I thank Senator Brockman for that question. As I've said, we came into this crisis in a stronger, more resilient position as a result of the budget repair work done by our government during our first six years in government. That allowed us to commit to $314 billion worth of support for the Australian economy, nearly 16 per cent of GDP. According to Treasury, that support has helped save 700,000 jobs—

Opposition Senators:

Opposition senators interjecting—

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

Seven hundred thousand jobs! The unemployment rate would have been around five per cent higher than it is today—

Government senators interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Order! Senator Birmingham and Senator Watt, before I call Senator Wong I will insist on both of you being quiet. Senator Wong on a point of order?

A government senator interjecting—

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

He did. I heard what he called him. I'd ask him to withdraw.

Scott Ryan (President) Share this | Link to this | Hansard source

I'm afraid I did not hear. There was so much—

Senator Wong interjecting—

Order! Senator Wong, please! There was complete disorder across the chamber. I was struggling to hear Senator Cormann. I'm going to ask you, Senator McGrath, to withdraw that.

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

I heard him, and he didn't actually say that.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Do you want me to put it on the record? He called a senator a moron. I'm asking him to withdraw.

Scott Ryan (President) Share this | Link to this | Hansard source

I did not hear it. I can't attest to it. What is conventional in these opportunities is that if a senator wishes to withdraw a comment they may, but I cannot order a withdrawal for something I did not hear. I'm going to ask Senator McGrath to withdraw the comment he made.

James McGrath (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I withdraw.

A government senator interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

I heard that one. Senator Cormann.

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

Thank you very much, Mr President.

Scott Ryan (President) Share this | Link to this | Hansard source

Sorry, Senator Birmingham is seeking the call.

Simon Birmingham (SA, Liberal Party, Minister for Trade) Share this | Link to this | Hansard source

Mr President, I stand by the question asking which planet Senator Watt's been on all year, but if I said that I withdraw it.

Scott Ryan (President) Share this | Link to this | Hansard source

Thank you. Senator Cormann, please continue.

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

I've got to say that's a very good point by Senator Birmingham—that question that he just raised. But Senator Watt is certainly not Robinson Crusoe, because everyone on that island that is called the Labor Party these days is in complete denial of what is actually happening on planet Earth. Here is a message from planet Earth, Senator Watt— (Time expired)

Honourable senators interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

I'll call Senator Brockman when there's silence. Senator Brockman, a final supplementary question?

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

I thank the minister for that answer. Minister, can you inform the Senate how the government is giving employers the flexibility they need to keep workers employed while they fight back from this economic shock?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

This is another important part of our plan to protect jobs during this pandemic. The temporary JobKeeper provisions in the Fair Work Act have provided essential flexibility that has been vital for struggling businesses to survive the impacts of COVID-19 and keep their employees in jobs. It allows employers receiving the wage subsidy to make key changes to their operations. These include adjusted employee work hours and altering duties or the location of work. While this support will be essential for businesses that remain eligible for JobKeeper, greater workplace flexibility will also be vitally important for many businesses that no longer qualify for JobKeeper post September. This will allow those businesses to keep as many of their employees as possible as they continue to recover from the worst of the crisis.

Opposition Senators:

Opposition senators interjecting—

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

And again the Labor party is not interested in everything that is being done to protect jobs. They want to pursue base political attacks from a different planet.

Scott Ryan (President) Share this | Link to this | Hansard source

Order, Senator Cormann, the time for the answer expired.

Katy Gallagher (ACT, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

My question is for the Minister representing the Treasurer, Senator Cormann. Today the National Accounts confirmed we're in the deepest recession since the Great Depression almost a century ago, and we've recorded the worst quarterly contraction since records began, of seven per cent. Isn't this the worst time for the Prime Minister to be cutting JobKeeper, cutting JobSeeker, cutting wages and freezing the pension?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

Well, Senator Gallagher is mixing up a whole range of different things here.

Senator Watt interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Order! Senator Watt.

