TRANSCRIPT: 6PR PERTH LIVE INTERVIEW, 21 April 2020

E&OE

Subjects: Virgin Australia, coronavirus;

OLIVER PETERSON:

Virgin Australia has called in the administrators but the company Chief Executive, Paul Scurrah, declares that the airline is not collapsing with reports there are 10 investors already circling.  Mr Scurrah says the plan is for the group to survive the economic impact of the coronavirus pandemic.  The Deputy Prime Minister and Transport Minister, Michael McCormack, joins me now live on 6PR this afternoon. Michael McCormack, welcome to the program. 

MICHAEL MCCORMACK:

Thanks for having me, Ollie. 

OLIVER PETERSON:

My pleasure. Will Virgin Australia take off once again?

MICHAEL MCCORMACK:

I do believe so and they've certainly made a statement to that effect and said that by going into voluntary administration, they plan to recapitalise the business and help ensure it emerges in a stronger financial position on the other side of the COVID-19 crisis, their words, not mine, but I agree wholeheartedly that this is the way that they can retain as many, if not all of the 10,000 people who have done such a great job for them over the years and you know, it's a big company and of course they have 6,000 suppliers as well. 

Look, it's been a difficult day for those workers. They are placed in that sort of position that, you know, they're unsure of their future. I understand completely. I have great empathy for them and I watched the interview and the emotional heartfelt pleas for their futures by baggage handlers and by cabin crew.  You know, it was pretty stirring stuff.  I know that Paul Scurrah, the CEO, he's got their best objectives in mind, I know the board has.  They've taken the brave and courageous decision to go into voluntary administration and we'll work through them through Nicholas Moore, who has been put in place by the Government to work with Deloitte, the administration company, and we'll see where we go from here.  But certainly it's the best way forward for Virgin. 

OLIVER PETERSON:

You are determined to still see two strong airlines in Australia, Michael McCormack.  The airline did come knocking though, on your door for weeks and weeks looking for a bailout.  Why hasn't the Federal Government opened the door?  Why hasn't it already provided financial assistance before Virgin Australia went into voluntary administration this morning?

MICHAEL MCCORMACK:

Well, we have provided financial assistance.  We provided financial assistance to the tune of $1.2 billion in our aviation package which includes making sure that we have those regional networks, making sure that whether it's Port Hedland, Broome, Geraldton, Kalgoorlie, Karratha, Kununurra, Learmonth, Newman and of course through Perth that we've got domestic trunk routes available.  Virgin can certainly participate in that.  Virgin can certainly participate in the international air freight mechanism that we put in place that took West Australian lobsters out of your great state and to international markets.  They can also take part in obviously JobKeeper, which is making sure that we get workers paid to the tune of $1,500 a fortnight.  I know that's going to be powerful for not just Virgin but for so many businesses, right across Western Australia, to ensure we keep as many business doors open as we can. 

OLIVER PETERSON:

It's not just the 15,000 or so people either directly associated with the airline or work for the airline.  There are hundreds of other people and tourism operators and you just outlined many, many destinations here in Western Australia who will be affected by Virgin Australia's grounding.  You can understand how essential it is obviously, Michael McCormack, when we get back up and running and many, many Australians will want to go for a holiday in our own backyard that we can still continue to support all of those tourism operators as well. 

MICHAEL MCCORMACK:

And indeed and look, I was in Western Australia not that long ago.  In fact, I was up at Geraldton talking to some of those crayfishers and some of them have been in the industry for 40 years and they'd lost the opportunity to sell their great product for the Chinese New Year Lunar celebrations because China was, at the time, going through the worst of the pandemic for them and that was the opportunity lost for those crayfishers and that's why we put in place, in fact, that Air Freight Mechanism.  I took their case to our cabinet team and made sure that we got $110 million to support that sector and many others. 

Besides, tourism is a huge part, huge part of particularly regional areas and as a regional Member of Parliament myself, I just know how important it is.  At the moment it's stay home but certainly when the restrictions get lifted we want as many people to visit some of those great West Australian destinations as possible.  And we'll do it hopefully with two viable commercial airlines. 

OLIVER PETERSON:

Well, we would hope so.  Richard Branson, though, he took a swipe at your Government on Twitter today.  He says in most countries Federal Governments have stepped in, in this unprecedented crisis for the aviation industry but sadly this has not happened in Australia.  Why is that the case?  I know you outline there is an assistance package but not directly towards Virgin Australia.  Is that because 90 per cent of the airline is foreign owned, Deputy Prime Minister?

