KYLIE MORRIS:
The federal government is insisting the economy will rebound strongly once lockdowns in New South Wales, Victoria and the ACT are lifted. Unemployment fell by .3 per cent in the July quarter to 4.6 per cent, but the decline was largely the result of people in lockdown being unable to look for work, with just 2200 jobs created. And Treasury is forecasting a 2 per cent drop in GDP for the September quarter, the second worst result on record. Josh Frydenberg is the Federal Treasurer, and he joins us now. Welcome back to RN Breakfast, Treasurer.
JOSH FRYDENBERG:
Good morning, Kylie. Nice to be with you.
KYLIE MORRIS:
Now, low jobs figure sadly this time around isn’t one to celebrate, is it? People aren’t able to look for work because of lockdowns, and they’re giving up, effectively pulling out of the workforce many of them?
JOSH FRYDENBERG:
Well, it does show the underlying resilience of the Australian economy. And it’s always better when the unemployment rate falls as opposed to increasing, and it is at a 12‑year low. But you are right to say it’s not a cause for celebration, because we’ve got millions of our fellow Australians who are in lockdown, lives have been lost as a result of Delta and, of course, we know that our economy has been hit hard. But the numbers do show a tale of two cities – namely, Melbourne and Sydney. In New South Wales these numbers took into account the second and the third week of the lockdown, and we saw hours worked fall by 7 per cent, whereas in Victoria over the course of this survey date we saw Victoria emerge out of lockdown and we saw the hours worked increase by nearly 10 per cent, which does show you how an economy rebounds, how people get back to work very quickly once those restrictions are eased, and that is our hope obviously for the future.
KYLIE MORRIS:
Treasurer, we’ve heard from Lifeline this morning about the level of need and the level of desperation in the community. If I can, I’d just like to play you a little excerpt from the Lifeline chairman, John Brogden, who says that JobKeeper should be re‑introduced. Here’s what he said.
JOHN BROGDEN: Another reason driving our calls up is we don’t have the certainty of JobKeeper, and my view is as this drags on, and particularly if it continues to drag on in the sorts of numbers and the trajectory we’re seeing in New South Wales, we need to back to the JobKeeper system. It’s simple – people understand how it works and it provides them income, and that helps to reduce the level of crisis that they are feeling and they are experiencing.
KYLIE MORRIS:
So, I need to ask, Treasurer: are you sure your government is doing everything it can to support Australians through this? Isn’t it time to go back to JobKeeper?
JOSH FRYDENBERG:
Well, I absolutely point out that the COVID disaster payment that has now seen more than $3 billion go out the door since July to around 1.4 million Australians is actually set at the same rate of JobKeeper when we first introduced it – namely, $750 a week. And what it is based on is the number of hours of work that has been lost. So it’s actually more flexible than what we saw with JobKeeper, which was based on the turnover decline of the business that someone worked for. We also know the cohort of people who are receiving this payment is actually broader than under JobKeeper because casuals, all casuals, can receive this payment so long as they’ve lost hours of work whereas under JobKeeper it was only long‑term casuals who were receiving the payment. And this money is going out the door from Services Australia in as little as an hour after applications have been made, whereas under JobKeeper the payments were two weeks in arrears. So it is flexible. It’s fit for purpose. It’s designed for the new environment we find ourselves in where states are coming in and out of lockdown, and it’s coupled with very generous business support that we’ve entered into with the states on a fifty‑fifty basis. Just yesterday, Kylie, we announced $807 million in partnership with the Victorian Government for small and medium sized businesses. We’d announced previously $600 million in partnership with the Queensland government, and we are expecting $500 million a week to be going out in New South Wales between our two governments. So there is very significant business and income support occurring simultaneously.
KYLIE MORRIS:
Given all of that, though, there seems to be a bit of a disconnect, doesn’t there though, in the sense that you’ve laid out all of the support that’s available. It’s not called JobKeeper. John Brogden is saying bring back JobKeeper because what they’re feeling is a community that’s in crisis. They’ve had a record – they had 3,400 call on Monday alone. Are you worried that the support isn’t reaching those who are most in need?
