DAVID KOCH:
Treasurer, good morning to you.
JOSH FRYDENBERG:
Nice to be with you, Kochie.
DAVID KOCH:
You had a briefing from Philip Lowe earlier this week, the Governor of the Reserve Bank. What impact do you expect the Coronavirus to have on the economy and could it put our surplus in doubt for the next year?
JOSH FRYDENBERG:
I think it will have a significant impact and, as you say, we have a close economic partnership with China. They’re the number one source of foreign students in Australia, more than 200,000, number one source of tourists in Australia, more than 1.4 million and around 30 per cent of our trade is with China. Now, the Chinese economy is four-times larger today than it was back in 2003 when we had the SARS epidemic and the SARS epidemic impacted on Australia. So, it will have a significant effect.
DAVID KOCH:
You’re taking it pretty seriously, different to the Reserve Bank. Do you think they are out of touch, that they’re taking it too calmly?
JOSH FRYDENBERG:
The Reserve Bank is taking it seriously too. What Phil Lowe said yesterday was that it is too early to tell what the full impact will be and that is our view as well. What we do know is that the bushfires, the floods, the ongoing drought have all had an impact on the economy. But, Kochie, that’s why we’re being disciplined economic managers to give us the flexibility to respond these crises.
DAVID KOCH:
You’re responding today because you’ll introduced legislation which will make disaster assistance to bushfire victim’s tax free. How will that help and does it cover all forms of payments including the Bushfire Recovery Fund which is made to primary producers that can be up to $75,000?
JOSH FRYDENBERG:
We are providing tax relief, we’re not putting taxes on to those payments and allowances, and that $2 billion is both grants, as you say, for primary industries but also for small businesses that have been impacted. It’s $50 million for the wildlife habitat restoration, it’s $76 million for mental health support, $76 million for the tourism industry. That $2 billion is initial and additional and on top of the existing payments and allowances that we provide to the states. But we can only do that because we have actually brought the Budget back into balance for the first time in eleven years and we’re not promising higher taxes which the other side did at the last election.
DAVID KOCH:
It is terrific they are tax free, including all of them, including the Bushfire Recovery Fund. Treasurer, thank you for that. Good to see you.
JOSH FRYDENBERG:
Good to be with you.