SARAH HENDERSON:
Well, good morning everyone, and it’s absolutely wonderful to be here on the surf coast with my very good friend, the Treasurer, Josh Frydenberg, and also Josh and Tom from Bomboras and Folklore, here in Torquay. Josh and Tom run a couple of really successful businesses, another business called Main Beach at the Anglesea Surf Life Saving Club, and they’re just about to open another Folklore restaurant in Geelong, so, during the pandemic, they are an example of a great JobKeeper success story. Josh and Tom have been on JobKeeper, they’ve also been supported by the cashflow boost that we’ve initiated as a part of more than $250 billion of support that we have provided over the last year. Josh and Tom graduated off JobKeeper at the end of December, some 20 employees were being supported, but now as you can see, they’re doing a mighty trade.
So, I’m going to ask Josh to say a few words, and happy to take any questions after, of course, the Treasurer has spoken. So over to you, Josh.
JOSH FRIEND:
Obviously, first of all, I want to welcome Josh and Sarah to Torquay. Great time of year to be out, and obviously a massive thanks for the JobKeeper incentive and everything else that was offered to small businesses throughout the time. It’s good to see now that we’re off it and the economy is back to starting to boost in the region again and it’s a great incentive and we’re just truly thankful that we’re one of the lucky ones to get through and bigger and stronger for 2021.
JOSH FRYDENBERG:
Well, thank you very much, Sarah Henderson, a great advocate for this part of Victoria, as a former member for Corangamite as well, and it’s a great pleasure to be with you again here in Torquay. And Josh and Tom, thanks for inviting us to meet your staff and your clientele, and of course to see your business in action. You are another JobKeeper success story as a business that effectively had to shut its doors, except for some takeaway during the course of the pandemic, to have 20 employees on JobKeeper, and now to graduate off JobKeeper, and to see the business thriving, is just a real credit to you, to your staff, and of course, it’s really pleasing to hear how important the JobKeeper support from the Morrison Government, together with the cashflow boost and the other incentives and support measures, have helped your business transition through this difficult time.
Well, we know from new Treasury analysis that the Government’s economic support has provided a very significant boost to GDP. And we also know that there is now more than $200 billion of additional funding on people’s personal balance sheets, household balance sheets, as well as business balance sheets, compared to this time last year. That’s a function of increased Government support, but it’s also a function of increased savings, as people were cautious during a crisis, during the pandemic, as well as the health restrictions that were put in place last year, which meant that people could not travel or could not consume as they normally would do in their normal lives. But we do know that that money will continue to be spent and support cafes, restaurants, bars like the one we’ve just visited, for businesses right across the country as well. We are seeing an economic recovery, which is now well underway. 85 per cent of the 1.3 million Australians, who either lost their jobs or saw their working hours reduced to zero at the height of the pandemic, are now back at work. Business and consumer confidence has now recovered to its pre-pandemic levels, and we also saw GDP in the September quarter have a 3.3 per cent increase, which was the single largest increase in a quarter since 1976. And the $200 billion that is sitting on household balance sheets and business balance sheets in addition to what was there earlier last year, will help support the economic recovery and help avoid a fiscal cliff when the temporary emergency support measures come to an end. Our focus, as a government, is on jobs. The single major focus is on helping Australians stay in work, and those who are out of work get into work. And the fact that we have visited a business that has graduated off JobKeeper, the employees have remained in a job, is a very positive sign and another reason why we, as Australians, can be hopeful, optimistic, about the year ahead. Are there any questions?
JOURNALIST:
So, in terms of the fiscal cliff you’ve just described there, there was a lot of fear that there would be a lot of businesses failing as the measures like JobKeeper, the insolvency measures, all came to an end. Are you still thinking we’ll see this big wave of business interruptions, insolvencies, come potentially March and June?
JOSH FRYDENBERG:
Well, there were certainly some insolvencies that were deferred last year as a result of the temporary measures that we put in, which changed the amounts at which statutory demands could be made for, as well as the timeframes for those statutory demands. As you know, we’ve passed through the Parliament, at the end of last year, very significant changes to insolvency law, which will allow businesses to work through some of the challenges, and that’s adopting some of the elements of US Chapter 11-style bankruptcy laws. We have seen from Treasury’s analysis and forecasts about the unemployment numbers, but even when JobKeeper comes off, at the end of March, the unemployment rate will start to come down from there. And that is our message: as the restrictions are eased, as confidence comes back, as the economic support that we have provided continues to roll through the economy, more people will find jobs, businesses will stay on their feet, and we will get through this crisis.
JOURNALIST:
So, you don’t expect a wave of insolvencies?
