SABRA LANE: The Prime Minister Scott Morrison joins me now on the line from Parliament House.

Prime Minister, good morning.

SCOTT MORRISON: Good morning, Sabra.

SABRA LANE: How long will these small businesses need help, given for many of them the period right now, the summer school holiday period, is normally the most important trading period of the year for them?

SCOTT MORRISON: Well, they'll need it now and they'll need it for some time to come.

I mean, for some of these businesses, for many in these areas, this is the time of year which supports the rest of their year until the burst of next summer's season.

And so that's particularly why we've done the zero interest loans for two years, so the principle doesn't accrue; there's nothing there — nothing to pay for two years while businesses get back on its feet.

That's working capital, that's also for other works that they might want to do in the business. That's in addition for those businesses that have been directly damaged by the fires of grants of up to $50,000. That's assessed by the state governments, as are the loans through their financing authorities.

And then, on top of that, the other thing we're doing today, Sabra, is we're providing relief around the BAS (business activity statements) for these businesses. That affects cashflow and their pay-as-you-go income tax.

I mean, they can claim back anything they paid in the last quarter. They'll have a December — that is, for their income tax. There is a zero assessment for December and the BAS doesn't have to go until at least May.

So this is all about trying to support people around their cash flow right now.

SABRA LANE: Sure. How much money is the Government willing to spend to help these businesses, even businesses who are indirectly affected?

SCOTT MORRISON: Well, it is a demand-driven program, so as many as needed, and as many as qualified as to what we're doing.

This could be in the order of hundreds of millions…

SABRA LANE: Your wallet is open and there are no limits?

SCOTT MORRISON: Well, this is why we put the $2 billion fund in place. This is exactly why we did it, and we knew this was one of the key things we had to do.

We spent the last week working with the small business community. I mean, you have just heard from Peter there in your package, and we are working with the Chamber of Commerce and Industry, local chambers, the tourism industry.

I'd stress also a lot of the recovery works that are going to go on is also going to support these towns because it's going to bring contractors and tradies and a lot of activity, which will then support local economies.

The rebuilding effort of itself will be assistance to small business because it will bring, you know, people doing fences, people rebuilding sheds.

And yesterday we confirmed that the Commonwealth will spend over $100 million on this, supporting the states 50/50 to do all the site-clearing costs, clean-ups on all residences and all commercial private properties, on the demolition works that has to be done for the insurance.

That means if you’ve got insurance, you are starting, in many cases, about $50,000 ahead of the situation because you don't have to pay to get your site cleared, so your insurance will go further.

And if you don't have insurance, well, at the very least you'll have your site-clearing costs covered.

SABRA LANE: Alright. Cabinet is meeting today; are you taking your proposal for a bushfires royal commission to that meeting?

SCOTT MORRISON: We'll talk about that today. I mean, this is not something that I'm seeking to rush.

Right now, we're focused on the response and the recovery. I think the three things, though, that have become very clear to me, and I talked about them last in this last Sunday week, and that was: we have to get a clear idea about where the line is, is when the Federal Government can take action and initiate action to provide support in natural disasters.

I mean, in December there was less than 900 ADF (Australian Defence Force) personnel that had turned out in response to the requests that were being received by the states.

After we changed that policy and we did the compulsory call out of the reservist, the first ever, that figure is now at more than 6,500, and I think it's making an enormous impact on the ground and it's working in closely with the states and I know that's appreciated.

But then there's the broader climate resilience issues that need to be addressed and that’s hazard reduction, it’s dams, it’s the broader preparedness issues that we will look at and the longer term climate adaptation issues.

So I think they're the things that we we're looking to take forward out of this process and do that in the most constructive way we can.

SABRA LANE: How soon before you unveil all the terms of reference for that inquiry?

SCOTT MORRISON: Well, I said we will work closely with the state premiers and that's what I'm doing. So I'm not getting ahead of ourselves.

And also, right now, the focus is on the response and the recovery on the ground.

See, we've already committed over half a billion dollars, about 90 per cent of which is likely to be spent before the end of this financial year, by the 30th of June.

