LEON BYNER:
Josh Frydenberg thanks for joining us today, let’s go through this stimulus package. First of all, for the record, how much are we spending all up?
JOSH FRYDENBERG:
We have seen reports Leon in the paper of $17-$18 billion, that’s in the ball park, the exact number will be revealed later this morning when the Prime Minister and I stand up but what this package is, is very substantial, it’s proportionate to the challenge we face, all the measures are targeted, all the measures are temporary and are designed to boost confidence, to encourage investment, and to keep Australians in a job.
LEON BYNER:
I want to go through some of the things that we already know; a plan to save the jobs of 120,000 apprentices, how will that play out?
JOSH FRYDENBERG:
I think that’s going to be very important because we will be providing up to a 50 per cent wage subsidy to those employers who have an apprentice, whether it’s apprentice chef, or carpenter, electrician or plumber and as businesses go through difficult times, we don’t want them to lay off an apprentice, that’s why we are going to be there to support them with wage subsidies and that will be a very significant measure.
LEON BYNER:
Now tell us about the $25,000 cash flow boost for employers, which touches nearly 7.8 million Australians.
JOSH FRYDENBERG:
Well we are using the existing tax system, to ensure that businesses that employ people, get up to $25,000 to assist with their cash flow, they’re not going to need to put in any new forms, it will all happen automatically and it will reflect the size of their wages bill.
LEON BYNER:
So again, we’re going to give employers a wage subsidy of 50 per cent, that’s of the apprentices’ and the trainees’ wages, that’s going to affect over 10,000 Australians in South Australia alone, tell us what else is happening, what are we doing for pensioners and indeed the unemployed and those on a very limited income?
JOSH FRYDENBERG:
Well we will be making some further announcements today about some targeted support and the Prime Minister again and I will stand up and announce that. What the other measure that’s out there is the supercharging of the instant asset write-off, currently that applies to purchases for up to $30,000 for businesses with a turnover of up to $50 million. We’re taking that from $30,000 to $150,000 and allowing businesses with a turnover of up to $500 to use it. Which means that if you are a business that wants to buy a new truck or a new tractor or do a shop fit-out, you will be able to write that off, all straight away and that will really support investment in the current climate.
LEON BYNER:
So from $30 to $150,000 write off?
JOSH FRYDENBERG:
Yes, correct. Right now you can write off up to $30,000 purchases, let’s say like a new coffee machine or some new tools, for a sparky or a plumber and right now, we’re going to extend that to $150,000 which means much more substantial items can be purchased and written off straight away and 99 per cent of Australian businesses have a turnover under $500 million and will be able to access this very important incentive.
LEON BYNER:
We’ve a lot of people ask us, and we’re asking you on their behalf, these are self-funded retirees, pensioners, unemployed and others who are vulnerable and indeed the impaired. Is there going to be anything in it today, in this stimulus for them?
JOSH FRYDENBERG:
Well there’s going to be something in this package for every Australian because they all benefit from a stronger economy and we know that over the last six and a half years we’ve been very disciplined when it comes to economic management. That’s put us in the position right now, to be able to respond to this economic shock which has been beyond our control. You see we can’t control the extended drought, we can’t control the fires, we can’t control the floods and we can’t control the virus. But what we can do is have control of our response. And our response today is very substantial and it will strengthen the Australian economy at a time that it needs that support.
LEON BYNER:
So there will be some sort of cash handout for people hopefully to spend quickly so you get the bump that you want in the economy?
JOSH FRYDENBERG:
There will be a targeted payment designed to support consumption as well as the measurers that were already announced today which are designed to support cash flow and investment. But the package is overwhelmingly focused on businesses and business support because that’s who employ people and that’s who are going to face a challenging time in the period ahead.
LEON BYNER:
And just quickly, those people who are casual employees where there’s some doubt about their entitlement to sick leave, what’s the story there?
JOSH FRYDENBERG:
Well of course you know, this is a discussion that Christian Porter, the Minister for Industrial Relations, had with the employer and the employee groups the other day. If people have, are entitlement to sick leave then of course they will use it in this circumstance. The Fair Work Ombudsman has been providing some guidance about the different employment contracts and the like and how things work. But clearly we understand the challenging time it is for workers whether they are casual or permanent across the economy.
LEON BYNER:
By the way are we borrowing any of this money that we are going to use? Or is this money that would’ve been, or part of which would’ve been, in the surplus?
JOSH FRYDENBERG:
Well as you know we’ve delivered the first balanced budget in 11 years Leon and that’s a really important point because the work that has been done over the last six and a half years has given us the flexibility to respond now. But clearly we’re going to have to deploy extra funds, the extra funds is the money that the Government has had to find because the economy needs it most. Our focus has not been on the surplus, our focus just is in response to the fires and now in response to the virus…
LEON BYNER:
…Alright and just quickly…
JOSH FRYDENBERG:
… and it is about supporting people.
LEON BYNER:
The Prime Minister will announce the targeted package mid-morning this morning. How quickly, once you’ve announced it, how quickly will it be in people’s bank accounts?
JOSH FRYDENBERG:
Well it depends on the different measures but it will be there as quickly as possible. The vast bulk of the money is being spent in this financial year before June 30.
LEON BYNER:
Treasurer thank you very much for joining us. That’s Josh Frydenberg.