Television Interview with Kathryn Robinson – ABC Weekend Breakfast – Saturday 1 August 2020


SUBJECTS: Coronavirus in Victoria; proposed lending changes; end of eviction moratorium. 

KATHRYN ROBINSON, HOST: Let’s bring in our political panel now and we are joined by Liberal MP Jason Falinski and also by Labor MP Jason Clare, who’s the Shadow Minister for Housing, Homelessness and Regional Services. It’s the two Jason’s this morning. Good morning to you both.
G’day guys. G’day Jason.
Good morning. 
ROBINSON: Jason Clare, I might begin with you. When we look back at what we saw at the hearing into the inquiry with Daniel Andrews fronting that yesterday, there doesn’t seem to be any more clarity over who was responsible for the quarantine program in Victoria. Is that good enough? Should people lose their jobs? Should heads roll? A lot of people are asking this question over the mismanagement of that system because, don’t Victorians deserve and expect to have the people in place and confidence in the system who are going to manage their way out of the coronavirus pandemic? 
CLARE: You can see how frustrated Dan Andrews was yesterday. He wants to know what’s happened too, he’s digging into it trying to find out as well. It’s obvious that mistakes have been made. The virus got out of quarantine, it got out of the hotel system, and its run through the community and caused all this damage  But I give it to Dan Andrews, the bloke fronts up. Whatever you want to say about Dan Andrews, he turns up. He set up the inquiry, he turned up to give evidence, he turns up to do a press conference for an hour every day for the last 80 days. He wants to get to the bottom of this too. 

I asked a friend of mine in Melbourne the other day about this. She’s had the virus, her husband had the virus, all her kids have had the virus and her mum and dad have had the virus as well. She said “look, I’m not interested in the politics. I just want this bloody thing fixed. I want my kids to be able to go back to the playground and be able to go back to school to be able to see their grandparent’s again”. I think most people want to make sure that this is fixed, it doesn’t happen again and that life can get back to some sort of COVID normal as quick as possible.

ROBINSON: Jason Falinski, as Jason Clare said there, the Premier fronted up, he said sorry, it seemed like a very sincere apology. Is that good enough, though? Given that we still don’t know who is responsible for this hotel quarantine bungle. What do you think should have been done right from the very beginning?
FALINSKI: If I could just on indulgence, I would just like to recognise the life and times of John Fay whose funeral it was yesterday. He did a great job as Premier for New South Wales bringing the Olympics to Australia. In answer to your question, I had a line today about you know, the hotel quarantine in Victoria looking like the opposite of Hotel California: that no one could check in but everyone’s seemed to check out, but you’re right. Millions of Victorians have suffered because of this failure here. And I think you’re further right that we hope that what Dan Andrew said yesterday he really means because this isn’t about blame. This is about finding out what went wrong so that we don’t repeat the problems of history, and that this never ever happens again. I think what this inquiry has shown is that no one seems to know how this happened and that’s the really big problem here. Because if you can’t learn the lessons of history, then you’re doomed to repeat them. 
ROBINSON: So what’s the answer, Jason Clare, if we can’t find out what went wrong? We have the Premier saying the responsibility lies with Mikakos, Jenny Mikakos, the health department minister. Jenny Mikakos says that there was a timing issues. Saying that she did not mislead the Inquiry. If we can’t get to the bottom of the answers, where does that leave the hope and the prospect of Victoria navigating their way out of this if the leaders remain in place? 
CLARE: You’re right; it’s a big problem that has to be fixed. We have the same problem with Ruby Princess as well. This is why you have a Commission of Inquiry, to find out where the mistakes were made, to make sure that you can set up a system that is solid, so it doesn’t happen again. A big part of the problem here is obviously private security. Having the army in there or having the police like you have seen in other parts of the country works a hell of a lot better. That’s a big part of the solution here. But the other part of the problem here is making sure that you can trace people down as quick as you possibly can. Because if the virus takes off like a rocket, it’s so much harder to catch up, to be able to trace everybody down. Otherwise, you have to lock at the city down and you’re seeing that problem in London, now. You’re seeing it in the US, you’re seeing it in other parts of the world. This is a problem that’s going to be with us, I think, for another six to 12 months. So the recommendations that come out of this inquiry are going to be critical. 

