LAURA JAYES:
Joining me live now is the Treasurer Josh Frydenberg. Thanks so much for your time.
JOSH FRYDENBERG:
Good morning.
LAURA JAYES:
JobMaker has passed the Senate. But Pauline Hanson isn’t convinced it will work. You must have been convincing behind the scenes. What did you tell her?
JOSH FRYDENBERG:
Look, we had a very constructive discussion about the importance of this program, particularly in the economic climate that we’re in. The fact is the passage through the Senate last night of the hiring credit legislation is a big win for the job prospects of hundreds of thousands of young Australians. 450,000 jobs will be supported by this program, and it will provide up to a $200 a week payment from the Government to an employer to take on a young person for a minimum of 20 hours a week. Those people may have been on JobSeeker where they have been out of work, and this will be really important to get them back into work. We look back at previous recessions in Australia, Laura, particularly the 1990s, where it took a full 10 years to get the unemployment rate back below six per cent from where we started. But it took an amazing 15 years to get the unemployment rate for younger people back below from where we started. So right now we have an unemployment rate for those who are aged 15 to 34 at 10.2 per cent. But for those who are aged 35 to 44 the unemployment rate is 4.7 per cent, a very big difference, and that’s why we’re focusing on creating jobs right across the economy but particularly this hiring credit is directed at younger people.
LAURA JAYES:
You say 450,000 jobs will be supported. Does that mean created or just supported? What’s the difference?
JOSH FRYDENBERG:
Well, we made it very clear in the Budget Papers supported by Treasury advice, that like with JobKeeper that supported over 3.5 million jobs, this will support 450,000 jobs. They’re jobs for younger people who may previously have been out of work. So that is why it’s a very important initiative.
LAURA JAYES:
Can you guarantee that these 450,000 jobs won’t come at the expense of jobs for older workers?
JOSH FRYDENBERG:
It’s very clear in the legislation the many protections that are in place. Firstly, there is a requirement of additionality. When an employer takes on a younger person under the JobMaker hiring credit, in order to be eligible they have to be additional to both head count and to their payroll. Secondly, there cannot be any contrived schemes designed to get around the rules and the Tax Office will be monitoring that very, very closely with appropriate penalties. Then thirdly, what we know with this particular program is that the Fair Work Act and its provisions will continue to apply, for example, like unfair dismissal. So there are many protections that are in place.
Labor was playing games. Pauline Hanson called out those games in the Senate in her speech last night. Given the many challenges that they’ve had this week with Joel Fitzgibbon, I think they were looking for a fight to have in the Senate. Unfortunately for them they lost this one.
LAURA JAYES:
What is the appropriate penalty, as you put it, for those businesses that might do the wrong thing here? And what was wrong with Labor safeguards though? On the surface they seemed pretty sensible.
JOSH FRYDENBERG:
Well, again, we have these protections in place, so this was grandstanding by the Labor Party. There are financial penalties that are set out very clearly, and this will be an important protection to ensure the integrity of the scheme. A scheme which is part of a suite of measures that we have in place to create jobs. The good news for the Australian economy is that we are starting to see the recovery that’s underway, Laura. 446,000 jobs have been created over the last four months. We’ve seen consumer confidence up now 10 weeks straight. We saw consumer sentiment have its biggest jump in a Budget month ever since the series began back in 1974. We saw our AAA credit rating reaffirmed, and we heard from the Governor of the Reserve Bank of Australia just last week that the Government’s fiscal policy is the right policy and that we are on the right track with respect to our economic response. So there is some good news out there for the Australian economy despite the big hit that we’ve had through this pandemic.
LAURA JAYES:
Yes, not to mention a bounce back in the housing market predicted by Matt Comyn and others. But how much of this is artificially created by the JobKeeper, JobSeeker schemes and the billions of dollars in support that you’ve put forward in recent months? When these schemes do come off, do you expect a bit of a dip in consumer confidence and those other factors that you point to?
JOSH FRYDENBERG:
Well, you’re absolutely right. The Government has injected an enormous amount of support into the economy. If you include both our balance sheet support as well as our direct fiscal support, it’s $507 billion. It’s the equivalent of 26 per cent of GDP. In contrast, the state contribution, around $65 billion, is three per cent of GDP. So there is a great contrast between what we’ve provided and what the states have provided. But our programs have always been temporary and they have been targeted. As the virus is suppressed the jobs are starting to come back. Consumer confidence will build and the economy will find its level. We’re seeing that now, for example, in Victoria, as people are starting to get back to work.
LAURA JAYES:
But is it all smooth sailing from here, Treasurer, or do you expect inevitably that there will be peaks and troughs over the next couple of years?
JOSH FRYDENBERG:
I think the road ahead is hard. I think it’s long, and I think it’s going to be bumpy. That’s the reality. There is a lot of uncertainty out there but the Government has the Australian people’s back. We’ve shown that since the start of this crisis, through this crisis, and we’ll be with them right to the end of this crisis.
LAURA JAYES:
It’s now looking quite positive in terms of a vaccine by Pfizer at least. The CSIRO is working on one, too. But it won’t be given to the elderly or children straight away until it is ticked off by the Therapeutic Goods Administration. What does that mean? Does that mean the chances of overseas travel is then pushed back to the later part of next year? Does it mean that a recovery in our tourism sector might also be delayed?
JOSH FRYDENBERG:
Well, the Government’s working through with health officials a detailed implementation map for rolling out the vaccine. That is a topic that will also be discussed at National Cabinet tomorrow. But the key point here, Laura, is that the Morrison Government has invested more than $3 billion in a portfolio approach to vaccines with five separate agreements. We have access to more than 134 million doses. So that’s enough to cover and to vaccinate the country three times over. It’s a very significant investment.
LAURA JAYES:
Yes, but how many Australians percentage wise need to receive this vaccine before we can get back to those things like welcoming overseas travelers and travelling overseas?
JOSH FRYDENBERG:
Well, again, that implementation plan is now being worked through. It will be discussed with the Premiers tomorrow. Obviously we’ve seen positive reports of the Pfizer vaccine, but, again, there are still some formal steps for them to go through. But the outlook is positive. I think this is giving people hope, as it should.
LAURA JAYES:
Just finally, a formal complaint against the employment Minister, Michaelia Cash, has been put forward by Rachelle Miller of running a fake redundancy process and trying to force that particular adviser out. Is that right that that should be investigated? Is that anything that you know about?
JOSH FRYDENBERG:
Well, again, we take these issues very seriously. That is a matter that is now being followed up by the Department of Finance and my colleagues have both made statements, and I’ll leave it at that.
LAURA JAYES:
Treasurer, thank you.
JOSH FRYDENBERG:
Thank you.