NEIL MITCHELL:
On the line from Canberra, the Federal Treasurer, Josh Frydenberg, good morning.
JOSH FRYDENBERG:
Good morning to you Neil, and to all your listeners.
NEIL MITCHELL:
Thank you for your time. Basic question. If my small business is going under or my job is going, how do I survive the next six months?
JOSH FRYDENBERG:
Well, as you know, we've announced cash payments of up to $25,000 for hundreds of thousands of small businesses, including in Victoria.
NEIL MITCHELL:
Has that been taken up by the way, yet?
JOSH FRYDENBERG:
It's working its way through the system. It's automatic. No applications need to be made. What these small businesses will find is that money will make its way straight into their accounts. That will help with cash flow, that will help meet wages bills, that will help meet fixed costs like rent and energy and water bills. But we're also taking some other actions as we're working on our second package.
NEIL MITCHELL:
What about my job? If I've lost my job, what happens? How do I survive?
JOSH FRYDENBERG:
Well, obviously, that is going to be a reality and a very unfortunate reality for many Australians as a result of this coronavirus. We obviously have a welfare system but we're also working in our second package, on measures to cushion that blow and we're talking to businesses, some of whom want to take on additional staff to work with their fellow business leaders who may be letting other staff go and, for example, I spoke to one business last night who's reached out to Virgin and Qantas to take 500 more staff.
NEIL MITCHELL:
Is that Woolies?
JOSH FRYDENBERG:
No, it wasn't Woolies, it was in a different sector to, to the supermarket sector.
NEIL MITCHELL:
Okay. Our Premier said it's no longer about stimulus, it's about survival, which word is it?
JOSH FRYDENBERG:
It's about getting through, hanging on and…
NEIL MITCHELL:
So it's a bit of both.
JOSH FRYDENBERG:
Look, the first package was very important. For example, wages subsidies for 117,000 apprentices, those cash payments I talked about, but also $750 cash payments for six-and-a-half million Australians. All of that helps but our second package will be different in nature and scope. It's not only about cushioning the blow but even giving further support to small businesses to get through.
NEIL MITCHELL:
Are you looking at increasing the dole?
JOSH FRYDENBERG:
We are looking at measures to make it easier for people who've lost their job.
NEIL MITCHELL:
That sounds like a yes.
JOSH FRYDENBERG:
Well, we've been very clear, we're not looking to bake in long-term expenditure that can't be removed. This is a temporary crisis, the Prime Minister has prepared the nation for six months or more, but we will get to the other side. So we've got to build that bridge to recovery, and yesterday you saw the Reserve Bank and the Federal Government join together to inject more than $100 billion into the financial system which will lower the cost of credit for many businesses and households, and today the banks are going to be making a significant announcement about further relief that they're going to provide to their customers.
NEIL MITCHELL:
Okay. I was going to get into banking in a moment. I know you won't tell us what they're doing but there's some interesting areas there. What about self-employed, sole traders? They seem to feel there's just nothing for them.
JOSH FRYDENBERG:
Again, that's front of mind for the second package.
NEIL MITCHELL:
So there will be something for sole traders?
JOSH FRYDENBERG:
Well, we're very much focused on supporting them but don't forget they benefit from a strong economy, and the measures that we've provided to them, provided in the first package and in the second package, are designed to help them and the broader economy.
NEIL MITCHELL:
But they're going to the wall. People are ringing me up saying, "I'm going to the wall because my business has dropped 90%."
JOSH FRYDENBERG:
And, again, this is a very unfortunate predicament for people who, through no fault of their own, have gone as you say, to the wall during this time. This is a global pandemic, Neil, this is a health crisis like we haven't seen. But I'm talking to the major shopping centre owners, I’ve been talking day and night to the banks, I'm talking to the telecommunications companies, we're talking to the energy companies. We want them, and they understand this, we want them to show great consideration and care for their customers because there is going to be the other side of this and there is an alignment of interest between those businesses and their customers.
NEIL MITCHELL:
Can anything be done - I know you're meeting the banks regularly, to guarantee people's loans so that they can have a mortgage holiday, that sort of thing?
