BEN FORDHAM:
Well the gloves are off in Victoria. Premier Daniel Andrews is pushing to extend the State of Emergency. He wants another twelve months, but the parliament may settle for six. It’s a nightmare for Victorians and their businesses. The Treasurer Josh Frydenberg says enough is enough. He says we need to hear more about a road out, not a longer road in. Josh Frydenberg joins me live on the line. Treasurer, good morning to you.
JOSH FRYDENBERG:
Good morning Ben. Nice to be with you.
BEN FORDHAM:
The enthusiasm is just being sapped at the moment in Victoria because Daniel Andrews keeps talking about extending the lockdown.
JOSH FRYDENBERG:
We haven’t seen a definitive plan from the Victorian Government for the road out of the stage four restrictions. I mean in Victoria, people cannot move more than five kilometres from their home. They’re locked in their homes twenty-three hours a day. Families cannot go to work, kids cannot see their friends, grandparents cannot see their grandchildren. The cost to the economy is immense, Treasury’s estimate that up to 400,000 people will either lose their job or see their hours reduced to zero, and the hit to the national economy Ben, will be between $10 and $12 billion.
BEN FORDHAM:
It’s hard to know who to believe because we have been watching the numbers from Victoria on a daily basis and they seem to be trending down in the right direction. But on the other hand Daniel Andrews is saying no no no, hold on a moment, we are worried about a third wave.
JOSH FRYDENBERG:
Well the second wave can be traced back to the failures in quarantine in Victoria. We’ve heard expert evidence based on genomic testing, that 99 per cent of the cases in Victoria’s second wave can be traced back to the failures of quarantine. As you know, they had private security guards there. There was a rejection of the ADF support. We are now going to see a situation where more Victorians will be on JobKeeper than all the other states combined and businesses are pulling their hair out. They came to us, at the federal level, at the original time when they were putting in the stage four restrictions, saying they hadn’t been properly consulted. That the Victorian Government hadn’t taken into account the impact on the supply chains, and the impact on jobs. Now, as we approach the end of the stage four restrictions there’s no road map out, and it’s just not good enough.
BEN FORDHAM:
There’s now a class action in the works, looking for billions of dollars of compensation from the Victorian Government over the second lockdown because as you point out, it was a mistake from them that led to it. Are people right to consider action like that?
JOSH FRYDENBERG:
Look I’ll leave those individuals to make their own choices. What I know, as the National Treasurer and the Federal Treasurer, is that the cost to our economy is immense and that early on in this crisis, you will remember that the National Cabinet, led by the Commonwealth agreed to a three stage process for easing restrictions. Now that involved specifying which types of activity could be allowed, and the number of people that could gather. We haven’t seen any of that detail from the Victorian Government.
BEN FORDHAM:
There’s some GDP data coming out on Wednesday. You’ve warned in the past that the numbers are going to be eye watering. What’s your feeling about what’s coming on Wednesday?
JOSH FRYDENBERG:
We will see falls in consumption, we will see falls in business investment and dwelling investment, and the market expectation is for GDP to fall in the June quarter between 6 and 7 percent. This would be the biggest fall on record. But you also want to bear in mind Ben, that across the world we are seeing much bigger falls. In the United Kingdom, the fall was more than 20 percent. In France, it was around 14 percent. In the United States and Germany, it’s been around 10 percent. So in Australia, the states and the territories outside of Victoria are seeing jobs come back. 340,000 new jobs have been created in the last two months but the situation in Victoria is a completely different case.
BEN FORDHAM:
So it’s more important than ever that we have access to our own money, so why don’t you delay the increase to compulsory super? Because the next increase is due on July 1 next year.
JOSH FRYDENBERG:
Well that’s the point, the next increase is not due until July 1st next year…
BEN FORDHAM:
But that’s not a long way away Treasurer.
JOSH FRYDENBERG:
It’s not a long way away and we are considering that issue, and I do point to the words of the Governor of the Reserve Bank who said that increases in compulsory super leads to lower wages, lower wages leads to less income, less income leads to less…
BEN FORDHAM:
But this is your policy, and if it’s being criticised by the Governor of the Reserve Bank why don’t you take control of it and say we’re not going to go ahead with it on 1 July? That sounds like that’s what you’re going to do.
JOSH FRYDENBERG:
Well we are considering the issue Ben, and as you know, events have changed. We have seen a once in a century pandemic. The impact on the economy has been immense and it’s in that context that we are considering the issue.
BEN FORDHAM:
But if you are going to kill it off, and anyone listening right now would say ok, we heard Josh Frydenberg on 2GB this morning, it’s clear he’s going to kill that off on 1 July. Why not put it out of its misery and give people certainty because as you have acknowledged, 1 July isn’t too far away.
JOSH FRYDENBERG:
Well there are times and places for the announcements of policy decisions and they are not always on talk-back radio.
BEN FORDHAM:
Now is the time and here is the place.
JOSH FRYDENBERG:
So you would say.
BEN FORDHAM:
Well come on, why don’t we just be honest with people and say that it’s not going ahead?
JOSH FRYDENBERG:
Well as I’ve said there, it’s a complex issue. There’s a lot of considerations to take into account. We’re considering them, and it’s not just the Reserve Bank Governor, it’s been the Grattan Institute, it’s been the Council of Small Business, ACOSS and others that have expressed their concerns around the increase in the superannuation guarantee.
BEN FORDHAM:
You mentioned some of those groups, the Australian Industry Group wants you to bring forward tax cuts to 1 January, are you open to that?
JOSH FRYDENBERG:
Again, we are considering our options. As you know we legislated after the last election, the biggest tax cuts in more than twenty years. We will see the abolition of a full tax bracket based on the policy that we took to the Australian people, and it was supported by the Australian people and will see 94 percent of Australian taxpayers Ben, pay no more than 30 cents in the dollar. Right now, it’s about 63 percent. So it’s a huge improvement in our tax system. It’s going to create a stronger and fairer tax system. We are giving consideration to the timing of those tax cuts.
BEN FORDHAM:
You have said a few times in this conversation that you are considering your options. I’m wondering about your fashion options that you were considering yesterday. I saw you on the news last night walking around in a full suit but with the sneakers down below, which was very Jerry Seinfeld from the 1980’s or the 1990’s. Did you consider your options carefully before going with that?
JOSH FRYDENBERG:
I didn’t expect the cameras to be on the bottom half, but only on the top half. As you know it was a Sunday and I was busy working away in the office and it’s better to be in sneakers than to be in dress shoes. But ultimately if you had me on the Ninja show I would put an even different outfit on.
BEN FORDHAM:
Good on you Treasurer, thank you so much for joining us.
JOSH FRYDENBERG:
Good to be with you Ben.
BEN FORDHAM:
Josh Frydenberg who is channelling a little bit of Jerry Seinfeld.