JOSH FRYDENBERG:
Good morning. Overnight, the International Monetary Fund released their Global Economic Outlook. It reflected their forecast of a big hole they see emerging across the global economy. They are forecasting a contraction in the global economy of 3 per cent this calendar year. To put that in perspective, at the height of the Global Financial Crisis, the global economy contacted by just 0.1 per cent. Importantly, they are forecasting that the global economy will bounce back strongly in the calendar year 2021 with growth of 5.8 per cent. These numbers from the International Monetary Fund are not surprising. They reflect the reality that we are in and the severe economic impact that economies around the world are facing as a result of the spread of the coronavirus. They also underline the importance of the major support packages that countries like Australia have announced. At around $320 billion, or 16.4 percent of GDP, Australia’s support packages is much greater than those we’ve seen from a number of other countries around the world. We have provided cash payments to millions of Australians. We are providing a cash flow boost to hundreds of thousands of small businesses. We have injected, with the Reserve Bank, over $100 billion into our financial system to support the lending of banks and other non-bank lenders. And of course, with the $130 billion JobKeeper program, we have provided a wage subsidy which is an economic lifeline to the nation at this critical time. We will continue to take the actions necessary, but we are seeing progress on the health side by flattening the curve, and we are also seeing the benefits of the economic measures that we have announced. And just finally, tonight I will be joining a video conference call with my G20 counterparts. It will be an opportunity to exchange notes about the various measures that countries are putting in place to support their economies and also the challenges that we are all continuing to face at home but also, across the globe. From Australia’s perspective, our messages are clear and consistent, we must continue to see the trade in essential items like health supplies at this time, and the current crisis should not be seen as a cause for protectionism. We will also continue to support emerging economies and many of those developing economies who do not have the established health systems that we see in Australia and in other nations. These are messages, together with the need for continued synchronised action by central banks, including the Reserve Bank of Australia, are vitally important to ensure that the Australian economy and the global economy get to the other side of the coronavirus.
QUESTION:
Treasurer one of the key forecasts is that unemployment is to average 7.6 per cent this year in Australia then going up to 8.9 per cent and there’s not that many countries seeing an increase in their average unemployment in 2021, why do you think that is so, especially given the amount of support that the Government and the Reserve Bank and the States are pumping into the economy?
JOSH FRYDENBERG:
Well there’s two important points to make there, Shane. Firstly, as the IMF a couple of weeks ago were finalising their numbers, it was before the JobKeeper payment was announced, and as you know the JobKeeper payment will ensure that many Australians remain in their jobs and maintain that formal connection between employer and employee and won’t be joining those Centrelink queues, and that was one of the driving purposes behind the JobKeeper payment. The other point to make is at the time that the IMF were putting together their figures, the Australian curve was heading in the wrong direction if you like. We were seeing an exponential increase of more than 20 per cent a day in the number of cases of coronavirus affected people. Since that time, we’ve bent that curve and we are seeing a growth of less than 2 per cent per day and our health measures are making significant progress. So I would ask you to take those factors into account because, of course, the success on the health side helps also determine the broader economic impacts that are also taking place.
QUESTION:
Does that extend, Treasurer, to the IMF’s growth estimates for Australia as well?
JOSH FRYDENBERG:
It does, in terms of when they were putting together this report, and again, tonight is a G20 call, Phil, tomorrow night is an IMF call and I will be joining my counterparts then.
QUESTION:
Treasurer, New Zealand’s PM has just announced that all Ministers and Public Service Chiefs are going to take a 20 per cent pay cut, she said it’s about leadership. At a time we’re seeing mass job losses here in Australia, companies are forcing their employees to take pay cuts, is it time that Australian politicians take a pay cut?
JOSH FRYDENBERG:
Well as you know we have frozen the pay increases for politicians here and for public servants, and Anthony Albanese was asked this question, and Mathias Cormann has been asked this question, and they’ve given the answers that…
QUESTIONS:
(inaudible)
JOSH FRYDENBERG:
Well again, that’s the action that we’ve taken.
QUESTION:
Treasurer just on the mobile phone app that the Government is working on, what exactly is the data that the Government would be taking from people’s phones, and what can you say to reassure people that their privacy will still be protected?
JOSH FRYDENBERG:
Well the Attorney-General is working through those privacy-related issues and obviously we’re modelling the development of our app similar to what has been rolled out in Singapore. It’s all about protecting the safety of Australians and if you’ve come into contact with someone who has the coronavirus, that obviously increases the chances that you’ve been affected by it, and of course it’s in your interests to know that and it’s in the interests of people around you to know that. So, the app is voluntary, it’s an opt-in and the privacy issues are being worked through by the Attorney-General.
