ALLISON LANGDON:
Treasurer, thanks so much for your time this morning.
JOSH FRYDENBERG:
Good morning Ali, good morning Karl.
ALLISON LANGDON:
Are you working on a 4 to 6 week plan to open schools and the economy? Does that sound about right?
JOSH FRYDENBERG:
Well in terms of schools, we want kids to go to school and continue to get their education whether it’s online or in the classroom, and the Prime Minister and the State Premiers have been making that point. With regards to the broader restrictions across the economy we will continue to be led by the medical advice, that’s served us well Ali. We’ve actually had success in flattening that curve. Just a few weeks ago we were seeing the growth in the number of coronavirus cases of more that 20 percent per day, that’s now gone below 2 percent. If you look at Japan, if you look at Singapore, in those countries they thought they were making real progress, they started to relax restrictions and then they saw a second wave of infections across their country, and in places like Sweden which allowed large gatherings, they have now had more than ten times the number of deaths from the Coronavirus than Australia, yet Sweden has less than half of our population. So there are real challenges ahead, people should not be complacent, patience is a real virtue.
KARL STEFNOVIC:
Nonetheless retailers and retail groups are putting enormous pressure, I guess on you, including Wesfarmers, they are pushing hard for a reopening, what are you saying to them exactly?
JOSH FRYDENBERG:
I’m talking daily with business leaders and look I understand the severe economic impact that the health restrictions are having on businesses. But everyone understands that we do need to take the medical advice that we need to preserve lives and livelihoods. What we are dealing with here is a global pandemic, the scale of which we have never seen before, and it’s deadly. I mean it’s wrong to think Karl, that this is a virus that only hits older Australians, it hit’s younger Australian’s as well and what we do know is that thousands and thousands of people have died around the world and Australia has put in place strict measures to preserve the safety of Australians and that has served us well.
ALLISON LANGDON:
Treasurer, I think this is where some parents are getting confused because on one hand you are saying it doesn’t just impact the old, that it does the young as well but you are saying that it is safe for all kids to return to the classroom.
JOSH FRYDENBERG:
Well again the medical advice is that schools should remain open. That is the clear medical advice to the National Cabinet. With regards to social distancing laws again, we have taken the medical advice. But we need as a country, to work together, to follow that medical advice because it has served us well.
KARL STEFNOVIC:
The problem is the argument, I mean you must see it yourself, you must hear it yourself, the argument falls down at social distancing in schools and also when you say the medical advice is that it doesn’t affect our kids when you said just then, it does affect our kids. So there is this confusing messaging going on, you have to concede that.
JOSH FRYDENBERG:
Well I can understand that in terms of schools it’s a challenging issue and we want kids not to miss a year of education, we have been very clear about that. The pandemic may take lots of things away from us but we don’t want it to take away our kids’ education, and the other thing that you have got to recognise Karl and Ali is that there are thousands of essential workers out there who are on the front line saving lives in hospitals as we speak, now they can’t look after their kids at home and go to work at the same time. So we need to have a system where the schools are open providing that form of education, but also providing the online support for those parents who do chose to stay at home.
ALLISON LANGDON:
The March job report; it is out today, how bad is it going to be?
JOSH FRYDENBERG:
We will see an uptick in unemployment but we won’t see the full impact of the coronavirus. These numbers were essentially forecast in mid-march and as you know, the severe impact of the coronavirus has continued to take hold. Treasury put out some forecasts earlier in the week which indicated that unemployment will go from where it was in February at 5.1 percent to around 10 percent but it would have gone to 15 percent if it wasn’t for the JobKeeper package, and that $130 billion wage subsidy is going to keep people connected to their employer, and that will help us bounce back stronger on the other side.
KARL STEFNOVIC:
The IMF assessment is for a ‘V shaped’ recovery from all of this, is that do you think too optimistic as some economists are saying? You met with your G20 colleagues overnight, do you agree with their assessment?
JOSH FRYDENBERG:
Well it will depend on how quickly the health restrictions are lifted and as you say there is no vaccine right now and let’s hope some smart person in a laboratory is making progress on that, but the reality is as long as the health restrictions put restrictions around social distancing and on the economic activity, we are going to see a hit to the economy. But the IMF and the G20 are seeing greater global coordination on both the fiscal side as well of in terms of the monetary policy and the work of central banks, that is having a positive impact. We are starting to have a lot more stabilisation in equity and debt markets.
ALLISON LANGDON:
The IMF is talking about a $9 trillion loss to the Australian economy but what I’m finding interesting is that our economy is going to shrink at a much faster rate, or greater rate than what the US and the UK are. When you consider that they are in a far more dire situation than we are in this pandemic, why is it that we are feeling the impact economically more than they are?
JOSH FRYDENBERG:
Well a couple of points, firstly they say that we are going to bounce back stronger than a number of those other nations. The second thing I would say is that when they put together these IMF numbers, we were seeing the number of daily coronavirus cases increase by 20 percent or more and as you know we have had real progress and that increase in the number of cases is down to less than 2 percent. Secondly, when they were finalising their package, the JobKeeper payment had not been announced and the JobKeeper payment will be really important, at $130 billion, in helping to keep people in a job and businesses in business. So there are a number of factors that you need to put that IMF report into context.
ALLISON LANGDON:
Treasurer Virgin Australia could be placed into administration within days, will we have two major airlines in a month?
JOSH FRYDENBERG:
Well we want to see two major airlines continue to operate in Australia, it’s served us well. But at the same time, the Government is not in the business of owning an airline. Paul Keating sold Qantas back in 1993, 27 years ago. What our focus has been is on industry wide support, providing relief from various taxes and charges and other regulatory measures and both Virgin and Qantas and some of the smaller airlines have been the beneficiary of that. You have to recognise that Virgin has a number of very significant shareholders, Singapore Airlines, Etihad, Virgin International and of course, some China related companies as well. No doubt, Virgin is talking to their shareholders right now about their future.
ALLISON LANGDON:
And 4 out of 5 of those major shareholders have already said no to a bailout. Alright Treasurer, we’ve ran out of time thank you so much for joining us this morning.
JOSH FRYDENBERG:
Thank you.