JOSH FRYDENBERG:
Well, again, let's wait and see what happens with today's announcement.
NEIL MITCHELL:
Okay so you have been discussing that type of thing, have you?
JOSH FRYDENBERG:
Discussing a range of options with the banks, because healthy banks mean healthy customers and so there's an alignment of interest.
NEIL MITCHELL:
Some specifics from the audience, apart from that one. Can BAS payments be delayed [inaudible] they're due?
JOSH FRYDENBERG:
Well, in terms of the ATO, they are willing to talk to any taxpayer and try to work through their difficulties. So there is a number, 1800 806 218, and of course the ato.gov.au website.
NEIL MITCHELL:
So, sorry, does that mean if you can prove you've got problems you might be able to delay your BAS payment?
JOSH FRYDENBERG:
There's certainly a lot of flexibility there with the ATO, but the other thing the ATO is saying is that businesses can change to monthly statements instead of quarterly statements if they want to get their GST credits back, earlier than would otherwise be the case.
NEIL MITCHELL:
Could repayment of tax bills, a lot of them are due soon, be delayed?
JOSH FRYDENBERG:
Well again, on a case-by-case basis, the Tax Office is saying up to four months they'll be willing to provide some deferrals.
NEIL MITCHELL:
Up to four months, what do you mean?
JOSH FRYDENBERG:
Well, in terms of, there's a number of taxes where payments would otherwise be due and they're willing to reach out to their customers and in some cases it might be more, but they're willing to talk to their customers.
NEIL MITCHELL:
Can you change the rules so people can access their superannuation?
JOSH FRYDENBERG:
No options are off the table.
NEIL MITCHELL:
Possibility?
JOSH FRYDENBERG:
There's lots of possibilities.
NEIL MITCHELL:
Can you change the rules so the minimum draw-down for the self-funded retirees is not compulsory?
JOSH FRYDENBERG:
Again, we can, and these are all matters that I don't want to rule in or rule out but other than to say they're very serious issues and that they're very genuine issues and we are giving due consideration to them.
NEIL MITCHELL:
They're really urgent, though. If they don't happen in this stimulus, in this next package, we're going to need them very soon afterwards.
JOSH FRYDENBERG:
You won't have to wait long.
NEIL MITCHELL:
Thank you. Self-funded retirees are really in the gun, though, aren't they? I mean, they need help.
JOSH FRYDENBERG:
They certainly do and they're people that we have supported right along, as you know, by trying to reduce their tax burden, not increase it and again, they are people that we are focused on.
NEIL MITCHELL:
Would you consider nationalising some businesses?
JOSH FRYDENBERG:
That's not what we're focused on right now.
NEIL MITCHELL:
I see it was reported today, it was on the table.
JOSH FRYDENBERG:
Well, again, that's not what we're focused on right now. We're focused on particular measures using our existing tax and transfer system that are targeted, that are designed to boost the economy. But yesterday's announcement is extremely important because what it will mean is a lower cost of credit. And we already saw the Commonwealth Bank respond by decreasing the cost of borrowing for small and medium sized businesses by a full percentage point which was four times what the RBA reduced the cash rate by, as well as saying for fixed home loans that they would come down substantially too.
NEIL MITCHELL:
Did you see Macquarie says, "Conventional capitalism is dying, we're headed into a form of communism after this", do you agree?
JOSH FRYDENBERG:
No. But certainly these are not normal times and when you have extraordinary times you have extraordinary measures, and we will do what it takes, Neil, to support Australian jobs and businesses. And I want to say to your listeners that actually the Australian economy was strengthening the end of last year and was strengthening earlier this year. Just yesterday we got the jobs numbers for February. It showed that the unemployment rate came down to 5.1 percent and more than 26,000 jobs were created. We've delivered the first balanced budget in 11 years and by getting the books back on track, we now have the financial firepower to spend where it's needed, and the Australian people need to be reassured that we approach this health crisis from a position of economic strength.
NEIL MITCHELL:
National Cabinet’s is meeting today I think, or hooking up today. Is a total lockdown on the table?
