LEON BYNER:
Josh Frydenberg, thanks for joining us this morning.
JOSH FRYDENBERG:
Nice to be with you, Leon.
LEON BYNER:
The Prime Minister did say when JobKeeper started that this would be going until September. So, it has taken the childcare sector by surprise that the scheme will end early and will mean that many parents will be in a much more difficult position to get childcare for their children. What do you say to that?
JOSH FRYDENBERG:
This is a transition that has actually been welcomed by senior members of the childcare sector because what we have put in place is an easing of the activity test, an extra transition payment. Of course, what we always said was that those supports were going to be temporary and now that the curve has been flattened and people are starting to go back to their normal lives. We’re seeing more people going back into the childcare sector and our policies were designed to maintain the childcare sector on a sustainable level at a very challenging time and now that that height of the problem has passed we can now move to the next stage.
LEON BYNER:
The issue of when JobKeeper will cease is contentious I know, because there is surely a view that you can’t just cut if off completely. It has got to taper out. What is the way in which this is going to happen after September?
JOSH FRYDENBERG:
What we’ve said is we will do a review at the midway point. That review is currently underway by Treasury and I will announce the outcomes of that review on the 23rd of July when I provide an economic and fiscal update with the Finance Minister. This is a vitally important program. As you know, when we first announced the JobKeeper payment and the JobKeeper program, Treasury were telling me that potentially Australia could go into an eight-week lockdown, akin to what we’ve seen in Europe and you could see up to 6.5 million people on JobKeeper. But by virtue of the fact that we’ve had great success in flattening the curve and reducing the number of new coronavirus cases, less people have gone on to JobKeeper as originally thought, now about 3.5 million is where they think it is going to get to. That means a reduced cost to the taxpayer of around $70 billion instead of $130 billion. That is less money that we have to borrow but it is still doing the important role that we always intended it to do which was to keep people in a job and to maintain that formal connection between employers and employees.
LEON BYNER:
You’ve extended by six months in fact that the write-off of any businesses purchases to the tune of up to $150,000. Do you think that is going to make a big impact on the well-being of businesses, many of whom are still not working even though the coronavirus curve has been flattened?
JOSH FRYDENBERG:
It depends on which sector you’re talking about. Obviously the tourism sector is going to continually find it difficult as long as those international borders are closed and until the state Premiers start to lift their domestic borders. In the construction sector, we’re seeing social distancing followed and a lot of activity starting to be generated. In the mining sector and the agriculture sector, they’ve managed to work well through this crisis. Obviously with the easing of restrictions we’re seeing our cafes, restaurants and our pubs start to open and more people going to work in the hospitality sector. But we’ve always been minded to ensure that we continue to provide that support to business, to employers and to employees and that instant asset write-off extension has been used by hundreds of thousands of businesses. If you’ve got a turnover under $500 million, you can go out and buy as many assets as you want up to $150,000 and write them off straight away as opposed to over multiple years. So that means if you’re a café and you want to get a new coffee machine, or if you’re a tradie and you need some new tools or if you’re the local florist and you need a new delivery van or a farmer who needs a new tractor or truck. This is what is going to enable you to make that investment in a lot more tax conducive way.
LEON BYNER:
The biggest factor that will determine whether businesses then fire up and employ more people, and we’re talking big numbers, will be the opening of state borders. Now at this stage, all the Premiers are being very slow on this. What’s your attitude to this when you know that that’s going to be a crucial factor in regaining employment opportunities across the country, and in South Australia?
JOSH FRYDENBERG:
It’s simple, closing state borders costs local jobs. That’s the bottom line Leon. Because we know from the Deputy Chief Medical Officer in his public comments, there is no good medical reason as to why these borders should be closed. It’s important that we continue to practise social distancing. It’s important that we have contact tracing and testing. But at the same time we should be relaxing those restrictions on the borders.
LEON BYNER:
What’s your message to Steve Marshall?
JOSH FRYDENBERG:
Well Steve Marshall’s been a terrific partner for the Federal Government and I think he’s shown great leadership in the state of South Australia. The fact that people are starting to go back to the footy is exactly what we wanted to see. It’s a very positive sign of life gradually getting back to normal. But I’d say to Steven the same message that I have for Anastacia Palaszczuk or for Mark McGowan, or for Peter Gutwein, for Premiers right across the country, open those borders because as long as they are closed, they cost jobs.
LEON BYNER:
Now I want to talk about the business of foreign investment for a moment, you’ve closed a lot of loopholes, do you think that’s now going to protect Australia from predatory businesses, many of whom are state owned, to come in and pick up some of these vital assets of ours cheap?
JOSH FRYDENBERG:
I certainly think it will strengthen our system and enhance and protect the national interest. Foreign investment’s been critical Leon, to our country. We wouldn’t have developed so much of our resources sector or our agricultural sector or many other sectors across the economy if we didn’t welcome open foreign investment. But when it comes to sensitive national security businesses, and I’m talking about those in the defence supply chain, or particular energy or utility assets or indeed increasingly data storage, data that is important to our national security and defence. It’s important that we as a country and as a Government have the ability to scrutinise those investments by putting them under the microscope of the Foreign Investment Review Board and until now there have been certain investments that were made by foreign investors, not foreign government investors, but by foreign investors that did escape that scrutiny.
LEON BYNER:
Alright the other question I’ve got is what do you think are the battlelines for the next election between yourself and Labor?
JOSH FRYDENBERG:
Well it’s clear, the role of government and the future role of government will be much debated. The Labor Party always want to see government as the big spender, limitless spending and as the continuous provider of everything across the economy. We see government as an enabler, an enabler to ensure that people can be their best. That businesses can go out there and innovate higher and grow, that individuals can provide for themselves, but if they need a helping hand there is a generous safety net that is at the same time there for them. I think that battleline will be very clear at the next election. Labor was promising to spend more before the coronavirus, during the coronavirus and no doubt after the coronavirus. We are very much focused on ensuring responsible, prudent economic management so that we don’t leave an unnecessarily high debt burden for future generations to pay.
LEON BYNER:
Josh thanks for your time.
JOSH FRYDENBERG:
Good to be with you Leon.