ALLISON LANGDON:
Let's bring in Josh Frydenberg now who joins us from Canberra. Treasurer, good morning.
JOSH FRYDENBERG:
Nice to be with you, Ally.
ALLISON LANGDON:
So do you reckon that we will be spending Christmas with our families this year?
JOSH FRYDENBERG:
Certainly, that's the hope. We are making great progress in meeting those vaccination targets of 70 and 80 per cent as agreed by National Cabinet, and particularly in New South Wales you've seen people rolling up the sleeves in record numbers, 215 jabs a minute. People need hope and the plan gives us hope. And if we don't open up at 70 or 80 per cent Ally, when do we? When do we see the kids go back to school? When do we see businesses reopen? When can we go and attend funerals and weddings of loved ones? And when can we move freely in our own country? That's why we need to stick to the plan because it gives us hope.
ALLISON LANGDON:
Okay. So if the states don't play ball like you want, they open the borders at 70 per cent, what does that mean for the national economy?
JOSH FRYDENBERG:
Well, I sense the premiers picking up on the change in public sentiment and they know that the plan is based on scientific evidence. The best advice of the medical experts at the Doherty Institute who have said that zero COVID forever is unrealistic, which means we have to learn to live with COVID. And that means an honest conversation with the public about what that means. It means deaths, it means serious illness and indeed it means more cases. But our health system is built to cope. We have put in place a surge capacity for that and there really is no other alternative than opening up when it is safe to do so. We can't live in lockdown forever.
ALLISON LANGDON:
The problem is you do have several states who just don't seem to agree with you on that one and the issue you've got at the moment, as all this fighting is taking place, is you've got small business right, and no‑one is hurting more than small business right now.
JOSH FRYDENBERG:
Well, for small business they are desperate. They're despondent and many people have their life savings on the line through their small businesses, and indeed in many cases their homes. And that is why we've been providing support in partnership with all the states and the territories to small businesses, from day one of this pandemic. But today we're also announcing that we're expanding a small and medium-sized business loan scheme with loans of up to $5 million for up to 10 years with the first 2 years repayment-free. That's going to give a big boost to small business and the Council of Small Business has said that this will help them rebuild and reopen.
ALLISON LANGDON:
Okay. I mean, you're going to have a lot of small and medium-sized businesses take you up on this. If you're saying you've got these loans of 5 million, up to 24 months repayments free, what happens after that 24 months? What does the interest rate go to?
JOSH FRYDENBERG:
Well, we're obviously seeking to give them the best possible interest rate, lower than what they otherwise may have found in the market. It would depend on the different lenders and the agreements that can be reached, but we do know that this loan scheme Ally, has been very successful. More than 70,000 loans are now in place and we've seen the value of those loans be worth more than $6 billion. Up to now, the requirement had been that a small or medium‑sized business had been on JobKeeper in the March quarter. We're removing that requirement to allow more businesses, whether they're in the tourism industry, whether they're in the hospitality industry, whether they're arts and recreation businesses, they can enter into these loans to support their working capital, to refinance their existing loans, or, indeed, to expand their business by purchasing machinery and equipment.
ALLISON LANGDON:
I mean, we saw businesses who made it through last time and you would know that perhaps even with this help that’s being offered now, being announced today, there are some who are not going to make it.
JOSH FRYDENBERG:
That’s right.
ALLISON LANGDON:
Are you concerned that we're heading to recession?
JOSH FRYDENBERG:
Well, again, the September quarter, which is what we're in right now, is expected to be negative, which means that the economy will contract in the September quarter. But I'm also confident that once the restrictions ease, our economy will bounce back strongly. We saw that in the unemployment numbers just earlier last week. Which is that when restrictions are eased, the number of hours worked increase dramatically and people get back to what they do best. And so that's what we need to enable small businesses to do, because small businesses are unlike journalists or politicians or public servants, they don't keep getting paid when their doors are closed and there's a huge pressure on them emotionally, not just economically, as well as of course, their staff. And we know that small business is the backbone of the economy. They employ around eight million people across the country and the small businesses in our CBDs Ally, they've done it so tough. I was speaking to a single mum recently who runs her own small business. She had five staff in her CBD business. It's now seeing its revenue fall by more than 90 per cent and she is asking herself the question, "should I close up permanently?" It is those people that we've got to continue to support and that's why we've got to open up in accordance with the plan.
ALLISON LANGDON:
Well, I mean, so many of these small businesses, they treat their staff like family. We know they're doing everything to hang on and let's hope that they do.
JOSH FRYDENBERG:
They do.
ALLISON LANGDON:
And just quickly before we go, I mean, you have young kids and know the trials and tribulations of home schooling. How worried are you that some kids aren't going to catch up considering how long they've spent in lockdown and not in the classroom?
JOSH FRYDENBERG:
I'm really worried about this. I think this has been a devastating blow to the education of our kids, but also the emotional and mental health of our kids. I've got one local GP in my electorate who said the other day in one day she had five year 12 students who came to see her and, you know, they were, dare I say it, in a really, really bad way with respect to their mental health and she said they were normally happy‑go‑lucky people who had bright futures and were excited about their future and she's now put these kids on antidepressants. And she's spoken publicly about putting kids as young as 12 on antidepressants as a result of what the impacts of COVID have had. So I think our leaders and, of course, I'm one of them at the national level, but our leaders at the state level, who do run the school system, I think they've got to be super creative here in working out how they can get kids back into the classroom, in a COVID-safe way, because there is no substitute for kids being able to meet with their friends, have face-to-face learning from their teachers. The kids are our future and we've got to give them that very bright future.
ALLISON LANGDON:
And certainly those who have fallen behind and fallen through the cracks, make sure they've got that opportunity to catch up.
JOSH FRYDENBERG:
Absolutely.
ALLISON LANGDON:
Treasurer, we appreciate your time this morning, thank you.