MICHAEL MCCORMACK:

There would be nothing wrong with Sir Richard Branson doing a little bit more too.  I mean, he lives on a Caribbean island.  He said that he potentially might mortgage that to help save his UK – European arm of the Virgin business.  I haven't seen him come out solidly to say that he would do it for the Australian arm of Virgin Airlines.  And you're right, I mean Virgin is always co-owned by Etihad, Singapore Airlines, a Chinese consortia and taxpayers could quite rightly say it's almost entirely foreign owned.  We want to see value for our taxpayers' dollars and any sector - any assistance we've given has been sector wide.  It's not just been Virgin, it's been for all airlines.  It's been for the entire sector and I think that's an important distinction to make. 

You look at the assistance that we've given so far to address this and it is a health pandemic, it's also an economic crisis but it has been industry wide.  We've been there to support those who have lost their jobs, those who haven't got jobs and those who we want to keep in work and they're as many as possible, as the Prime Minister Morrison says.  They're all essential workers.  We want to get Australia through the other side and I think the proof in the pudding of what we've done has been the fact that you look at how many deaths we've had and look, it's been a long time since March 1 when James Kwan was tragically the first to die from the coronavirus and our sympathies and our condolences again go out to his family and to the other 70 or so families who have suffered loss but you compare our record on the health front with those from overseas and it has been remarkable what Professor Brendan Murphy has been able to achieve through the restrictions that we've put into place and through the assistance that the Government has provided. 

OLIVER PETERSON:

Just on that for a moment, Michael McCormack, are you pleasantly surprised that we are in the strong position that we are in right now as opposed to say one month ago?

MICHAEL MCCORMACK:

I wouldn't use the word "pleasantly".  I'm hopeful, I'm always hopeful.  I look at what we've been able to do as a Government and we've made sure that whether it's aviation, whether it's agriculture, whether it's mining, that we've tried to help those industries and people who are in jobs as much as we can.  We need to, as a nation, get through this together and I appreciate it's been difficult telling people to stay at home, it's been difficult for people to do just that. 

I thank, I have to say, Governments and I appreciate Mark McGowan is not on the same side of politics as I am, but the efforts that he and all Governments, right across the nation, have done as part of the National Cabinet, working together in a bipartisan way, as best they can, to make sure that we have, you know, limited consequences health wise from this virus and as a nation, I think we can be justifiably proud at this moment, but there's still a long way to go and complacency is literally a killer and we can't ease restrictions and then have is a second wave of outbreaks and undo all the good work that we've done so far, Ollie. 

OLIVER PETERSON:

Back onto Virgin Australia.  You made the point before that you've appointed Nicholas Moore, the former Macquarie Group CEO to lead the Government's engagement with the administrator Deloitte.  Does your Government now have a preference and can it shape what the company's ownership structure looks like in the future and would the Federal Government become a shareholder in a new Virgin Australia?  Is that still an option on the table, Michael McCormack?

MICHAEL MCCORMACK:

We'll see what happens.  I'm encouraged by the fact that there are 10 potential investors and perhaps that would not have happened but for the company taking the step and the brave move to go into voluntary administration.  We would still be no better off than we were yesterday or a week ago. 

I mean, let's face it, you know, Virgin came into COVID-19 with a $5 billion debt.  That's very unfortunate.  Of course, the aviation sector has been hit hard, not just Virgin but Qantas, Regional Express, all airlines have been hit hard by this crisis, this virus and you know, what we want to see is two viable commercial airlines coming out of this, operating those domestic routes and I'm sure that with the measures taken so far and with the steps that Virgin has taken today to go into voluntary administration, we can do just that. 

OLIVER PETERSON:

Just before you go, Michael McCormack.  Your National Party colleague Barnaby Joyce is pouring a bit of cold water on this track and trace app.  Do you have any concerns about downloading the app and tracking and tracing where the coronavirus might be spreading?

MICHAEL MCCORMACK:

Not at all and I think if it saves your life or someone else's it's well worth doing.  It doesn't take long to download an app.  It's optional but I will be encouraging my family members, I've got three adult children, they've all said they will download it.  It's something that I think is a no-brainer.  Honestly, if downloading an app is going to save your life or someone else's, I think it's a good move to make and take and I would far sooner download an app and trust those who are going to be using the information to save perhaps your life or someone else's, than be lying in an ICU ward or indeed, a palliative care bed two months from now wishing I'd downloaded an app, wishing I'd taken that simple step. 

OLIVER PETERSON:

Michael McCormack, thank you for your time live on 6PR this afternoon. 

MICHAEL MCCORMACK:

Thanks, Ollie.  Pleasure.

Shane Manning