JOSH FRYDENBERG:
Yesterday the Morrison Government announced a significant economic support package for the more than five million people in New South Wales who are now subject to a lockdown. This package has a number of important elements. First, it provides household assistance, income support for families and for workers who have lost hours of work due to these lockdowns. We have elevated that payment to $600 if you’ve lost more than 20 hours a week or $375 a week if you’ve lost less than 20 hours a week. This is the rate of payment that JobKeeper was at in the December quarter of last year.
On top of that income support we have also put in place a cash flow boost to support businesses, because businesses not just have wages to pay but they’ve also got fixed expenses, like their rent or their utilities – water, electricity – which are costs that are still incurred even when customers are not coming through the door.
So based around a similar program that we announced during the height of the pandemic, we will pay between $1,500 and $10,000 a week to businesses that have seen their turnover reduced by 30 per cent or more. And we have entered into a 50‑50 funding share agreement with the New South Wales government to deliver that program. Half a million businesses in New South Wales employing more than 3 million people will be eligible for that payment, and registrations are open today.
Importantly, these initiatives build on the more than $300 billion in direct economic and health support that the Morrison Government has committed to the people of Australia from the start of this pandemic. This provides us now with a template to provide further support to other states should they incur a lengthy lockdown that we’re now seeing in New South Wales.
Now I noted the comments yesterday from the Victorian Premier critical of these payments to New South Wales. This is deeply disappointing that the Premier is deciding to play petty politics at a time when the country faces real challenges in the midst of Covid‑19. The facts are these: the Coalition government provided three‑quarters of a billion dollars a week to the people of Victoria when they were in the middle of a lockdown last year, a lengthy lockdown it was. The people of Victoria – and I’m a proud Victorian – have received more on a per capita basis under JobKeeper than any other state or territory across the commonwealth.
When Victoria went into a lockdown just weeks ago they were offered by the commonwealth a 50-50 funding split. We were prepared to go 50-50 on the business support and 50-50 on the income support. They rejected that and they decided that the commonwealth would pay for the income support and that the Victorian government would pay for the business support. As I understand it, in some cases that business support promised weeks ago has still not arrived for some businesses.
We have also seen in the lockdown in New South Wales, the New South Wales government and people receive exactly the same support as Victoria received for the first two weeks, which was the duration of the Victorian lockdown. Now that the lockdown has extended into the fourth week, as is expected next week, then we are providing this additional support because it’s a particularly lengthy lockdown. And, as I said, we now have a template that we can roll out across the rest of the country.
Finally, I wanted to touch on an issue which is a key point of difference between the Coalition and the Labor Party. The Coalition is a party of lower taxes. The Liberal Party and the National Party have proven time and time again that we seek to reduce taxes at every opportunity because people deserve to keep more of their hard-earned money. It rewards aspiration and it encourages effort. The Labor Party on the other hand took to the last election $387 billion of higher taxes. It was a very clear choice for the Australian people at the last election – in fact, the Labor Party had so much hubris going into that election that they told the Australian people that if they didn’t like Labor’s tax policies to vote against it. And they took them literally – the Australian people did vote against Labor’s tax policies. They rejected their higher taxes and they voted in favour of the Coalition’s lower taxes.
We subsequently took legislation to the parliament after the last election and passed through a substantial package of tax relief. We passed it against the will of the opposition. Now after that legislation was passed the Labor Party was quick to say they supported our tax relief. But ever since then they’ve been seeking to undermine that tax package, talking it down with the Shadow Treasurer saying it was unfair and unreasonable to have such a tax package and provide such tax relief, which includes major structural reform with the abolition of a whole tax bracket – the 37 cents in the dollar tax bracket – and the vast bulk of taxpayers paying one single rate if they earn between $45,000 and $200,000 they’ll pay a marginal rate of no more than 30 cents in the dollar.
