LEON BYNER:
I want to welcome the Federal Treasurer Josh Fydenberg. Josh thanks for joining us this morning.
JOSH FRYDENBERG:
Nice to be with you Leon, and plenty of rain coming down now in Melbourne too.
LEON BYNER:
We got the same thing here. Now look, I notice that the Australian Tax Office is extending the time that is available for businesses to pay their employees and still be able to claim back the first JobKeeper payments. Can you explain that for us?
JOSH FRYDENBERG:
Well that’s right. Initially employers had to pay their employees by the 30th of the month in order to receive their first payment in arrears and that payment would be flowing from the first week of May. We’ve extended that from the 30th April to now the 8th May which gives employers a bit more time to pay their employees, to get their finances arranged, and then they can receive the payment through the ATO.
LEON BYNER:
Can you just explain, and I’ll tell you why I’m asking you this, I’ve had a lot of people in hospitality who’ve been hit very hard, who are running small businesses, who are aware that you can go to a bank and get a bridging loan until the money is available for JobKeeper. But the thing is they don’t want to get into more debt when they’re already on the precipice. What’s the reason that we’ve done it the way we’ve done it?
JOSH FRYDENBERG:
Look when you’re spending this amount of money, and it’s a $130 billion program, the scale and scope of which this country has never seen, you obviously have to be careful with taxpayers’ money, and you’ve got to have an integrity measure. And the integrity measure, one of many that we’ve put in place, is that you get reimbursed by the Tax Office, by the Government, after you’ve proven that you’ve paid your employees and I think that’s understandable. There’s clearly a cash flow issue for some businesses, that’s why we’ve spoken to the banks, that’s why they’ve each set up a hotline number, and for their customers, who they do know well the banks I have to say, can contact their bank, can arrange that bridging finance, and ensure that they can pay their employees and get reimbursed by the Tax Office.
LEON BYNER:
Just for the record Treasurer, what’s our current debt? Because we’ve certainly been paying out a lot of money for good reason, and no one is going to argue with that, but everybody’s asking ‘well how the hell are we going to pay this back?’ What are we owing at the moment?
JOSH FRYDENBERG:
We’re owing a bit more than half a trillion dollars. Now, the important thing is to look at the size of our debt to the size of our economy. And we entered this crisis with our net debt to GDP at around 20 per cent. Now if you compare that to other major economies like the United Kingdom or like the United States, our debt to GDP is about one quarter of what they have had. And so we’ve put ourselves in a good position, a position of economic strength, to deal with this economic shock. And it’s also important for your listeners to understand that when we went into this crisis, unemployment was falling, growth was rising, the Budget was in balance for the first time in 11 years, and obviously the coronavirus is something we cannot control but we do have to deal with.
LEON BYNER:
You’d be acutely aware Treasurer, wouldn’t you, that every day, you could call it lockdown but everybody understands what that is, everyday we have this lockdown and businesses are unable to trade or they’re somehow limited, just means that the prognosis for them coming out of this is going to be more negative. You’re obviously aware of this, is there pressure to try and lift some of these restrictions pretty soon?
JOSH FRYDENBERG:
Well we have started to ease the restrictions with regards to elective surgery. You’ve heard the Government talk a lot about getting kids back into school. That’s important because when parents are not at home looking after their kids, they can also get back to work and that is important too, provided that the medical advice around social distancing is followed. We’ve had a great deal of success as a nation, much better than many other nations, in flattening the curve, in reducing the incidence of new cases every day, and we’ve gone from having a rise of more than 20 per cent of new cases a day to now having less than one per cent increase per day in new cases. And I think that’s a testament to the commitment of the Australian people in adhering to the medical advice. And as that medical related success plays out, then obviously the restrictions can be eased and we can get back to work because we don’t want our Government payments to be there for a day longer than they have to and we don’t want the health restrictions and the economic impact that they’re having to be in place for a day longer than they have to.
LEON BYNER:
Treasurer, how seriously do you take China’s economic threats, suggesting that they’ll target our education, tourism and agricultural industry?
JOSH FRYDENBERG:
Well we won’t bow to economic coercion. We’ll defend the national interest in a consistent and clear manner as the Australian people would expect their elected representatives to do so. We do believe that there is a need for an independent, transparent investigation into what took place with the spread of the coronavirus. Thousands of people have lost their lives globally, and economies the world over have been seriously disrupted. And so it’s important to know about the origins of this virus and then obviously to put in place the precautions for next time we face such a threat so the world can respond as quickly and as effectively as possible. Our two-way trading relationship Leon, with China, is very important to both countries. There’s more than $200 billion of two-way trade, one-third of our exports go to China. Many peoples’ jobs in South Australia relies on export and import, and Simon Birmingham is doing an excellent job in promoting those markets. And so we’ll continue to provide the economic support to our exporters because we realise how important they are to jobs in this country, and at the same time we want that economic partnership with China to continue.
LEON BYNER:
Treasurer, the company Swissport, which runs a lot of services at airports and also owns a fair bit of infrastructure, have hit you up for quite a bit of money to help them out, where is that going to go?
JOSH FRYDENBERG:
Well look, obviously matters to do with the airline industry and various support measures have been handled in the first instance by the Minister responsible, namely Michael McCormack, and as you know we’ve provided significant support for the airlines to continue to provide the movement of people and to meet the freight task and I think that’s important to note as well. We’re going through this issue right now with Virgin in voluntary administration. We want two major airlines to continue to operate in Australia, we think that’s good news for the economy, good news for jobs, good news for tourism. But we’re not in the businesses of owning an airline, or we’re not in the business of just handing out money without it being targeted and temporary and proportionate to the challenge we face.
LEON BYNER:
Alright, just one final point. I think there are a lot of people today in business who are absolutely chafing at the bit, hoping that sooner rather than later, we can get some semblance of letting them operate their businesses again to their full capacity. How long do you think they’ll have to wait? Any idea?
JOSH FRYDENBERG:
Well again, we’ve made some inroads into lifting the restrictions, there’ll be further discussion but as for Cabinet, Steven Marshall has been a great advocate for the interests of South Australians. And as you know, kids are getting back to school in South Australia as they are in the Northern Territory and as they will in other states and I think that’s a good thing. But we don’t want to make the same mistake that Japan and Singapore made, where they started to lift their restrictions in the belief that they had made great progress against the coronavirus, only to see a second wave of infection and the problem then is that you have to put back in place the restrictions and that has its own economic consequences. So we’re proceeding very carefully, we’re taking the medical advice, but there is a light at the end of this tunnel.
LEON BYNER:
Treasurer thank you for joining us.
JOSH FRYDENBERG:
Good to be with you.