ALAN JONES:
The Federal Treasurer Josh Frydenberg is on the line. Treasurer, good morning.
JOSH FRYDENBERG:
Good morning, Alan.
ALAN JONES:
Thank you for your time and please be assured there are no trick questions here. These are difficult times. Look, they were extraordinary measures announced last night. Seven people are dead in Australia from coronavirus, one is critical, but you're now going to close pubs and club, you've got to say this slowly, cinemas, casinos, nightclubs, places of worship. Will all these people be out of work?
JOSH FRYDENBERG:
Well these are dramatic times and extraordinary times call for extraordinary measures. The Prime Minister was very clear last night when he outlined the position of the National Cabinet at 9:00pm. It was based on medical advice, as you say, casinos, cinemas, clubs will be closed from midday today. Cafes and restaurants will move to takeaway only. These are places of social gathering, Alan, and what we are doing here is trying to slow the spread of the coronavirus because if you look around the world, whether it's in the United States, Italy, parts of Asia, the virus has spread when people have been in close contact.
ALAN JONES:
That's true, and, look, I think everybody, well, those that are who are listening, it does appear as though there are some people who aren't listening, and I think that's a sociological issue, when people assemble on Bondi Beach as they have and don't listen to the advice of the Prime Minister. I think they're most probably listening to other things to get their advice. But nonetheless, we talk about cases, don't we, but we've managed to contain this to seven people dead and one critical. It is important, isn't it, that we don't alarm people and I'm just worried about those people who wake up today and wonder how they're going to put food on the table?
JOSH FRYDENBERG:
Well, I'll be very clear. This is deadly serious. And if people don't adopt the social distancing arrangements recommended by the medical experts, they will increase the likelihood that their fellow Australian will contact the coronavirus. This is not the normal flu and I think people have to understand, whether you are young or old, you can be affected. Clearly the senior members of our community in age are the most vulnerable, particularly people with comorbidities or other health conditions. People need to make the necessary arrangements in their daily lives to reflect the medical advice.
ALAN JONES:
Right, but the Prime Minister said last week, and believe me we're all supportive here, I can assure you, but he did say last week we must keep Australia running. How do you keep Australia running when you look at the aviation industry, the travel industry, the live music industry, the hospitality industry, the entertainment industry, the tourism industry, how do you keep Australia running when they, as I speak to you this morning, are on their knees?
JOSH FRYDENBERG:
Because ultimately we have to accept the health advice because this is a global pandemic like we've never seen before. Now these health restrictions have an impact on the economy and a very severe impact and those industries that you referred to, like aviation, like tourism, like hospitality, are on the front line because these health restrictions have meant that people haven't been able to travel, whether we've closed our borders or whether we've reduced interactions locally among people. That is the impact on the economy. But other businesses can remain open and, as you know yesterday, we announced a record $66 billion package of new measures designed to keep Australians in jobs and businesses in business. Now that's on top of what we had previously announced with the Reserve Bank of $105 billion injecting funds into our financial system and into our banks as well as our first stimulus package which provided a wage subsidy for 117,000 apprentices and which also provided support for small business as well as cash payments to 6.5 million Australians, many of whom will be listening to your program. Pensioners, people on the Carer's Allowance, the Disability Support Pension, the Commonwealth Senior Health Card, people who are receiving Family Tax Benefits, will all be receiving these cash payments from the Government.
ALAN JONES:
Part of your education was in America...
JOSH FRYDENBERG:
True.
ALAN JONES:
And you would be very familiar, therefore, with the prestige of the Wall Street Journal. I mean, they have won the Pulitzer Prize for distinguished reporting on international affairs. They took, the editorial board, in fact, wrote an editorial on Friday, not a particular journalist, the board, about all of this and they ended by saying, and I'd just like your comment here, "No society can safeguard public health for long at the cost of its overall economic health. Even America's resources to fight a viral plague aren't limitless and they become more limited by the day as individuals lose jobs, businesses close and American prosperity gives way to poverty. America urgently needs a pandemic strategy that is more economically and socially sustainable than the current national lockdown." And the editorial recommends, Treasurer, a pandemic strategy two. Do you agree with those sentiments?
