LAURA JAYES:
The Treasurer, Josh Frydenberg joins us, thanks so much for your time Treasurer.
JOSH FRYDENBERG:
Good morning Laura.
LAURA JAYES:
You have a cabinet meeting tomorrow, a decision re. this stimulus on Wednesday and perhaps rolled out by Friday, is that a reasonable timeline?
JOSH FRYDENBERG:
Oh look, obviously that work is still being undertaken, and we’ll be working with our colleagues to finalise the package but it will be announced sooner than later.
LAURA JAYES:
Is $10 billion just the beginning?
JOSH FRYDENBERG:
Well obviously we’ll be making a substantial fiscal response and the Prime Minister has foreshadowed that. It’s about keeping businesses in business and Australians in jobs. It’s about focusing on investment, jobs and supporting the cash flow of businesses, but obviously we’ll also have the Budget in a matter of weeks after that announcement so there will be other opportunities too to continue to provide the support to the economy where it needs it.
LAURA JAYES:
Ok so whatever you announce this week, it’s not set and forget is it? Are you giving yourselves, and are you giving yourself, the opportunity to scale this up in the coming months as this situation unfolds?
JOSH FRYDENBERG:
Well we’ve been very clear that our response will be guided by the fact that it has to be targeted, it has to be considered and responsible and has to also be scalable because we don’t know what the end date is for the spread of the Coronavirus. It continues to evolve, obviously more people are getting it here in Australia as well as internationally, and a vaccine is still being worked on. But what the Australian people can be reassured of is that their Government is doing everything to protect them as well as to ensure that the economy remains strong. We’ve already announced that we’ll be going 50-50 with the States on health costs related to the Coronavirus, we’ve spent the last six and a half years getting the Budget back into balance and now we’re working to our plan in a responsible manner.
LAURA JAYES:
As you point out, you don’t just have this stimulus package to roll out but you have the Budget in less than two months’ time. So can we expect that whatever we see in the stimulus package, there’ll be more to come in the Budget?
JOSH FRYDENBERG:
Well obviously in every budget there’s a whole range of measures, both short and long term, designed to strengthen the economy and this Budget will be no different to that. But we did see the Australian economy strengthening at the end of last year. We just had the most recent National Accounts and it showed that the economy grew from 1.8 per cent through the year in the September quarter to 2.2 per cent through the year in the December quarter. This puts us in a strong position to respond to the spread of the Coronavirus and the OECD pointed out in recent days that Australia and Germany were two countries that had the fiscal flexibility, the room to move, without endangering debt sustainability.
LAURA JAYES:
Well Treasurer that said, in the Budget is that where you’ll be looking at structural changes?
JOSH FRYDENBERG:
We’re always looking at particular structural reform, whether that’s in industrial relations, whether that’s changes to the tax system or in deregulation which is also a feature of this Government’s plan. We are always looking for opportunities to strengthen the economy. The International Monetary Fund has Australia growing faster in comparable countries around the world, our employment growth is around twice the OECD average and nearly three times what we inherited when we came to Government, and we saw in the back of last year household disposable income, money in people’s pockets, increase substantially off the back of our tax cuts. So the economy has been strengthening, that’s been reaffirmed by the Secretary of Treasury and the Governor of the Reserve Bank that the economy has reached a gentle turning point for the better.
LAURA JAYES
Given that we’ve seen the March Quarter, the June Quarter is yet to get underway, but the forecast isn’t great due to the impact of the Coronavirus. I mean, March we’re already looking at a $14 billion hit to the economy, so can we expect a $10 billion stimulus to be just the starting point?
JOSH FRYDENBERG:
Well obviously the details of our fiscal response are still being finalised and like I said we’ll be working with the colleagues in incoming days to conclude that. But in terms of the impact on the March quarter, obviously we won’t know that until June, and the June Quarter, we won’t know that until September. But no one is understating the global or the domestic economic impact from the spread of the coronavirus and if there’s one window into how significant it is, it’s looking at the index that goes to manufacturing activity in China which now, as of February, saw that index fall to a rate lower than at the height of the GFC.
LAURA JAYES:
Well what is the purpose of this stimulus package, this one off package, that you’ll announce sometime this week? Will it be enough to stave off a recession, is that what the ultimate aim is here?
JOSH FRYDENBERG:
Our focus is on keeping people in jobs and businesses in business. That is the clear focus for us. This is about business continuity, this is about ensuring that they get through this challenging period where we’ve seen outbound tourism from China grind to a halt. Obviously that’s prevented 95,000 international students starting their course here in Australia, and of course the number of planes coming to our country has slowed quite dramatically, particularly from places in Asia. So the impact has been severe, but we’ve got the plan, we are prepared, and we’ll continue to take what is the required action to keep the Australian economy strong.
LAURA JAYES:
There’s some 3.3 million casual workers in this country, many of them are being either directly or indirectly impacted, will there be something for them in this stimulus package or will they need to wait for the Budget?
JOSH FRYDENBERG:
Well the Industrial Relations Minister Christian Porter is meeting with key employee and employer peak groups tomorrow and obviously they’ll be discussing a range of issues relating to people in employment and the challenge that this is creating…
LAURA JAYES:
So does that tell us that this is one of your priorities, this cohort of workers?
JOSH FRYDENBERG:
Well all workers are a focus for the Government, we don’t distinguish…
LAURA JAYES:
…but isn’t, aren’t casual workers a special case here because they have less of a safety net?
JOSH FRYDENBERG:
Well look, there’s a whole range of different contracts, different employment situations, the Fair Work Ombudsman has provided some guidance in relation to that. But our goal here is to get a cooperative workplace where businesses obviously need to be flexible during this time, employees want to feel confident about their job security. So we’re going to be working with both employer and employee groups over the coming days and weeks and months to ensure that everyone is getting the best possible support.
LAURA JAYES:
A one off boost to Newstart perhaps?
JOSH FRYDENBERG:
I’m not in the rule in rule out game, but what I do say is that we will have a very comprehensive and very substantial package designed to support the Australian economy through this economic shock which comes off the back of the extended drought and the bushfires and many things that have been beyond the Government’s control which have obviously hurt the economy.
LAURA JAYES:
Treasurer Josh Frydenberg thank you.