MICHAEL ROWLAND:
Treasurer Josh Frydenberg joins us. Treasurer, good morning.
JOSH FRYDENBERG:
Good morning, nice to be with you, Michael.
MICHAEL ROWLAND:
Those tax cuts start hitting pay packets by the end of this month. But Treasurer, every day on this show over the last six months, we keep hearing from so many anxious families out there worried about job security, worried about their health, worried about the broader economic outlook for Australia. How confident are you that the families will do what you'd like them to do and spend that money as a way of reviving the economy?
JOSH FRYDENBERG:
Well, obviously people are saving more now because of the uncertainty in the economic environment. But also, Michael, as a result of the health restrictions that have been placed. So as you know, in Victoria, subject to the lockdown, has meant that people can’t go to their local cafe or restaurant or take a holiday at their favourite tourist destination as they otherwise would. That means that money is not being spent across the economy as would normally be the case. Once those restrictions are eased, and the virus is suppressed, then that savings ratio will come down. More people will spend the money and obviously, as we have more success in battling this virus, we will see greater economic activity and that means greater jobs.
MICHAEL ROWLAND:
Lots of help for employers to employ younger people, those under 35. But I know Treasurer, that you’re a great student of political history in Australia, and after the last big recession in the 1990s, workers over 50 who lost their jobs spent a long, long time on unemployment queues. What’s in the budget for them to get back to work? And what’s in the budget for employers to be encouraged to hire older workers?
JOSH FRYDENBERG:
Well again, our experience in previous recessions is that it does take a long time for people of all
ages who are unemployed to get back into work, and that’s why we’ve thrown everything at it this time. But in this crisis, women and young people have been particularly impacted by COVID-19. So our focus has been on providing that additional investment and incentive to businesses to take on young people. We’ve also put in place the Women’s Economic Security Statement and those jobs are starting to come back. As for seniors, there are a whole range of measures, whether it’s the JobTrainer program, which is 340,000 new training places. Whether it’s the 50,000 online support places. They’re all designed to reskill and upskill Australian workers of all ages. But then, you shouldn’t see just one measure like the JobMaker Hiring Credit in isolation. It needs to be seen as a broader suite of initiatives, including bringing forward infrastructure spending, the business investment allowances, the manufacturing strategy. That’s all designed to get more economic activity, create more jobs and it’s Treasury’s forecast that nearly a million new jobs will be created across the economy in the coming few years.
MICHAEL ROWLAND:
Okay, a lot of assumptions in the budget, borders except WA reopening by the end of the year, also Victoria coming out of stage 4 lockdown on schedule. But we’re reporting this morning as is everybody else, that that deadline could be pushed out for valid health reasons. So if that happens, if Victorians stay longer in lockdown, what does this mean for your budget?
JOSH FRYDENBERG:
Well again, it does underline the uncertainty in making forecasts during this time. We are facing a once-in-a-century pandemic and primarily, this is a health crisis Michael, that’s having a very severe economic impact. We have based assumptions for Victoria on what the Victorian Government has set as their pre-conditions, and with those pre-conditions being met, then the restrictions will gradually ease and open up at the end of this year. There’s also a scenario in the budget that were a state like Victoria to have a third wave of cases, then that would impact across the economy by around $55 billion or about 1% of GDP over a couple of years. So we are talking big numbers both on the positive side or on the negative side, depending on how successful we are in suppressing the virus.
MICHAEL ROWLAND:
Okay, and just very quickly before you go, we’re about to speak to the Queensland Premier Anastacia Palaszczuk. She has been one of the more hard-line Premiers, as you’d know, in terms of border closures. How confident are you your assumptions on Australia reopening, other than WA by the end of the year will be met?
JOSH FRYDENBERG:
Well on WA, we are suggesting that it will be in April of next year that they will open up and we assume that with the other state, those border restrictions will be lifted by the end of the year. But closed borders cost jobs, cost jobs in the tourism sector, which is obviously vitally important in Queensland. It makes freight movement very difficult for our export markets, for our agricultural sector. Obviously, we need to do it in a COVID-safe way, but Australia is having great success in reducing the number of cases. We, as a nation, have done so much better, Michael, than other countries, whether it’s on the health front and on the economic front. So your viewers this morning, as they’re around the kitchen table, as they’re about to start their day at work or take their kids to school, they should be optimistic and hopeful for the future. Australia has a brighter future and together we will get through this.
MICHAEL ROWLAND:
Treasurer Josh Frydenberg in Canberra, thank you so much for joining us.
JOSH FRYDENBERG:
Thank you Michael