KIM LANDERS:
The Federal Treasurer is Josh Frydenberg, I spoke with him earlier. Treasurer, JobKeeper has been extended until March at a reduced rate. The pandemic though is unlikely to be over by then, do you expect that you are going to have to keep some sort of wage subsidy in place until it is?
JOSH FRYDENBERG:
Well you’re right Kim there’s great uncertainty about the economic environment, I mean forecasting is difficult at the best of times let alone in the context of a once in a century pandemic. But what we’ve announced will support many businesses and the number of businesses who are accessing JobKeeper is actually coming down steadily over time reflecting the fact that the economy is reopening gradually and outside of Victoria we have seen some strong job numbers that were reflected in the ABS data last week.
KIM LANDERS:
But are you leaving open the option of keeping it going if you have to, beyond March?
JOSH FRYDENBERG:
Well I don’t have a crystal ball and certainly I did not predict the once in the century pandemic, but I do know that the Government will do what it takes to support the Australian people through this very difficult time and I want to underscore how significant the JobKeeper package and program has been, at $86 billion it’s the single largest economic measure any Australian government has undertaken and right now it’s supporting more than three and a half million workers and about 960,000 businesses.
KIM LANDERS:
You’ve conceded though the effective unemployment rate is just over 11 per cent and it is going to continue to rise, how bad do you expect it to get?
JOSH FRYDENBERG:
Well again we’ll update the forecasts and make those public from Treasury tomorrow, and they do reflect a very difficult economic environment but there is some positive news which is that the virus is being managed effectively outside of Victoria and in those job numbers last week we saw 210,000 people find a job in the month of June. That was more than double what the market was expecting. 60 per cent of those were women, 50 per cent were young people, and it is a sign that as the virus has being got under control domestically, that the economy is opening up and people are finding work.
KIM LANDERS:
Well you’re anticipating that between now and the end of the year a bit over two million people will come off JobKeeper. How many do you think are going to wind up out of work and on JobSeeker as some businesses realise that they just can’t continue?
JOSH FRYDENBERG:
Well there’ll be a large number who get both the JobKeeper and the JobSeeker payments, that’s because we’ve introduced a tiered payment. You’ll also see some businesses that start to restructure, and then they may make some adjustments to their workforce at that time. But the majority of people that will be coming off JobKeeper will be working in viable businesses and that again is a sign that the economy is starting to open up.
KIM LANDERS:
By scaling down JobKeeper and JobSeeker, the unemployment benefit, and reintroducing mutual obligation requirements for the unemployed, are you assuming that people who are looking for work are actually going to be able to get it?
JOSH FRYDENBERG:
Well not everyone, because that’s why the unemployment rate will remain elevated for some time, and that will be reflected in the forecasts from Treasury tomorrow. There are jobs out there and what we want to do is give people the best chance of finding those jobs, that’s why when they’re receiving taxpayer’s money, considerable amounts of taxpayer’s money, through the JobKeeper and JobSeeker programs, we actually want people to be engaging with their potential employers in a case of those undertaking mutual obligation requirements.
KIM LANDERS:
We’re hearing anecdotally though that some people looking for work they just simply just can’t find it and in some cases employers don’t even respond when approached. Is that going to be a problem, employers being flooded with even more applications?
JOSH FRYDENBERG:
Well Kim that will be the work of the job providers and they’re the ones through that formal system that we have connected potential staff members with potential employers. Let’s not forget that we have been able to reduce the unemployment rate from 5.7 per cent when we came to government to 5.1 per cent in February. But as a result of the COVID pandemic, the numbers have started to rise, that’s not unsurprising. This is the biggest global shock certainly in living memory that we have seen and the Australian economy will have to recover accordingly.
KIM LANDERS:
When will you decide whether or not to permanently boost the base rate of JobSeeker, is that going to be by the October Budget?
JOSH FRYDENBERG:
Well the Prime Minister was heavily leaning into the fact that people can have a genuine expectation that the JobSeeker coronavirus supplement will be continued beyond December but what we want to do is give ourselves maximum…
KIM LANDERS:
But I’m talking about the base rate, would you rule out going back to $40 a day?
JOSH FRYDENBERG:
Well I’m not in the business of ruling in or ruling out particular changes that right now are not our focus. Our focus right now is how do we get the economy through this most difficult period, and when it comes to the JobSeeker coronavirus supplement we’ve left ourselves the option of making some amendments closer to the end of the year when we have a better sense of the labour market dynamic given how uncertain things are right now.
KIM LANDERS:
Treasurer thank you very much for joining AM this morning.
JOSH FRYDENBERG:
Nice to be with you.