So what I want the recovery agency led by Andrew Colvin focusing on is actually getting these programs out and doing.

I want the cheques in people's hands, I want the money flowing in the communities, I want the tourism campaigns being run, I want the $50 million that we put into wildlife support and assistance getting to those organisations and the various programs that we run there.

The mental health program, $76 million also there. I want to focus on the implementation.

SABRA LANE: Okay. The New South Wales Minister, Matt Kean, says there are a group of senior Liberals, including federal colleagues, urging your Government to adopt stronger climate policies and a commitment not to use the so-called carry-over credits to meet Australia's emissions commitments.

Will you consider those calls?

SCOTT MORRISON: Matt Kean doesn't know what he's talking about. He doesn't know what's going on in the Federal Cabinet. Most of the Federal Cabinet wouldn't even know who Matt Kean was.

And we are dealing with our climate policies in the same way as we took them to the election. We're beating, and will meet and beat our emissions reduction targets. Not just Kyoto...

SABRA LANE: It is a significant slap down of a state minister. If you're not going to change those policies, as he and others are requesting, how are you going to deal with this internal angst?

SCOTT MORRISON: Well, who are the others? Who are the others, Sabra?

SABRA LANE: Well, you know that I don't like to divulge the sources.

SCOTT MORRISON: I don't know, Sabra; that's the point. What is being suggested in your question is that there are others. This just isn't the case.

The Government is completely united on focusing on the challenge of the response to the current bushfire crisis and meeting and beating our emissions reduction targets and taking our climate policies forward over the next term of government.

And we have the opportunity beyond to ensure we meet and beat our emissions reduction targets, which would see a halving per capita in emissions by Australia over the next 10 years.

We are leading the world on renewable energy technologies. That's a fact.

In terms of our levels of investment in renewables, we've got one in five homes that has solar on its roof. Australia is getting the job done. We're carrying our weight.

But I tell you what I'm not going to do: I'm not going to put a carbon tax on people, I'm not going to increase their electricity prices and their cost of living, and I'm not going to wipe out resource industries upon which hundreds of thousands, if not millions, of Australians depend on for their living.

SABRA LANE: We need to move on, Prime Minister.

SCOTT MORRISON: Well, you know what our target is; it’s 26 per cent and the Government has one and I can't say that for everyone else.

SABRA LANE: Do you endorse Bridget McKenzie's approach in deciding how public money will be allocated in her administration of the sports grant scheme?

SCOTT MORRISON: Well, the auditor-general's report I thought was very serious, and we are acting on its recommendations and moving quickly to do that.

And on top of that, there are some legal issues that were raised by the auditor-general which I'm moving quickly with the Attorney-General to ensure that they’re clarified as soon as possible.

The auditor-general found...

SABRA LANE: Sorry, that wasn't my question. It was: do you endorse her approach?

SCOTT MORRISON: I was getting to it.

The auditor-general found that there were no ineligible projects that were funded, and that the rules were followed.

So that was the finding of the auditor-general.

SABRA LANE: And the auditor-general — sorry, Prime Minister — also said it was not informed by an appropriate assessment process and sound advice and that there was evidence of distribution bias.

Voters would know that as pork barrelling 101.

SCOTT MORRISON: Well, I also know that the program was delivering very much needed grants to local communities to build sporting facilities, which I know those communities are very appreciative of.

And where there are lessons to learn from this process, that's fine.

But what I do know is that the program of $100 million was spent on ensuring that young girls don't have to change in their parents’ cars or out the back of the shed; they can have actual proper facilities in their communities.

And I do know that these grants, all eligible, every single one of them was an eligible project, unlike what happened in the Ros Kelly affair and what happened under the previous government.

So there were no issues about ineligibility of any projects. The auditor-general found that.

SABRA LANE: Did either you or your office have any involvement in allocating the money to marginal seats?

SCOTT MORRISON: The decisions were done in accordance with the process the Minister set out, and that was that the Minister made those decisions and they were actioned in an endorsing way by Sports Australia.

That's how it worked.

SABRA LANE: Prime Minister, thanks for joining AM this morning.

SCOTT MORRISON: Thanks a lot, Sabra.