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Source: Australian Treasurer

CHRIS SMITH:

Josh Frydenberg is the Federal Treasurer and he’s on the line. Treasurer, welcome to the program.

JOSH FRYDENBERG:

Good morning. Nice to be with you, Chris, and your listeners.

CHRIS SMITH:

OK, let’s start with the extent of the problem and then you can tell us a little bit about how you’re going to get back and save the economy. How hard has the economy been hit?

 JOSH FRYDENBERG:

Very hard, and Australia’s not alone in having the economy dealt a very severe shock. We’ve seen obviously many people lose their jobs, many businesses have had to temporarily close their doors. Treasury are expecting that the unemployment rate will go from 5.1 per cent in February, the unemployment rate was falling prior to this crisis, to increasing to 10 per cent or more by the end of the June Quarter.

CHRIS SMITH:

And what, that equates to about a million people, does it?

JOSH FRYDENBERG:

We’re going to see many on the unemployment queues. The exact numbers will come out with the next ABS statistics. But it’s clearly having a big effect on employment. We’re also going to see GDP fall by 10 per cent according to Treasury, and this underlines the importance of getting people back into work.

CHRIS SMITH:

How much has the Government paid out? Like, in dollar figures, how much has the Government paid out up until now?

JOSH FRYDENBERG:

More than $20 billion has gone into the economy in recent weeks. That’s a combination of what is called the cashflow boost, where businesses are being, small businesses, are being provided money based on the size of their payroll. It’s also, there’s $750 cash payments to Australians who are on income support, more than six million Australians got that payment. But it’s also people accessing their own super early and tax free, with a million Australians doing that. And on top of that you’ve got the JobKeeper payments flowing from today, and that will be a very significant injection of funds into the economy.

CHRIS SMITH:

Yeah, but the JobKeeper payments begin today, in the same week in which the National Cabinet begins lifting restrictions. Have we overestimated what support was needed? I know we kept talking about the six month period, but six months, as I understand it, was based on the expectation that we’d have 150,000 lives lost. It was a furphy from the get go. Are you able to taper back how much commitment we have to JobKeeper?

JOSH FRYDENBERG:

Well we’ve prepared the nation for the long haul because we don’t want to see a repeat of what happened in Singapore and in Japan, Chris, where they thought they had the virus beaten and then they saw a second wave of cases. So we’ve got to be very careful as we ease the restrictions to follow the medical advice. But we’ve had great success in flattening that curve. We have one of the highest testing rates in the world, one of the lowest mortality rates in the world. We haven’t seen the lockdowns that we’ve seen in Europe. We haven’t seen the death toll that we’ve seen in the United States. So I think our response has been proportionate but of course we don’t want the spending to go for one day longer than it has to.

CHRIS SMITH:

Okay. So, this JobKeeper allowance, we’re talking around 4.7 million people, nearly 730,000…

JOSH FRYDENBERG:

So far.

CHRIS SMITH:

So far. There’ll be more, right. You’re expecting more?

JOSH FRYDENBERG:

We are.

CHRIS SMITH:

So how long will you pay JobKeeper to all of these individuals? Or does it matter? When they get back to work do they still receive JobKeeper?

JOSH FRYDENBERG:

Well, you can currently be working and still receiving the JobKeeper. The idea is that it supports the employer by reducing the cost of labour. And the ABS did a survey, Chris, which found that nearly half of those businesses that were using JobKeeper had actually been positively influenced to keep their staff on as a result of that program.

CHRIS SMITH:

So they’ll get that until September, will they?

JOSH FRYDENBERG:

Well, that’s what it’s legislated for, and of course we want to lift those restrictions as soon as possible, and we’ll continue to follow the medical advice.

CHRIS SMITH:

Hang on, when you say ‘lift restrictions’ it’s got nothing to do with JobKeeper. It’s locked and loaded until September.

JOSH FRYDENBERG:

It’s legislated until then.

CHRIS SMITH:

What if we get to a situation where, say, August, we have a situation where the economy seems to be moving again, restrictions are lifted, everyone seems to be back to work. Well, not everyone but close to on half a million people. You still got to have a commitment for JobKeeper and that commitment won’t change?
  
