LAURA JAYES:
The Treasurer Josh Frydenberg joins us this morning, thank you for your time. The Government and the RBA yesterday Treasurer banded together with some unprecedented measures, this has been described as part of a bridge across a very big chasm. How long are you planning for the other side? Is it going to be months? Or perhaps more like years?
JOSH FRYDENBERG:
Well nobody really knows because even the medical experts will tell you that we have to wait to find a vaccine, we have to flatten the curve, but this as the Prime Minister said could go for at least six months. So yesterday’s announcement was very, very significant. Both the Government and the RBA are aligned on doing what it takes to support Australian jobs and businesses. But as for the duration of this challenge Laura, to paraphrase Winston Churchill, this is not the beginning of the end, it’s merely the end of the beginning and there is a long way to go.
LAURA JAYES:
So these measures that we’ve seen to date, assume, including the stimulus package to be announced this weekend, they’re only designed to last about six months?
JOSH FRYDENBERG:
Well they’re going to support businesses as long as that support is required because the first stimulus package was, as you know, announced in a slightly different environment, things have got worse in terms of the economy since then. But those measures were very important and remain important, namely the $750 cash payments to over 6.5 million Australians, the cash payments of up to $25,000 for hundreds of thousands of small and medium sized businesses, the wage subsidies for 117,000 apprentices. And this second package that we are working on right now is all about cushioning the blow for so many of those Australians who may lose their job as well as continuing the support for small businesses so that they can continue to operate.
LAURA JAYES:
Have you got a ball park figure?
JOSH FRYDENBERG:
We know where we’re heading, but it’s obviously complementary to the first package, but it’s also complementary to the measures announced yesterday. And I just want to underline for you how significant yesterday’s announcement was. More than $100 billion of funding being injected into the financial system at a time where there is a real tightening and tension in international and domestic bond credit and equity markets. This is a challenging time and the RBA and the Government made a substantial, made a substantial intervention yesterday.
LAURA JAYES:
You’ve opened up $15 billion to give some of these smaller lenders access to cheaper money, you met with the banks once again, what are you expecting in return for this money?
JOSH FRYDENBERG:
Well we expect them to lend to small and medium sized businesses, because those small and medium sized businesses need to make that bridge to their recovery. Namely they need that cash flow support so that they can meet some of their fixed expenses, whether it’s rent, whether it’s some of their wages bill, whether it’s their energy and water bills and other bills that will continue to come through the door even though the customers may not. The banks are also working on another package of significant initiatives which would be looking to relieve some of the pressures on their customers and I was in discussions late last night with the banks as well as with the prudential regulator and there will be an announcement later today.
LAURA JAYES:
Ok so expect an announcement later today from the big four banks and some of the smaller lenders too?
JOSH FRYDENBERG:
I think you can be confident of that.
LAURA JAYES:
Ok. Let me ask you about this idea of perhaps nationalising businesses. Is that required yet and are you considering it?
JOSH FRYDENBERG:
Well that’s not our focus right now. Our focus is on our second package. Our focus is on supporting businesses, cushioning the blow and of course, yesterday’s intervention as well as some other interventions that we are working on. So that is not our focus right now.
LAURA JAYES:
But if it comes to it, will you, you wouldn’t rule out nationalising some Australian businesses that require it. The front page of the Australian suggests that maybe Virgin Australia might be one of those to ensure that there’s completion in the airline industry.
JOSH FRYDENBERG:
Well as you know we announced a more than $700 million package for the aviation sector, because that’s a critical sector in the Australian economy. And more to the point, together with tourism and international education, the arts sector and a few other sectors, has been on the front line of the pressures that have followed, the economic pressures as a result of the spread of the Coronavirus. We understand what airlines are going through, we made a down payment on that support and we’ll continue to maintain a watching brief.
LAURA JAYES:
Chris Richardson, the economist this week wrote, ‘the Government is going to have to spend vast amounts of money without batting an eyelid.’ Is that what you’re doing?
JOSH FRYDENBERG:
We’re certainly spending vast amounts of money because we’re in a position that we can. And that is really important. We’ve gone into this health crisis, which is having a significant economic, from a positon of economic strength. The Australian economy was not just strengthening at the end of last year, in fact in the early months of this year, we saw yesterday the jobs numbers come out for February which saw the unemployment rate fall to 5.1 per cent and more than 26,000 jobs being created. And as you know, we delivered the first balanced budget in 11 years. So we got the books back in track and this has put us in a position to spend this money now and we understand the predicament that many Australian families and businesses find themselves in through no fault of their own, this is a global pandemic, these are unprecedented times, and when you’ve got extraordinary times, they call for extraordinary measures and that’s what the Government in undertaking.
LAURA JAYES:
The Prime Minister said yesterday, whatever we do, we need to do for six months, so will foreigners be locked out for at least that amount of time?
JOSH FRYDENBERG:
Well we will maintain those border restrictions until it’s safe to lift them, and that has been always our approach to adopt the best possible medical advice and to have that reflected in what we do and that includes on our borders. We’ve put those restrictions in place because the vast majority of Coronavirus infections here in Australia have been related to overseas cases coming to this country and so this has been all about protecting the Australian people and we make no apologies for that Laura.
LAURA JAYES:
No but does that mean six months, or could it be potentially a shorter time frame?
JOSH FRYDENBERG:
Well we actually don’t know and nor do the medical experts know, because we’re seeing the spread of this virus and obviously the number of infections have increased pretty significantly and will continue to do so but we will put in place these measures to slow that spread and there will be an end date, there will be the other side to all this, but not even the health experts can put a definitive date on it.
LAURA JAYES:
Indoor limits of up to 100 people, or fewer than 100 people has also been put in place. Is that the same kind of thing? Do you expect that to be six months or you simply don’t know?
JOSH FRYDENBERG:
Well all these measures, from social distancing to travel restrictions, are designed to protect the community and they will be in place as long as it’s safe to do, as long as that is the medical advice and they will be lifted when only when it’s safe to do so.
LAURA JAYES:
The Prime Minister just finally did say, ‘whatever we do we need to do for six months’ yesterday, was he just referring to schools or was that across the board? Is that about the ballpark that the Government is looking at?
JOSH FRYDENBERG:
Well what the Prime Minister was doing was saying that this could be in place, that the spread of this virus could be around for at least six months and he was preparing the Australian people for the long haul that’s in front of us and that’s leadership that’s being up front, that’s telling the Australian people as it is, and we continue to work closely with the medical experts. We now have a National Cabinet for the first time in Australia’s history, we saw yesterday unprecedented monetary policy and intervention by the Reserve Bank and the Government and these are extraordinary times so the Australian people need to understand that we are as well prepared as any other nation on the health side, on the economic side, we will continue to be open about the challenges that are in front of us, but we will get through it, we will bounce back stronger than ever.
LAURA JAYES:
A few more sleepless nights ahead for you I’m sure Treasurer, thank you for your time.
JOSH FRYDENBERG:
Thanks Laura and all the very best to you and your viewers.