JOSH FRYDENBERG:
Well good morning. From today, five million Australians on income support will receive a $750 cash payment from the Commonwealth Government. This will be at a cost of nearly $4 billion and is the second $750 cash payment from the Morrison Government as part of our broader economic response to COVID-19. Pensioners, veterans, carers and other eligible concession card holders will get a $750 cash payment to spend on their day to day expenses, food and grocery bills, their rent and some may seek to pay down their debts. This will come at an important time for many people being challenged by the economic consequences of COVID-19. Also as of today, around 1.2 million Australians have put in their tax return seeking to receive a refund as well benefitting from the tax cuts that the Morrison Government has implemented. I also just wanted to say a brief word about recent events in Victoria. Obviously it is a very difficult time for my fellow Victorians. Events in Victoria are very serious and people need to follow the medical advice. There are some very tough days ahead but the Federal Government stands with every single Victorian in helping them get through this difficult period. We've funded some 28 respiratory clinics which have undertaken more than 55,000 tests. We have more than 260 Australian Defence Force personnel deployed to Victoria to assist with the health tasks, the logistics, the planning that is required. And there will be more Defence Force personnel on their way to Victoria to assist. We have more than 800 Commonwealth officials who are also working in Victoria on the various health tasks and community engagement tasks with their Victorian counterparts. It's important that we stay strong in the days and the weeks ahead. We always knew the pathway to the economic recovery would be tough. We always knew that there was this threat of a second wave of cases, as we've seen around the rest of the world. But by working together we will get through this. Victorians will get through this and they will do so with the support of their Federal Government. Are there any questions?
JOURNALIST:
Treasurer, Andrew Probyn here from the ABC. Could you take us through the actual unemployment rate? You alluded to this morning, rather than it being 7.1 or thereabouts, the actual number is much, much higher and can you take us through how you arrive at that figure and what we will see by the end of this week, and perhaps how it will reflect on what you do next week?
JOSH FRYDENBERG:
Well thanks, Andrew, the official unemployment rate is 7.1 per cent and the market is expecting for that to go a bit higher later this week. The effective unemployment rate takes into account not only those who are officially unemployed but also those who have left the labour force altogether as well as those who are on zero hours and that is around 13.3 per cent right now. So that is a large number of people reflecting the economic challenges that we see right now. That's why we have announced the JobSeeker payment, which is legislated to the end of September, which effectively doubles the safety net with the $550 a fortnight coronavirus supplement. But also the JobKeeper program, which is effectively helping businesses pay their workers, whether they are stood down or whether they are coming back with reduced hours. We have seen a big reduction in hours worked in the months since the COVID pandemic first hit in Australia. Globally, they are seeing the same. In fact, the International Labour Organisation said that in the June quarter there has been about a 14 per cent reduction in hours worked, which is the equivalent of losing around 400 million full-time jobs around the globe. That just reflects the enormous economic challenge that we face and the impact it's having on the unemployment rate.
JOURNALIST:
Thanks Treasurer, Patrick Commins from the Australian. Given a vaccine could be years away or quite a way away we have expected these expected outbreaks, can the country really afford the kind of lockdown we are seeing in Victoria every time we have an outbreak? Isn't this just unsustainable looking out over the next couple of years?
JOSH FRYDENBERG:
Well we’ve got one country and two stages right now. We've got Victoria, which has been going into lockdown and other states, Queensland, New South Wales, Western Australia, South Australia, Tasmania, they have been opening up, benefitting from the suppression of that curve. So the reality, and it is a harsh reality, is that we are going to see more cases. That is what other countries have seen and that is what Australia is now seeing. We are going to have to live with the COVID pandemic for some time to come. And it means modifying the way we live and we operate and we engage with others. It means following the medical advice and the social distancing requirements and putting in place effective quarantine measures as well as testing and tracing processes. So we're going to have to live with the COVID pandemic and we are going to have to accommodate the requirements accordingly. That means there are difficult, tough days ahead but we will get through this and we will have success in suppressing the curve just as we did earlier this year.
JOURNALIST:
Katina from AAP. So I was just wondering the projections you have got of how many people will be getting the low and middle income tax offset, those are projections from the Budget last year. With so many people having either lost hours or lost their jobs and therefore lost probably a big chunk of their income for the year, could that possibly [inaudible] blow out?