Now, yesterday on the front page of The Financial Review we read that the Labor Party is going to walk back from its denigration of our tax relief and support our legislated tax cuts. But asked this morning, the Shadow Treasurer, would he support our tax cuts that are now legislated through the parliament that the story yesterday said they would support, he refused to do so and he said no decision had been taken. So Labor is confused; Labor is divided on tax policy. But, most importantly of all, they can’t be trusted to deliver the stage 3 tax cuts that have been legislated through the parliament.
So the next election, regardless of whatever Labor tells you is their policy, the next election will be fought between a party – namely, the Labor Party – that is in favour of high taxes and the Coalition – Liberals and Nationals – who believe and who have delivered lower taxes. Are there any questions?
JOURNALIST:
Treasurer, when Victoria was calling for money the last time, it was just after your budget and you actually said outbreaks were included in the budget and that you said this was calibrated accordingly and further outbreaks were taken into consideration. Well, what’s changed since that budget to have to change your policy now to provide more money for New South Wales?
JOSH FRYDENBERG:
Both the budget delivered in May this year and the budget delivered last October were pandemic budgets. So they were firmly in the midst, in the middle, of this pandemic. So we actually dedicated some $41 billion in the budget in May this year to direct economic support. Now, it was of a different nature than we saw in last year’s budget and early on the crisis. Those emergency support payments had tapered off, we put in further tax relief, as you’ll remember, we put in an extended year of the lower to middle income tax offset, we put in place some infrastructure projects, including ones that we could get out the door really quickly as well as other payment and supports.
We anticipated that there would probably be one week of a lockdown every month across the country. We didn’t factor in these longer, extended lockdowns that we have now seen. So that will impact on economic growth. That may even impact on the labour market outcomes, and we’re getting some jobs data out tomorrow – on Thursday. But the key point here is that we put in place some support in the budget and now we announced yesterday some additional support to take into account these lengthy lockdowns.
JOURNALIST:
That was only eight weeks ago though, and that’s been blown out now. Is that because the vaccine rollout effectively hasn’t been as quick as you thought, that you anticipated fewer lockdowns that we’ve actually seen?
JOSH FRYDENBERG:
Well, we had an assumption in the budget that everyone who was eligible would be able to access a dose of the vaccine by year’s end. And we also anticipated that the borders would gradually open from the middle of next year. Now, they were assumptions; they weren’t policy decisions. Clearly the vaccine rollout has faced some real challenges. Some of those issues we can control and others we can’t. But the good news is that more and more people are getting the vaccine each and every day. More than 9.3 million doses have been delivered. More than a third of the eligible population over the age of 16 have received a dose. Importantly, those vulnerable cohorts in terms of the over 70s have seen more than 70 per cent receive a dose. So we are doing everything we can to secure access to more vaccines, which we have got that commitment from Pfizer and from other vaccine producers, and to ensure more people get that vaccine as quickly as possible.
JOURNALIST:
The Victorian government said that you – the federal government – came kicking and screaming to help Victorians during the last lockdown. How do you react to that?
JOSH FRYDENBERG:
That’s just not true. We announced very clearly that in the first week there would not be federal support, and there wasn’t. In addition to what we put in the budget there wouldn’t be specific support for that lockdown, but from the second week these Covid disaster payments would take effect from that second week in designated hotspots. Now, there was a liquid assets test that applied, and it was also at a $500 and $325 level. Now that was for the second week. In the third week of the lockdown in New South Wales we removed the liquid assets test. Now in the fourth week –
JOURNALIST:
Why did you do that? Why did you do that in New South Wales and not for Victoria?
JOSH FRYDENBERG:
Well, Victoria got exactly what New South Wales got for the first two weeks of the program. There’s no quibbling about that. Victoria and New South Wales got exactly the same financial assistance from the federal government for the first two weeks of the lockdown. And that was the extent of the Victorian lockdown – two weeks. Now that this lockdown is going into what third and to a fourth week and maybe even longer, there is other additional support that is being provided, and understandably so.
