JOSH FRYDENBERG:
Today, Deloitte released its Business Outlook, with significant upgrades to its economic forecast for Australia, suggesting that our economy will contract by 3 per cent this calendar year and grow by 4.7 per cent next calendar year. This shows that Australia is performing much better than many other nations during this once-in- a-century pandemic. This report also follows recent reports from the IMF and the OECD that praised Australia's economic performance, and that our response has been strong and has helped set Australia up to deal with the challenges that we face. It also follows reaffirmation by the three leading credit rating agencies of Australia’s AAA credit rating.
In this Deloitte Economic Outlook they do point out that Australia entered into this crisis from a position of economic strength. That debt was low and the Budget was balanced. And that programs like JobKeeper, as well as the many other support packages and initiatives that the Government has announced has helped save lives and has helped keep people in jobs. It also points out, we have got money into people's pockets much faster than previous governments have done, including during the GFC. And that some of those sectors, that were hardest hit, including the arts, food, accommodation, are starting to open up again and the jobs are coming back. But this Deloitte Report also points out the challenges that we face and particularly the recent spike in cases in Victoria. We are all in this together, this is not State of Origin. Australia's success depends on Victoria’s success and stemming the tide of these new cases and getting it under control. And that is why we welcomed the announcement by states to provide additional support to Victoria and as well as that the Commonwealth continues to provide the necessary support that Victoria needs during these pretty trying times. Any questions?
QUESTION:
How much will the closure of the New South Wales-Victoria border impede that economic recovery though?
JOSH FRYDENBERG:
Well I have to say this outbreak in Victoria while serious, while significant, it’s not a surprise. We are going to see some outbreaks in the period ahead. Australia has had great success in flattening that curve and that has allowed many of our sectors to start to reopen again but there are going to be these challenges. Now with regards to the border closures that you are talking about, they are decisions that state premiers are taking based on the advice to them. Now I’m not going to second-guess that advice, other than to say, we obviously need to ensure that our communities are safe and the economy continues to recover. When it comes to the future forecasts, we will obviously be updating those and that will be part of our economic and fiscal update on July 23.
QUESTION:
But Treasurer, you have questioned before, quite strongly with Queensland, you said, unequivocally, closed borders cost jobs, so how many jobs will this decision today cost?
JOSH FRYDENBERG:
Well when we talked about the Queensland borders we had specific advice from the Deputy Chief Medical Officer who said there were no medical reasons for those borders to remain closed. What we are saying here is that we obviously want the recovery to continue apace, but when decisions are taken like these in relation to the spike, then obviously we will have to look at that.
QUESTION:
No matter the reason, do closed borders cost jobs?
JOSH FRYDENBERG:
Well there is no doubt, in my view, that closed borders do cost jobs, but we are facing a significant spike in cases from Victoria.
QUESTION:
So has the medical advice changed then? Was the Prime Minister the one that was told?
JOSH FRYDENBERG:
Well in terms of the Victoria situation, the medical authorities are consulting very closely on this, they have been having a number of emergency meetings to discuss these related issues. What we have seen in
Victoria is a significant number of new cases. And it's very challenging times. But, of course, we will continue to work with the states, to ensure that not only the economy opens but we can get the health support to those who need it.
QUESTION:
The Chief Medical Officer said that the community transmission in Victoria is unlike anything so far seen in Australia. Do those kinds of extraordinary circumstances mean we should see more border closures, that Victoria should close its borders to all states?
JOSH FRYDENBERG:
Well let’s just wait and see about the period ahead. I think the next couple of weeks will be really telling. I think what happens in the next couple of weeks, in terms of the steps that the Victorian Government have taken to ensure that we can try and stop the rise and the number of cases, with contact tracing and testing, we can continue to take the steps necessary. I think that’s going to be critical. Let's see what happens in the next couple of weeks, we’re in a very challenging period.
QUESTION:
The impact on the economy and jobs, I guess, what is your message to Victoria about how it should reopen its borders and economy once this is brought more under control?
JOSH FRYDENBERG:
Of course once it's brought under control we want the economy to get back to normal as soon as possible, that's the reality of it, that is why we have been pushing so hard through the National Cabinet and though our bilateral discussions to ensure that we can put in place the necessary measures to protect people as they get back into work. And that’s why tracing and testing and that’s why effective quarantine is so important. And we have seen obviously some failures in that regard. But the key message is this is not a time for state vs state, this is not State of Origin. We are all in this together. And Victoria's success in the weeks ahead with stemming the tide of new cases will affect the whole economy as a whole. We have recently seen some consumer confidence numbers from a weekly ANZ survey, and it showed that consumer confidence fell off the back of what we saw in Victoria. So consumer confidence has picked up about 80 per cent off its lows, business confidence has picked up about 70 per cent off its lows, but the recovery very much depends on success on the health front.
QUESTION:
You mentioned the July 23 economic statement and working towards the Budget in October, as you are doing that will you be auditioning colleagues you think might replace Mathias in the finance portfolio?
JOSH FRYDENBERG:
Look, we know that Mathias will leave a big hole, he's been a fantastic, fantastic Finance Minister - Australia's longest serving Finance Minister - and his departure at the end of the year will be a real loss for our team because he's been such a significant figure and he’s been a great friend and colleague for me as well as many others. But I will continue to work closely with him not only on the July 23 Statement but also on the Budget in October and then the MYEFO at the end of the year.
QUESTION:
Treasurer, in March when you announced the early access to super, you estimated about $27 billion cost with 1.5 million…
JOSH FRYDENBERG:
$29 billion.
QUESTION:
And now you’re at 2.5 million people before the second half of this has gone and more than $18 billion has gone out the door, how have you guys got it so wrong in terms of the estimate of the number of people and what sort of ramifications is that going to have to your Budget and to retirement savings given more people are taking this up than you clearly envisaged?
JOSH FRYDENBERG:
Well, Shane, we’ve got it so right because we have actually given people an opportunity here to get access to their own money and people have very clearly voted with their feet here. What they have done is they’ve accessed their savings at a time of hardship and that has been the test. Now we forecast around $29 billion, right now we are at about $25 billion, including those early access in the second half of the year. But as you know, under the existing super scheme, people can access their super at times of hardship. We have done this tax-free for them. This money is being used obviously to pay some of the debts that people have, but also to meet the daily discretionary expenses during this crisis. So I stand by that policy, I think it has been very effective.
QUESTION:
Can I just clarify something, you cited the Deloitte report and some of those points they made, do you also take seriously their warnings about the risk of withdrawing economic supports too soon and specifically that JobSeeker will need to remain higher to capture those people for whom some of that broader support is being withdrawn?
JOSH FRYDENBERG:
Well the report talks about JobKeeper and JobSeeker being standouts and praising those two policies among many others. What the Prime Minister and I have made very clear is we’re going to continue to provide the support that is necessary for those sectors and for those people who need it. Now we have already announced a number of significant initiatives for the housing sector, with the HomeBuilder program, support for the arts sector with the $250 million program, increased support for the aviation sector and, of course, the tourism sector. So we will continue to look for sector specific support as well as economy wide support that we have been providing through JobKeeper and JobSeeker, all will be revealed in that week of July 23.
QUESTION:
Should TikTok be banned? Is it a threat to national security?
JOSH FRYDENBERG:
Look, we are very concerned about foreign interference in o social media platforms and the spread of fake news. And so these are issues we are talking to our Five Eyes partners about, taking advice from the security agencies, and the steps that we take in relation to a whole range of areas in relation to social media will be based on the advice we get. Thank you.