JOSH FRYDENBERG:
Well, I’m very conscious of the mental health toll that the lockdowns are having. That’s not a function of the economic support; that’s a function of people not being able to see their friends, not being able to move far from their homes, kids not being able to be in the classroom and many people not being able to turn up at work. We’ve been providing very significant mental health support, and I’ve been in good contact with John Brogden and others because he’s right to the point that the mental health toll, the toll on people’s wellbeing of lockdowns, is immense. The numbers of calls into these various help lines are enormous. That’s why we’re providing targeted support. But the best way we can provide for this community is to get more and more people vaccinated to get people out of these lockdowns as quickly as possible.
KYLIE MORRIS:
No doubt, but he does draw himself the line between the financial uncertainty and financial anxiety. He says that that’s what’s driving the calls for them this year, is that JobSeeker gave people a sense of comfort, a sense of assuredness that’s lacking.
JOSH FRYDENBERG:
Well, we’ve got, as I say, a disaster payment that is going out the door faster than JobKeeper, at the same rate of JobKeeper. We’ve got very generous business support that’s being provided in partnership with the states. I’ve spoken to the Tax Commissioner, who’s providing relief to taxpayers from their obligations based on hardship. I’ve been working with the banks who are providing deferrals on loan repayments both interest and principal, and, of course, in the states they’re also taking additional actions within their remit of responsibility, like commercial tenancies to provide relief for rent that otherwise may fall on a business that does not have any customers coming through the door. So a lot is being done to provide very significant economic support to help cushion the blow. But nobody is understating the significance of the health toll that the lockdowns are taking on people’s lives.
KYLIE MORRIS:
Treasurer, you’ve said that states shouldn’t expect federal economic assistance to continue at this level support lockdowns once vaccination rates hit 70 per cent. Will there be any ongoing economic support for states beyond that?
JOSH FRYDENBERG:
Well, my point was very clear based on the Doherty Institute modelling, which is that when you get to 70 and 80 per cent they say in their words that stringent lockdowns become unlikely, that the transmissibility of the virus significantly reduces and, therefore, the numbers of people who actually have got serious illness as a result of COVID also substantially reduces. That is what we’re shooting for – 70 and 80 per cent targets. And we need to give the public hope that at that point in time restrictions ease. So there should be no expectation on behalf of the states and the territories that the scale of economic support that we’re providing will continue beyond that date because as –
KYLIE MORRIS:
But they still could need assistance, couldn’t they? In the sense that the New South Wales Chief Health Officer says that even with a 70 per cent vaccination rate they can’t reopen until cases come down significantly. So do you accept that they could still need assistance even after that magical figure has been reached?
JOSH FRYDENBERG:
Well, they’ll take the medical advice at the time. But we have to give people the clear sense that there is light at the end of the tunnel. If they think that by rolling up their arms and their sleeves to get the jab in record numbers, as they did just yesterday with 309,000 vaccinations being delivered or 215 every minute of the day, that they are just going to get more of the same at 70 and 80 per cent, then people will give up. People will lose hope. Those businesses who are listening to our program this morning who have had their doors closed will say, “why bother?” They have to know that their political leaders have a plan and will stick to that plan. And that’s why the Prime Minister, Kylie, worked so hard to get the states and territories to agree to the process through the national cabinet to open up at 70 and 80 per cent. Nobody should be under any illusions that we can eliminate COVID. We can’t. Based on all the medical advice to date, we can’t eliminate it. If you look in the United Kingdom, they have 75 per cent vaccination rate double dose, yet in any one day they’re getting 30,000 cases and more than 100 deaths. So we can’t be in a permanent state of lockdown. What we have to do is be honest with the public that by living with COVID there’ll be cases, by living with COVID there’ll be people in hospital, and living with COVID there’ll be deaths. But at the same time getting high levels of vaccination reduces the likelihood that lockdowns will be required and reduces the likelihood that people who get vaccinated will get sick.
KYLIE MORRIS:
Treasurer, thanks for joining us.
JOSH FRYDENBERG:
My pleasure.
KYLIE MORRIS:
Josh Frydenberg is the Federal Treasurer.