DAVE SHARMA:
We’re here in the electorate of Wentworth. Just been in at the Blair Street Dairy, a local coffee shop here in Bondi. Talking to the two local business owners, James and Cliff, about how they’ve been using things like JobKeeper, the instant asset write-off and the cashflow boost for small business to get through the COVID-19 pandemic, but to also come out stronger on the other side. Josh, it’s great to have you.
JOSH FRYDENBERG:
Thanks very much, Dave. Congratulations to you for advocating hard for the people of Wentworth, every day you’re out there. I have to say, being out here in Bondi is probably not as hard as some other places across Australia. What a beautiful place Bondi is. Just meeting these local cafe owners tells the story of COVID-19 when the pandemic first hit, they had to close their doors, put off their staff because of the challenges they faced. They were able to use, in some instances, the JobKeeper payment and then they were also able to get the benefit of the cashflow boost. Once the virus was suppressed, they were able to open their doors. They started to adapt. They were selling cookie dough and now they’re selling 2,000 packets a week; an amazing adaptation by them in light of the circumstances. Now, business is thriving. Business is back to normal and that is what has happened in New South Wales as their world-class testing and tracing has been used to suppress the virus. So, Dave, thanks for the opportunity to be here. Great to see the people of Sydney out and about in the sunshine. Of course, backing small business has been a key feature of our Budget. There are so many measures in the Budget to support small business, whether it is the immediate expensing which will allow businesses to write off new purchases of equipment of machinery all in year one, whether it is the use of the loss carry-back which will enable businesses that made a loss as a result of COVID-19 to carry it backwards against profits and taxes previously paid and get a tax refund. Whether it is the tax cuts that we have now legislated, supporting more than 11.5 million Australians which is putting money in their pockets to spend at local cafes, such as this one. In the Budget there are a range of measures. And, of course, the support for 100,000 new apprentices to get a new apprentice chef, to get a new apprentice baker, to get some other apprentices right across the economy. The Budget is all about jobs and the measures in our Budget will help create one million new jobs over the coming years.
QUESTION:
Treasurer, you said the Federal Government is still considering what the future rate of JobSeeker should be before the Coronavirus Supplement expires at the end of the year. What economic indicators are you waiting for?
JOSH FRYDENBERG:
Both the Prime Minister and I have been very clear that we’re leaning in to ensure continued support for people on JobSeeker. We recognise the circumstances are very different than to pre-COVID. Pre-COVID you had two thirds of people who were on the Newstart payment as it was then known, coming off within 12 months. The circumstances in the labour market are very different. But we’re watching very closely what is happening in the labour market and what is happening more broadly with the economic outlook. For example, in the month of August, the last job numbers that we had; 111,000 new jobs were created, bringing to a total of 458,000 jobs that have been created over the last three months. 60 per cent of which have gone to women and 40 per cent have gone to young people. The unemployment rate fell in the month of August from 7.5 per cent down to 6.8 per cent. Treasury were telling me, and the market was expecting, that the unemployment rate would actually rise and not have its biggest fall in 32 years. So that level of uncertainty and dynamism through the economy is what we want to closely monitor before we make a decision about the JobSeeker rate.
QUESTION:
Can you promise, though, that the base JobSeeker rate won’t return to pre-coronavirus levels?
JOSH FRYDENBERG:
Again, we will make our announcement once those decisions are taken. But we recognise the importance of providing people with that safety net, and we effectively doubled the safety net with the coronavirus JobSeeker supplement. That helped cushion the blow for people who were unemployed. The important point is that the best way to get people back to work is to ease the restrictions. Here we are in New South Wales where restrictions have been eased and people are filling the cafes behind me. That’s creating jobs. And that is what our Budget is designed to do. Our Budget sees Government as a catalyst for the recovery, not the solution. Our political opponents always see Government has the solution. They will always seek to spend more, they will always seek to tax more. What we want to do is encourage businesses to invest, to hire, to innovate and to grow. By easing those restrictions, by providing those incentives to businesses to invest, by ensuring that the JobMaker hiring credit can help get people aged 16-35 back into the workforce, that’s what we’re seeking to do, to provide the catalyst for job creation across the country.