ROBINSON: Jason Clare, looking back at this Senate Inquiry, and we watched day after day after day to see what actually comes out of the Senate Inquiry. What seemed to come out was no one seemed to know what the other person was doing. Is this an administration that’s in disarray, or is this an administration that’s covered trying to cover its tracks? 
CLARE: You mean the Commission of Inquiry? 
CLARE: I think it’s absolutely the opposite. You’ve got a Premier here who’s set up an inquiry, who’s actually turned up. I didn’t see the Premier of New South Wales turn up to the Ruby princess inquiry. The Prime Minister of Australia refused to let border officials go to that inquiry. Here you’ve got the reverse. You got the Premier fronting up. You got the Premier expressing frustration saying “I tried to get the answers. I couldn’t get them. I don’t know all the answers. That’s why I’m having this inquiry to get to the bottom of it”. This is actually what politicians should do. They should be honest. Too often politicians don’t say “I don’t know the answer”. You’ve got a Premier here saying “I don’t know, I need you to find out to help to make sure this doesn’t happen again”. That’s a good thing. We should be welcoming that rather than politicians just sprouting lines. 
ROBINSON: Let’s move on to lending laws and the changes that were proposed yesterday by the Treasurer. These planned changes really shift the responsibility from the banks to the responsibility of the borrowers, if you like. Jason Falinski. Isn’t there a concern now, though, that the banks are going to aggressively push credit onto some people that can’t afford to take it?
FALINSKI: Kathryn, absolutely not. I mean, these laws are a disgrace. They have hurt consumers. They have entrenched the position of the big four banks in Australia. They have stopped smaller providers and new banks and fintechs coming into the marketplace. They have done irreparable damage to the Australian economy. They’ve stopped young people from being able to afford their first time. They, as the Hayne Royal Commission showed, after seven years of these laws being in operation, it made absolutely no difference to consumer protection. They were appalling. They were restrictive. They did enormous damage. And it was of course, they were created under this idiotic premise that somehow the financial crisis in 2008, which originated with loose lending laws in the United States, that somehow instituting credit laws in Australia would impact US banks in the United States. All we’ve done is hurt the most vulnerable Australians, people trying to get on with their lives in Australia for no discernible public interest outcome. And as I repeat, the Hayne Royal Commission demonstrated conclusively that these laws didn’t work. They just made the situation worse. The only regret I have about appealing, repealing those laws is the fact that we didn’t do it a lot sooner. 
ROBINSON: If I can ask the motivations behind it, because the Treasurer, Jason Falinski, said that the changes are designed to increase the flow of credit to households and businesses. Where is the evidence that there is a problem with credit flow? We had the Commonwealth Bank recently saying that the flow of credit is above pre-COVID levels, and their lending is showing a disturbing pattern. 
Sorry to interrupt Kathryn, but of course the Commonwealth Bank is going to say that. These laws benefit the Commonwealth Bank. These laws benefit the big four banks in Australia. 
ROBINSON: So there is a credit issue?
FALINSKI: What they do is they stop smaller credit providers coming into the marketplace and providing competition and providing better credit products to Australian consumers and to people who are trying to buy their first time and Australian businesses who are trying to get ahead. Of course, the big four banks are opposed to repealing these laws. We have Matt Comyn in front of the economics committee just two weeks ago, saying “oh look, you know, if you’re willing to invest in IT systems, and you’ve got the consumer data”, which of course they have, how many start-ups, how many fintechs have a billion dollars to spend on IT systems? How many fintechs have, you know, 30, 40, 50 years of consumer data that they can apply to machine learning? These laws have done nothing to protect consumers and done everything to hurt the Australian economy, hurt people who are trying to get ahead, hurt businesses that are trying to expand. I mean, I just put it on people, when you are supporting these restrictive lending laws, all you are doing is supporting the very vested interests that you claim that you want to actually protect consumers from. You’re doing the opposite of what you said you wanted to achieve. The evidence is in. It is conclusive. It’s not just the Hayne Royal Commission, ASIC, APRA, the Reserve Bank, all of them have come to the same conclusion. We need to get rid of these laws so that consumers can get a fairer go in Australia. 
ROBINSON: But the question here Jason Clare is that these laws were put in place because of the lessons that we learned from the GFC. Do you think borrowers are far more aware now and borrowers can be trusted to borrow only up to the credit that they can afford?

