DAVID KOCH:
Treasurer, talk us through the details. What can the loans be used for?
JOSH FRYDENBERG:
The loans can be used for working capital, they can be used to refinance existing loans or, indeed, they can be used to expand a business's operations, for example by buying new machinery and equipment. We've had a loan scheme in place for small and medium‑sized businesses throughout the pandemic, Kochie, and it's provided more than 70,000 loans, worth more than $6 billion. But as you say, we are removing that requirement that businesses need to be on JobKeeper in the March quarter. And with loans of up to $5 million for up to 10 years, with up to two years repayment free, this will be a big boost to small business and the Council of Small Business has said that this will help them reopen and recover from what has been a pretty, pretty difficult period.
DAVID KOCH:
And you can use it to refinance existing loans? That’s good news. Hopefully the banks are on board with that. New South Wales, extended lockdown, are you fearing it could spark a second leg of a recession, a double dip?
JOSH FRYDENBERG:
I won't be surprised and certainly the Treasury are forecasting this September quarter to actually go negative, meaning the economy will contract. But as for the December quarter, I'm hoping that it rebounds strongly off the back of the easing of restrictions. We know from our experiences in the economy last year, we rebounded strongly, we saw it in the unemployment numbers that we discussed last week; that when you ease restrictions, hours of work increase very dramatically. The key is for us to stick to this plan. You see, if it's not 70 per cent or 80 per cent when we reopen, Kochie, when is it? When is it that businesses can reopen? When is it that the kids can go back to school? When is it that we can attend the funerals and the weddings of loved ones? When is it that we can move more freely in our own country?
DAVID KOCH:
You have to get the states to agree.
JOSH FRYDENBERG:
I suspect the states are picking up on the changing community sentiment and they know that our plan that they’ve agreed to was based on the best medical advice and you’ve heard from the Doherty Institute themselves that zero COVID‑19 forever is unrealistic. It means living with COVID and having an honest conversation with the Australian people that there will be illnesses and there will be deaths, but learning to live with COVID is our future.
DAVID KOCH:
The states control the health system, they control their borders. You control the purse strings, are you going to look at financial sanctions against states that don't stick with the plan?
JOSH FRYDENBERG:
I wouldn't use that term ‘sanctions,’ but what I would say is that I've made it very clear that there should be no expectation on behalf of the premiers and the chief ministers that our emergency economic support will continue at the scale that it is currently when we reach those 70 to 80 per cent targets. That's the plan they have agreed to, Kochie. The Commonwealth right now is picking up the whole tab, pretty much, for the income support, those $750 payments every week for people who have lost hours of work. That's already $4 billion out the door since July. We are also picking up the tab with the states, 50‑50, on business support and we are doing programs like this. We are doing a lot of heavy lifting in terms of economic support but it's with a purpose, it’s with a purpose to suppress the virus to get to those targets and then to open up as we have committed to the Australian people to do so.
DAVID KOCH:
Fair enough, pretty blunt talking there. Just before you go, on a lighter note, how is the federal frat house going in The Lodge, with you boarding with the Prime Minister? How is life? Do you have a separate part of the fridge or do you have domestic duties that have been assigned to you?
JOSH FRYDENBERG:
There are enough bottles of ginger ale for us both to get one, I can tell you. We are living under the same roof, we are eating together. My wife did have a laugh though...
DAVID KOCH:
Is he tidy?
JOSH FRYDENBERG:
He is very good. He is actually on the dishes, would you believe? Because it's just the two of us there and after dinner we both get the scrubbing brush and have a go for it. You might not believe it but it's true. We pop the spaghetti Bolognese, or last night it was the schnitzel, into the microwave and then we sit down and have a good conversation. My wife did have a laugh, Kochie, she said I’m turning up for dinner on time now like I've never done at home. She’s a bit jealous of that but she understands.
DAVID KOCH:
Good luck. Could be a reality series, you never know. Treasurer, thanks for joining us.
JOSH FRYDENBERG:
All the best.