JOSH FRYDENBERG:
Well I agree that the economic impact is enormous, but I think it's a false choice to choose between the health of your nation and the strength of your economy. You cannot have a strong economy without a healthy nation and that is why every step of the way…
ALAN JONES:
Sorry to interrupt you there, I didn't read the whole thing and I recommend it to you. It does make this point, and if I can share, that's the point you're making, “This will surely include," when it talks about a phase two of the campaign, "This will surely include strict measures to isolate and protect the most vulnerable, our elderly, and those with underlying medical conditions. This should not become a debate over how many lives to sacrifice against how many lost jobs we can tolerate."
JOSH FRYDENBERG:
I agree with that.
ALAN JONES:
That's right. "Substantial social distancing and other measures will have to continue for some time in some form, depending on how our knowledge of the virus and its effects evolves." And that's when it makes the point that “no society can safeguard public health for long at the cost of its overall economic health.”
JOSH FRYDENBERG:
Well look I think that this is exactly what the Prime Minister has been trying to do, working with the states at the National Cabinet, ensuring that as many Australians can remain in a job, to make sure that our essential services can be maintained while also trying to, what is called, ‘flattening the curve,’ to limit the spread of the coronavirus by these very strong restrictions on social gatherings or interstate or international travel. That is what we've been trying to do, Alan, and our measures of providing money to small businesses to keep people employed and our measures to allow people to access their superannuation early, and our measures to ensure that the regulatory regime allows businesses to trade through this crisis is exactly towards that end.
ALAN JONES:
Ok, well let me just make one point there, if I might, because today is the 23rd of March. It's a long time, Treasurer, until 28th April. Now one of your announcements was, and I can't stand the way these bureaucrats write stuff in language that you need a translator, but you're going to provide employers with a payment equal to 100 per cent of their salary and wages withheld. Now for the benefit of our listeners out there, basically if a bloke's on $500 a week and his tax is $100, the employer hangs on to the $100 and sends it to the tax office. Now am I right in saying that therefore he will send the $100 to the tax office but you will provide an equal amount to the amount he parcels off to the tax office to the employer and that will be maximum of…
JOSH FRYDENBERG:
…straight into their bank account and they don't have to put in one form.
ALAN JONES:
Right. And that's a maximum of $50,000 a week?
JOSH FRYDENBERG:
$50,000 for that quarter.
ALAN JONES:
Quarter.
JOSH FRYDENBERG:
And then another $50,000 for the second quarter. So there will be on April 28th and then on July 28th.
ALAN JONES:
$50,000…
JOSH FRYDENBERG:
On each.
ALAN JONES:
That’s on the 28th April, right.
JOSH FRYDENBERG:
Up to $50,000, depending on your wages bill, and a good example would be a business, Alan, that employs eight people at average full time earnings. That business will receive the $50,000 and, again, will receive the $50,000 in the next period and that will be really important for that business to be able to keep on their staff, to meet their entitlements, to meet their rent, and other fixed costs…
ALAN JONES:
Can they hang on until the 28th April? This doesn't come into being until 28th April.
JOSH FRYDENBERG:
Well that's when the next BAS statement is due and the other point I want to make clear to you, Alan…
ALAN JONES:
…Can you answer my question, do you think they can hang on until the 28th April?
JOSH FRYDENBERG:
Well I do believe that the businesses are receiving very positively this announcement. They understand that the Government is doing everything possible to help them. I've heard from the Small Business Association and from the Australian Industry Group and many other big bodies representing millions of Australian employees and employers that these are great initiatives. The other thing I want to point out to you, is I've been working hand in glove with the banks to ensure that they reach out to their customers and do not require any interest payments or principal payments on any loan for small businesses for the next six months. Now that is a game changer. That means if you are a small business listening to your program, and you have a loan with the bank, as many do, to fit out their shop, or to have for their motor vehicle, or they even mortgage their own home most small businesses to allow capital for their own small business, they will not have an interest payment for the next six months. That is going to help them get to the other side of the coronavirus.
