JIM WILSON:
The Treasurer joins me on the line this afternoon. Josh Frydenberg, welcome back to Drive.
JOSH FRYDENBERG:
Nice to be with you, Jim.
JIM WILSON:
New South Wales is on track to meet its 70 and 80 per cent vaccination targets. You've made the call to cut off the payments. Are you confident it's the right call?
JOSH FRYDENBERG:
Yes, I am, and the key point is that our economic support for the overall economy obviously continues and we've left in place the pandemic leave payment till mid‑next year, but with respect to the COVID disaster payment, this is up to $750 a week that people get if they've lost a certain number of hours, that is coming to an end once New South Wales reaches an 80 per cent double dose vaccination rate, and then there'll be a two‑week transition.
JIM WILSON:
Okay.
JOSH FRYDENBERG:
With respect to the Business Support Program, similarly that's going to taper down from a 70 per cent double dose vaccination rate and it will come to an end at an 80 per cent double dose vaccination rate.
JIM WILSON:
All states and territories have agreed, Treasurer, to follow the National Plan, so how concerned are you that New South Wales is planning to keep certain businesses closed beyond the 80 per cent vaccination rate, places, for example, like indoor pools and even nightclubs?
JOSH FRYDENBERG:
Well I know that New South Wales is doing everything it can to open up in a COVID‑safe way as soon as possible and I'm sure they'll continue to reassess their various aspects of their plan and if they can bring aspects of it forward, they will. I also note though that Gladys Berejiklian and Dominic Perrottet have announced today that there will be an additional payment, as you were alluding to, from the 80 per cent double dose vaccination rate to support some of those businesses at that time. So they'll continue to provide elements of support. We'll have our social security system in place as well. But I'm confident that as the economy reopens, even if it's gradually, the jobs will come back.
JIM WILSON:
Do you think once we get to 80 per cent all businesses should be open, even if some restrictions like caps or square metre rules apply?
JOSH FRYDENBERG:
Well I think we do have to learn to live with the virus and I think we have to bring the lockdowns to an end, and I think we have to ease the restrictions. Now there will be, as you indicate, some health restrictions that are in place, like the density rules, like the masks and so forth. But I think at the first opportunity, as much of New South Wales, as much of Sydney should open.
JIM WILSON:
Okay. How confident are you that this is going to be New South Wales’ last lockdown though, and what will you do with economic support if it isn't?
JOSH FRYDENBERG:
Well what we know from the Doherty Institute, Jim, is that with 70 and 80 per cent vaccination rates not only do the restrictions ease and you can live with the virus, but there will be some people who get sick, there will be some people who go to hospital, and tragically there will be some people who die. But the lockdowns themselves become unlikely. If they occur, they may be targeted, they may be temporary, but they become unlikely. If you look around the rest of the world, the United Kingdom, the United States, Canada, people are going about their daily lives. They are learning to live with the virus. It's been incredibly positive to see in New South Wales the rate of vaccination go up so dramatically. So I'm confident that we can live with the virus once we get to those 80 per cent vaccination rates.
JIM WILSON:
So with that in mind, what do you say to states like Queensland and WA, Tasmania even, who don't seem interested in opening their borders until at least 90 per cent vaccination? How much is this holding back our recovery?
JOSH FRYDENBERG:
Well it certainly costs jobs. Closed borders cost jobs because people can't travel freely, it hurts the tourism industries and, you know, many people who are employed in that broader chain of industries and sectors. So I would encourage those state premiers, those chief ministers, to open their borders in accordance with the plan. With respect to Queensland and WA, of course their vaccination rates are slower than New South Wales so if they could get there quicker that would be a great thing.
JIM WILSON:
Even one of the listeners has just texted in, Treasurer, and says: "What about airport workers who can't work because of border closure? I'm getting 15 hours a fortnight". What do you say to those workers, for example, our listener there, but also those businesses, industries that it's going to be a long, long road to recovery, it might take until March, April next year?
JOSH FRYDENBERG:
Well, Jim, we do have a range of other economic support measures that have been in place to support the aviation sector, to support the tourism sector, to support the events sector. Those programs have been designed to help them transition. But the sooner we re‑open the quicker the jobs will come back. That's my key message, is that we can't live in lockdown forever. These were emergency payments. They were always going to end and we're now ending them in accordance with the National Plan, which was agreed by the premiers and the chief ministers at National Cabinet.
JIM WILSON:
Do you think they'll come to the table, that once they reach their 80 per cent vaccine targets that they signed on at National Cabinet they will actually open up the borders?
JOSH FRYDENBERG:
Well I think the onus will very firmly fall on them to explain to their public, to explain to their small business owners as to why they continue to keep those borders closed or put the restrictions in place. You see, we've taken our decision based on the best medical advice. We consulted the Chief Health Officer of the Commonwealth, we took advice from the Treasury, and we decided to end these payments at 80 per cent. But it was premised on the work of the Doherty Institute which says that at 80 per cent, these lockdowns become unlikely. I'd say to all those other states that we do need to open up in accordance with the plan, and if they don’t, they're simply delaying the inevitable.