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

When it comes to the pension, the pension will continue to rise in line with inflation. We have not made any decisions whatsoever to change the indexation arrangements for the pension. I think that that question, the way you're framing it and the way you seek to scare vulnerable Australians, is very dishonest indeed. When it comes to JobKeeper, of course we need to phase out of these historically unprecedented, transitional, crisis-level support arrangements. That is what none other than Mr Albanese used to say. In May, June and July he was on the record saying we've got to phase out this historically unprecedented level of support. He is right, because we need to allow the economy to adjust so that it can get into the new normal and start growing again from the new baseline. That is what we need to do.

Quite frankly, we were hit with a crisis. We needed to pause and put in place all the appropriate support mechanisms. But now, moving forward, we've got to allow the economy to transition out of the crisis into the new normal and for those businesses which have the opportunity to be successful, viable and profitable into the future to have the best possible opportunity to succeed. That is why we are pursuing, again, our pro-growth agenda which the Australian people voted for before the last election. That is why we're providing—

Opposition senators interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Order on my left!

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

tax incentives to business to encourage them to invest more in their future success, so that growing businesses will hire more Australians. That's why we're pursuing an ambitious free trade agenda, giving our exporting business better access to markets around the world, and lower electricity prices, better skills and indeed less regulation and faster approvals for our projects so that we can ensure we get more projects and more jobs off the ground. These are all the things that we are doing and will continue to do to create more jobs.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Gallagher, a supplementary question?

Katy Gallagher (ACT, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

The National Accounts show that household spending levels collapsed in the June quarter, demonstrating lack of confidence in the economy. Why is the government reducing support to households now, at a time when they clearly require it?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

In one of my earlier answers—

Senator Watt interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Order! Senator Watt.

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

I pointed out that consumption levels had dropped, in particular in cafes and restaurants and for travel. Message from planet Earth again: governments around Australia imposed restrictions, restaurants were not allowed to open, cafes were not allowed to open, planes were not allowed to fly. I mean, what do you expect would happen in that context?

Honourable senators interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Order!

Honourable senators interjecting—

Order! On both sides of the chamber.

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

Honestly, even on planet Mars they would understand, I think. They would understand that when you have a global pandemic that requires restrictions which prohibit restaurants from opening, cafes from opening, planes from flying, that will—

Senator Gallagher interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Gallagher.

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

have an impact on the consumption in relation to those areas—of course. That is absolutely logical.

Honourable senators interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Order!

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

The only people who don't seem to understand the context of the global COVID-19 pandemic are the Australian Labor Party.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Gallagher, a final supplementary question?

Katy Gallagher (ACT, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

Thank you, Mr President. I do have—

Senator Wong interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Order! Senator Wong, I'd like to hear Senator Gallagher's question.

Katy Gallagher (ACT, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

a supplementary question. Won't the government's decision this week to cut JobKeeper, cut JobSeeker, cut wages and freeze the pension make the worst recession in almost a century even deeper and even longer than it needs to be?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

We now have Senator Gallagher criticising legislation she voted for.

Senator Keneally interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Order! Senator Keneally. Senator Wong, a point of order?

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mr President, I know this minister doesn't want to answer the question. He has continued to talk about the opposition.

Honourable senators interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Order! Can I hear the point of order?

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

The senator asked a question about the minister's decision this week. He wants to talk about Senator Gallagher and her voting record. There are plenty of other opportunities for him to do so, but he was asked a direct question. I ask him to return to the question.

Honourable senators interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Order! We won't get through many questions if this keeps up.

Honourable senators interjecting—

Order! We will just sit here and waste time. We're on broadcast; I don't think this is a particularly good example for the Senate. On the point of order, the question was very broad. The minister was eight seconds in. The point raised by Senator Wong and the interjections supporting Senator Wong were matters for debate. In my view, the minister is being relevant, particularly as he was eight seconds in. Senator Cormann.

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

Thank you, Mr President. We stand by the legislation that we put to the Senate and which the Labor Party supported and we absolutely stand by the decisions that we have made.

Senator Wong interjecting—

Senator Wong is actually not interested in answers; she's interested in disorderly interjecting.

Senator Wong interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Wong, please. I need to hear Senator Cormann.

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

We will continue to implement our plan for the strongest possible economic and jobs recovery and for phasing out the level of JobKeeper wage subsidy as the economy recovers at the end of a 12-month period of historically unprecedented support. We need to allow businesses to adjust and to allow the economy to adjust so we can maximise the strength of the recovery on the other side.