QUESTION:
Is it true that social restrictions could be relaxed if at least 40 per cent of the population sign up to this app?
JOSH FRYDENBERG:
Well again, this app is important in contact tracing and obviously we’ve got increased testing that’s taking place and we’re seeing progress in bending the curve. But my message and the Prime Minister’s message, the Health Minister’s message, has been consistent and clear. We will continue to take the best possible medical advice that’s available to us, and that’s served the nation well. If you look abroad, if you look at Japan and you look at Singapore, they thought they were having great success in beating back the virus, yet they saw a second wave of cases and they’ve had to put tighter restrictions in place. Sweden which went down the route of having, allowing, large gatherings have now called in the military to set up a hospital in the middle of Stockholm and with less than half of the Australian population, they have more than 10 times the number of deaths from the coronavirus. We need to move away from this mindset of thinking that the coronavirus is an older person’s virus. It’s not an older person’s virus, it’s not a younger person’s virus. It’s a virus that affects all of us. I mean, the median age of those who have lost their lives from the coronavirus is around 80. The median age of those who have been hospitalised from the coronavirus is around 60. The median age of those who have contracted the virus is 47. But if you look at the greatest cohort, the size of the number of people who have contracted this virus, that’s those aged between 20 and 29, which indicates that those people are contracting the virus. Some are going to be dealing with it more than others, but they will also be passing it on to others, and we need to treat every Australian equally here. We need to value every Australian life equally. That’s why this is a Team Australia moment. This is why we are all in it together. This is why we need to put in place those health restrictions based on the medical advice.
QUESTION:
Treasurer, President Trump has decided to halt funding for the WHO, will Australia now take a tougher position on that organisation in terms of its funding?
JOSH FRYDENBERG:
Well firstly, we respect the decisions of any sovereign country in relation to who they fund and what they fund. In terms of Australia, we see the World Health Organisation playing an important role, particularly in our region, and that’s important to Australia and as you know, we have funded the World Health Organisation. But that doesn’t mean we’ve agreed with them on everything, and the Prime Minister has been very clear about the wet markets, for example. I mean it’s unbelievable, it’s extraordinary, that the World Health Organisation sees it fit for these wet markets to continue in China. They shouldn’t. I mean they’ve been the source of outbreaks that have killed people around the world. I would have thought from the World Health Organisation’s perspective, protecting the health of the world is its first priority.
QUESTION:
When will you commit to reviewing the funding, if obviously they’ve got that call so fundamentally wrong, why isn’t Australia reviewing its funding?
JOSH FRYDENBERG:
Firstly, we see the World Health Organisation contributing to better health outcomes in our region. Some of the work that they do in developing countries is important and we play our role in supporting global organisations through the UN, but that’s not to say we don’t disagree with them from time to time. So we will make those views known about areas where we think the World Health Organisation can do a better job but we’ll obviously continue to support global bodies.
QUESTION:
Treasurer on Virgin, there’s reports that they’re hiring insolvency experts, that they’re looking at voluntary administration on the cards, are you aware of those reports (inaudible)
JOSH FRYDENBERG:
Look, obviously I’m aware of the reports about Virgin’s predicament and as I’ve said in this place yesterday, having two airlines has served Australia well. Airlines play a vital role, not just in providing tourism links and movements of people, but also a freight and Australia is a country of 25 million people and I understand that two airlines have served us well. But at the same time, our approach has been sector-wide support and that’s critical to understand. We’ve announced more than a billion dollars worth of support measures which help Virgin, which help Qantas, which helps some of those regional airlines.
QUESTION:
But what about all those supports for fees and so on (inaudible) flying. A lot of these planes aren’t flying anymore. Don’t they need just a general bailout or (inaudible)?
JOSH FRYDENBERG:
Well there was a rebate on some of the expenses that already incurred earlier. But in terms of Virgin, their first point of call is their shareholders. Their first point of call is their equity holders, and they’ve got some big equity holders there as you know. Not just Virgin globally but there’s Etihad, there’s Singapore, there’s two China-related companies who are stakeholders, so that’s their first point of call. I know that they’re doing a lot of work. The Government’s had open lines of communication with Virgin, as we have with Qantas, and as you would expect us to do.