QUESTION:
Those who are struggling would want a bit more clarity. Can you be a bit clearer about when that decision will be made? Will it be late October? Will it be November? Will it be December or past that?
JOSH FRYDENBERG:
We will be expecting to make that decision in December and we have a Mid-Year Economic and Fiscal Outlook out in December. It’s unusual times because that is so soon after the Budget, with the Budget normally due in May and, obviously, being handed down on October 6. We’ll be making that decision in December.
QUESTION:
Treasurer, does the Government remain (inaudible)?
JOSH FRYDENBERG:
The Morrison Government is absolutely committed to the Stage 3 tax cuts. In fact, we took them to the last election. The Australian people voted in favour of our tax cuts; $158 billion of tax cuts which are designed to put more into people’s pockets, to reward effort, to encourage aspiration, to boost economic activity and to create jobs. It was a very clear contrast at the last election between the two sides of politics. Labor went to the election with $387 billion of higher taxes; higher taxes on retirees, higher taxes on superannuation, higher taxes on income earners, higher taxes on housing. That was the Labor Party’s policy. Still remains the Labor Party’s policy. They will always tax more, they’ll always spend more. Our focus has been on cutting taxes. We took it to the Australian people and we successfully legislated through the Parliament. But the reason why we believe so strongly in those tax cuts is it creates a fairer, stronger and better tax system. You will have one big tax bracket between $45,000 and $200,000, where 95 per cent of taxpayers across the country will pay a marginal rate of no more than 30 cents in the dollar. That’s a huge reform. It’s a reform we have legislated and it’s a reform we are committed to.
QUESTION:
Labor says it would spend money on improving social housing. Do you agree that this achieves the Federal Government’s aims of supporting apprentices and the construction sector?
JOSH FRYDENBERG:
Well we have strongly supported apprentices in this Budget, a total of $4 billion of support both for existing apprentices, but also $1.2 billion to encourage people and businesses to take on 100,000 new apprentices with a wage subsidy of up to 50 per cent. That’s really, really important. We’re supporting the construction sector with programs like HomeBuilder and the First Homeowner Deposit Scheme. That is a really important initiative to get people buying housing and to see more construction. But we’ve also strong supported in this Budget affordable housing, building on the $4.6 billion a year we spent on rental assistance, we’ve put an extra $1 billion, bringing to $3 billion that we are spending on affordable housing by providing concessional finance to NFIC which does an important role across the community.
QUESTION:
Treasurer, Jonathan Kearsley from Nine News, thanks very much for time this morning. Can I ask you, it is only a few days since you handed down your Budget and already we have the Victorian State Government saying the restrictions, easing of restrictions, could be delayed, given your Budget was based on a number of parameters, what does Victoria’s decision on easing of restrictions do to the nations finances?
JOSH FRYDENBERG:
Well, we’ve already said the hit to the national economy from the second wave of cases in Victoria has been very significant, between $12 and $14 billion has been the hit just in the September quarter and we in the Morrison Government have provided some $28 billion already to Victorian workers and Victorian businesses through JobKeeper, through the cash-flow boost and we’ll continue to provide that support with an estimate in the December and March quarters around 60 per cent of those on JobKeeper will come from Victoria. But our assumption in the Budget is based on the announcements that the Andrews Government have already made about the easing of restrictions over time and that that would happen by the end of this year. That it would happen in a gradual stage and we would see the easing of those restrictions and the lifting of border restrictions by the end of the year. But obviously, being here in Sydney couldn’t be a clearer contrast to the situation in Victoria. And my message to Daniel Andrews is to get on with it. The other day you had more cases in New South Wales than in Victoria and we know how successful New South Wales has been in suppressing the virus and allowing businesses, such as the cafe behind me, to get back and open and get people back to work. So in Victoria we need to get people back to work, we need to get people back on the streets, we need to allow kids get back to school. So my message to Daniel Andrews is get on with it. Get on with it and let people get on with their normal lives in a COVIDSafe way.
