DAVID KOCH:
Alright, let’s get the information straight from the horse’s mouth, the Federal Treasurer Josh Frydenberg, lot of questions Treasurer about this, let’s get stuck into it. You’ve effectively doubled the JobSeeker Payment, used to be called NewStart. Who qualifies for the extra $550 a fortnight, so that’s a total of $1,100 a fortnight?
JOSH FRYDENBERG:
Well you will get that $550 in full if your income has fallen below $1,075 a fortnight. So that’s important for the sole-traders and the casual workers who are watching your show who may have seen their hours worked or their income fall as a result of the coronavirus. They’ll now be able to get that $550 a fortnight in full and of course we have also announced the $750 cash-payment, a second one, to more than 5 million Australians as well.
DAVID KOCH:
The JobSeeker Payment; is that assets tested or is it family income tested?
JOSH FRYDENBERG:
Well what we have done is remove the assets test, we’ve also removed the waiting periods, but we have maintained the income test, namely that $1,075 a fortnight. So if you’re earning under that…
DAVID KOCH:
For the individual?
JOSH FRYDENBERG:
For the individual.
DAVID KOCH:
For example if you’re married or in a household, it’s not combined family or household income test?
JOSH FRYDENBERG:
There are some slight variations around combined family incomes but essentially, what we have tried to do is get as much money out the door to those people who have either been stood down, who have lost their job or have seen their hours worked, or their income reduced as a result of the Coronavirus.
DAVID KOCH:
Now small businesses will receive cash-payments of up to $100,000 plus up to a $250,000 unsecured loan. Let’s break those down into two pieces. The $100,000 plus cash payment, how is that worked out? Are you saying you’re going to pay our BAS?
JOSH FRYDENBERG:
Well effectively the small business needs to do nothing. That will just work through the existing tax system and the Tax Office will automatically put that money into the small businesses’ bank account.
DAVID KOCH:
How is that calculated?
JOSH FRYDENBERG:
Well it’s based on what the wages bill is and as you know, small businesses withhold tax equivalent to the size of their wages bill for the Tax Office and we are going to give you up to $100,000 of that. Minimal payment is $20,000 and importantly as well, we’ve now opened that program to around 30,000 not-for-profit organisations and charities who also employ people, also have a wages bill but now will also get this support of up to $100,000.
DAVID KOCH:
So it’s based on your instalment activity statement that comes through?
JOSH FRYDENBERG:
It’s based on your wages bill and that’s obviously an encouragement for small businesses to keep people on. Now when it comes to those loans that you refer to, we’ve partnered with the banks and the other lenders to go on a 50/50 risk-sharing arrangement where you will get a three year loan up to $250,000, no interest payments for the first six months and that’s all about building that bridge to the recovery phase, Kochie, and that’s really important.
DAVID KOCH:
Really good for cash flow. You’ve also relaxed access to superannuation, $10,000 tax-free this financial year, another $10,000 tax-free if you want it after July 1, money in the pocket. A lot of critics saying this will spark a run on superannuation funds and they’ll have to sell their shares at this low price in panic times, which is bad news.
JOSH FRYDENBERG:
Well let me make it very clear. Treasury estimate that this will put around $27 billion into the economy as a result of this measure and the superannuation funds last year had $300 billion in cash. So this is not about forcing them to sell any assets, they have that cash available. This is less than one percent, of the $3 trillion in superannuation, and the prudential regulator, Kochie, has told us that this won’t have a negative impact on the industry overall. You’ve also got a situation currently, where people can access for hardship, for example if they were going to lose their home, they can access super. So you’ve already got that system. Normally, you would pay around 22 percent tax on taking money early out of super. We’ve made that tax-free. This is really important for your viewers. This is important for the sole trader or for the casual who has seen their hours worked or their income reduced by 20 percent or more since the 1st of January this year. They will just have to make a simple declaration to the Australian Tax Office and then the Tax Office will pass it on to their super fund and that money will get into that person’s bank account.
DAVID KOCH:
That’s fabulous. Thank you for your time and for explaining this so clearly, appreciate it.
JOSH FRYDENBERG:
Good to be with you, thank you.