FRAN KELLY:
Treasurer, welcome back to breakfast.
JOSH FRYDENBERG:
Nice to be with you Fran.
FRAN KELLY:
It’s officially a state of disaster for Victoria. Is this also a national emergency for the rest of Australia?
JOSH FRYDENBERG:
Well certainly how Victoria manages the spread of coronavirus cases will impact upon the national economic recovery, and certainly it’s been devastating news for Victorians to know that we’re going into stage 4 restrictions, that there are curfews, that there are more school closures, business closures and greater restrictions on people’s movement. Nobody wanted it to come to this Fran, and we very much feel like we’re in a war-like situation here in Victoria with every Victorian on the front line. We can’t afford any holes in our defences, so everyone needs to follow the rules, although it’s going to be very difficult for many.
FRAN KELLY:
These are war-time measures, you mentioned, like a war there are soldiers on the streets, there’s a night-time curfew, a major crackdown on when people can leave their homes. As a Victorian do you believe the Premier had any choice other than to impose measures like this?
JOSH FRYDENBERG:
We understand why these measures are being introduced and clearly yesterday with another 671 coronavirus cases in Victoria, off the back of very high numbers in the weeks leading up, more had to be done. There are obviously real challenges here in Victoria with the testing and tracing and obviously mistakes were made in the quarantine process, but we the Federal Government, are providing every support we can to the Andrew’s Government. On the health front we have around 1,500 Defence Force personnel deployed, we’ve funded 28 respiratory clinics that have now conducted more than 100,000 tests, we’ve deployed some seven million masks from our national stockpile with other personal protective equipment being provided as well. So we’ll do everything we can on the health front, and on the economic front we have obviously the JobKeeper program and the cash flow boost which together have provided around $14 billion into the Victorian economy already, and with JobKeeper still with months to run, it’s providing about $100 million a day into Victoria.
FRAN KELLY:
I’m going to come back to JobKeeper, but as a Victorian are you disappointed in some of your fellow Victorians because they didn’t stay home? I mean this virus has spread because people who are sick kept going out and about, and I’m getting a lot of texts from people who are angry at their fellow Melburnians, are you?
JOSH FRYDENBERG:
Well there are no excuses for people not to follow the rules, no excuses for people not isolating at home when they’ve either contracted the virus or come into contact with someone who has. And as for people’s anger, disappointment, frustration, they need to put that aside and now we all need to come together, follow the rules and that is the only way possible, Fran, that we will suppress the number of new cases.
FRAN KELLY:
The Premier is going to announce today, he told us, more restrictions on workplaces and businesses, what kind of industries do you expect will be shut down?
JOSH FRYDENBERG:
Well that will be decisions for the Victorian Government. I’ve had discussions with my counterpart here in Victoria, Tim Pallas. The Prime Minister’s been speaking to…
FRAN KELLY:
So what do you think is going to close?
JOSH FRYDENBERG:
Well, it’s important that they maintain national supply chains and they’re very conscious of that. For example, the Port of Melbourne is the largest cargo port in the country. I was speaking to the head of Wesfarmers, Rob Scott, just yesterday and he was explaining that when it comes to paint, it’s manufactured in Victoria and forms part of their national supply chain. Drilling equipment, IT and computer equipment is also distributed out of Victoria into the rest of the country. So those integrated supply chains nationally, very much depend on Victoria, so I know that is front of mind for the Victorian Government and the announcements that they make today. There will be certain sectors like energy, Fran, that obviously we need to keep that going. You’ll have the supermarkets, the pharmacies, it’s more likely to be a black-list approach as opposed to a white-list approach.
FRAN KELLY:
You mean certain abattoirs might shut for a while, things like that?
JOSH FRYDENBERG:
Well again I’m not going to speculate because they are decisions that the Victorian Government is taking and their decisions alone. But I have been having, obviously discussions with Tim Pallas, because it’s important that the Federal Government and the Victorian Government are working together to support Victorian’s at this really difficult time.
FRAN KELLY:
You mentioned JobKeeper, it’s scheduled to start decreasing to $1200 a fortnight from the end of September, there’ll also be a tougher qualification test for businesses. Will you take another look at these changes given they were based on the false assumptions Victoria would be out of lockdown from the middle of this month? And will there be particular extra support around JobKeeper and JobSeeker for Victorians?
JOSH FRYDENBERG:
Well let’s go through those issues individually. In terms of JobKeeper, that is as you say, going out to the end of September at that $1500 flat rate, and currently there are 975,000 Victorian workers who are on JobKeeper and our expectation is the vast majority of them will continue to be on it obviously after September…
FRAN KELLY:
And more, would you expect more to be still on it after September?
JOSH FRYDENBERG:
Perhaps, and I’ll come to that in a moment. In terms of the JobKeeper payment and that 975,000 people, they’re people and businesses that have seen their turnovers expected to be down both in the June and September quarters. But there may be some businesses that didn’t have turnover that was down in the June quarter, so for example in May they had strong retail sales, but obviously now we’re in August and over the course of July these businesses have been badly hit. So we’re looking at the eligibility question for those because we don’t want businesses that have been really badly hit through the September period but maybe not have met the 30 percent threshold in the June period, we want to make sure we can get support to them as well.
FRAN KELLY:
And would that be nationwide or just Victoria?
JOSH FRYDENBERG:
Well obviously this has been an approach that we’ve adopted nationwide. And I think that will continue to be the case, it’s a demand driven program, but the situation in Victoria is very acute. 98 percent of new cases yesterday were in Victoria, the second-wave is occurring in Victoria whereas many other parts of the country are opening up, people are getting back to work, and we saw that in the ABS jobs data for the month of June.