CLARE: Of course we want people to be able to borrow money to be able to buy a house, to be able to set up a business. But what we should all agree on is you don’t want people being lured into borrowing money that they can’t afford to repay. That’s the real risk here. We saw lots of evidence of that at the Royal Commission. I see evidence of that still people coming into my office that don’t have a job are being enticed to borrow $20,000 for a car. The Government opposed the Royal Commission, they haven’t implemented most of the recommendations of the Royal Commission. The Royal Commission actually recommended that we don’t do this. So I just say, let’s be careful here, we will look at the laws. We want to make sure that people are able to borrow money to buy a house or to be able to set up a business, but you don’t want people drowning in debt that they can’t repay. And hopefully there’s a bit of a balance, a bit of common sense can be applied. 
ROBINSON: So Jason Falinski, Jason Clare is saying that the Royal Commission advised against proposed proposals. 
FALINSKI: Yeah, I was about to say the Royal Commission made didn’t make that recommendation. The Royal Commission didn’t opine on the responsible lending obligations. Responsible lending obligations had been in effect for eight years by the time the Royal Commission commenced its proceedings. And in eight years it was able to demonstrate that the consumer, the restrictive lending laws had no impact on consumer protection. These are bad laws. We’ve has ASIC take Westpac to court where the court found that actually consumers that borrowed before restrictive lending laws came into place, we’re less likely to default on their loans than people who borrowed with restrictive lending obligations in place. I mean, these laws are bad. They may have been a good idea. They may have been implemented out of concern for consumers, but they have done the opposite of what they were meant to achieve. And the sooner we get rid of them, the sooner consumers will be better off. 
ROBINSON: We have to move on now. We want to talk about this: the moratorium on rent deferment that’s coming to an end in some states. Jason Clare, we know that some welfare subsidies are also starting to wind down at the moment, some charities are warning that homelessness may start to rise. What do you think is the solution here?
CLARE: The freeze on evictions worked. It helped to stop people from being thrown out of the homes in the middle of a pandemic and potentially getting the virus and passing it on. But the state governments also set up schemes that were intended to encourage landlords to cut the rent for tenants and it seems overwhelmingly that they have failed. I think only one in ten people who lost their job got a cut their rent, a lot of people got their rent deferred. And as you point out, Fauziah, things are about to get a bit tougher because JobKeeper and JobSeeker are going down, unemployment is going up, and people have got to start to pay their rent now plus all of the back rent that they might owe over the last six months. So I worry about that. 

One of the things a lot of state governments did was set up schemes that involve giving money to landlords or tenants to help make sure they can pay the rent. I think in most cases it was about two thousand or two and a half thousand dollars. But from what I can tell, most of those schemes didn’t provide any money to landlords or tenants at all, or not a hell of a lot. It’s still there. And if things are going to get tougher over the next six months, which I think they will with people potentially getting evicted because they can’t pay the rent and all this back-rent, then I think state governments need to look at those schemes, fix them up, and make sure they’re helping landlords and tenants to get through this really rough period that I think is ahead of us. 

ROBINSON: And Jason Falinski, almost out of time. Just the last word to you on this. What’s in place to protect some of these vulnerable people who might be kicked out of their homes or apartments who might not be able to afford to stay where they’re living once all the wage subsidies are wound back? Is the Budget going to look at any areas for these vulnerable people? 

FALINSKI: The Budget will be looking at a lot of these areas. There’s no doubt about that Kathryn, the Treasurer has indicated that already, but Jason Clare is right. This is a very difficult time for both landlords and for tenants. We have managed to work together as Australians to get to this point. I was talking to a real estate agent yesterday who said in Randwick, which is in Sydney, vacancy rates are up to 20 per cent. So this is going to be a long hard slog out of it and the community will need to support both sides this time for us to get out of it fully. 
ROBINSON: Jason Falinski and Jason Clare, always great to have you on the program. Thank you for joining us today. 
FALINSKI: Thanks very much. 
CLARE: Thank you guys.