JOURNALIST:
So it’s merely a coincidence that all these new measures come into force in New South Wales at the point where the Victorian lockdown closed?
JOSH FRYDENBERG:
Well, the fact is –
JOURNALIST:
Just a coincidence?
JOSH FRYDENBERG:
– the New South Wales lockdown is longer than the Victorian lockdown. But don’t lose sight of the fact that when Victoria had a lengthy lockdown last year they were getting from the commonwealth around three-quarters of a billion dollars each week. To put that in perspective –
JOURNALIST:
That was a national program.
JOSH FRYDENBERG:
And it was the JobKeeper program, in particular.
JOURNALIST:
But it was for everyone.
JOSH FRYDENBERG:
And so is this program. This program that we announced yesterday is for everyone, Nick. But it applies in situations where states go into a lengthy lockdown. Now if tragically tomorrow Victoria was to go into a lengthy lockdown that would extend into the third, fourth and maybe even longer period of – third and fourth week and maybe even longer period of time, they would get exactly what we announced yesterday.
JOURNALIST:
Were you negotiating with the Victorian government for similar programs if the Victorian lockdown went longer? Had you started talking to them about, “Okay, if it goes longer, this is what we’re going to do”?
JOSH FRYDENBERG:
We hadn’t had those conversations. But I can tell you that in my discussions with Tim Pallas he was encouraging additional support for New South Wales to get over this challenging time. And he knows as well as anyone that she was offered a 50-50 split when it came to the payments both for business and for income support in Victoria.
JOURNALIST:
So just on the 50-50 split, exactly who is paying for what here? Is it a true 50-50 split with the New South Wales government?
JOSH FRYDENBERG:
So, as I announced, we’ve got an income support payment and a business support payment. With respect to the business support payment, it’s a 50-50 split. And it’s estimated that that would require about $250 million from the federal government each and every week. And to Nick’s question, I put that in perspective, Victoria was receiving three-quarters of a billion in the period in the period in which they were in lockdown late last year.
With respect to the income support payment, we are picking up the full bill for those income support payments in the designated hotspot areas – so that’s like Greater Sydney and a few other areas – and outside the designated hotspot areas the New South Wales government is picking up the bill for those payments.
JOURNALIST:
Tim Pallas also says that you introduced the disaster payment only after days of public pleas from the Victorian government. Do you concede that you were dragging your feet with the Melbourne lockdown?
JOSH FRYDENBERG:
We provided significant support for Victoria over the course of Covid-19 – more than $45 billion has already flowed from the federal government to the people of Victoria. That’s more than the Victorian government itself has already delivered to the people of Victoria.
JOURNALIST:
But I’m talking about the latest lockdown that we had.
JOSH FRYDENBERG:
Well, we put in place I think it was an appropriate program for the lockdown in Victoria, and those payments started from the second week. Tim might not like the fact or Victoria might not like the fact or, indeed, other states might not like the fact that we didn’t provide funding for that first week. But that was a principled decision that we took, and let’s not forget, if a state goes into a longer lockdown they get the same deal that we’ve seen in New South Wales.
JOURNALIST:
You’re heading into the election next year and you’re saying that that was a principled decision that you took. Can you see that you’re going to get heat from the Victorians at the ballot box?
JOSH FRYDENBERG:
Well, I think the Victorian people understand that when it comes to the heavy lifting in Victoria it’s been the federal government that has provided that vast bulk of that economic support. We’ve seen over $45 billion from the start of this crisis with programs like JobKeeper, the cash flow boost, the payments to veterans, to carers, to pensioners and others on income support. That is all significant money that has flowed, and we have other programs that are flowing into the people of Victoria.
JOURNALIST:
But some Victorians are seeing this as favouritism, though. So how do you think that they are going to respond to you in terms of your re-election?
