JOSH FRYDENBERG:
As we’ve said before Australia is fighting a war on two fronts. We are facing an economic and a health crisis simultaneously. On the health side, Australia is making progress in flattening the curve. Just a few weeks ago, we were seeing an exponential increase in the number of cases on a daily basis. In fact, more than 20 per cent per day. Through the social distancing, quarantine, isolation processes that we’ve put in place, we have seen that growth in numbers come down to less than two per cent. Australia has one of the highest testing rates in the world and one of the lowest mortality rates in the world. On the economic front, it's important to note that Australia has approached this crisis from a position of economic strength. Since coming to government, we’ve created over 1.5 million new jobs. We reduced the growth in government spending by half. We’re able to achieve the first balanced budget in 11 years. And we got the welfare dependency levels down to its lowest rate in 30 years. As recently as February, unemployment had fallen to 5.1 per cent. Today, we released Treasury figures indicating their estimate that unemployment is expected to peak at around 10 per cent in the June quarter. But for the JobKeeper package, unemployment would have peaked at 15 per cent, five percentage points higher. The JobKeeper package is providing an economic lifeline to millions of Australians. At $130 billion, it's a wage subsidy the size and scale and scope of which Australia has never seen before. Around six million Australian workers are expected to benefit. Part-timers, full-time workers, casuals who’ve been connected with their employer for 12 months or more, sole traders and those working in the not-for-profit sector. And as of today, well over 800,000 businesses have registered with the Tax Office for the JobKeeper payment. So, the unemployment rise is very concerning but it's also a reflection of the economic challenges that we face. What is important to note is that with the JobKeeper package that passed the Parliament with the support of the Labor Party, just last week, we are helping to keep millions of Australians in a job.
JOURNALIST:
Treasurer, what do you think will be the fall in the trajectory of unemployment from 10 per cent? How long do you think it will take to get back to around to 5.1 per cent and do you have estimates around underemployment?
JOSH FRYDENBERG:
Well again Shane, our focus has been from Treasury on that unemployment headline number. As for the speed in which people get back into the workforce, who have tragically lost their jobs that will depend to some extent how long the health restrictions are in place. But as I said over the weekend and as the Prime Minister and the Health Ministers have repeated today, we cannot get ahead of the medical advice, to do so would be dangerous and unrealistic. The medical advice has serviced Australia well and Australians expect us to be implementing measures that reflect that advice. So over time, once we get to the recovery phase and restrictions are eased, at that point you will see more people come back into the workforce.
JOURNALIST:
Treasurer, if Virgin Australia goes bankrupt, would that give Qantas a monopoly on domestic travel in Australia?
JOSH FRYDENBERG:
Again, you’re speculating about the future and nobody knows where those issues will end up. What I can tell you though, is as a Government, we’re absolutely committed to the aviation sector. We've already announced over $1 billion worth of support measures from regulatory and fee changes to other support for freight services and the like. Australia's been well served by having two major airlines operating in the domestic market. But Virgin and Qantas are both publicly listed companies, both with substantial shareholders. And I know that obviously that sector has been very badly hit by the impact of the coronavirus and in both cases they continue to talk to their key shareholders about the road ahead.
JOURNALIST:
Are you sympathetic though, to Virgin's pleas for assistance? I mean, surely a collapse of Virgin and that being left with one airline is something no government can stomach?
JOSH FRYDENBERG:
We look at all these issues on an objective basis and again, there is still quite a way to go in terms of the aviation sector and some of the challenges that those particular companies that you are referring to are working through.
JOURNALIST:
Treasurer, is it still the Government's view with aviation that any support has been sectoral rather than one specific business?
JOSH FRYDENBERG:
We've been very consistent in that message that we will support the aviation sector but we're doing so with a sectoral wide approach and you've seen that in the announcements to date.
JOURNALIST:
Treasurer, how many people do you predict will receive the JobKeeper payment but be unemployed, effectively not working?
JOSH FRYDENBERG:
Well if you’ve got the JobKeeper payment you’re maintaining a connection with your employer. Well in terms of those who were stood down, again that is to play out in the weeks and the months ahead. What we do know is that the benefit of the JobKeeper package is that it maintains that formal connection between employer and employee. Now in some cases because of the health restrictions businesses have had to close their doors for the employee through no fault of their own. They are seeing their income reduced and the wage subsidy at $1500 a fortnight provides very substantial support at a very difficult time.
