JOSH FRYDENBERG:
Today the OECD put out an important report which paints a pretty grim picture of the global economic outlook. Suggesting that the global economy will contract by 6 per cent this calendar year and describing what we're going through internationally as the deepest recession since the Global Depression. The OECD also talked about the risk of a second wave of cases. And in that event, they described the global economy as by contracting a further 1.6 per cent. But the positive news for Australia in this report, is that Australia stands out as a leader in the economic recovery. The OECD suggests that Australia's economy will contract by 5 per cent this year and grow by 4 per cent next year. This stands in stark contrast to Japan, where the OECD are forecasting its economy to contract by 6 per cent this calendar year, to the United States, which will contract by 7.3 per cent according to the OECD. To Canada which will contract by 8 per cent, to New Zealand which the OECD is forecasting to contract by 8.9 per cent, to Italy at 11.3 per cent. To France at 11.4 per cent and to the United Kingdom at 11.5 per cent. The OECD, in its report, also praises Australia for moving quickly to close its borders and put in place the necessary health restrictions which has helped us flatten the curve so successfully here. And the OECD also praises Australia for, in its words, ‘massive macroeconomic support.’ Economic support that was only possible because we entered this crisis from a position of economic strength where growth was increasing at the end of last year, unemployment was falling in February, the Budget was in balance for the first time in 11 years. This report does signal the economic challenges that Australia and the world face. But as we have success on the health front, we are starting to ease the restrictions, and it's critically important that we maintain that momentum, that we lift those restrictions on the domestic borders. Closed borders cost jobs. There is no clear medical reason as to why those domestic borders should be closed. So, we need to continue to follow the medical advice, but we also need to ease those restrictions that are in place and let Australians get back to work. Any questions?
JOURNALIST:
Treasurer, what will you do if the states don't open up their borders soon? The Prime Minister was very clear in question time yesterday he wants it done by July. Are you contemplating any carrots or sticks to get that moving?
JOSH FRYDENBERG:
Well, the biggest carrot is jobs. And we know how important job creation and getting people back to work is, to not just the Prime Minister, but also to those state premiers and to those Chief Ministers. So they have a big stake in the outcome of our success on the economic front. And they know how important it is to lift those restrictions on the borders to get people back to work. So, we continue to talk to our colleagues at a state level, whether it's at the Prime Minister's level or whether it's at the Treasurer's level or at other levels, we continue to make the case for strengthening our economy by easing those restrictions.
JOURNALIST:
Treasurer, could you put a figure on it? How much is it costing each week to have those borders shut?
JOSH FRYDENBERG:
Well we do know that the restrictions more generally, if they're eased, will see about 850,000 people get back to work and more than $9 billion added to the economy each month. It depends on various states and the sectors that will benefit. So take Queensland, they have a $30 billion tourism industry. It's critically important for Queensland, for them to lift those border restrictions to get people in their tourism industry back to work.
JOURNALIST:
Treasurer, the agreed roadmap has international students possibly returning in semester two. How likely is that, that that will happen?
JOSH FRYDENBERG:
Oh look, we continue to talk to the international education sector and to our universities about the importance of that sector to their businesses, but also to our economy. But we won't do anything that is not in accordance with the medical advice so we continue to work on our options.
JOURNALIST:
Treasurer, the Victorian authorities have just announced that one of the protesters in the rally in Melbourne on the weekend has tested COVID positive. Is it a conflicting message to ask states to open their borders when we don't know the full health effects of these rallies, and there may be clusters, is it contradictory now?
JOSH FRYDENBERG:
Look, absolutely not. What we have been absolutely clear about is that people shouldn't have gathered in those numbers for those rallies. And in doing so, they put the broader community's health at risk. That was the obvious message from the medical experts about those rallies. And it was very unfortunate that they proceeded in the way that they did. And obviously, we'll wait and see what the health outcomes are in the weeks ahead.
JOURNALIST:
Treasurer, the Prime Minister said today that those who do attend another Black Lives Matter protest later in the week should be charged. Do you agree with that sentiment, given those arrested could also be disproportionately Indigenous?
JOSH FRYDENBERG:
Well, in terms of protecting Indigenous lives, that's been an absolute focus for our Government through the course of this pandemic, Andrew. We have put in place lots of different measures to ensure that we could get as much support and as much protection to those communities, particularly given their vulnerabilities. So when people gather together for these debates and for these protests, they need to consider what is the broader impact on the community and we do know it puts people at risk. As for whether charges should be laid that would be a matter for state authorities.
JOURNALIST:
Treasurer, your leader says that they should. You’re Deputy Leader of the Liberal Party. Should they be charged in your view?
