ALAN JONES:
Treasurer, good morning.
JOSH FRYDENBERG:
Good morning, Alan.
ALAN JONES:
Thank you for your time. Just on that, do you understand that, and this is a very difficult thing to say, but the public have no faith in the Foreign Investment Review Board. Between 2007-2008 and 2017-2018, that's ten years, the Foreign Investment Review Board reviewed almost 12,000 applications and rejected five. Now, can you tell my listeners how the FIRB, which I understand has one permanent employee and a handful of part-time members, give proper consideration to the sale of so many Australian assets? I would argue it can't. My listeners are saying it can't, and they aren't looking out for the best interests of all Australians. Now people are worried that the Chinese predator will move. What's your response to that?
JOSH FRYDENBERG:
Well, actually the full Department of Treasury are supporting the Foreign Investment Review Board and it's led by David Irvine, a very distinguished Australian, someone who was the head of ASIO and the head of our foreign intelligence service, ASIS, as well as being a former ambassador to China. So he knows the issues that are at play, he knows from a national security perspective, and he supports the actions by the Government in abolishing the threshold through legislative change…
ALAN JONES:
…Just before you go there, Josh, because I know this is your new initiative. I just want to make that point and I'll let you go here. A speech at the Western Hotel, this was worrying listeners, on August 14, 2018. The same David Irvine, yes a distinguished Australian, stated that an estimated total volume of critical infrastructure transactions that had been approved in three years was $40 billion. Now, the people listening to you now are very much in favour of investment. They are not in favour of ownership.
JOSH FRYDENBERG:
Well, as you say, investment is critical. One in ten Australian jobs are with businesses who have benefitted from foreign investment. Take our resources sector, we've benefitted greatly from Japanese investment and, indeed, the Chinese investment in that sector…
ALAN JONES:
But there is a difference between investment and ownership, isn't there?
JOSH FRYDENBERG:
There is a difference and what this legislative change will enable us to do, Alan, is to run the ruler over every application, to ensure it's in the national interest. Now, your listeners may ask how do you define the national interest? Issues like the character of the investor, national security, the tax implications, the competition law implications, all of these issues are relevant to our determination.
ALAN JONES:
Would it be in the national interest for, as a consequence of this economic crisis that we face, health plus economic crisis, would it be in the national interest for our assets to be bought by China at a time when they are completely devalued? Would that be in the national interest?
JOSH FRYDENBERG:
Actually the reason why we have moved as we have is because there are many Australian companies, indeed global companies as well, that are distressed, that have seen their asset values severely diminish as a result of the coronavirus and we don't want to see predatory behaviour that is against the national interest, and that is really important in terms of the reasons for our change.
ALAN JONES:
But see, as you know right now, we are having great difficulty because the manufacturing industry has been wound back, free trade and all that stuff, and much of what we need now to resolve this crisis is in the hands of the Chinese. Now, later on it may be food. China have bought all the dairy farms, bought them, bought them in Tasmania. We know that they own beef farms, we know that they own our water, we know that they own our coal, we know that they own the avocado farms, the sheep farms and people are saying where the hell does this stop? I mean we've got to stop being soft on this kind of takeover of Australian assets, haven't we?
JOSH FRYDENBERG:
Well, I actually have rejected a number of proposed acquisitions, some of which you know about and some of which you don't. And the reason why you don't is because the application comes in, I assess it and I say no and then they withdraw that application before it ever sees the light of day. So you need to understand we are running the ruler, but this distressed time for businesses means that the threshold needs to come down to zero. But you make an important, broader point, which is supply chains and Australia's ability to manufacture the things that are going to be important to our country in the future, because after the coronavirus, there will be another challenge, and I think this is a global conversation, not just an Australian conversation, that will have to be had on the other side of the coronavirus.
ALAN JONES: Definitely, definitely.
JOSH FRYDENBERG: Right now, Alan, I'm focused on the health of Australians and the economic security of Australians.
ALAN JONES:
That's a very good point that you make, though. We may have to recalibrate and reset after this is over, may not we?
JOSH FRYDENBERG:
I think we will. I think we will.
ALAN JONES:
But for the moment you're saying today…
JOSH FRYDENBERG:
(inaudible) …an important conversation.
ALAN JONES:
Sorry, for the moment today you're saying there were thresholds in the past, no. From today, every application to the FIRB, every application, will have to be approved?
JOSH FRYDENBERG:
Absolutely.
ALAN JONES:
Right. Can I just share, and I know you're going to make another economic package coming out. I just want, you and I have had some conversations off air I should say, can I just repeat to you what we actually discussed earlier this morning. That places like Denmark, the Netherlands, Germany, South Korea, the UK and New Zealand are all guaranteeing wages. Now, there are people writing to me, Jason says, "Alan, why," I mean this is rough language, forgive it, but I'm just telling you what they're saying, "Why does a dole bludger who doesn't have a job or has never looked for one get $750 a week when someone like me, who has worked nonstop for the past 28 years gets nothing?"
JOSH FRYDENBERG:
Well, I’d say to your listener that there are many Australians, indeed millions of Australians, who because of the health restrictions are no longer employed in the same way that they were before, meaning that their retail business has had to close its doors because customers haven't been able to frequent the shop. Now in those situations, we want the employer and the employee to stay connected because we want, on the other side of the coronavirus, the economy to bounce back quicker than ever and it is heart breaking to see the harsh reality of the coronavirus with those long queues outside Centrelink. So we’ll have an Australian scheme, not a UK scheme, not a New Zealand scheme, not a Dutch scheme. We'll have an Australian scheme which we'll announce later today which builds on our other measures to date, which have been including, you know, doubling the Newstart payment, providing the coronavirus JobSeeker supplement…
ALAN JONES:
Having doubled the Newstart payment when it's all over, how do you reduce the Newstart payment to what it was before the crisis?
