ALLISON LANGDON:
A very good morning to you Treasurer.
JOSH FRYDENBERG:
Good morning Ali.
ALLISON LANGDON:
We need to talk about Italy to start. I mean, Italy has just closed its borders, locking down 60 million people, this is, this is huge and disturbing news.
JOSH FRYDENBERG:
Well this is obviously a very significant development and it just reflects the uncertainty and the seriousness of the spread of the Coronavirus. Australia moved ahead of many other countries in putting in place travel restrictions that helped ensure that the spread of the virus here in Australia was not as great as what we’ve seen in other countries like Italy, South Korea, but obviously we’ll continue to take the best possible advice from our Chief Medical Officer and continue to reassess our travel restrictions.
KARL STEFANOVIC:
Italian authorities seem to be taking a very hard line approach here in relation to shutting their borders, that is a huge thing as Ali said. Also I noticed that Benjamin Netanyahu and Israel have said that anyone, anyone, that comes to the country goes into 14 days of quarantine. Does that up the ante for us here?
JOSH FRYDENBERG:
Well again we’ll take the best possible medical advice and we did move ahead of other countries, Karl. We will put the interests and the safety of Australians first, there’s no doubt about that, that’s our utmost and foremost priority. And of course we have announced already a number of significant measures including going 50-50 with the States on the health costs of dealing with the Coronavirus. We are announcing in coming days our economic response which will have a suite of measures that are designed to keep Australian businesses in business and Australian workers in jobs, because obviously this is having a significant impact on the economy, not just here but also around the world.
ALLISON LANGDON:
But are these contingency plans being talked about? Are you having discussions saying okay if this gets any worse we are going to shut the borders, we are going to say no to footy games being played in front of a crowd, no to public gatherings and concerts?
JOSH FRYDENBERG:
Well the National Security Committee has been meeting very regularly throughout this health crisis and again, the actions that we have taken, including putting in place those travel restrictions, have been based on the medical advice that we’ve received. So the National Security Committee will be meeting again this week and again taking that advice and deliberating on all these recent international developments because obviously the situation is serious. But Australians can be reassured that their Government, led by Scott Morrison, is putting their safety first as well as ensuing that we keep the Australian economy strong.
KARL STEFANOVIC:
Doesn’t do anything for our confidence does it when we see a whole country shutting its borders. Meantime, as you know Treasurer, it’s been a bloodbath on the markets. Both in the US today it was terrible, down I think seven and a half thousand points, and here with $400 billion wiped from our market in the past two weeks. We’ve had senior economists, even on our show this morning, saying we will go into recession, be it technical, what are your thoughts on that?
JOSH FRYDENBERG:
Well again, I wouldn’t be looking ahead with any definite statements such as that. What I would be saying is that the Australian economy has been remarkably…
KARL STEFANOVIC:
…are they wrong?
JOSH FRYDENBERG:
Well again, nobody knows how the virus will continue to evolve and I think that uncertainty Karl is reflected in the volatility in the global stock market, as well as not just in equities but also in the debt and the credit markets. What we do know is that the Australian economy has been remarkably resilient, we’ve had an extended drought, we’ve had the damaging fires, and yet despite all of that the Australian economy was growing in the back half of last year and the Reserve Bank Governor, who doesn’t have a political axe to grind, has said that the fundamentals of the Australian economy are ‘very strong’. So Australians can be rest assured that our package of measures will be substantial, will be targeted, will be responsible but are also designed to make us stronger as an economy on the other side of this health crisis.
ALLISON LANGDON:
Treasurer, we want to talk about the stimulus package, you know, what is it going to look like? Because last week you were pretty confident that the Government wouldn’t be dishing out cash splashes, but I mean, is that still the case? Pensioners, Newstart recipients, and small business owners, are they likely to get a sugar hit?
JOSH FRYDENBERG:
Well the money will be going to where it’s needed most. It will be targeted, that’s really important, it will be designed to boost the productivity of the nation, and it will help us get through this challenging time. Because what we’re seeing with businesses is their cash flow is being affected, what we’re seeing with businesses is that investment decisions are being deferred because of the uncertainty and of course, what we’re seeing is a lot of Australians being anxious about their own job security. So our package of measures are designed to tackle some of these challenges, to reassure the Australian people and of course the markets, to ensure an alliance between our responsibility which is fiscal policy and the Reserve Bank’s responsibility which is monetary policy, to ensure that’s all aligned to continue to support growth which has already been the case.
KARL STEFANOVIC:
The Financial Review has a big summit this morning which I’m really interested to see the outcomes of and there’s some very big heavy hitters who’ll be attending and making speeches there, including Scott Morrison. His rhetoric around his speech today is, I found very interesting this morning. He’s almost, almost pleading with big businesses to pull their load and he’s also indicating that this could be worse than the GFC. Is that accurate, is that consistent with what you think?
JOSH FRYDENBERG:
Well it’s very different to the GFC in the sense that the GFC was a problem in the financial system. We saw credit drying up, we saw liquidity problems and we obviously saw banks collapsing, and this is a very different situation. It’s primarily a health crisis which has led to the shutters going up on the global economy, and as we’ve seen and talked about this morning, major developments like we’re seeing in Italy. This is obviously affecting global economic confidence and the economists won’t solve for the Coronavirus, it will be the medical researchers and the scientists who will. But what the economists can do and what Government can do, is ensure that money is being spent though this difficult period to keep businesses going and to keep Australians in jobs, and that’s where our focus is. It’s a very different challenge to the Global Financial Crisis and because of the uncertainty around the health aspects of this, it is indeed more challenging to solve for because you’re not only solving for a demand problem, you’re also solving for the supply side constraints with many of those factories in China Karl being closed for a long period of time, which meant that the goods that come in to Australia for our building and construction sector or other sectors are just not coming at the moment.
KARL STEFANOVIC:
Okay. Treasurer, big day for you as it is always seemingly these days. Thank you for your time, we appreciate it.
JOSH FRYDENBERG:
Good to be with you both.