JOSH FRYDENBERG:

Well, again I’m not going to speculate on where the economy will be exactly then or where the health restrictions will be. What I can tell you is that we’ve legislated a program for six months. We’ve budgeted $130 billion, and we want the restrictions to ease as soon as possible.

CHRIS SMITH:

Okay. A listener has just written to me about JobKeeper. They say, “the employer does not get Government money and then pass it on to the employee. The employer uses its money to pay the employee and then waits at least a month for the Government to reimburse it. A big strain on small business and sole traders.” That’s pretty accurate, isn’t it?

JOSH FRYDENBERG:

Well, the program had to have an integrity measure. When you’re dealing with this amount of money, you have to have a system in place where it’s proven to the tax office that the money has been paid to the staff and then the business gets reimbursed. But in order to bridge that financial challenge for the business, we’ve approached the banks. Each of the banks have set up hotlines for their customers, who they know well, and have said that they’ll provide that bridging finance. And again, the surveys have shown that very few businesses are not applying for JobKeeper because they can’t access finance. So I think we’ve seen real improvement in the work of the banks to ensure that their businesses and their customers are able to participate in this program.

CHRIS SMITH:

Now there’s a report, Treasurer, in the West Australian that you’ve been given a 24-hour security detail because of threats you’ve received over JobKeeper. Are you able to confirm that?

JOSH FRYDENBERG:

Look, I’m not going to go into any of those details. I can tell you that the AFP make their own independent assessments, and they provide advice to me and I follow that advice.

CHRIS SMITH:

Who would possibly whinge about JobKeeper? It’s something that no other conservative government has ever ventured into. I don’t get that, but anyway. When you decide to take the foot off the brake, when will that be? What are the indicators economically that will tell you that the economy is back moving forward again?

JOSH FRYDENBERG:

Obviously seeing the unemployment rate fall is one. GDP and economic activity is another. And obviously business confidence is critical because we want businesses to be at the centre of job creation as opposed to Government. Government helps create the rules for the game, but it’s businesses that, you know, that drive investment, that drive job creation. It’s businesses that take risk and put their own time and hard work into growing their small enterprise. That’s what we want to encourage and that’s why I outlined in the speech yesterday, Chris, that there are certain values and principles that will guide our approach to the reform and the recovery phase…

CHRIS SMITH:

How long is it going to take to pay all of this back, though?

JOSH FRYDENBERG:

Years, years.

CHRIS SMITH:

Will it be in our lifetime, our children’s lifetime or our grandchildren’s lifetime?

JOSH FRYDENBERG:

Well, it will take years but the way to pay such a new level of debt back is not through higher taxes, which will reduce aspiration and investment. It will be through growing the economy, and the economy today is 16 per cent larger than it was when we came to Government, and that’s why infrastructure spending, cutting red tape, tax and industrial relations reform, and focusing on skills and education are going to be so important in the future.

CHRIS SMITH:

Ok. I just want to ask you the other question which has been bugging me for days. What were you thinking when you sang a song with Shane Warne?

JOSH FRYDENBERG:

I was thinking about getting more people to download the app to be honest, and I was responding to a challenge from Tony Burke on the Labor side who said that he was throwing to me, and obviously I reached out to Shane Warne and he was very kind in agreeing to do what was a pretty poor duet I would have thought.

CHRIS SMITH:

Yeah, well, you’ll never live it down, and for those people who haven’t heard it, here it is. It’s not the cat screaming outside your home.

[Plays excerpt]

CHRIS SMITH:

Oh, no, don’t do it to us. What have your kids said about that?

JOSH FRYDENBERG:

Oh, they loved it, they had their “come on, Aussie, come on” signs ready for the cameras, but obviously kept them away from that. But, you know, the good news is that five million Australians have now downloaded the app, and that’s an important part of our suppression strategy and getting to the recovery phase.

CHRIS SMITH:

Yes, let’s download more. Federal Treasurer, Josh Frydenberg, thank you for your time.

JOSH FRYDENBERG:

Good to be with you Chris.

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