LAURA JAYES:
Thanks so much for your time, Treasurer. You had a busy day yesterday. It's going to be another one of those today. We've heard some really positive signs out of the government; the Prime Minister saying yesterday he wants to see the majority of businesses back on track, back in business in a COVID safe environment by the end of July. What do you expect the economy to look like at that time?
JOSH FRYDENBERG:
Well, yesterday I painted a picture of the economic indicators, unemployment and GDP, worsening before they get better, Laura. It's Treasury's forecast that while we saw unemployment fall in February to 5.1 per cent as a result of COVID-19, unemployment will increase to 10 per cent or more by the June quarter. At the same time, GDP will fall by 10 per cent. Now, Australia's not alone in seeing such a large economic shock but, as you know, with our JobKeeper package at $130 billion, it's providing support to millions of Australian workers, helping to keep that formal connection with employers and employees as well as our many other programs that have seen more than $20 billion go out to the economy in the last few weeks. So I think the economy will bounce back, but I think it's going to be challenging.
LAURA JAYES:
JobKeeper payments, as you say, flow from today. Almost five million employees will get it through their employers but it's still a million short of what you predicted when you first announced this package. Why is that?
JOSH FRYDENBERG:
Well, employers have to the 8th of this month to pay their employees and still be eligible for those payments under the JobKeeper program and that is what they are doing. We've made some amendments as a result of some feedback from stakeholders and I'm sure that that number that we've seen today of more than 725,000 businesses officially register, representing more than 4.7 million employees, I think that number will increase. It is a good sign that there's been strong take-up and in the ABS survey data, it showed that around a half of those businesses who are taking up JobKeeper have been influenced to keep their staff on as a result. So it's actually working as intended.
LAURA JAYES:
Do you expect, though, in the two days that employers have to sign up to JobKeeper that you will get a million more employees under this scheme or is that a little too ambitious?
JOSH FRYDENBERG:
Well, the exact numbers will just play out but I think the fact that nearly five million workers have been covered already by the JobKeeper package is very significant. Don't forget too that we had a $30 billion-plus program to support small business with cash flow assistance and that money is now already making its way into people's pockets. A million Australians have sought early access to their superannuation, tax-free and that's a significant amount of money that's flowing to the economy as well more than six million Australians on income support have received their $750 cash payments as well. So there is significant government support. In fact, support at a level that we've never seen before in this country.
LAURA JAYES:
Will the JobKeeper payment then cost the government less than you first anticipated, or because there hasn't been quite the six million take-up, do you have scope to perhaps tinker around the edges and extend that to employees that haven't quite been eligible under the original architecture?
JOSH FRYDENBERG:
Well I mean, let's not forget that it is a program available to full-time, to part-time, to casuals who have been connected with their employer for 12 months or more and in that case we've based it on an established definition in the legislation, the Fair Work Act. At the same time you've also got sole traders and the not-for-profit sector being able to access this program. So it's a broad range of stakeholders and businesses and employees who are going to benefit from this program and I think that's appropriate.
LAURA JAYES:
So there's no scope to broaden it perhaps to casual employers that have been employed for 12 months but not with the same employer?
JOSH FRYDENBERG:
Well, we've been pretty clear about the broad parameters of the program and that's where it's staying.
LAURA JAYES:
By my calculation, if only around five million people have signed up - or are eligible under the JobKeeper plan, it might cost the government about $20 billion less, is that about right?
JOSH FRYDENBERG:
Again, these are demand driven programs. The actual final number will be totalled up and spelt out at Budget, no doubt as part of our broader economic costings and forecasts. But it is a significant amount of money already that is being committed across the economy and we'll do what is necessary to ensure that businesses can stay in business and employees can stay in jobs. If you look at our success on the health side, flattening the curve with one of the highest testing rates in the world and one of the lowest mortality rates in the world, we've now become the envy for many other countries as to our progress and our success on the health front. As with the economic front, our goal is to ensure that the restrictions are lifted as soon as possible, based on the medical advice. And yesterday I outlined in the Press Club, Laura, how for every extra week these restrictions stay in place, we lose $4 billion worth of economic activity.
LAURA JAYES:
Yeah.
JOSH FRYDENBERG:
And that's not an insignificant amount and that's the economic imperative of getting people back to work.
LAURA JAYES:
I'll have one more crack here. If you don't meet that six million employee target that would be covered under the JobKeeper program, what happens with that money that you've set aside? Will you redeploy that elsewhere in terms of re-kickstarting the economy in terms of your COVID response?
JOSH FRYDENBERG:
Well, it's treated as any other demand driven program. We make provisions for expenditures and obviously forecasts around revenue and then we total it up twice a year, at the mid-year economic and fiscal outlook which was pre-Christmas and then at budget time, which was obviously scheduled for next week but that has been postponed to October, bearing in mind the uncertainty around economic forecasts and the volatility at this time. That was a prudent decision that was taken by the Government and also reflected decisions that were taken at a state level with respect to their own budgets.
LAURA JAYES:
Let me ask you about JobSeeker now, Treasurer. Are there any circumstances in which that payment would be extended?
JOSH FRYDENBERG:
Well, we've said it's a supplement to obviously what was the old Newstart, the JobSeeker supplement, the coronavirus supplement. That $550 is going to provide a much needed support to the additional people who are coming on to this program. But like all our measures Laura, it's been guided by our principles and our principles have meant that these programs are being targeted, that they've been temporary, that they've used existing systems and have been proportionate to the challenge. So the goal is that once the restrictions have been lifted, once the economy is back on track, then we can actually get back to life as normal where people are in jobs and don't need that level of extra income support.
LAURA JAYES:
Does life as normal mean that you will be returning to the Newstart payment as it was or is there a consideration, are you looking at increasing that payment indefinitely?
JOSH FRYDENBERG:
Well, we've said that the programs and the announcements that we've made including that $550 supplement are temporary, and that's consistent with the announcements that we made at the time but also with the need to ensure that our programs, our additional spending programs don't go for a day longer than they have to. I think that's really important when you consider there is no money tree at the back of the parliamentary garden. There is nowhere we can go and just you know, prune off a few extra dollar bills and throw them around. We have to ensure that our spending is very targeted, that Australia lives within its means and the fact that we went into this crisis with a strong economic position, with a debt to GDP ratio of a quarter of that in the US and the UK, has meant that we've been able to spend in a way that other countries cannot. But it also means that we should not be spending more than we absolutely have to.
LAURA JAYES:
Treasurer, thanks so much for your time. We will speak soon.
JOSH FRYDENBERG:
Good to be with you, Laura.