NEIL MITCHELL:
On the line Federal Treasurer Josh Frydenberg, good morning.
JOSH FRYDENBERG:
Nice to be with you, Neil.
NEIL MITCHELL:
What do you think of the roadblocks?
JOSH FRYDENBERG:
Oh look, the police will take the necessary measures. They're best intentioned. They're designed to help keep Australians and Victorians safe. This is a deadly serious issue, Neil and as you know, as a result of the social distancing rules, the isolation, the quarantine systems that we've put in place, we've been able to flatten that curve and in the process save lives. But I'll leave those issues to Daniel Andrews and the police.
NEIL MITCHELL:
Yeah, well it's up to the Government to direct the police when they want roadblocks. Are we heading for a trillion dollar debt?
JOSH FRYDENBERG:
Certainly the debt is rising and that is as a result of the spending measures that we've undertaken in response to the coronavirus. But we make no apologies for spending where it's necessary and we don't want our programs Neil, to go for one day longer than is absolutely necessary. But you would have been just as heartbroken as I was when you saw those queues outside Centrelink and people who have lost their job through no fault of their own, need our support at this time and that's what the Government has done in an unprecedented way.
NEIL MITCHELL:
So is a trillion dollars likely?
JOSH FRYDENBERG:
Look, the debt will increase. I don't have the exact number because obviously the spending initiatives are still under way and they're demand-driven programs so they do depend upon the number of people that take them up and, of course, that are eligible.
NEIL MITCHELL:
I'm not arguing they had to be done at all, but this country will be paying for this for a generation, will it not?
JOSH FRYDENBERG:
It will take years to pay the debt back but can I tell you and your listeners that we've gone into this economic crisis from a position of economic strength. We were able to get the books back on track, we delivered the first balanced budget in eleven years and Australia's debt as an overall proportion of the size of our economy, going into this crisis, was about a quarter of what it is in the United States and in the United Kingdom and that has given us the financial flexibility and the financial fire power to respond as required.
And I was talking to John Howard, someone who has been on your program many times before, Neil, and he said to me at times of economic crises there are no ideological constraints. So Scott Morrison and myself, what we've tried to do is what is absolutely necessary to support those Australians who have lost their job, or who could lose their job.
NEIL MITCHELL:
What happens after six months? The PM says six months, what happens if we have to continue? Can you put more in, or can you put more in even before six months?
JOSH FRYDENBERG:
The economic restrictions will be depending upon the health advice, and we continue to assess that health advice and receive it on a daily basis. None of our policies are set and forget, and the Prime Minister was right to prepare the nation for a struggle of six months or more because Neil, it's not going to be you or I who are going to solve the coronavirus, it's going to be some smart medical researcher or scientist and doctor who is going to find that vaccine or the antivirals and I hope they find it sooner than later.
NEIL MITCHELL:
Okay, there are several business leaders today saying we need to look at easing the restrictions earlier, they want to ease them now and Richard Goyder is one of them. What do you think?
JOSH FRYDENBERG:
Well, again…
NEIL MITCHELL:
Is that a possibility?
JOSH FRYDENBERG:
I think we've got to be guided by the medical advice. The pandemic continues to spread, both internationally and here in Australia. People have died, more than 6,000 Australians have contracted it, and at the same time we've got one of the highest testing rates in the world and we've got one of the lowest mortality rates in the world. So the advice has served us well and I think we've got to continue to take that advice. But I'd say to the business leaders, as they would know well, that not all aspects of the economy have been equally hit. Of course the retail sector, the tourism sector, the hospitality sector, they've been badly hit because of the social distancing laws and the other health and economic restrictions, but mining continues to go well, parts of manufacturing sector are strong, we've obviously seen construction continue and the supermarkets and the pharmacies have never had it so good.
NEIL MITCHELL:
Financially maybe. 730,000 businesses we heard had registered. Has that gone up overnight?
JOSH FRYDENBERG:
That has and is going up every day and that is a signal of the strong interest in this particular program and now that the legislation has passed, the Australian Tax Office will be getting in touch with those businesses that have registered.
NEIL MITCHELL:
Why so many in Victoria? I think more than a quarter in Victoria, why?
JOSH FRYDENBERG:
I think it's just a reflection of the economic pressures that those businesses are facing and as you know, this program is available to employers who have employees who are either part time, full time, casual workers that have been connected with that employer for 12 months or more. It's also available to sole traders, the local sparky or the plumber or the carpenter who is listening to your program, this program will be available to them if they've seen their turnover fall by a certain amount and the not-for-profit sector, the many charities across Victoria and across the country who do an amazing job and will see an increased demand for their services at this time, they will also be able to access this scheme.