QUESTION:
Treasurer can I ask you a question, I don’t expect you to know the detail of the case, but perhaps a general observation. A Brisbane man…
JOSH FRYDENBERG:
I’ll take that as a comment.
QUESTION:
Well no I’m telling you it’s probably unfair to ask you about this specific case, but in the general, a Brisbane man who has terminal cancer has had a kidney removed in emergency surgery. He’s trying to access his superannuation to pay for that surgery and being told because he’s doing it after the surgery not before, even though he does comply, and would otherwise get this access, that he’s not going to get that money. Does that seem like a compassionate thing to do for a dying man?
JOSH FRYDENBERG:
Well that seems like a very bad outcome for someone who needs that support, so I’m happy to take the details from you, Mark, and to take it up directly with the superfund.
QUESTION:
Treasurer, realistically looking at the future of airlines, when do you imagine that (inaudible) open our borders? Certainly not this year under the plan which you’ve got (inaudible) and probably not next year at the rate that we’re going. Will there even be a marketplace for one airline in Australia or will that airline have to be supported by Government?
JOSH FRYDENBERG:
Again, we like the private sector to be doing things as opposed to the Government and the Government is obviously there as a last resort in areas across the economy which cannot be met by the private sector. Now, in the case of airlines, we’ve been served by two private sector run and owned airlines. Now we hope that continues to be the case…
QUESTION:
And where will the marketplace be?
JOSH FRYDENBERG:
Well in terms of the global borders, as you know we have imported a number of coronavirus cases, and we’ll continue to take the medical advice, but no one should be expecting the international borders to open up any time soon. When it comes to domestic travel, that would happen earlier one would assume. But again, it will be based on medical advice and I don’t want anyone to have a sense of complacency right now. We’ve had success, Chris, in flattening the curve. We’ve had great success in reducing the growth in the number of coronavirus cases. But patience is the virtue, complacency is the problem. Right now, the Australian people have come with us on this journey and we want them to stay with us on this journey as we continue to meet those health and economic challenges.
QUESTION:
Treasurer, when do you think that that deeply important economic sector, the construction industry, might recommence operations given, I presume, that you would hope it would be part of any recovery?
JOSH FRYDENBERG:
The construction sector is actually operating today, and when I went for a walk over the Easter weekend in Melbourne, I saw people working hard on removing a level crossing in my home state of Melbourne. So there were workers obeying the requirements around social distancing as you would expect them to do, but also getting on with their construction activity. So Malcolm, this is one area we would like to see continue but obviously to reflect the best possible medical advice.
QUESTION:
Treasurer (inaudible) about the IMF forecast being based on old data…
JOSH FRYDENBERG:
As they were finalising their numbers, the JobKeeper package was just being announced and the infection rates were much higher…
QUESTION:
So do you have your own estimates as to maybe the impact on GDP this year and next year?
JOSH FRYDENBERG:
Treasury are working through that. Again, that will depend, because it’s a fluid situation, it depends to some extent on how long the health restrictions are in place. But what we do know, Phil, is that the hit to GDP will be very significant just as the hit to unemployment is very significant. But we also have positioned the economy for the recovery phase, for the bounce back, and that is why the JobKeeper package will be so important because it will maintain that formal connection between employer and employee.
QUESTION:
Just on JobKeeper from a colleague at home. A number of large and small businesses, while grateful for the JobKeeper wage subsidy, are struggling to understand how it works and can’t bridge the gap until May. So what is your advice to them and can the Government help in any other way?
JOSH FRYDENBERG:
A couple of points. The first thing is that the ATO have released some information today that they are making available to employers and to employees, and providing that level of guidance now that the legislation has passed through the Parliament. So I would ask people to go on to the ATO website, to go on to the Treasury website and to access that information. There are also forms that employees are to fill out for their employer which is obviously consistent with their eligibility criteria. Yesterday I got a call from a casual worker who I know well, they’re a long-term casual with a retail chain in Melbourne, the retail chain is closed and their employer had paid them their $1,500 payment and this was a lifeline for them. I know of other examples of businesses that are now paying their employees. I would encourage all employers who are eligible for the JobKeeper program, and we know there are many of them employing around six million Australians, to obviously register their interest, to fill in those requisite forms and to pay their employees as soon as possible. I also want to make it clear that in order for you to get that first payment in that first week of May, you would have needed to have paid your staff because the employer is getting that payment and they need to have paid their staff. The ATO will be making sure that happens and the banks stand ready to stand with their customers to bridge that financial load between now and that first payment in May. Thank you.