LEIGH SALES:
Australia’s Treasurer Josh Frydenberg joins me now live from Canberra, thank you very much for speaking to us this evening.
JOSH FRYDENBERG:
Nice to be with you Leigh.
LEIGH SALES:
We already know that some small businesses and sole traders have immediately seen their income go through the floor, in some cases straight to nothing. How soon will you have direct help for them?
JOSH FRYDENBERG:
Well we’ve already announced up to $25,000 cash payments to hundreds of thousands of small businesses and that's directly linked to their wages bill and desire to support them through this difficult time. But today we saw extraordinary measures from the Reserve Bank and from the Federal Government with over $100 billion injected into our financial system. And that's all designed to lower the cost of credit and to increase the flow of credit, particularly to small businesses, whether it's a cleaning business, a cafe, a construction business, and we’ve already seen the Commonwealth Bank reduce their interest rate for small business lending by a full per cent.
LEIGH SALES:
I understand that you have been talking to the bank bosses, can they do other things like, for example, put a pause on mortgage payments?
JOSH FRYDENBERG:
The answer is they can and they are working on a package and I’ve been speaking to them day and night. I mean this is a team Australia moment. Whether you're an energy company, whether you’re a landlord, whether you’re a bank, you need to fully understand the predicament in which your customers are finding themselves, through no fault of their own. And we need to build that bridge to the recovery phase and there's an alignment of interests here, Leigh, between the small businesses and their banks because both parties want to succeed.
LEIGH SALES:
You mentioned utility bills, what about utility companies? Are there things that they're going to do for people?
JOSH FRYDENBERG:
Well they certainly can. They’ve already put in place hardship arrangements, just as the Tax Office has, just as the banks have and other significant players in the economy. But of course everyone can do more. That's why we're working on our second package of measures. It will be different from the first package of measures but it will be very substantial, designed to deal with an economic situation which has obviously got much harder as the weeks have gone by.
LEIGH SALES:
In that second package, could there be cash handouts for individual households?
JOSH FRYDENBERG:
Well as you know there were cash payments of $750 to 6.5 million Australians in the package we first announced...
LEIGH SALES:
More?
JOSH FRYDENBERG:
Well look, I'm not ruling in anything or ruling out anything. In fact, everything is actually on the table, because what this second package will be designed to do is to cushion the blow for Australians, particularly those who have lost their jobs, but also for those small businesses who are facing this very, very difficult moment.
LEIGH SALES:
In terms of cushioning the blow, are you anticipating that you are looking at a recession or potentially a depression?
JOSH FRYDENBERG:
Well, of course this continues to evolve but it's a massive one in a hundred year event and the economic impact is huge, not just for us here in Australia, but globally. I can only take the best advice from Treasury, as well as obviously the RBA. Both have said that in the March quarter, the quarter that we are currently in, we will see a half a per cent fall as a result of the coronavirus. And they’ve both said also when it comes to the June quarter, it’s clearly too early to tell. But I can tell you, Leigh, we are dealing with this situation from a position of economic strength. We just saw data today on unemployment numbers for February, where actually more than 26,000 jobs were created. So we actually saw a strengthening economy in the first part of this year before we were hit by the coronavirus.
LEIGH SALES:
Lots of economists disagree that the economy was in a position of strength. The reason I ask if you think it’s a recession or a depression that’s coming, is because what you’re anticipating, perhaps, is going to dictate the level of stimulus and assistance you put into the economy.
JOSH FRYDENBERG:
We are not limiting ourselves in terms of what we are putting into the economy. Today, over $100 billion has gone into the financial system. As you reported, $17.6 billion went in our first stimulus package. This new package will also be very substantial, and, of course, many other players are doing what they can. We are absolutely focused on ensuring that we build a bridge to recovery, ensuring that Australians can get to the other side because we know there will be the other side.
LEIGH SALES:
A gin distillery partly owned by Shane Warne has announced today that it’s switching immediately to hand sanitiser manufacturing. We’ve heard a lot of talk about the nation being on a war-footing. Will we see other manufacturing facilities in Australia convert to products that we’re going to be desperate for? Like masks and gloves and ventilators and so on?
JOSH FRYDENBERG:
If they can, of course then there is going to be a market for those goods. When you talk about masks, in particular, we’ve actually deployed the Australian Defence Force to one particular manufacturing facility to actually boost what is produced at that facility. We’ve prioritised at the ports, containers that are coming in with essential supplies. But people also need not to panic about having enough food on their table. Leigh, we’re a country that produces enough food for 75 million people. Yet, we are a country of 25 million people and yet some of that behaviour we’ve seen at our supermarkets has been very unbecoming.
LEIGH SALES:
I noticed that you and the Prime Minister, and we had the head of Woolies on this week, basically are urging people to stop doing that. If that doesn’t sort itself out, what measures are available to try and get that under control?
JOSH FRYDENBERG:
We’ve actually set up a working group with the large retailers, with the logistics suppliers, with the ACCC, and of course, with the Government to ensure that we manage those supply chains, to ensure that the food is getting to those supermarkets. We’re working through the National Cabinet with the State Governments because we all have a stake in ensuring that this outcome at our supermarkets can see people get the goods that they need, but also can do so in a safe manner.
LEIGH SALES:
Treasurer, thanks for your time this evening.
JOSH FRYDENBERG:
Good to be with you.