KIERAN GILBERT:
Let's go live to Treasurer Josh Frydenberg. Thanks very much for your time, Treasurer, as always. The Labor Party said you should’ve just kept JobKeeper in place, dialled it down and then dialled it back up when needed. Given you're back to the level the JobKeeper was anyway, why didn't you just do that?
JOSH FRYDENBERG:
Well the Labor Party was wrong yet again suggesting that JobKeeper should be continued indefinitely. As you know when we ended it after the March quarter, Kieran, we saw the unemployment rate fall to its lowest in more than a decade at 4.9 per cent. JobKeeper was costing more than $2 billion a month. The advice from Treasury was very clear, it was starting to distort the labour market. The labour market needed to find its right level. We needed to enable, empower workers to move more freely across the economy. So JobKeeper did its job, 3.8 million people received the payment. It cost the taxpayer $90 billion but it's been part of the strong rebound that we saw in the Australian economy. We're now in a different set of circumstances. We've got a lockdown in one State today, namely New South Wales, our biggest State, and we've got a set of payments, both for businesses and for households that are targeted and that are temporary and that are scalable and can be delivered very quickly to those areas of need. And around a million payments have already now been processed by Services Australia at a cost of around half a billion dollars, and we know that some payments have been delivered as soon as 40 minutes after the application and more than 90 per cent of people are doing it online.
KIERAN GILBERT:
Okay.
JOSH FRYDENBERG:
And today's announcement, where we've scaled up the business payments to a turnover of $250 million will see around half a million eligible businesses for these payments employing over 3.3 million workers.
KIERAN GILBERT:
Will you keep going with the support if this gets worse? We know that the Premier says the lockdown is at least until August 28 in New South Wales. Will you go as long as you need to at a cost of, what is it, three quarters of a billion dollars a week?
JOSH FRYDENBERG:
Well the three quarters of a billion dollars a week that we are pouring into the New South Wales economy is equivalent to what we were pouring into the Victorian economy when they were subject to lockdown at the back half of last year. When that was occurring JobKeeper was in place. We will do what is required to support the people of New South Wales. We've shown from day one, from day one of this crisis, that we will use the Commonwealth's balance sheet to support Australian families and businesses. That's why there are more people in work today than before the pandemic began. That's our economy today, Kieran, is bigger than before the pandemic began. But we're facing a new challenge and that's we have a new set of economic support payments in place.
KIERAN GILBERT:
Is the 40 per cent of payroll basis upon which you're judging how much to provide businesses, why is that the right mechanism and is it enough to get businesses through this, what is going to be another significant downturn?
JOSH FRYDENBERG:
So let's be clear who is eligible for these payments. If you have a turnover of between $75,000 and now $250 million you are eligible for a payment that varies between $1,500 a week and now $100,000 a week. Now, it's capped, that 100,000 is capped, at 40 per cent of your payroll. So if you are a business, 40 per cent of your payroll being picked up the Federal Government is not insignificant and if you couple that with the income support payments that we're providing to workers who have lost from between eight and 19 hours a week, they get now $450 a week, if they've lost 20 hours or more a week, they get $750 a week. They're significant payments to both the employees and their businesses, and those businesses are fixed costs, like rent, like electricity, water bills, other maintenance expenses. So these payments are designed to work in tandem. I think they're a significant amount of money and it's on top of what also the State Government is providing. And as you know these business payments are on a 50/50 basis with them and they have some other payments that are also in place.
KIERAN GILBERT:
Do you fear a double dip recession is now inevitable with our largest city and State economy facing this prolonged lockdown?
JOSH FRYDENBERG:
Well, Kieran, I won't be surprised if the September quarter goes negative and that's just a fact of seeing our largest two States in lockdown for considerable periods. How we go in the December quarter, which would need to be negative again if we were to go into another recession, will largely depend on how successful New South Wales is in getting on top of this virus. And we're doing everything we can to support the people of New South Wales to get on top of this virus and we hope that the extended lockdown goes only as long as Gladys Berejiklian announced today. But we don't know what's around the corner. But what I do know from the previous lockdowns and from the previous months of this pandemic is that when we suppress the virus, the economy bounces back strongly. It's enormously resilient. The economy outperformed even the most optimistic expectations of both Treasury and the Reserve Bank.
KIERAN GILBERT:
Indeed, that was great result. But this is another test of the resilience of not just the economy but the Australian people as well. Do you think given how precarious things are now, in your mind as Treasurer ‑ incidentally now I think second only to Peter Costello in terms of length of time in the Treasury portfolio, leaping ahead of both Joe Hockey and Scott Morrison this week, so your time in the job is quite significant now ‑ but are you looking at a pre‑election budget? Is that something you're thinking is a real possibility here?
JOSH FRYDENBERG:
Well the first thing to say the time in the job is not really the barometer. The barometer is what you do in the job. We have helped steer Australia through the most difficult time since the Second World War economically and we've faced a once in a century pandemic and it's been the greatest economic shock since the Great Depression, and we have seen a strong rebound but today we face a new set of challenges that we are responding to. In terms of more generally, I mean I think that the economy is well placed. I think that we have put it in a position where household and balance sheets have been strengthened since the start of this pandemic and we are resilient in the face of new challenges.
KIERAN GILBERT:
How likely is a pre‑election budget?
JOSH FRYDENBERG:
Well again, the timing of the budget is related to the timing of the election and the timing of the election is a matter for the Prime Minister. If you or I were to speculate on a date for the budget, it would be purely that, speculation, because it will depend on when an election is chosen.
KIERAN GILBERT:
Okay, Josh Frydenberg, thanks for your time, appreciate it.
JOSH FRYDENBERG:
Always a pleasure.