JOSH FRYDENBERG:
Well, I think the first point to say is this is not about re-elections or not; this is about ensuring that the Australian economy recovers strongly and that we maintain the formal connection between employers and employees as well as ensuring that we keep as many people in work and businesses formally opened. I can even tell you that the Victorian Chamber of Commerce, the Victorian Chamber of Commerce, reached out to me saying any support that can be provided to their friends in New South Wales would be for the better. And yesterday after our announcement you had national bodies like the Australian Industry Group, the Business Council of Australia, the Australian Chamber of Commerce and Industry representing more than seven and a half million Australian workers between them and other associated bodies come out and speak very positively about our announcement. They described it, in their language, as a strong package, as a boost for business, as a coordinated and swift response.
They’re not my words; they’re the words of the business groups representing the traders, the retailers, the pub owners across the country and, indeed, across New South Wales. So I think that the Victorian government has decided, disappointingly, to play petty politics in the midst of a crisis. When you look at the facts, they tell a very powerful story.
JOURNALIST:
Aren’t these payments essentially JobKeeper by another name? They have a lot of similarities, the workers to businesses and the individual payments at the same rate.
JOSH FRYDENBERG:
It’s not JobKeeper. JobKeeper was a national program. As you know, it was initially introduced for six months; we extended it to 12 months. We tapered the payment. We introduced a second-tier payment. We have sought here to configure a payment and to configure a program that would be designed to support businesses in their hour of need but also to keep as many people with sufficient income support as the lockdown impacted on the hours of work. So there are elements in this package that reflect previous initiatives that the government has undertaken. I noticed that there was an academic from the Australian National University, Steve Hamilton, that had an extended article in The Conversation today where he actually said this was a more targeted and more fit for purpose set of programs that we have announced than JobKeeper itself. So that’s an academic view.
From our perspective, we want to do things that work. We’ve partnered successfully and effectively with the New South Wales government with one idea and one objective in mind – namely, that we’ll be supporting the people of New South Wales get to the other side of this crisis.
JOURNALIST:
And you’ve been critical on some of the impacts of lockdown and constantly say that this is a decision that the states make. Do you think Gladys Berejiklian had any option but to, you know, put in this quite strict lockdown, and how does that compare with what Daniel Andrews did few months ago? Do you think there was any alternative there?
JOSH FRYDENBERG:
Well, again, whether it’s Daniel Andrews or whether it’s Gladys Berejiklian, they’re going to be receiving their medical advice. What we have sought to do at the federal level is to make some of our economic payments contingent on a designated hotspot. And that is a decision that is taken by our health authorities with respect to particular lockdowns.
The experience, though, in New South Wales and Victoria is very different. If you take out that initial nationwide lockdown that was experienced across the country last year, Victorians have been unfortunately subject to 149 days of lockdown. The average across the other states and territories is just around a dozen days. I mean, it’s a very different experience that we’ve seen in Victoria and we’ve seen in New South Wales. But hopefully in my state of Victoria, where we stand today we won’t be facing another lockdown. But that obviously is not something we can predict right now.
JOURNALIST:
And if some of those assumptions have already blown out for the budget only eight weeks after you delivered it, do you have any confidence in some of the other predictions made, like the borders opening on time and the number of people being vaccinated? Are you disappointed that only eight weeks later, this document has flaws?
JOSH FRYDENBERG:
Well, the first thing to say is we are dealing with a once-in-a-century pandemic and the biggest economic shock since the Great Depression. So we’re dealing in real time with very unpredictable and uncertain circumstances. But if you actually look at what Australia has achieved on both the health and the economic front over the cost of the last 15 or so months, it’s been pretty remarkable. The average loss of life due to Covid across the OECD has been about 30,000 people. Australia has lost, tragically, just over 900 people, so less than a thousand people here in Australia.