JOURNALIST:
Is there a number for how many people that would be?
JOSH FRYDENBERG:
I don’t have a definite number as for what percentage of those people will be stood down and what percentage of those people will continue to work. But what we do know from Treasury is around six million workers are expected to benefit from the JobKeeper payment.
JOURNALIST:
Just on those restrictions because we’re doing so well domestically comparative to the rest of the world is it quite likely that those border lockdowns are the last thing to go regarding the international world? And if so, is more support for those sectors that will be really hit by that like tourism or the university sector going to be considered?
JOSH FRYDENBERG:
Well there’s lots of questions in that. In terms of the border protections that we’ve put in place, obviously we’ve imported like other of countries a number of cases from visitors from overseas or Australians who have been returning home. So again it’s unrealistic to expect those border restrictions will be lifted anytime soon. But again if you look at the overseas experience, countries like Japan and Singapore saw themselves as having quite a deal of success in countering the spread of the Coronavirus, only then to see a second wave and heavier restrictions to come back in. Sweden is one country that took a relaxed approach to major gatherings in public spaces. Yet now there’s more than 600 deaths in Sweden from the Coronavirus and they’re a country with less than half of our population yet they’ve got more than ten times the number of Coronavirus deaths. And as I said again on the weekend the military are putting up a hospital in the middle of Stockholm. So I think this is a very fluid situation, a very difficult situation and we need to continue to take the medical advice. In relation to the other questions you asked about the retail sector and the tourism sector and the hospitality sector, they are of course sectors that have been hardest hit as a result of the Coronavirus. Importantly our $1500 wage subsidy at $1500 a fortnight is in many cases a full replacement wage for many people working in those sectors. But again we’ll continue to monitor the situation in line with medical advice.
JOURNALIST:
The ANU’s Tax and Transfer Institute says that either young Australians will be forced to pay back the debt the Government is now running up to stave off this virus or the Government will agree to increase the goods and services tax and land tax at a very minimum. Is the Institute right?
JOSH FRYDENBERG:
Well Tim we have no plans to change the GST, what we are focused on is growing the economy. The economy today is 16 per cent larger than when we came to Government. And by virtue of growing the economy and creating more jobs then you see both expenditures go down and you see revenue go up. And we’ve done that while lifting health and education spending to record levels. So we’re the party of lower taxes. We’ve shown our track record indicates that. And of course there will be a debt burden that will be left to pay for years to come. But we will approach those issues in the considered way that we’ve done in the past.
JOURNALIST:
What would the unemployment rate be if it was extended to casuals who are currently excluded from the JobKeeper?
JOSH FRYDENBERG:
Well Treasury based their forecast and estimates on the legislation that has passed the parliament.
JOURNALIST:
Treasurer 700,000 people have become unemployed because of this crisis. How confident are you that when Australia emerges, when the restrictions are gone, that those 700,000 people will actually get jobs again? Because as we’ve seen from previous recessions it’s really hard for many people to get work after a recession.
JOSH FRYDENBERG:
We’ll be doing everything we can to encourage and incentivise further economic activity. It will be a team Australia moment - having to look at the economy as a whole, work as we’ve done constructively with the states, key stakeholders. I mean the unions and big business have been involved in the discussions ahead of the JobKeeper package passing the Parliament and of course we’re looking to cut red tape at every opportunity to streamline those opportunities. So I believe that more jobs will be created on the other side of this crisis. I think there will be the recovery phase, Australia will be well positioned for that, but there are certainly some challenges ahead.
JOURNALIST:
Treasurer, when you’re talking about striking a balance on this between the health and economic side do you take into account the health side on balance, mostly elderly people will benefit from what you’ve done, whereas on the economic side over a long period of time, young lives will be sacrificed?