JOSH FRYDENBERG:
Well, certainly there will be some that have deferred their insolvencies from last year that may go into that position this year. But, overall, the economy will continue to strengthen, even when the temporary emergency measures come off, and that insolvency legislation that passed the Parliament will be a great support.
JOURNALIST:
Also, I’ve spoken to some insolvency experts [inaudible], businesses in Melbourne, which has been very badly hit by COVID, as you would know. They’re terrified about losing JobKeeper in March. They’re terrified that it will be the main test for businesses. Why not taper JobKeeper for businesses? Up to 80 per cent of the businesses I’ve spoken to [inaudible].
JOSH FRYDENBERG:
Well, we have tapered JobKeeper. As you know, it was originally scheduled to be a six-month program and we extended it for another six months. Again, as a very positive sign for the economy recovering, we saw two million fewer workers, and around 450,000 fewer Australian businesses that were on JobKeeper in the month of October, compared to the month prior in September.
So, we will see, again, transition occurring across the economy, and as the restrictions are eased, as the confidence comes back, people are getting back to work. Now, yes, there are some aspects and some areas of the economy that continue to do it tough. That’s why we’ve adopted both economy-wide measures like JobKeeper, JobMaker Hiring Credit, and tax cuts, but also specific measures, targeted at specific sectors like what we’ve done for travel agents, like what we’ve done in the HomeBuilder program for the construction industry, like what I announced in last year’s budget around the tourism industry with a $350 million boost for regional tourism.
JOURNALIST:
So, JobKeeper definitely ending in March? Yes or no?
JOSH FRYDENBERG:
The JobKeeper program is legislated to the end of March and it’s our intention for it to end there.
JOURNALIST:
Is there any potential to extend JobKeeper or taper it out slower for hard hit industries like tourism? We’ve seen a lot of industries here still operating at half their capacity because of closed borders and international travel.
JOSH FRYDENBERG:
We have no plans to change the major parameters of the JobKeeper program. As I said, it’s been an enormously successful program. At its peak, it was supporting 3.6 million Australian workers. That number has significantly come down as the restrictions have eased, and people have got back to work and the confidence is coming back. So yes, there are families, there are businesses that are doing it tough, and the Morrison Government continues to be there for them with a whole range of measures. And it’s really important to understand that our economic support program is made up of not just JobKeeper, but a whole range of other measures; whether it’s the JobMaker Hiring Credit, which is helping to get young people, who are unemployed, into work; whether it’s the tax cuts, which have already seen in the last six months, $7 billion going into the pockets of Australian families - that’s money that’s being spent at coffee shops like the one behind us; as well as business investment incentives, bringing forward infrastructure spending, a whole range of other measures, which is helping the economic recovery.
JOURNALIST:
Should the states be coming up with their own JobKeeper because they’re the ones closing their own borders?
JOSH FRYDENBERG:
Well again, the States have announced some significant spending programs and if they announce further ones, that is matters for them. What we do know is that the Federal Government, the Morrison Government has done the bulk of the heavy lifting. $250 billion has been committed, already $140 billion is out the door. That is money that is in people’s pockets to be spent across the economy, helping to keep people in a job and helping to create new jobs.
JOURNALIST:
Treasurer, just on that $200 billion figure, is your message that these people, these businesses, should be spending it regardless of what they might be doing with it?
JOSH FRYDENBERG:
Well it’s not for me to tell them how to spend it, where to spend it, or when to spend it. Well what we do know is that money will be spent over time. That’s the history, that’s the experience of previous economic downturns when people become cautious with their savings and their savings ratio goes up as we saw last year that it does come down over time and that money does get spent. So I’m confident that people will spend that money across the economy that will help generate economic activity.
JOURNALIST:
Just in other news, CSL has confirmed that it won’t be producing Novavax here in Australia, should we find Australian companies, any other Australian companies that could produce that vaccine here?
JOSH FRYDENBERG:
Well again, we’ve been working with CSL and the other key players and rolling out the vaccines. What we do have is access to the Pfizer vaccine, access to the AstraZeneca vaccine, access to other opportunities depending on the success of stage three clinical trials around the world for other products. We already have a domestic manufacturing capacity for vaccines here, we’ll obviously explore other options, but again, our focus is on the timetable the Prime Minister and the Health Minister spelled out, which is once the vaccines go through the TGA approval process then the idea is to have 80,000 plus doses distributed a day. Hopefully reaching around four million people by the end of March.