JOSH FRYDENBERG:
Well, this is a very important point. We have made it clear that our measures are temporary, for the duration of the crisis. And as you know, the Prime Minister, who has led from the front, has said that the country needs to be prepared for a period of six months at least. And so our measures that we have introduced through the Parliament with legislation, are for that period and after which will go back to where we were.
ALAN JONES:
Okay, now to go back to where you were, these were legislated changes. The Greens and Labor, I can tell you, won't be legislating for the Newstart allowance to be halved after all this is over. Do we face a political dogfight?
JOSH FRYDENBERG:
Well, it's actually built into the legislation that it (inaudible). And now it can be extended by the relevant Minister in the event that this crisis goes on longer than the six-month period but we have worked to that six-month period with the legislation we've been putting in place.
ALAN JONES:
Okay, two things before you go. There's two issues that haven't really been talked about and I know it's an impossible task to try and cover everything but says Jeffrey "My wife and I are self-funded retirees and as such are not entitled to anything from the public purse. Our super is copping a drubbing and now the Government has given a green light to tenants in our investment property to not pay rent for six months. Nothing we can do but bend over and cop it. I'm really glad I busted my gut saving for my retirement so that I wouldn't be a burden on the country.” Now the investment return for self-funded retirees has dropped by 90 per cent in the last two years from 2.55 per cent to about 1.31 per cent. If they dropped your salary by 90 per cent, or your income by 90 per cent, you'd struggle. How do we assist self-funded retirees?
JOSH FRYDENBERG:
Well, as you know, we've halved the drawdown rates and this is something, again, you and I have discussed in the past and so, therefore, self-funded retirees will have more control over their savings, they won't be forced to liquidate their assets if they don't need to, that's really important. But I'd say, again, to your listener, that the markets will bounce back and we are very much focused on ensuring that the landlord and the tenant share the pain because, again, there's an alignment of interest that both the landlord wants a tenant on the other side this and a tenant wants to stay in business…
ALAN JONES:
I know but the landlord has got a mortgage and the tenant is not paying rent because there is a rent holiday here. How does the landlord survive?
JOSH FRYDENBERG:
So, we've had this conversation with the banks and this morning the banks are announcing that anyone with loans up to $10 million, if they're landlords or small or medium-sized businesses, then they won't have to pay any interest or principal for six months. Now that's a deal that we've struck with the banks to ensure that they provide that support to landlords because everyone has to share in the pain.
ALAN JONES:
Right. Good answer. You're going to make a statement about that. Is that coming out, so just repeat that again. So if you've got a loan from the bank, say that again up, to $10 million…
JOSH FRYDENBERG:
Up $10 million and you're an SME, or this will cover about 90 per cent of landlords, they won't have to pay interest or principal on their loans for the next six months. Now this is really important because what we're seeking to do for this hibernation strategy is to work with the banks, to work with the energy companies, to work with the insurance companies, to work with the landlords and the tenants and obviously to provide the income support for a wage subsidy so that everyone plays their part in softening the blow for your listeners.
ALAN JONES:
Okay, well just one final thing. Many people out there now, because a lot of these initiatives, and that's why we're hoping for the wage subsidy and we hope it will be about 80 per cent so that they will get the dough now, because many of the programs you've put in place don't come into effect until 28 April, it's a long time to wait for money to go into your account. Now many of them, currently, therefore, are using their credit card to pay for the necessities of life. If they then miss the payment, and many of them can't pay it off in full at the end of the month, they're facing usurious interest rates of 15, 16 and 20 per cent. In your discussions with the banks, can you seek some relief on credit card interest rates?
JOSH FRYDENBERG:
This is absolutely a conversation that we are having but I also want to tell you and your listeners that as of tomorrow, from tomorrow 31 March, 6.5 million people will start to get their $750 cash payments. That means pensioners, that means people on the Disability Support Pension, that means people receiving Family Tax benefits, the Commonwealth Seniors Health Card, people on Carer's payments will start to get that cash payment through the system of $750. 6.5 million Australians. That's good news for them and, look, Alan, I say to you and your listeners, the Government, the Morrison Government, has their back. That's what Australians are learning through this crisis. We have the publics’ back because we've all got to get together and get to the other side.
ALAN JONES:
No doubt. Absolutely right. Just one final thing then, and you've heard me this, I'm a cracked record.
JOSH FRYDENBERG:
Final is being defined as six things.
ALAN JONES:
Absolutely. It's never final. But just in relation to what you're going to announce today, the economic package. Give us a bit of an insight and a preview. You are going to provide a subsidy for wages, are you, to enable people to continue with a sense of normalcy in their life and to relieve business of that load?
JOSH FRYDENBERG:
The purpose of this wage subsidy is twofold. First, to keep Australians in jobs by reducing effectively the cost of business for the employer. And, secondly, to connect the employer and the employee in a formal way so that when we get to the recovery phase, post coronavirus, the economy can bounce back stronger than ever and these people can remain in their job.
ALAN JONES:
Okay, thank you for your time. Thank you for always talking. We no doubt will talk often and again soon. Very grateful.
JOSH FRYDENBERG:
Thank you, Alan.