FRAN KELLY:
Now Treasurer, welcome back to Breakfast.
JOSH FRYDENBERG:
Nice to be with you, Fran.
FRAN KELLY:
Treasurer, today you’re going to announce wage subsidies for all staff who have been laid off. It’s the new JobKeeper payment. How’s it going to be paid? As a flat rate, say $1500 a fortnight as reported in The Australian? Or a percentage of income, as other countries have done?
JOSH FRYDENBERG:
Well, you’ll have to tune in for the detail later today, Fran, but what is clear is that it’s critically important that we maintain the connection between employers and employees because there is going to be the other side to the coronavirus and having that relationship in tact is really important. And we’ve also announced significant support for small businesses to keep people employed, as you know. Cash payments up to $100,000 based on the size of the wage bill for those particular businesses, and we’ve doubled the old Newstart to effectively enhance the safety net to cushion the blow for many Australians. So, we’ve already taken a number of significant measures, over $180 billion of announcements to date, but today will be another step in that process.
FRAN KELLY:
Well, a big step. I mean that’s going to have a pretty big price tag to it, depending on the figure, whatever the figure really. This figure of $1500 a fortnight that’s around, that’s equivalent to about 70 per cent of the median wage, but it’s a long time short of the gross average wage. Is that incentive enough for employers to keep people in their jobs through such a dark time? Because the ACTU and indeed some of the employer groups have been arguing for something almost double that?
JOSH FRYDENBERG:
Well, if you look at the UK, the New Zealand system, it’s actually lower than that number that you’ve speculated on. Again, I won’t go into the detail. Look, we’ll have an Australian solution to what is an Australian challenge. Namely, keeping people in their job and getting them to the other side. We also want to lower the cost for business for continuing to keep their doors open where it’s possible for them to do so. Obviously, for a lot of retailers, they cannot do that because of the health-related restrictions that are in place. But, we recognise that this is a tough time for employees and employers, but there’s an alignment of interest between them and we want to support them both at this time.
FRAN KELLY:
So, what’s the obligation on employers whose staff get these subsidies? Will their staff effectively still be employed? Is that how they’ll be thinking of themselves? Still be employed by their boss, by their company?
JOSH FRYDENBERG:
Well, that’s how some of the other international systems work, and there will be legal obligations for employers to pass money onto their employees. That’s absolutely critical to this process too.
FRAN KELLY:
So they’ll go through the payroll system effectively?
JOSH FRYDENBERG:
Well, again, further detail will be announced today but it’s all about connecting the employer and the employee, even at a time when the door is shut for particular businesses.
FRAN KELLY:
And who would be eligible? Retrenched workers? As well as those laid off? Workers from big corporations like Qantas and Virgin, who’ve stood down tens of thousands? Would all those retail chains who have closed? Would all those be covered by this?
JOSH FRYDENBERG:
Again, I don’t want to make an announcement on your program for something which will be announce formally later today. But, of course, we recognise that hundreds of thousands of people have lost their job. It’s heartbreaking to see the queues outside Centrelink. This is the harsh reality of what is a global pandemic like we’ve never seen before. And we’re dealing with a war on two fronts, Fran. We’re dealing with a health crisis and we’re dealing with an economic crisis. And when it comes to the economic crisis, my primary focus has been to keep Australians in jobs and businesses in business, as well as also ensuring that our debt, equity and credit markets remain stable.
FRAN KELLY:
We’re going to be talking to Labor’s Tony Burke a little later, but Anthony Albanese yesterday urged you to get on with it. How soon could a JobKeeper allowance be in peoples’ pockets?
JOSH FRYDENBERG:
Well again, by using existing systems, the tax and the welfare system, is a bit advantage for us in getting money out, quickly out the door. As you would have seen from the UK system, the Chancellor of the Exchequer, my equivalent, has said that he would be building a system from scratch, and that this would take a significant amount of time to actually get the money to the public. So, these are really big challenges, and when you’re dealing with taxpayers’ money, you understandably have got to be very careful and deliberate and considered and take the best possible professional advice from the public service, from the Tax Office, and other related institutions. So, that’s what we are doing. We’ve been working on this for some time, but we’ve got to get it right, and that’s why we haven’t rushed out an announcement to date.
FRAN KELLY:
Alright. But it sounds like it might be a while before people get this in their bank accounts.
JOSH FRYDENBERG:
Well, again, you need to tune in today, but I can say that in terms of the announcements to date, they have effectively doubled the safety net. That was already a very significant announcement…
FRAN KELLY:
But still, people aren’t getting that payment until April 27th.
JOSH FRYDENBERG:
Because, again, in terms of using the existing systems, we’re getting it out the door as quickly as possible. But that $750 cash payment will start from the 31st of March. Which, as you know, I think is tomorrow.
FRAN KELLY:
Tomorrow.
JOSH FRYDENBERG:
And money will start to flow from there. And that’s to 6.5 million Australians, including pensioners, people on the Disability Support Pensions, people on the Carers’ Payment, people who are on the Commonwealth Seniors Health Card, Family Tax Benefits, and the like. These are people who need that support.