JOURNALIST:
So is it likely that we have Australian production [inaudible]
JOSH FRYDENBERG:
Well again, I’ll leave that to the Health Minister. What I do know is that we will at all stages follow the medical advice. And that medical advice has been to adopt a portfolio approach to vaccines and their access here in Australia and that’s what we’ve successfully done.
JOURNALIST:
Should we just dump Novavax and focus on AstraZeneca given that CSL will actually produce that one here?
JOSH FRYDENBERG:
Well again, AstraZeneca, Pfizer, other opportunities we’re always exploring, but what we do have is access to safe, effective, available vaccines, and you heard that from the Chief Medical Officer just yesterday.
JOURNALIST:
Is it a bit of a concern that we could end up with just one option though produced here?
JOSH FRYDENBERG:
Well we have adopted a portfolio approach and I think Australia is in a very good position when it comes to the rollout of those vaccines. Importantly, the vaccine has to be safe, and the Chief Medical Officer yesterday testified to that effect, as well as the TGA approval process which is currently underway. We know that we’ve got the manufacturing capacity here in Australia, and not many other countries have that capacity, so we’re very fortunate.
JOURNALIST:
Well if we have the manufacturing capacity here though wouldn’t CSL do both of them? Instead, it doesn’t have the capacity, it says it can just do one?
JOSH FRYDENBERG:
Again, put those questions to the Health Minister, what we do know is that we have a domestic manufacturing capacity. Other questions?
JOURNALIST:
In terms of other issues, 70 to 80 coal ships from Australia sitting offshore China, there’s actually reports today now that Beijing wants those ships to go elsewhere. What do you know of the situation now [inaudible]
JOSH FRYDENBERG:
Well we have made representations about exporting coal into China. What we do know is that Australia has been a very reliable, trusting, long-term partner for China when it comes to coal exports and our coal is of very high quality. It’s a high quality coal, in terms of both metallurgical and the thermal uses of coal in China. So if that coal is not being able to access the Chinese market then obviously that has an impact more broadly on both price but also China’s ability to access high quality Australian coal.
JOURNALIST:
So if it’s so high quality why is China not taking it?
JOSH FRYDENBERG:
Well again, there are challenges in the relationship. We have made representations in relation to those coal exports.
JOURNALIST:
How challenging is the relationship and why did you knock back ProBuild?
JOSH FRYDENBERG:
Well in terms of Foreign Investment decisions we don’t talk about the specific details of individual cases but what I can say is that the national interest always comes first. We have a comprehensive Foreign Investment Review Board process, ultimately the final decision is with the Treasurer, and Treasurers of both political persuasions, whether it’s Peter Costello, whether it’s Wayne Swan or others, have made some challenging decisions around foreign investment. But ultimately it comes to the national interest. Now, over the last six months, around 20 per cent of approved foreign investment applications have at least one Chinese partner. So that means more than 250 Chinese related foreign investment applications have been approved. Now less than a handful have not received approval. But when it comes to our approach to foreign investment, we welcome it, it is important to Australia, from whichever country it comes. But we do have a strict national interest test. Now, when you apply the national interest test, it might apply to national security issues, it might apply to tax issues, it might apply to competition issues, what we did do, through the Parliament, of which Sarah and I are members, is pass very significant changes to the foreign investment framework at the end of last year - the most significant changes in some 50 years - to ensure that Australia’s national security and Australia’s national interests are protected.
JOURNALIST:
So what were the actual issues with Probuild then, was it actually national security and what were they?
JOSH FRYDENBERG:
Again, we don’t go into the specifics no matter how many times you can ask that question.
JOURNALIST:
I’ll ask it 100 different ways, Josh. Any ideas? Is it wrapped up in [inaudible]?
JOSH FRYDENBERG:
Again, not going to go into the specifics about individual foreign investment decisions. But what I can say, unequivocally, is that, at all times, we are seeking to protect, to preserve, and to advance the national interest. My responsibility, as the Treasurer and the ultimate decision maker on foreign investment, is to ensure that the national interest is protected.
JOURNALIST:
So, we’ve got 80 coal ships sitting offshore in China, from Australia, we’ve got you knocking back Probuild, at what point do we just say that this is a trade war?
JOSH FRYDENBERG:
Well, again, it is a challenging time in that bilateral relationship. But also our trade relationship continues, it continues strongly in a number of areas, it’s an important relationship both to China and to Australia, and if you look at what we’ve been able to provide China over many years, it’s affordable, reliable supply of key commodities. Our iron ore from Australia has helped underpin China’s economic growth, and we have been a very reliable supplier of not just iron ore but a range of commodities, products and services.
JOURNALIST:
[Inaudible]
JOSH FRYDENBERG:
There’s a series of exports [inaudible]. Any other questions?