ALAN JONES:
Just take an example, Treasurer, of the wedding industry, for example, because they're all being cancelled, everywhere crowds of more than 100 are banned, so event venues are closing. Now the wedding industry involves the florist, the person who prints the wedding invitations, who sells the wedding dresses and the suits and the accessories, the person who takes the photos. Now, when these close down, and then the driver, the Uber driver and the hire car driver who take everyone to the wedding and so on, when these close down, how do these people manage?
JOSH FRYDENBERG:
This is going to be extremely tough and that's why more people are going to require this coronavirus supplement that the Prime Minister and I announced yesterday, $550. So if you're a sole trader, like one of those people that you mentioned, you can still earn up to $1,075 a fortnight and receive the full $550 Alan. And that's the purpose of what we're trying to do. Help casuals who may have reduced hours, or sole traders. And I also want all your listeners to understand, that if they have seen the number of hours worked or their income reduced by 20 per cent or more, since the 1st January, they will be able to get up to $10,000 from their superannuation this financial year, and another $10,000 from their superannuation next financial year and that will be tax free. Normally they will pay a tax rate of around 22 per cent on taking money out of superannuation early because of hardship. We are making it tax free. So there are lots of measures that we have introduced in a record package to support the Australian economy, to cushion the blow, and because we were able to balance the Budget, because we were able to get the books back on track, we now have the financial firepower to respond when Australians need it most.
ALAN JONES:
Why wouldn't you have just said to employers, that they don't have to compulsorily deduct 9.5 per cent from the wage of a worker and let that money for six months, suspend the compulsory superannuation payments, and let that money for six months go straight to the worker? That's money in their pocket, billions of dollars, in fact?
JOSH FRYDENBERG:
But they're people that are still employed. What we have tried to do here is to provide extra support for people who have seen their hours worked or their income….
ALAN JONES:
…I know but if you put that money straight into the worker's pocket he would spend it. And that’s what should be keeping the economy going. What about the face-to-face people, let's take a solicitor, I know we all sort of think oh well they're all doing very well. What about the people who are not businesses but they're just very, they're face-to-face operators, how do they manage? The courts have closed down. I mean I know this is the upper end of employment but the solicitor, the artisan, the service businessman, the people who we ring up every day, what do they do? Go to Newstart?
JOSH FRYDENBERG:
Well this is what we've announced yesterday, about a doubling of what effectively is Newstart. So you will get $1,100 or more a fortnight and if you are…
ALAN JONES:
…so the solicitor goes to Newstart?
JOSH FRYDENBERG:
Well, the ideal is to keep the solicitor in a job but the…
ALAN JONES:
…the courts have closed down.
JOSH FRYDENBERG:
And, again, these are extraordinary times. I mean what we are seeing right now across the world, I mean look at Italy, Alan, look at California, 40 million people. They've closed it down completely.
ALAN JONES:
But look at Australia, there are seven dead and two critical.
JOSH FRYDENBERG:
But as you know, this is an escalating crisis, not one that's diminishing.
ALAN JONES:
Well I hope as a result of all these measures it's not escalating?
JOSH FRYDENBERG:
Well, you know, to quote Winston Churchill, “we're more likely at the end of the beginning than at the beginning of the end.” This has got a long way to run...
ALAN JONES:
…thank you for your time but Boris Johnson said, I thought this was very simple. He basically has done exactly on Friday what you then announced last night, closing cinemas and gyms and theatres and cafes and so on but he said for the first time in the country's history, every employee, the Government will pay the salary of every employee, 80 per cent of the salary. Isn't that pretty simple?
JOSH FRYDENBERG:
Well, let me say two things. Firstly it doesn't cover sole traders and as you know, there are millions of them across the economy and that's who we're trying to help, and that was your florist that you were just talking about. The second thing is, we have used our existing tax and welfare system. Even the Chancellor of the Exchequer in the United Kingdom says they have to start from scratch. They have to build a new system (inaudible) be on the blower to me saying when is that money going to get there? That's a new system…
ALAN JONES:
Ok, I shouldn't have asked the question because I've got to go to the news. Look, thank you for your time. We will talk again when it's necessary.