FRAN KELLY:
And, Treasurer, how much is this subsidy package going to cost?
JOSH FRYDENBERG:
Again, another detail that you’ll have to tune in later today.
FRAN KELLY:
Alright. Won’t wage subsidies need to be legislated? Will Parliament have to be brought back to legislate this?
JOSH FRYDENBERG:
There’s a legislative element to this and, obviously, that will be a discussion that we’ll have with the Opposition at the appropriate time.
FRAN KELLY:
So, just a bit more on that. Does that mean that you’ll have to, I mean Parliament is in an abeyance until August. Is there some way that can be done in the mean time?
JOSH FRYDENBERG:
Well, again, those are details that will be discussed between the Leaders and, obviously, between the Managers of Government Business in the House and the Senate.
FRAN KELLY:
You’re listening to RN Breakfast, it’s 17 to 8. Our guest is the Federal Treasurer, Josh Frydenberg, who later today will announce the Government will go ahead with a subsidy plan for all workers who have been stood down or laid off. On another front, Treasurer, as of last night, you announced all new foreign investments will be subject to review by the Foreign Investment Review Board, regardless of their value and of who’s making the bid. All bids. Doesn’t matter what it’s for, will be weighed in the national interest. Is this a move that’s aimed at China.
JOSH FRYDENBERG:
It’s not aimed at a particular country, indeed China was the fifth largest foreign investor in Australia last year, with about $13 billion worth of investment, whereas the United States had $58 billion worth of investment. It was our number one investor. This is a precautionary, temporary measure to increase our visibility and scrutiny over all foreign investment proposals to ensure that they’re in the national interest.
FRAN KELLY:
But why are you doing it? What’s worrying you? What’s your concern?
JOSH FRYDENBERG:
Well, these are extraordinary times and we’ve seen the value of Australian companies, indeed companies right around the world, be severely diminished because of the coronavirus. And we don’t want predatory behaviour that is not in the national interest occurring and that is why removing the threshold altogether, which for free trade agreement countries is currently at $1.2 billion, by reducing it down to zero, will give me the authority, as Treasurer, to scrutinise every one of those applications, because that is what the Australian public would expect us to do.
FRAN KELLY:
Predatory behaviour is exactly the concern of some of your colleagues. Andrew Hastie and Tim Wilson have expressed concern at the prospect of predatory behaviours by state owned enterprises. Now, the reality is, China would be, I think, the only country in the world right now that has money to invest overseas at the moment. Is that what you’re concerned about and are we seeing approaches already to struggling businesses? Is this reactive or preemptive.
JOSH FRYDENBERG:
Well, let’s put a very clear principle on the table first. Which is that foreign investment has served Australia very well. One in ten Australian businesses have benefitted from foreign investment. And we want that foreign investment to continue in Australian. Not just in the coronavirus crisis, but also in the days and months and the years after. But, at the same time, we need that visibility and scrutiny. So, it’s not about a particular country, but it’s about a situation that we find ourselves in with distressed companies that may be the target of buyers, of buyers whose behaviour is not in the national interest. And when it comes to what is in the national interest, you need to take into account national security, tax issues, competition issues, and the character of the investor.
FRAN KELLY:
And just finally, Treasurer. The States are negotiating agreements with private hospitals. Well, we hope they are. After elective surgery was banned to try and take the pressure of the hospital system, the private hospitals responded saying ‘Well, there goes our income stream. We’re going to have to close’. And some have already stood down, said workers are going to be stood down from this week, which seems outrageous given what we’re going through. Is the Commonwealth Government going to step in with funds to help back the States, to ensure that private hospitals can continue to keep operating?
JOSH FRYDENBERG:
Well, Greg Hunt as the Health Minister, the States, are all engaged in conversations with the hospital sector. I mean, it’s obvious that we need to maintain that capacity for the challenges ahead. But Australians need to know that the Government has their back. Whether it’s with the health funding announcements yesterday on telehealth and mental health and the support that we’ll continue to provide for a surge capacity among our hospitals, or it’s whether the backing of small business, the increase in the safety net, or the foreign investment restrictions that we’ve talked on today. All of these measures are designed to have the public’s back at what is an extraordinary time, unprecedented in our recent history.
FRAN KELLY:
And Treasurer, just as we’ve been speaking, a lot of people writing in, contacting us trying to get clear if the new subsidy regime comes in, as you’re suggesting, it’ll be announced today, does that mean people already listed to receive the JobSeeker announcement will go off that and onto this subsidy?
JOSH FRYDENBERG:
Well, again, you’ll have to tune in, as they will, later today. It will be very obvious, of the additional support that will be coming to people who find themselves in the difficult situation of having lost their job.
FRAN KELLY:
Alright. Well, stay tuned. Treasurer, thank you very much for your time.
JOSH FRYDENBERG:
Thank you.