BEN FORDHAM:
Josh Frydenberg, good morning.
JOSH FRYDENBERG:
Nice to be with you, Ben.
BEN FORDHAM:
Good to be with you. In 1991 it was the recession we had to have, so is this the one we can’t avoid?
JOSH FRYDENBERG:
Well what we saw yesterday were economic numbers as a product of the health restrictions we had to put in place, I mean, we have faced a one in a hundred year global pandemic and no country has been immune and Australia has progressed the health measures better than most and that’s put us in a position now Ben, to ease the restrictions so people can get back to work.
BEN FORDHAM:
We’ve had JobKeeper, we’ve had JobSeeker and now we’ve got HomeBuilder, tell us all about HomeBuilder.
JOSH FRYDENBERG:
Well if you’re an owner occupier and you meet the income test, namely that you’re earning less than $125,000 as a single or $200,000 as a couple, we’ll provide you with a $25,000 grant, to build a new property up to $750,000 or to undertake a major renovation of more than $150,000. This program will be managed by the states, we think around 30,000 new homes and renovations will take place and it’s important that it’s time constrained, the program will run from today right through to 31 December and the idea is to put our more than 100,000 tradies, plumbers, sparkies, carpenters, but them back to work.
BEN FORDHAM:
Yes, I noticed in the eligibility criteria they say ‘owner builders need not apply.’ So is that right, you can’t manage the work yourself, you need to go out and hire and tradie and pay them to do the whole thing?
JOSH FRYDENBERG:
You’ve got to go and contract some labour and obviously add to the economic activity across the economy, this is not going to be funding someone to add on a swimming pool or a tennis court Ben, this is about upgrading the home, bringing forward a decision that you may have postponed or not taken because of the economic climate. There’s going to be a significant fall in the housing industry in the back half of this year, it’s a gap that we want to fill as we get people back to work after the virus.
BEN FORDHAM:
You talk about the fall, there are 3.5 million Aussies on JobKeeper and there are fears the economy will fall further down the cliff when Jobkeeper ends in September, don’t you have to find a way of easing workers off that support, because if it just stops suddenly, there will be mass casualties?
JOSH FRYDENBERG:
Well we’re certainly focused on the transition. You’re absolutely right, it’s a critical thing to ensure, particularly given that there’s going to be less demand in the economy for some time, but the easing of restrictions is giving people more hope, 850,000 people will be back in a job if the states follow through with what they agreed at National Cabinet, which was to ease those restrictions in three stages. It will add more than $9 billion to the economy, and it’s also important to understand Ben, our program is not just around JobKeeper, our programs also involves a cash flow boost to small businesses, we’ve been providing $750 payments to people on income support, we’ve provided incentives for businesses to undertake investment, there’s a whole lot of things the Government is doing, it’s a comprehensive range of measures and we’re absolutely determined to get the economy back on its feet.
BEN FORDHAM:
Why not cut company tax?
JOSH FRYDENBERG:
Well company tax has been cut for small and medium sized businesses. But we tried bigger businesses and we couldn’t get it through the Parliament. What we’re focused on now, and this was announced in or first package, is to encourage investment by providing incentives, so there’s a 50 per cent accelerated depreciation for businesses up to $500 million in turnover, and we’ve also announced an instant asset write off of up to $150,000, which can be used as many times as a business wants to, in order to get the equipment, the plant and the machinery to expand and to grow.
BEN FORDHAM:
Just a last one, Treasurer, does the refusal by Victoria and Queensland to open up their states make it an even longer road back to recovery?
JOSH FRYDENBERG:
Well if you’re talking about border closures, there’s no medical reason that we’re aware of as to why they should be closed. The Deputy Chief Medical Officer has made that clear, and these states have big tourism sectors and there are plenty of people in the cafes in the restaurants and in the other businesses around the tourism sector that are itching to get back to work. We call on the state Premiers to lift those border restrictions as soon as possible.
BEN FORDHAM:
Thanks for the early chat, we’ll catch up soon.
JOSH FRYDENBERG:
Great to be with you and your listeners.