KIM LANDERS:
Treasurer, good morning. Let’s step through these changes. How are you making it easier for businesses to qualify for the JobKeeper extension?
JOSH FRYDENBERG:
Well, Kim, the Morrison Government is committing an extra $15.6 billion to JobKeeper, of which $13 billion will go to Victorian businesses and Victorian employees. We are making two changes; one is to the business turnover test and the other is to the eligibility employee test. So, to be eligible for the December quarter, using JobKeeper, you now as a business will just have to see your turnover down in the September quarter, not the June quarter as well. With regards to eligible employees, they are ones who are on the books as of the first of July, whereas previously it was the first of March. These changes allow for those employees who have come into businesses as they were starting to recover, particularly in Victoria, to now be eligible in light of what’s happened with the stage 4 restrictions. And with businesses who were doing ok through June, April and May but obviously have been hit very hard by the stage 4 restrictions in July and August, and ultimately into September, they will also now be eligible.
KIM LANDERS:
So how many extra businesses and how many extra workers do you think are going to qualify now that you have eased the rules?
JOSH FRYDENBERG:
We believe that about 530,000 extra Victorian employees with now join the JobKeeper program over the September quarter. That means 1.5 million Victorians employees will be using JobKeeper. That’s nearly half of the private sector workforce across the whole state. We’ll see similar numbers through the December quarter, a bit less in the March quarter but clearly, Victorians are going to be the great beneficiaries of these changes.
KIM LANDERS:
So you have decided to dump the tightening of the rules that you had planned just a couple of weeks ago, but one thing that you’re not changing is the JobKeeper payment itself. It’s still going to drop down to $1,200 for full time and $750 for part timers from October. Is that because it would have been more expensive to keep the rate at a flat $1,500 rather than making the changes you have?
JOSH FRYDENBERG:
Well even prior to the changes JobKeeper was the single largest economic support package that any Australian Government had ever undertaken at $86 billion. We are now topping $100 billion in terms of the cost of this program. We had always planned on it being a national program, which it continues to be, a demand driven program, but one that transitioned down in terms of the amount the payment was in light of the Australian economy recovering…
KIM LANDERS:
But would it have cost you more money if you had just decided, if so many people need help, would it have cost more to have kept the rate at a flat $1,500 rather than make these other changes?
JOSH FRYDENBERG:
Well of course if you have it at a higher rate over the course of the December and the March quarters, that is a higher cost to the program. But the key point here is that we are actually providing that flat $1,500 payment until the end of September and as you know, Daniel Andrews with the stage 4 restrictions in Victoria are until mid-September. So we will continue obviously to provide the support in record amounts into the Australian economy…
KIM LANDERS:
I’m just trying to understand, sorry to interrupt, I’m just trying to understand what is the rationale, if the need is so dire, what is the rationale for not keeping it at a $1,500 rate?
JOSH FRYDENBERG:
Well again it stays at $1,500 until the end of September. That goes beyond the six-week additional stage 4 restrictions announced by Daniel Andrews. But still at $1,200 which is where it steps down to in the December quarter Kim, that’s at 80% of the minimum wage. So we as a Government are providing major support. If the Victorian Government wanted to step in and provide further support, then we would welcome that. We as a Federal Government have now announced more than $300 billion worth of economic support. The states have announced around $42 billion worth of support. So the Federal Government continues to do the lion’s-share of the spending to support Australian businesses and their workers through this crisis.
KIM LANDERS:
Now, you say you are making these changes to JobKeeper because you estimate the economic cost of the Victorian lockdown has tripled to about $10 to $12 billion, up to 400,000 extra people either out of work or on zero hours. So what happens, for example, if NSW has a big outbreak? Are you going to have to find even more money?
JOSH FRYDENBERG:
Well that’s why we have to make these health measures in Victoria work. Because as a country, we are all in this together, and if Victoria has success on the health front, then NSW and the other states will all benefit. We as a Federal Government, have deployed around 1,500 Defence Force personnel to Victoria, we have got many Commonwealth officials, we’ve got AUSMAT teams, we’ve released products out of the National Medical Stockpile, all designed to provide Daniel Andrews and the Victorian Government as much support as possible…
KIM LANDERS:
I’m just trying to check how deep your pockets might be if another state falls into similar circumstances.
JOSH FRYDENBERG:
Well again we will always provide the support that is necessary. It’s a record fiscal amount that we have already provided and will continue to provide more as need be. But it’s really important that people understand, in order to see a national economic recovery, we must see progress on the health front. And as a country we are at two different stages; we’ve got Victoria, and we’ve got the rest. Outside of Victoria, people are getting back to work, restrictions are being eased and we saw that in the most recent job numbers, Kim, with 210,000 people finding a job over the month of June, twice what the market expected, and 60% of those jobs went to women and 50% went to young people. That was a positive sign about the resilience of the Australian economy.
KIM LANDERS:
Treasurer thank you very much for your time this morning.
JOSH FRYDENBERG:
Good to be with you.