FRAN KELLY:
So, I guess what I’m asking is will there be special Commonwealth support for Victoria? We know the business sector there and the Premier are keen for some Federal support for JobKeeper but also for cash grants, for sectors like retail and hospitality. Will you match the $5,000 grants that are already being offered by the State Government?
JOSH FRYDENBERG:
Well we’re talking to the Victorian Government about what more needs to be done, and it’s very important that that load is shared. I mean let’s not forget that at a Commonwealth level we’ve made $289 billion worth of commitments of economic support during Covid, and the States have made…
FRAN KELLY:
But are you going to offer more?
JOSH FRYDENBERG:
Well we do think there’s a need to do more, but we’ll work with the Victorian Government and it will be based on sharing the load with them. But as for the $1500 cash payments, they go out until the end of September and that is a period beyond these extended restrictions, these stage 4 restrictions that were announced yesterday by the Premier. And when it comes to JobSeeker, there are no mandatory mutual obligation requirements on those in Victoria.
FRAN KELLY:
What about pandemic leave? Critical, given the high number of people who are still turning up for work despite being ill, (inaudible) the spread really in Melbourne. The Shadow Treasurer, Jim Chalmers says quote, “everyday of delay is deadly”. Will the Federal Government fund paid pandemic leave for workers without sick leave? This is above and beyond the Aged Care staff who have just started getting it.
JOSH FRYDENBERG:
Well the Attorney-General is working through these issues with the stakeholders, but I do point out that already big businesses like Wesfarmers, that have 30,000 employees in Victoria in a Bunnings, Officeworks, Kmart, Target, they’ve already announced 14 days of paid pandemic leave to their staff…
FRAN KELLY:
What about small businesses that can’t afford to pay that? Will the Federal Government pay that?
JOSH FRYDENBERG:
And again, these are issues that we are working through. The Victorian Government, see some State Governments have already moved, the Victorian Government announced a $1,500 payment for those workers who don’t have access to leave, but have been forced to isolate because they’ve either got coronavirus or come into contact with someone who has the virus. So again, we are working through these issues methodically.
FRAN KELLY:
Less than a fortnight ago you were predicting quote, “an increase in economic activity from the September quarter and beyond”, have you now given up hopes of an economic revival in the lead up to Christmas?
JOSH FRYDENBERG:
Well again, this is a country at two different stages. Victoria is experiencing this record number of new cases and obviously these restrictions are unprecedented in our state. This is a real kick in the guts to businesses and it’s going to have a major impact on a quarter of the national economy. It will also impact, I think, on consumer confidence and business confidence more broadly. Outside of Victoria though…
FRAN KELLY:
So what’s that going to cost to the broader economy then?
JOSH FRYDENBERG:
But across the other parts of Australia we’ve started to see businesses open up. In the ABS June data for jobs, we saw 210,000 people find work. That was double what the market was expecting, 60 percent of those jobs were for females, and 50 percent of those jobs were for young people. That was a really positive sign of what we’ve seen. But there’s no escaping the fact that what is happening in Victoria is devastating, and we’re all really feeling pretty sombre right now.
FRAN KELLY:
So have you already ripped up the forecasts from just two weeks ago?
JOSH FRYDENBERG:
Well again it underlines why the situation is so fluid. I mean the opposition were bleating about producing four year numbers. Well you’ve seen in the last few days just how quickly things can change, and that’s why the RBA Governor, has also made that public comment that it is a very difficult situation in which to make economic forecasts. We’ll obviously do official forecasts for four years in the Budget, which will be on October 6, and as I get a new number from Treasury about what these latest restrictions in Victoria will have on the broader economy I’ll make those public.
FRAN KELLY:
Can I just ask you finally Treasurer, it’s your home state, I’m sure you’ve been feeling it probably yourself but others around you, the anxiety from this, intense anxiety. There will be knock-on effects for people’s mental and emotional wellbeing. Early modelling before this already predicted an extra 750 deaths by suicide, which is of course greater than the number of deaths from the virus so far. What’s the Commonwealth thinking about doing here in terms of stepping in for extra support?
JOSH FRYDENBERG:
Well just yesterday Health Minister, Greg Hunt, announced an additional ten psychological therapy sessions for those in Victoria in the affected areas, and that’s obviously through Medicare. That will assist people who as you say, are really feeling the emotional pressure from events. And also since January we’ve announced another $500 million worth of support for suicide prevention for mental health support, including backing groups like Lifeline and others. So it is really difficult, I think you’ve made an important point Fran, about the psychological toll these restrictions are having. I’ve spoken to family members, I’ve spoken to friends, people who are isolated in their homes, young kids who are not going to school who are not seeing their friends, the pressure on parents from home-schooling, the pressure on elderly people who are not getting visited. I don’t think you want to underestimate how significant the emotional toll is, and the other thing is people see the period ahead. I mean they’ve just been announced, they’ve already been through three weeks of lockdown, and now they’ve been announced another six weeks and so everyone’s got limitations on the amount of exercise they can do or when they can go to the shop and they can’t go out at night. So people, I think, are very much in a state of shock in Victoria, I think people are feeling very disappointed, some are feeling angry, but my message to them is they have to put that aside, we are in a war-like situation and only by working together will we get through.
FRAN KELLY:
Treasurer, thank you very much for joining us.
JOSH FRYDENBERG:
All the very best.