JOSH FRYDENBERG:
Andrew, I absolutely support the necessary measures being taken by our legal authorities in response to those who break the law.
JOURNALIST:
The OECD makes reference to extending support measures like JobKeeper beyond September. It also points to investments in energy, social housing. Are you open to extending JobKeeper beyond September and making those investments?
JOSH FRYDENBERG:
We’ve been very consistent that we’re undertaking a review, over the course of this month, by Treasury and we will announce the outcome of that review on the 23rd of July when myself and the Finance Minister provide an economic and fiscal update to the Parliament. What we do know is that JobKeeper is supporting more than three million workers across the country. It is helping to maintain that formal connection between employer and employee and it is complementary to our other support measures, whether it is the $30 billion cash-flow boost, whether it is the support for doubling the safety net with the JobSeeker program, or the extension of the instant asset write-off which we announced just a few days ago and which has been taken up by lots of businesses. I don’t want to pre-empt the outcome of that review and decisions that the Government will take in respect of that review. What I do know is that JobKeeper right now is supporting so many Australians.
JOURNALIST:
Treasurer, the Prime Minister has guaranteed that whole sectors won’t have JobKeeper taken off them. Can you explain what is on the table in terms of the review? Could businesses be required to show each and every month that they have a particular revenue downturn in order to qualify?
JOSH FRYDENBERG:
Again, we’re considering those sort of questions in the context of the review. What the Prime Minister has made clear and what we did in the Parliament yesterday and Dan Tehan in the days before is that the childcare sector was a special case. The childcare sector was asking for a transition and we provided that transition with the employment guarantee, with the transition payment, with the easing of the activity test and that will enable children to get the necessary childcare supports as well as those businesses to remain viable. When it comes to other sectors of the economy, whether it’s the tourism sector or the arts sector, we continue to look at our options to build on announcements that we’ve made already. When it comes to the housing sector, as you know, we’ve announced a particular package of measures, nearly $700 million worth already.
JOURNALIST:
Treasurer, is it inevitable now that restriction relief will be delayed because a protestor has tested positive and do you think as an abundance of caution, everyone who went should self-isolate for two weeks?
JOSH FRYDENBERG:
I don’t that accept the inevitability of what you just said then in terms of what that will mean for the restrictions. What we do know is that there was a timetable agreed by the National Cabinet. I think it is important to move ahead with that timetable because we know how many jobs are going to be created and we know how much the economy will benefit as a result.
JOURNALIST:
Treasurer, if JobKeeper can’t go on beyond September, would the Government get better bang for its buck from devising or introducing potentially new stimulus measures if the economy is still a little bit weak at that stage?
JOSH FRYDENBERG:
Again I don’t want to pre-empt, John, what the discussions within Government are going on right now because we are looking at our options. We’re looking at where the economy is today, but also where it is likely to be with those further restrictions being eased. But let’s not underestimate the support that we have provided to the economy. What we also need to bear in mind is that there are other supports across the economy, not necessarily being provided by Government, that are also coming off near the end of the year. I’m talking particularly about the deferral of interest payments and principle payments by small business owners on their loans to the banks. I’m talking about some of the regulatory changes, the regulatory shield we’ve created around insolvency and bankruptcy that was there for a six-month period. There is a number of things that we’ve put in place that were temporary, that were designed to support the economy in its time of need that we need to consider in the context of the improvements across the economy.
JOURNALIST:
Treasurer, you asked recently for Super funds to help invest to get back in to domestic recovery. Greg Combet sent you a letter over a month ago offering to assemble the executives of top Super funds to coordinate with Government about this sort of investment. How have you responded to him on that offer?
JOSH FRYDENBERG:
Since that time I have spoken to Greg Combet. As you know, he’s a member of the COVID Commission. This is one of the topics that I and the Prime Minister have discussed with him in the context of one of those meetings.
JOURNALIST:
Can I just come back to international students because I’m not clear about your answer. We are almost at semester two now. Is it possible that you might allow international students in for semester two, or is it just not going to be something you can do in time?
JOSH FRYDENBERG:
I think I’m very clear that we will follow the medical advice and the medical advice right now is that we have to be very, very cautious about any loosening of those travel restrictions because of the fact that the virus continues to spread across the world. We haven’t seen the flattening of the curve in comparable countries to Australia as we have seen here.
JOURNALIST:
Some states are talking about a partial reopening of borders rather than fully reopening to the rest of the country. Would you support a partial reopening first or to get the economic benefits, should they open to everyone?
JOSH FRYDENBERG:
States should go the full hog. They should lift those borders immediately. Closed borders cost jobs, the public wants to get back to work and if those states lift those borders in accordance with the medical advice that we have, then that will be good news for the economy overall. Thank you.