LEIGH SALES:
The Treasurer Josh Frydenberg is with me live from Canberra. Thanks for your time Treasurer.
JOSH FRYDENBERG:
Nice to be with you.
LEIGH SALES:
There are 12,000,900 Australians in the workforce and the Prime Minister today said that this JobKeeper allowance will go to about 6 million people. Does that mean that the Government thinks that half of all Australians are set to lose their jobs?
JOSH FRYDENBERG:
No. What it means is that people will either be stood down or continue to work and that their employers will be eligible for this particular scheme. What we've tried to do here, Leigh, is to reduce the cost to businesses of employing people, so that more people stay in a job. But also, to ensure there’s a formal connection between employers and employees because we know there's going to be a recovery phase after the coronavirus and if we have that formal connection maintained, then the recovery will be a lot quicker and easier.
LEIGH SALES:
As of 7:00pm, more than 30,000 people had already registered for this, but employees won't get their money for about four weeks or so. What do they do in the interim?
JOSH FRYDENBERG:
Well, they need to talk to their employers to make sure that their employer sees themselves as eligible for this particular scheme and is reaching out to the ATO to register for it. And as you say, there's been very high demand already…
LEIGH SALES:
But what about that interim period?
JOSH FRYDENBERG:
But what the employers will do is reach out to their banks knowing that they will have this confirmed money flow coming from the tax office, namely from the Government, and then that will give them the ability to pay their employees.
LEIGH SALES:
Why did you settle on the $1,500 a fortnight amount?
JOSH FRYDENBERG:
Well that's around 70 per cent of the median wage, but importantly in the sectors that have been hit hardest by the coronavirus, namely the retail sector, the tourism sector, the hospitality sector, this $1,500 a fortnight could be about 100 per cent of the median wage. In fact a replacement wage for many. So this is very much an Australian scheme, not a UK or a New Zealand scheme, a flat payment, an equal payment, regardless of what people earn, and I think that's very much an Australian way to go.
LEIGH SALES:
This applies to full-time, part-time and casual workers who’ve been with an employer for more than 12 months, but a lot of casual workers do short-term gig to gig work. We heard Sally McManus, the union boss, raise concerns about that before. What is their best option here?
JOSH FRYDENBERG:
Well, we've adopted this particular definition of a casual who’s been with the employer for 12 months because that's also reflected in the Fair Work Act. But there will be casuals who are not eligible for the JobKeeper supplement so what they will do is go on to the JobSeeker supplement which is available to them at $550 on top of the old Newstart or JobSeeker payment as well. And that is a considerable amount of support at a very difficult time and as you know, was effectively a doubling of what was previously available for people who had lost their job.
LEIGH SALES:
We saw those big queues at Centrelink last week. Has the ATO been resourced so that we’re not going to have the same sort of bottle-neck for people now?
JOSH FRYDENBERG:
Well the Prime Minister and I and the Finance Minister sat down last night with the Commissioner of Taxation, and he gave us those reassurances that they're well-resourced and ready to implement this scheme as necessary. And, as you know, they’re a formidable organisation and as people go on, as employers go on to the ato.gov.au website, they can register their interest and then that will be processed accordingly.
LEIGH SALES:
You said today that to qualify, businesses would have had to have lost 30 per cent of their turnover. Over what time frame do they have to demonstrate that?
JOSH FRYDENBERG:
That's over a 1-month period compared to the previous year and of course, that would reflect the challenges that those businesses or sole traders are encountering as a result of the coronavirus. For businesses with a turnover of more than $1 billion, Leigh, they have to show that their turnover has fallen by 50 per cent or more. So there’s a higher threshold for those larger businesses.
LEIGH SALES:
This is a very complex plan and I cannot ask every question that every person at home would want me to ask about their individual circumstances. How do people get detailed information?
JOSH FRYDENBERG:
You can already, as an employer, register on the ATO website but also the Treasury website, www.treasury.gov.au, has factsheets available both for employees as well as employers and more information will be provided everyday.
LEIGH SALES:
The Government also announced today a change to the foreign investment rules to prevent takeovers of struggling businesses on the grounds of protecting assets of strategic importance. From which countries are you trying to protect Australian businesses?
JOSH FRYDENBERG:
This is all about preserving the national interest and it’s not directed at a particular country. What we have seen is a number of companies being in a distressed state, their market valuations have fallen dramatically, so the old thresholds don’t really apply in this situation. So what we are ensuring is that every foreign investment proposal has a ruler run over it, has more scrutiny and, of course, as the decision maker, I will take that job very seriously and take into account the character of the investor, tax and competition issues as well, of course, national security issues.
LEIGH SALES:
Does that mean that you would be unlikely to allow, for example, takeovers of energy companies, telcos, agricultural businesses?
JOSH FRYDENBERG:
Well, again, I will run the ruler over every proposal but, rest assured, the Government believes that foreign investment is in Australia’s national interest; one in ten Australian workers work for a business that has benefitted directly from foreign investment. Indeed, just last year, the United States was our number one foreign investor with about $58 billion of investment. China was number five with $13 billion of investment. So, we really do need to focus on the wide range of investors in this country who are not just Chinese.
LEIGH SALES:
One last question. This is a staggering amount of money that you have announced to spend over the past few weeks. Has any thought yet been given as to how Australia will ultimately pay for this or is that to be worked out down the track?
JOSH FRYDENBERG:
This will be paid back for years to come, there is no secret in that. And of course, we will enter into discussions with the credit rating agencies over due course. But Australia has entered into this crisis from a position of economic strength. Our debt to GDP ratio is around 20 per cent, Leigh. That is a quarter of what it is in the United Kingdom and in the United States, and about one seventh of what it is in Japan. So that has given us the fiscal flexibility to respond and we have delivered the first balanced budget in eleven years. That’s been really important in allowing us to provide this level of support at a time of critical need.
LEIGH SALES:
Do you have a bit more sympathy for Labor during the GFC and the fact that a stimulus package was necessary?
JOSH FRYDENBERG:
Look, I’m not looking backwards, I’m looking forwards. I know that today’s measures will be of great relief to millions of Australians. This is a ‘Team Australia’ moment. I’m working very closely with the Labor states as well as the Liberal states with our discussions at Treasury level. The Prime Minister leading the National Cabinet has worked very effectively together. Politics plays a very distant second, third or fourth to what is really the focus for all of us right now, which is to get Australians to the other side of this health and economic crisis.
LEIGH SALES:
Treasurer, thank you very much.
JOSH FRYDENBERG:
Good to be with you.