JOURNALIST:
Should Google be allowed to bury news links from traditional media outlets?
JOSH FRYDENBERG:
Well, Google, Facebook, other digital giants, should focus not on blocking users in Australia accessing domestic content, they should focus on paying for it. The digital giants should focus on paying for original content, not blocking it. That’s my message to those digital giants, and, as you know, we have again introduced legislation that’s now before a Senate committee, to put in place a world-leading mandatory code, to see those digital giants pay traditional new media businesses a fair sum of money for those news media businesses generating original content. That is a world-leading scheme that we are putting in place. It has been acknowledged not just by regulatory agencies but by other governments around the world. It’s going to have a final arbitration model in place and it’s going to be a very significant advance for our domestic media businesses.
JOURNALIST:
Donald Trump has just been impeached for the second time, following the Capitol insurrection, was that the appropriate course of action, in your view?
JOSH FRYDENBERG:
I’m not going to provide a running commentary on the political and democratic processes within the United States, but what I can say is those images we saw of the riots in Washington DC were horrid. It was despicable, it was disgusting, it was condemned by the Morrison Government. Those sort of riots, those violent demonstrations, have no place in the United States or here in Australia. What we want to see is people peacefully exercise their democratic right to demonstrate, and not in a violent way. And that was an attack on America’s democratic institutions and therefore an attack on democracy itself, and it was very, very concerning to see.
JOURNALIST:
Just another on JobKeeper if that’s possible?
JOSH FRYDENBERG:
Last question.
JOURNALIST:
So, on JobKeeper, in terms of you saying it’s definitely ending in March, in terms of the ability of businesses to get through those next few months, will you think of other measures, for instance, any other sorts of grants for those impacted, the 80 per cent of businesses?
JOSH FRYDENBERG:
Well, again, we continue to monitor the circumstances across the Australian economy. But JobKeeper is one of many measures that we have in place, and as I said earlier this week that $6 billion has made its way into people’s pockets through the tax cuts. We’ve got infrastructure spending that has been brought forward to create jobs, we’ve got the JobMaker Hiring Credit, we’ve got business investment incentives, we’ve got massive investment in skills and training, and of course JobKeeper goes to the end of March. These measures are designed to support those businesses and those individuals who need it, but also to encourage economic activity, and also to boost the productivity of the nation. So, the major pillars of our economic response are firmly in place. JobKeeper has been a very successful program, but it was always a temporary program, it was always a targeted program, and it is coming to an end.
JOURNALIST:
Is it just the case that some businesses will fail [inaudible]?
JOSH FRYDENBERG:
It was always the case that some businesses would not make it to the other side of the COVID crisis, but our focus as a government has always been to give every business the best chance of getting to the other side. Our focus has always been on helping people get into a job, and we have seen a very successful JobKeeper program, which has seen now two million fewer Australians on JobKeeper in the month of October compared to the month prior. And what we have seen today, with the visit from Sarah and I to this wonderful business, is again a graduate from JobKeeper, as the customers are coming back, people are spending again, the restrictions are being eased, and Australians are enjoying their normal lives.
JOURNALIST:
As we’ve mentioned, Josh - sorry, just one last one. As we’ve mentioned, there may be some businesses that fail just because of an economic model after JobKeeper ends. Are there any plans in the pipeline to create further job stimulus for people looking for work?
JOSH FRYDENBERG:
Well, again, we have a number of measures that are in place to support people get into work, and the JobMaker Hiring Credit is a really important aspect of our support, an up to 50 per cent wage subsidy for apprentices to be taken on by businesses is another aspect of that. The JobTrainer program, and the 300,000 plus training positions that we’ve created. They’re all part of a complex and comprehensive set of measures that are designed to support jobs across the economy, and this is the final message I’ll leave with you: 85 per cent of the 1.3 million Australians, who either lost their jobs or saw their working hours reduced to zero, are now back at work. So, the economic recovery is clearly on, and what we’ve seen with the forecasts from Treasury is that the unemployment rate will decline over the years ahead. And it is really important for people to understand that, compared to previous recessions, and this was a COVID-19 recession, compared to previous recessions, the economic recovery is happening faster. It is the expectation of Treasury and the government that the unemployment levels will get back to where they were pre-COVID in around four years. When you look at the 1980s recession, it took six years. When you look at the 1990s recession, it took a full ten years. And we have learnt from those experiences with previous recessions, particularly about the impact on young people, and how long it took for them to get back into work, and that’s why we’ve designed a series of programs, which are designed to create jobs and to keep Australians in jobs. Thanks very much.