JIM WILSON:
And would you withhold Commonwealth funding? You've said that before, are you standing by that?
JOSH FRYDENBERG:
I signalled over a month ago that we had to learn to live with the virus, that elimination doesn't work, particularly with Delta, which has changed the game, and that there should be no expectation on behalf of the chief ministers and the premiers that our economic support would continue in the scale and on the scale that it was. You know, true to that word, we've announced that there is a transition period and that's at 70 to 80 per cent vaccination rates.
JIM WILSON:
What else would you withhold from the states if they don't come to the party?
JOSH FRYDENBERG:
Look I'm not getting into that game. We've had on our plate the COVID disaster payment as well as the business support payments. We've announced those and now we're bringing those to an end and it's up to the states if they want to continue to provide additional economic support. That is obviously their prerogative.
JIM WILSON:
When will we start to see easy travel in and out of Australia for people like overseas students, temporary workers, tourism, immigration? How much are you pushing for this in Cabinet?
JOSH FRYDENBERG:
Well, Jim, the Prime Minister's already signalled our intentions in that regard, namely when we get to that 80 per cent vaccination rate, he's keen to see some of those borders open and he's keen to see Australians travel more freely in and out of the country. We don't want to see, you know, the bizarre situation where a Sydney‑sider could travel to Fiji before they could travel to Cairns or before they could travel to Perth. We don't want to see that.
JIM WILSON:
But that's the reality, isn't it, Treasurer?
JOSH FRYDENBERG:
Well it's not the reality now and we don't want it to be the reality in three months' time. What we want is for the state borders to open as well as the international borders to be eased. The good news is the vaccination rates are increasing so rapidly that that makes it more likely than not that we can open those international borders sooner than later. That means skilled workers could move more freely, obviously, Australian citizens coming and going will move more freely, it means that international students can come and go more freely, and of course, families can be reunited. Because one of the sad consequences of these border closures has been that families have been apart and, you know, there are many sad consequences of these lockdowns and that's one of them.
JIM WILSON:
Speaking to the Federal Treasurer Josh Frydenberg. Treasurer, it seems home quarantine is going to be seven days at the first instance. But do you think this should be even shorter for the fully vaccinated, like say just make them clear one negative test for example?
JOSH FRYDENBERG:
Well again, we'll continue to take and consider in that context the medical advice, and moving to home quarantine, Jim, I think is a very positive development. I think it obviously reduces some of the stresses and strains on people who have been in hotels for a couple of weeks, but it also means that we can cater for greater numbers of people coming in and out of our state or our country.
JIM WILSON:
And Australia's budget forecast from this time last year, we were looking at a record deficit of $213.7 billion, you've managed to bring that down substantially to $135 billion but it's still a hell of a lot of money that we need to pay back.
JOSH FRYDENBERG:
Well it's been in response to what has been the biggest economic shock since the Great Depression. We should not lose sight of the fact that last year when COVID hit, Jim, there were hundreds of thousands of our fellow Australians who were lining up outside Centrelink, and for many those images were reminiscent of the scenes of the Great Depression. You'll know from your listeners and your friends and your family members, people were not just fearful of losing their job, they were fearful of losing their homes and their life savings. We stepped in with programs like JobKeeper which immediately gave people the confidence back. It gave employers the confidence to keep their workers on and the net result of that is that Australia had one of the strongest economic recoveries of any nation in the world, and we've seen more people be in work today than before the pandemic began and the economy being bigger today than before the pandemic began. Now today's numbers should give people confidence that once restrictions ease, the economy does bounce back, because as you say, at a deficit of $134.2 billion, Jim, it's $80 billion better than what I forecast last October when I actually announced the budget initiatives. And it's been mainly driven by a better labour market, by more people being in work and less people being on welfare.
JIM WILSON:
Can you rule out proposing any tax increases to pay this back at the next election?
JOSH FRYDENBERG:
Well we've been the party of lower taxes, that's been our track record. We've passed through the Parliament, legislated, implemented over $300 billion of tax cuts. That will see when it's fully rolled out a whole tax bracket abolished, the 37 cents in the dollar tax bracket. You'll have 95 per cent of Australian taxpayers paying a marginal rate of tax, no more than 30 cents in the dollar. So you do know that at every turn, at every opportunity, whether it's company tax, whether it's business investment incentives, whether it's personal income tax, we've looked to cut taxes. And that was a real fault line, Jim, at the last election you may remember. Labor was promising $387 billion of higher taxes on your franking credits, on your superannuation, on your income, on your family business, indeed on your investment properties. All of those taxes Labor planned to impose. Given half the chance they'll do it again. So you'll hear a lot more about our plan for lower taxes and Labor's plan for higher taxes between now and the next election.
JIM WILSON:
So from your perspective though no tax increases?
JOSH FRYDENBERG:
Well we haven't ‑ what we've been doing is driving taxes lower. That's been our track record and obviously, that's our plan for the future.
JIM WILSON:
Okay. Treasurer, thank you for joining me.
JOSH FRYDENBERG:
Great to be with you.
JIM WILSON:
Good on you. That's Federal Treasurer Josh Frydenberg.