NEIL MITCHELL:
Casual workers, are they the only ones who miss out?
JOSH FRYDENBERG:
Well casual workers are actually in the program…
NEIL MITCHELL:
Not if they have done under a year.
JOSH FRYDENBERG:
The key point here, Neil, is that we have the JobKeeper program, which passed Parliament last night, which around 6 million Australians will get, but then there's also the JobSeeker program which is around $1,100 a fortnight. That will be available to those casual workers who don't fall within the JobKeeper program and that's obviously support through our welfare system for those who have come on hard times.
NEIL MITCHELL:
Are any industries not covered or is it really a matter of how much money they've dropped in a period of time? The travel industry, for example, I got a contact from a travel agent who said they don't think they're covered. Do you not cover certain industries or is it all based on the financials?
JOSH FRYDENBERG:
Certain industries are covered across the board.
NEIL MITCHELL:
Are not covered?
JOSH FRYDENBERG:
Are covered across the board. This is a program that doesn't discriminate against certain industries. We've said it won't apply to the big four banks and Macquarie because they currently are getting Government support through other means in terms of guarantees of deposits and the like. But what we have said is that this will apply across the board.
NEIL MITCHELL:
How much discretionary power does the Tax Commissioner have in this?
JOSH FRYDENBERG:
He has a bit and I will give you a good example of it. You've got to have your reduction in turnover by 30
per cent or more if your turnover as a business is less than $1 billion. But you might be a relatively new business that don't have a comparable period with last year. In that case, there may be discretion. If you're in a drought-affected area, obviously 2019 was a pretty bad year for you so comparing this year's turnover to that year's turnover may not necessarily be fair and appropriate. In those cases, the Tax Commissioner does have a discretion.
NEIL MITCHELL:
Some other countries are suggesting banks do not pay dividends. I think we've got $17 billion in dividends to be paid by our banks. Should they pay them or not?
JOSH FRYDENBERG:
Well again, this is not a decision for the Government. These are decisions for the independent financial institutions. APRA, as the prudential regulator, has provided pretty strong advice to the banking system, saying to them that they should strongly consider deferring their dividends and if they do pay their dividends for them to be materially lower at this time than would otherwise be the case. That's a decision for the individual banks in question.
NEIL MITCHELL:
Are you aware of a problem at Centrelink, I'm told, a bulk payment to recipients even if they had money during March, which meant they shouldn't receive anything, or less than they normally got, and they're now receiving debt letters for overpayment. Are you aware of that?
JOSH FRYDENBERG:
No, I'm not.
NEIL MITCHELL:
We'll check that out further. Just finally, well, almost finally, how much do we give to the World Health Organization? How much do we tip in?
JOSH FRYDENBERG:
I don't know the exact amount but we contribute to a lot of international bodies as you would expect as one of the strongest economies and one of the most significant nations on the planet.
NEIL MITCHELL:
Just a specific question from Karen, she's worked for a TAB for 15 years, same one, agent changed six months ago so she's only done six months under her current employer, what happens to her?
JOSH FRYDENBERG:
Again, individual circumstances they should reach out to the ATO, they should go to the treasury.gov.au website, there are fact sheets which spell out in detail the JobKeeper program that has passed the Parliament last night. Those are available for both employers and employees and I suggest she does that in the first instance.
NEIL MITCHELL:
You'd hope there's some common sense in a case like that, wouldn't you?
JOSH FRYDENBERG:
I mean, obviously, everyone's circumstance is different. What we've tried to do is construct a program that will get support to the people who need it most and some 6 million Australian workers Neil, will get this support. I mean that's nearly half the entire workforce and, as you can imagine, the economic impact is very severe as a result of the coronavirus and your listeners, and the Australian people at large, need to know that the Government has their back and will do whatever is necessary to get this country to the other side.
NEIL MITCHELL:
Thank you for talking to us. I notice a bit of confusion with you about handshaking yesterday, ended up doing some elbow bumping with the Prime Minister, I think, but nearly shook Albo's hand. Do you reckon the handshake will ever return? The US medical adviser to Donald Trump says he doesn't think it will ever come back, what do you reckon? You will be back handshaking?
JOSH FRYDENBERG:
I'd be very surprised if it doesn't come back. It's an old habit that's hard to break and I can understand why we don't do it at this time because we've got to take the medical advice. But there will be the other side of the coronavirus. We've got to get to that other side and we'll do so based on the medical advice and when we do, hopefully that handshake is back and so we can do it all again.
NEIL MITCHELL:
We just had a call from a bloke called Scott Morrison who said he's waiting for you. I think we better let you go.
JOSH FRYDENBERG:
Thank you.
NEIL MITCHELL:
Don't be late. Josh Frydenberg.