When it comes to our economic response, we now have more people who are in work than before this pandemic began. Our economy is bigger today than before this pandemic began. Unemployment is at 5.1 per cent; it will be updated on Thursday. That is where it was last February. So, in fact, the economy has surprised, if anything, on the upside and been better than the most optimistic forecasts of both the Reserve Bank of Australia and our own commonwealth Treasury.
They were assumptions we made in the budget; they weren’t policy decisions. But there’s no dismissing the fact that this lockdown in New South Wales, Australia’s largest state economy will be significant. The economic impact will be significant on investment decisions that get delayed, on border closures and their movement of people, supply chains get disrupted as well as the fact that people can’t go to work. All of those are real consequences of these lockdowns.
JOURNALIST:
There’s a perception out there in amongst the members of the public and also some commentators that Mr Morrison is the Prime Minister for New South Wales. Whether you like it or not, that perception is out there and this certainly plays into that, this feeling of favouritism to New South Wales and a fellow Coalition government. Can you understand Victorians looking at what you have done and actually perceiving it as favouritism, and being bitter? Because, as you pointed out, Victorians have been in lockdown a lot longer. They really deserve as much as they can get in terms of aid from the federal government.
JOSH FRYDENBERG:
Well, when I walk the streets of Melbourne, when I look at my correspondence, when I talk to my colleagues, when I talk to business owners, the message I get from them is how grateful they are for the support that the Morrison government has provided to the people of Victoria throughout this pandemic; a pandemic that is now more than 15 months long and a pandemic that we’re not out of yet. And so the numbers tell a very different story. The numbers show how we have delivered more than $45 billion to the people of Victoria and that we will continue to provide the economic support as required.
JOURNALIST:
But I’m talking about the perceptions out there. You can quote numbers, and I’m sure people you talk to tell you you’re doing a great job. That’s the way it works. But in terms of – I mean, you read Victorian newspapers, you listen to Victorian commentators. You know that there is a perception of that.
JOSH FRYDENBERG:
Well, the facts tell a very different story. The Australian people, the Victorian people, know those facts, and we will remind them of them every day – which is that on a per capita basis under JobKeeper Victorians received more than any other state across the country. We were providing around three-quarters of a billion dollars a week into Victoria when they went into a lengthy lockdown. Should they go into another lengthy lockdown the commonwealth will continue to provide the support.
The facts may be inconvenient for our political opponents or, indeed, for Daniel Andrews. But the reality is that the Morrison government has provided unprecedented amounts of economic support to the people of Victoria and will continue to do so.
JOURNALIST:
So you must have expected this backlash, then, mustn’t you?
JOSH FRYDENBERG:
Well –
JOURNALIST:
You must have expected it, surely, when you announced it, being a Victorian.
JOSH FRYDENBERG:
Well, Nick, if you look at the track record of the Andrews Labor government, it is to play petty politics during the crisis. You only have to look a few weeks ago they were calling for a reduction in the number of overseas travellers to come to Australia. Then when they cancelled the Grand Prix they put out a press release blaming the federal government for cancelling and reducing the number of people coming to the country. I mean, they are masters of distraction. They’re playing petty politics in the middle of a crisis. They should know better. And the facts tell a very powerful story of the unprecedented and significant economic support provided by the Morrison government, by the Coalition, to the people of Victoria.
JOURNALIST:
Regarding payments the workers are receiving, so what guarantees are in place to ensure that workers aren’t sacked as a result of these payments?
JOSH FRYDENBERG:
So there’s a commitment to receive the cash flow boost from the business that they will not reduce their head count, and that head count is of yesterday’s announcement. The head count takes into account full-time and part-time workers as well as long-term casuals. That is being put in place to ensure that we keep as many people connected to their employment as possible, and the compliance activities will be undertaken by Services NSW, who will be delivering this program.
But importantly, there’s also the income support that is there. And that income support is available to people who have lost hours of work as a result of this lockdown. That income support at $600 and $375 a week is at the same level that JobKeeper was in the December quarter of last year. Thank you very much.