LISA MILLAR:
Good morning, Treasurer.
JOSH FRYDENBERG:
Good morning. Nice to be with you, Lisa.
LISA MILLAR:
Can we turn to the top line that we’ve had this morning which is from WHO announcing that coronavirus is now a pandemic. How does that change things for Australia?
JOSH FRYDENBERG:
We’ve been taking the advice all along from our Chief Medical Officer, Lisa, and we’ve been treating it as a pandemic. And as you know, we have moved ahead of the rest of the world in putting in place travel restrictions, as well as providing the assisted departure for Australians out of China, as well as other places in the world where they have been impacted by this virus.
And of course, yesterday we announced a very substantial package of measures to boost our health preparedness, working with the states. So today we will be announcing our fiscal response, but we’ve certainly been treating this like a pandemic for quite some time.
LISA MILLAR:
With today’s announcement, this is all about trying to stave off a recession, isn’t it?
JOSH FRYDENBERG:
It’s a very substantial package and it is designed in response to a very significant challenge. Importantly, all these measures are designed to boost economic growth, designed to boost investment, designed to keep people in jobs and designed to boost confidence across the Australian economy. The measures are also targeted, the measures are temporary and the measures are very proportionate based on the best advice from the Treasury officials.
LISA MILLAR:
The AMA President said, ‘good start, but it’s going to take more.’ Are you open to that?
JOSH FRYDENBERG:
Of course, we’re maintaining a watching brief as this pandemic evolves across the world and here in Australia. But what we do know is that we’ve already deployed substantial resources and what you’ll see from the package today is it’s very focused on business, it’s very focused on assisting them with cash flow, we’re using the existing tax and transfer system, we’re providing a wage subsidy to 117,000 apprentices through their employers because we want to keep them employed, despite some of the economic challenges, and we’re giving a supercharge to the instant asset write off which is currently up to $30,000 for businesses with a turnover of up to $50 million and we’re extending that to $150,000 for businesses with a turnover of up to $500 million. So what that means, Lisa, is that 99 per cent of Australian businesses can go out, do a shop fit out, buy a truck, buy a tractor, spend up to $150,000 on things for their business and write if off straight away.
LISA MILLAR:
What about for the vulnerable? What are you offering them?
JOSH FRYDENBERG:
We will be making further announcements later this morning, but obviously, the measures we’re announcing are very targeted, they’re very targeted on the people who need it most, as well as obviously the businesses who are doing it tough at this time.
LISA MILLAR:
We heard from Dan Andrews over the last couple of days talking about some extreme measures that might need to be taken. Are we now at that point with a pandemic?
JOSH FRYDENBERG:
Of course, we are taking measures that we’ve never taken before in terms of locking down travel from particular countries. Certainly, health officials are working very cooperatively across state and territory boundaries to ensure that the people get the support that they need and this economic response is in response to what is a health crisis with a very significant economic impact. We’re not solving for a GFC, the challenges during the GFC were very different. That was a banking and that was a liquidity crisis. This is a health crisis that is disrupting end to end supply chains, hurting particular sectors, and that’s what you’ll see, our response very much calibrated to.
LISA MILLAR:
It is a health crisis, and that’s why so many events have been cancelled and we’re hearing about more every day. Are you comfortable that the Grand Prix is going ahead?
JOSH FRYDENBERG:
Well, Lisa, of course that will be a decision for the relevant authorities. We’re having a National Security Committee meeting later today and no doubt we’ll be briefed by the Chief Medical Officer and other relevant officials about issues related to events such as those. But at the end of the day, that will be a decision that will be taken at the relevant official level.
LISA MILLAR:
That’s not a yes.
JOSH FRYDENBERG:
Well, again, this is moving so quickly. I would like to see people continue to go about their daily lives. Certainly I’ve been going on planes, staying at hotels, meeting with groups of people. That is how I’m going about it, that’s how the Prime Minister is going about it, but, again, State Officials, medical officials, they’ll be making decisions based on the best advice that they have.
LISA MILLAR:
Just finally, Treasurer, we’ve seen the markets close just a little while ago in the US, it’s been a very bad day, they are officially in a ‘bear market’. What do you say to people as the Australian markets open today? This is going to be bad, isn’t it?
JOSH FRYDENBERG:
Well, there’s a lot of uncertainty out there and this is being reflected in the volatility. Not just in the equity market, but also in the debt and credit markets. I’ve spoken to the head of the Reserve Bank as well as the head of the Australian Prudential Regulatory Authority. Yesterday I met with the banks themselves. What is very clear is that the markets remain open, they remain orderly and yes, they are volatile, they’ve also been coming off particular highs off the back of the last year. But this is a very uncertain market and that uncertainty is playing out in markets. But what we will see from the Government today is a very substantial package that is designed, Lisa, to boost confidence, to keep Australians in jobs, and to keep Australian businesses in business.
LISA MILLAR:
Treasurer, thanks for your time.
JOSH FRYDENBERG:
Good to be with you.