ALLISON LANGDON:
Treasurer Josh Frydenberg joins us now. Firstly, thanks for joining us this morning.
JOSH FRYDENBERG:
Good to be with you.
ALLISON LANGDON:
Senator Jackie Lambie was just on our show and she says we should be shutting down our borders to Italy. Given Italian officials have shut down hospitals and unis for 10 days, why wouldn’t we do that?
JOSH FRYDENBERG:
Well we’re always acting on the best possible medical advice and the National Security Committee will be meeting later today to talk about the various measures we have in place and the spread of the virus and the impact that is having. But as you know, we moved ahead of the rest of the world with our travel restrictions both in relation to China but also more recently in relation to Iran and the spread of the virus in Australia has been much less substantial than what we’ve seen in other countries including in Europe…
KARL STEFANOVIC:
So you’re open to that this morning?
JOSH FRYDENBERG:
Well we’ll take the best possible medical advice and obviously our focus is on protecting the Australian people Karl as you’d expect us to do.
KARL STEFANOVIC:
Alright Treasurer, you spoke to the International Monetary Fund I believe last night. The economy is resilient but that figure that we were quoting in the intro of $27 billion that it could cost the Australian economy, is that about right?
JOSH FRYDENBERG:
Well it’s a very substantial impact. And as you know, the Coronavirus will not be solved by the economists, it will be solved by the scientists and let’s hope they find a vaccine as soon as possible, but it continues to evolve. It’s disrupted end to end supply chains, it’s hurt the Australian tourism industry, it’s seen many international students not be able to get to our country to start their course. So the impact on the economy has been severe and significant but as the Prime Minister has foreshadowed we’ll be making an announcement about a series of fiscal measures sooner than later.
ALLISON LANGDON:
Because the challenge you now face is not about delivering a surplus but you need to keep us out of a recession?
JOSH FRYDENBERG:
Well our focus is to ensure that the Australian economy continues to grow, Australians stay in jobs and businesses stay in business. And yesterday we got the December Quarter National Accounts and they showed that the Australian economy had improved and was strengthening. And we saw a jump in through the year growth from 1.8 per cent in September to 2.2 per cent at the end of December and that shows we’re growing, that the economy was strengthening and that’s why we feel confident about our ability to get through this.
ALLISON LANGDON:
But that doesn’t take into account Coronavirus or bushfires?
JOSH FRYDENBERG:
It took in a little bit of what was happening with the bushfires. As you know, New South Wales was seeing the impact in December, but obviously it spread to other states after that. But in terms of the Coronavirus, you’re right, that has been a 2020 phenomenon and the impact of that is significant.
KARL STEFANOVIC:
Well it’s going to be significant and given the predictions and how long this crisis might go, I mean how do you guarantee that we don’t slip into a recession?
JOSH FRYDENBERG:
Well we’ll do everything we can to support the economy and you’ve seen the Reserve Bank reduce interest rates and the big four banks passed that on in full. That’s good news for borrowers if you’ve got a $400 000 mortgage and you’re watching your show today, that could be worth up to $700 or more a year in lower interest repayments. And in terms of the fiscal measures that we’re undertaking, we’ll be looking to support business, support their cash flow and support our jobs.
KARL STEFANOVIC:
Ok you can’t guarantee that we’re not going to slip into recession though? I guess no one can.
JOSH FRYDENBERG:
Well what I can guarantee is that we are doing everything possible to strengthen the Australian economy. We’ve been lowering taxes, we’ve been rolling out infrastructure, we’ve been creating new apprenticeships, that’s what our focus has been. Australia enters this economic challenge Karl in a much better position than many other countries. We enter this economic challenge from a position of economic strength.
KARL STEFANOVIC:
Now the states are pleading for financial assistance at the moment and we know that Michael McCormack also yesterday had a proper dig at them saying, “The states needed to stump up as well.” He said, “It really annoys me” quote, “that I think states have been let off the hook this summer.” I mean is that kind of rhetoric from the Deputy PM helpful?
JOSH FRYDENBERG:
Well look, obviously we work with the states, whether it’s on the Coronavirus, whether it’s the response to the bushfires or response to a whole lot of other challenges, but the states have their own balance sheets, they have their own ability to respond to some of these challenges, no doubt they’ll be digging into their pockets just as we are at the federal level. But we’ll work together constructively because we both serve the same constituency, namely the Australian people.
ALLISON LANGDON:
And will you look for tax breaks for small businesses. And something else that’s been discussed lately is about hitting our big four banks with another levy, is that something that is on the table?
JOSH FRYDENBERG:
We’re not considering changing the levy. Our focus has been on ensuring that money flows to borrowers and obviously we’re very pleased and we welcome the announcement by the big four banks to cut their interest rates by their full amount, that was announced by the Reserve Bank.
KARL STEFANOVIC:
It wasn’t a trade was it?
JOSH FRYDENBERG:
It wasn’t a trade.
KARL STEFANOVIC:
I mean we can get to thinking these things. What about investment tax breaks, will that be part of it?
JOSH FRYDENBERG:
Look investment allowances are definitely on the table…
KARL STEFANOVIC:
…Ok.
JOSH FRYDENBERG:
That’s what we’re focusing on, that, as well as other measures Karl.
KARL STEFANOVIC:
Alright, good on you Josh. Thank you for your time today. Appreciate it.
JOSH FRYDENBERG:
Good to be with you.