JOSH FRYDENBERG:
Well those numbers may change. We will see it when people put in their tax returns but the key point here is that people will benefit from that low and middle income tax offset, up to $1,080 and those who have been earning between $48,000 and $90,000 will get that full benefit of the tax offset and those who have been earning a little bit less than $48,000 or a little bit more than $90,000 in that range from $37,000 to $126,000 will get a part of that low and middle income tax offset but this is money that will come to people at a very difficult time.
JOURNALIST:
Treasurer, thank you very much, can I ask you [inaudible] Victoria a massive surge, in New South Wales we are starting to see a peak as well. If we have zero contacts being identified through the COVIDSafe app beyond what the tracers have been able to identify, why is the app such an abject failure?
JOSH FRYDENBERG:
Again, the more people that take up the app the better because it does give our health authorities the ability to respond to this virus and it's just part of adapting the new technologies to the challenges that we face. But the reality Jono, is that we need to adopt a whole series of processes, systems, mechanisms to deal with the rise in cases. We've seen mistakes in quarantine in Victoria. There's a judicial inquiry to follow that up. We have got to see improvements in testing and tracing. The National Cabinet discussed these very issues last Friday and it's all about learning from mistakes, ensuring that they are not repeated and that as a country we are much better placed to deal with the inevitable increase in cases that we will see from time to time.
JOURNALIST:
[Inaudible]
JOSH FRYDENBERG:
We are rolling out the app, more than six million people have downloaded it. Hopefully more will do so in the period ahead and it is just one of a number of systems and processes that we are deploying to help stem the tide of new cases.
JOURNALIST:
Hello Treasurer, [inaudible] Secondly, are you prepared to give more money to childcare [inaudible]
JOSH FRYDENBERG:
Well, thanks, Daniel. In relation to childcare, what the Minister announced a number of weeks ago was a transition. A transition which would see the childcare subsidy come back on and that supported families to the tune of more than $8 billion a year. We're also easing the activity test which will see eligible families get up to 100 hours of subsidised care every fortnight. We've also announced the $708 million transition payment which is based on the revenue in that pre-COVID period of those centres, about a 25 per cent share of that revenue. All of those measures are designed to ease that transition and they've been welcomed by the childcare sector themselves. When it comes to Victoria we've also made special arrangements by allowing the childcare providers to waive that pay gap and that gives confidence to the parents that they won't lose that position of enrolment, it gives confidence to the childcare providers because they continue to receive that childcare subsidy and of course, it’s help maintaining the viability of our systems and our centres, despite what is happening in Victoria. So we will continue to assess the situation but we do know that that transition has been welcomed by the sector and it is helping to fund important programs. In relation Daniel to your first question about the JobKeeper and JobSeeker programs, we have announced that we will have a second phase of income support. It will be governed by the same principles that have defined our economic measures to date, namely that our support will be targeted, it will be temporary, it will be designed based on existing systems and it will also be demand driven. So it is fair to say in Victoria, with the lockdown, which is going to be harsh on businesses and households, that our announcements on the 23RD will take into account the Victorian circumstances and that Victorians, like those in the other parts of the country who are hurting through COVID, will continue to benefit from the Government's support. We've gone for a national approach as opposed to state specific approaches and that continues to be the pathway that we have set and we will follow on.
JOURNALIST:
Treasurer you’ve floated the fast-tracking of income tax cuts has a definitive decision been made about the [inaudible] and are you sure people will actually spend the extra cash and not just save it?
JOSH FRYDENBERG:
Well these are matters for the Budget. What I’ve said is that the Government is giving active consideration to the timing of the tax cuts and decisions will be taken about those maters in accordance with Budget processes. But what I do know as well, is that one of the key issues at the last election, one of the key battle lines was actually tax. We went to the election proposing lower taxes. Labor went to the election proposing $387 billion of higher taxes, higher taxes that are still on their books. Could you imagine going through the COVID crisis, as we are right now with the burden on retirees of Labor’s retirees’ tax, of the burden on households of Labor’s increased taxes on superannuation, their housing tax, their higher income taxes? That’s what they were proposing to hit the Australian economy with. We, on the other hand went to the election proposing to lower taxes. And not only were we elected on that platform but we have subsequently legislated those tax cuts. Now those tax cuts come in three stages. Stages one is already through and stages two is in 2022-2023 and stages three is in 2024-2025. We’re giving active consideration to the timing of those tax cuts, but what we do know is that lower taxes encourages aspiration, provides reward for effort and helps create jobs. That’s our mantra, that’s what’s driven us as a party, that’s what’s defined our policies before on tax, and that’s what will define our polices going forward on tax too. Thank you.