JOSH FRYDENBERG:
Again, I think we’ve all been affected by coronavirus, young and old. I think it is quite indiscriminate in the way that it can challenge people’s health. You saw in the United Kingdom, no less a person than the Prime Minister of that country go into intensive care. He’s not a senior citizen, if you like, he’s still a pretty spritely, relatively youthful person. Yet he was struck down by the virus. I think we have a responsibility, Chris, as a country to look after our fellow Australian, regardless of their age, regardless of their income, regardless of their background. And that’s what we’ve done in this case. We’ve taken the medical advice, we’ve put in place pretty stringent measures and those measures are helping to flatten the curve. But just as previous weeks have been tough, the weeks ahead will be just as tough and even tougher in some cases. In relation to the economic measures that we’ve put in place, they are designed to support businesses, they’re designed to keep people in a job and they’re designed to get us to the recovery phase and that will help young and old alike.
JOURNALIST:
The Prime Minister has said that businesses could pay their workers $1,500 a fortnight with confidence because that would be back paid. Has the Government got any record of employers actually doing that? And given the reports from employees that their employers don’t have the cash flow or aren’t willing to go to the bank to get it pay them, how are they supposed to pay their bills for the next two weeks?
JOSH FRYDENBERG:
There is a few points to make there. Firstly, the Australian Banking Association have put out a statement, and I do know that the banks are working closely with their customers to bridge that finance until those first payments come in the first week of May through the ATO, so I do know that is happening. Businesses are paying their employees and others are working on getting access to that finance. But we do know that once we get to that first week of May the money will continue to flow. It takes a while to set up the systems to pay the sums of money involved. But we have seen many companies, over 800,000, register their interest already.
JOURNALIST:
Could the JobKeeper and the expanded JobSeeker payments be tapered rather than simply ended at the end of your six month deadline? And has the take up of JobKeeper been in line with Treasury’s projections?
JOSH FRYDENBERG:
Again, we expect some six million workers to benefit. While over 800,000 companies have registered their interest we don’t know exactly how many workers are represented by each company because we don’t have those full details and that analysis is still yet to be done. But there is no doubt millions of workers and their businesses have registered through the ATO. In relation to your first question about the tapering, again what we are looking to do is to provide the JobKeeper payment for the circumstances in which we find ourselves. Decisions about the end date and related issues will come closer to the time. But what has been legislated through the Parliament is a six month program, consistent with our other measures which have all been temporary, targeted, scalable and using existing tax and transfer systems.
JOURNALIST:
Do you have any idea yet whether the people on JobKeeper or JobSeeker, the expanded payments, have the confidence to spend their money, I’m not quite sure where for a lot of them, or are they stocking it away because there is fear the worst is yet to come?
JOSH FRYDENBERG:
As you know, Malcolm, we announced $750 cash payments in the first tranche and over $4.5 billion has made its way to people’s pockets. We’ve actually seen some of the spending as a result of that money, indicating that people are spending that money whether it’s at the local mechanic, or whether it’s at the local corner store or paying down some other accumulated debts. In relation to the JobKeeper and the JobSeeker programs, people who have already had their applications processed for the JobSeeker payments are no doubt using it to meet their rental expenses, to meet their food bills, to meet other daily expenses. I suspect they are not taking a holiday anymore but what they are doing is spending it on the mandatory items, so too with the JobKeeper package. Once that money flows through in the first week of May, people will be using it to meet the daily bills of life.
JOURNALIST:
Is it cheaper or more expensive for say the sole breadwinner of a family of four who has been laid off to be on JobKeeper or JobSeeker?
JOSH FRYDENBERG:
Again, they are different programs. If you are with an employer who is eligible for JobKeeper, you will see a fortnightly payment of $1,500. For people who are not with the JobKeeper program for one reason or another, and in the JobSeeker program, you’re looking at about $1,100 a fortnight. But we’ve also relaxed the partner income test to make it easier for people to access that.
JOURNALIST:
I understand that. But for you, the Government, for the taxpayers, is it cheaper for JobKeeper or JobSeeker?
JOSH FRYDENBERG:
The JobKeeper payments are $1,500 and as I said, the JobSeeker payment is around $1,100. Our focus here is to keep people in a job. That’s our ultimate focus. To keep people in work, to maintain that formal connection between employer and employee so that when we get to the recovery phase we can bounce back stronger than ever.