DAVID KOCH:
Treasurer, extraordinary times. The Reserve Bank cut official interest rates yesterday, pumped billions into the economy, how will this help?
JOSH FRYDENBERG:
Well this will reduce the cost of credit to small and medium sized businesses and indeed for Australian households across the economy, as well as increase the flow of credit. Together with the Reserve Bank, the Government have put in an extra $100 plus billion into the financial system. These are very substantial measures, Kochie, they are extraordinary measures for extraordinary times.
DAVID KOCH:
Are you advising the banks on what to do? Because it was interesting Commonwealth Bank last night not cutting the variable home loan rate, doing it with fixed home loan rates but slashing the interest rate for small business loans by triple the actual cut yesterday.
JOSH FRYDENBERG:
In fact by quadruple, I think they reduced it by a full percent Kochie. This is a very significant move by them as well as lifting the rates that depositors can get as a way of attracting more funds. Look the banks are making their own decisions but I have been talking to them day and night and they will be making a substantial announcement today about the relief that they will be providing to a number of their customers and I think that’s really important. This is a team Australia moment, the Government, the banks and sectors right across the economy to support jobs and to support businesses.
DAVID KOCH:
So the banks are getting together later today to put into place how they are going to help their small business customers and home loan customers who might get behind on their repayments.
JOSH FRYDENBERG:
They’re going to announce a very significant package of measures which are designed to support the Australian economy at this difficult time. The banks have an alignment of interest with their customers Kochie. They want their businesses - that they lend money to - they want them to survive and we know that there is going to be the other side to this Coronavirus. The Prime Minister has prepared the nation saying it will at least take six months, but we will get to the other side and we are building that bridge to recovery.
DAVID KOCH:
Okay I look forward to those announcements this afternoon. Speaking of which, when are you going to detail your second economic stimulus package? When can we expect it?
JOSH FRYDENBERG:
Coming days, obviously the second package will build on the first package and be complementary to the measures announced yesterday. What the second package will do is try to cushion the blow for those Australians who may have lost their job, as well as continue to support small businesses, meet some of those fixed costs, whether it’s rent, whether it’s water, or energy or indeed their wages bill, even though their customers may not be coming through the door. We’ve got to get through this, and the Government will do what it takes to support Aussie jobs and Aussie businesses.
DAVID KOCH:
How big will the stimulus package be?
JOSH FRYDENBERG:
Very substantial, as you would understand…
DAVID KOCH:
…Put a number on it?
JOSH FRYDENBERG:
Well I’m not going to reveal that right now because the package has yet to be finalised. But what I can say to you is that we are taking the necessary steps because we have approached this health crisis, which is having a significant economic impact, from a position of economic strength. The economy was strengthening last year and early this year we delivered the first balanced budget in eleven years, we got the Budget back on track which has given us the financial firepower to now respond.
DAVID KOCH:
Which is great, we’re in really good shape. You were mentioning the help for people with their home loan. Paying wages for small business. If we look overseas, some extraordinary things are being done, in the UK they basically suspended home loan repayments. In, I think France, they actually said you don’t need to pay any tax for the next three months if you’re a small business. Other countries are subsidising the wage bill of small business owners. They’re thinking outside the square, are you going to do that?
JOSH FRYDENBERG:
Well as you know in our first stimulus package, we announced a 50 per cent wage subsidy for 170,000 apprentices, for your carpenter to your hairdresser, so we’ve already taken those sort of steps and this second package will go even further. As for the banks let’s wait and see for their announcement but I know whether they are a bank whether you are an energy company or whether you are the tax office you’ve already put in place hardship provisions where people who are doing it tough can get in touch with their bank or their retailer or their tax office to try and get that relief that they need.
DAVID KOCH:
Just quickly I know you’ve got to go, but a lot of sole traders, the self-employed say they were not supported last time. Are you going to look after them in this next package?
JOSH FRYDENBERG:
Well obviously we’re going to focus all the time on sole traders, they're a critical part of the economy.
DAVID KOCH:
Terrific. That’s music to thousands of peoples’ ears. Treasurer appreciate your time, thank you
JOSH FRYDENBERG:
Good to be with you Kochie.