JOSH FRYDENBERG:
Look, the Prime Minister has been very clear we're not closing the schools because the medical advice says not to. We are putting in place social distancing measures and we have announced, as of yesterday, very significant restrictions on incoming visitors or again, just making sure that the borders are open to Australian citizens. We make no apologies for these measures Neil because we've got to put the safety of Australians first.
NEIL MITCHELL:
I notice the Reserve’s saying we could have 0.25 percent interest rate for three years. What on earth is that going to do to self-funded retirees?
JOSH FRYDENBERG:
Well, this is a global phenomenon. We've got very low interest rates, as you know, we announced the changing of the deeming rates. That will be important for people who are getting the pension. But we are in this new environment with low interest rates and certainly this is something that Australians have to get used to.
NEIL MITCHELL:
A question from the audience, how long is it going to take to get on to welfare? Can that be sped up?
JOSH FRYDENBERG:
Well we said just last week that we were going to get rid of that one week waiting period so that people can get on as quickly as possible.
NEIL MITCHELL:
Talking about a recession being inevitable, but in this era, I mean recessions are perhaps, in a sense, less important. The world's not going to judge us for going into recession, is it?
JOSH FRYDENBERG:
Well the whole world is, is facing this global pandemic and facing the economic impact of that. I mean, I can only base my comments on the best advice from the Treasury and from the Reserve Bank, and they said that in the March quarter, which is the quarter that we're currently in, they saw the coronavirus having about a half a percentage point impact on GDP and on top of that you had the impact of the fires. It's too early to tell what the full impact will be on June as this virus evolves but to quote Winston Churchill or to paraphrase him, “we're not at the beginning of the end but we're more likely just at the end of the beginning.”
NEIL MITCHELL:
Also, are we on a war footing, Donald Trump says we are, or says he is.
JOSH FRYDENBERG:
Well, it feels like war by another means because the enemy has no face, the enemy can't be seen. But it's certainly out there and that's what we are devoted to fighting against.
NEIL MITCHELL:
Another specific one, just before you go, and I know you know a few people in the medical profession through your family. I'm told that medical conferencing is still being restricted. The College of Physicians say remove all restrictions on it, which would seem to make sense. I know it's not your area but could we look at that?
JOSH FRYDENBERG:
Well again, you've only got to take the best possible medical advice and social distancing measures need to be in place and I just know, for example, at the Cabinet level Neil, we are now meeting virtually over the video stream.
NEIL MITCHELL:
Well, yeah, but there are restrictions on this medical conferencing by specialists.
JOSH FRYDENBERG:
Well, again, that should be looked at by the relevant people because if you're talking about video conferencing then I can't see why there would be restrictions on that. But, again, I'll defer to the experts because that's not my principal field.
NEIL MITCHELL:
Rebates are a problem too, but I'll take that up with Greg Hunt's office. Well, good luck with the banks. How are you feeling?
JOSH FRYDENBERG:
Look, I'm feeling we're doing everything possible.
NEIL MITCHELL:
You must be tired, though.
JOSH FRYDENBERG:
Yeah, not much sleep but it's not about me. It's about the people listening to your program, and you know we've just had one hit after the after. We had the bushfires, we had the drought, we had the trade tensions. But again, it's a huge responsibility to serve the people of Kooyong and, of course, the people of Victoria and Australia and working with the Prime Minister who's leading from the front, we'll get to the end of this. It will take some time. It's going to be a long haul and we'll all get and we'll all be stronger for it.
NEIL MITCHELL:
And did you get a chance to watch any footy?
JOSH FRYDENBERG:
I had it in the background but I left the office at 11 pm last night, had a bowl of cereal for dinner, and kicked off here just after 5 in the morning. So it's a long haul but again, it's not about me, it's about your listeners.
NEIL MITCHELL:
And as a Carlton supporter, you would have hated it anyway. Thank you for your time.
JOSH FRYDENBERG:
Well you know, it's a long season, I hope.
NEIL MITCHELL:
I hope so.
JOSH FRYDENBERG:
I'm hoping, and we've got a strong team and better days ahead for the Blues as well.
NEIL MITCHELL:
Now, that is spin. Thank you very much for your time. The Federal Treasurer, Josh Frydenberg.