QUESTION:
So Treasurer, are your numbers already out of date?
JOSH FRYDENBERG:
The Budget numbers are the best assumptions based on the Treasury forecast at this time. And they remain the accurate Treasury forecasts for where they see the economy evolving, we’ll obviously have a Budget next May, we’ll update the numbers then. We’ve got a Mid-Year Economic and Fiscal Outlook Statement before the end of this year and we’ll update further numbers then. It’s a very uncertain, dynamic environment, but the clear message out of this Budget is that more people are coming into jobs, the Australian economy is going to be growing and we have the plan to strengthen our economy and rebuild for the future.
QUESTION:
Given there’s been a lot of backlash about the level and nature of support for women in this Budget, did you read the room wrong?
JOSH FRYDENBERG:
We’ve provided extensive support in this Budget to get more women into work. Look at our track record. Prior to COVID, female workforce participation reached a record high, the gender pay gap had started to close and of the 1.5 million new jobs that we were able to help create across the economy since coming to Government, 60 per cent went to women. Now it’s absolutely right that women have been significantly impacted by this economic crisis. 54 per cent of the jobs lost have been jobs that have been filled by women, but importantly 60 per cent of the jobs that have come now back have gone to women. And as you know we have put in place a women’s economic security statement, a second such statement in the Budget, and we had a range of other measures that are designed to boost female workforce participation across the economy.
QUESTION:
(inaudible)
JOSH FRYDENBERG:
The $137 billion, which is the cost over the medium term for the stage 3 tax cuts, is designed to put more money into Australians pockets, which will create more economic activity across the economy, which will create more jobs. Bringing forward stage 2 alone will help to create 50,000 jobs. You see, there’s a clear contrast between what Dave and I believe it, and the Morrison Government believes in, which is for people to keep more of what they earn, to reward effort, to encourage aspiration and to see taxes come down. And the Labor party, who took to the last election $387 billion of higher taxes, which is still on the Labor party’s books. And the Budget in reply speech from the Leader of the Opposition was conspicuous in its absence about the talk of business. Small businesses which are the backbone of this economy. Little talk about how small business, and businesses more generally, can help drive the economic recovery. That’s where our Budget was focused on, because eight out of ten jobs across the economy that are in the private sector (inaudible) spending more, investing more and hiring more. There are a range of programs to guarantee the essential services which you can do with a strong economy that we have. But we also had a series of individual measures which are designed to create tens of thousands of jobs across the economy.
QUESTION:
Treasurer just lastly, NSW is talking about moving to a two square metre rule at venues. How important are moves like that to help businesses return to normal?
JOSH FRYDENBERG:
Again it’s important to follow that medical advice here in NSW, as it is elsewhere. Here in NSW, they have shown successful how they can suppress the virus, deal with new cases, but still allow people to go about their normal lives. And you’ve seen the health professionals very critical about what has happened in Victoria, not just the way it’s been implemented, but also the consequences for young people, particularly for their mental health. You’ve seen the legal professional be very critical about has happened in Victoria about the nature of the legislation that the Government has been seeking to introduce. And you’ve heard the business community very critical about the lack of substantial support. But you’ve seen the Federal Government do the heavy lifting when it comes to spending in Victoria in order to get people back to work. No lesser figure than the Governor of the Reserve Bank has said that state government’s right around the country, whether they’re Liberal or they’re Labor, need to do more to spend to support the community and the economy. We at the Federal level have pulled out all stops, it’s been a full court press from the Morrison Government, to get more people into jobs and to help those who are in a job stay in a job. Thank you.