ALLISON LANGDON:
Treasurer, good morning to you.
JOSH FRYDENBERG:
Nice to be with you Ali.
ALLISON LANGDON:
Well the money starts flowing today but the curtain does come down on JobKeeper and JobSeeker in September. Loan repayment holidays also end then. What happens?
JOSH FRYDENBERG:
Well hopefully by then we have seen a lot of the restrictions lifted and people are getting back into their jobs, and getting back into life as normal. What we have seen is great success on the health side, flattening the curve with a testing rate which is very high, with a mortality rate which has been relatively low. We haven’t seen the lockdowns that we’ve seen across Europe and we haven’t seen the death rate that we’ve seen in the United States. But when it comes to the economy, it’s taken a very big hit and that is why we need to lift these restrictions as soon as possible because for every extra week that the restrictions are in place, we lose $4 billion worth of economic activity.
ALLISON LANGDON:
And this is the issue here isn’t it. I mean, you’re paying the bills but the states have all the power on when we re-open. Is that frustrating?
JOSH FRYDENBERG:
Well I think the National Cabinet is working well and we’re all in this together and it’s been a Team Australia moment. I think people have put aside their political differences or their geographical boundaries and what we’ve done is work together for the sake of the country. But it has come to a point now where some of these restrictions can be lifted and I think that’s really important if we are going to reduce the number of those people who are out of work, as well as ensuring that those people who may have been stood down can get back to work.
ALLISON LANGDON:
But you have seen states doing their own thing. Of course Victoria, they’re not re-opening schools. Is that frustrating for the Government?
JOSH FRYDENBERG:
Well certainly with schools we’d like to see kids back in school and we’ve already seen South Australia, Western Australia, the Northern Territory have around 70 per cent of their students back at school. Queensland and New South Wales have indicated timetables to get their kids back into school. What’s really important about the schooling, of course it’s of great benefit to the kids who are there in terms of their literacy and their numeracy and we don’t want them falling behind in any way, but it’s also important for their parents because when they’re home-schooling, some parents come out of the workforce and that affects the broader economy. So the quicker we can get kids back into school, it’s better for the kids, but it’s also better for the parents and the economy at large.
ALLISON LANGDON:
Say things don’t get back to normal by September, I mean it’s almost like we’re living in a little bit of a bubble at the moment, say we’re not back to where we wish to be or back to normal by September, is another stimulus package on the cards? Is it something being discussed, because I can’t imagine there’s much left in the kitty.
JOSH FRYDENBERG:
Well there is no money tree at the back of the Parliamentary Garden. There’s nowhere I can go and pluck a few extra bills off and spend them freely. The money that we spend we have to raise through the issuing of bonds, we have to pay interest on that debt and we have to pay that debt back at a future point in time. So we’re very conscious of living within our means and Australia had the benefit of going into this crisis with a strong balance sheet. We had about a quarter of the debt to GDP that you saw in the United States and the United Kingdom and that meant we could spend as required. But there are limits to our spending and our spending is temporary, and it’s targeted, and we don’t want it to be there Ali, for a day longer than it has to.
ALLISON LANGDON:
I mean we do have to pay this money back, you made that point. What is on the table as options, an increase in GST potentially?
JOSH FRYDENBERG:
Yesterday I talked about a whole series of areas for reform, whether it’s skills, whether it’s tax, industrial relations, whether it’s infrastructure, whether it’s obviously cutting red tape because the less time people have to spend filling in forms the more time they can spend on growing their business. But it’s really the principles that will guide us. We want to encourage reward for effort. We want to encourage personal choice as well as personal responsibility, and we’ll always ensure that there is a decent and fair safety net in place for those who may find themselves out of work at a particular point in time. So, we’re very conscious on those principles driving our reforms.
ALLISON LANGDON:
The Prime Minister was saying yesterday that we’ve got this new curve to flatten, that is unemployment. How confident are you that you’re going to get people back in jobs by the end of the year?
JOSH FRYDENBERG:
I’m confident that as restrictions lift, we can get people back into jobs. But what the history of the 1990’s shows you here in Australia is that when unemployment spiked up, it did take a number of years for it to come down. It’s been said that unemployment went up the elevator but came down the stairs and I think we have to bear that in mind when it comes to assessing the lifting of restrictions. Yes, we follow the medical advice, that has served us well, but so too we need to get people back into work because for every day that people are not in work, it does cost the economy.
ALLISON LANGDON:
Alright Treasurer, we appreciate your time this morning. Thank you.
JOSH FRYDENBERG:
Good to be with you Ali.