DARREN JAMES:
Good morning to you.
JOSH FRYDENBERG:
Good morning, Nick. Good morning Darren, Heidi. It’s good news for the taxpayer, this, because what it means is we don’t have to go and borrow another $60 billion to roll out the JobKeeper package. It is already going to cost around $70 billion. That’s the revised forecast from Treasury and it will support around 3.5 million workers.
NICK MCCALLUM:
Okay. So, Treasurer. I know it is money that you don’t have to borrow at the moment, the $60 billion, but you’ve alerted the country that you were going to use that amount of money. There will be a lot of pressure on to try and use it to help, on the one hand, casual workers who have fallen through the gap with JobKeeper, and on the other hand, industries like the tourism industry. So will you use some of that money to help those groups?
JOSH FRYDENBERG:
As you know, Nick, we’ve announced a comprehensive range of economic responses to the coronavirus, including an effective doubling of what was previously known as the Newstart payment, which is now known as the JobSeeker payment. That is around $1,100. So those people who are not getting the JobKeeper payment are now getting the increased JobSeeker payment. You’re still seeing full-time, part-time, sole traders, those who work in the not-for-profit sector and casuals who have been with their employer for 12 months or more benefiting from the JobKeeper payment and if you combine the 3.5 million on JobKeeper with the 1.6 million on JobSeeker, it is nearly half of the Australian labour force who are receiving these payments. We will continue to support the tourism industry, continue to support the arts industry, continue to support the universities. Indeed, we’re providing them with grants based on their enrolment numbers pre-COVID. That is the support we will be giving in addition to rolling out JobKeeper and JobSeeker.
NICK MCCALLUM:
Going back to the question though, Treasurer. I am sure there is enormous pressure within your own Party. There are so many people who have fallen through the cracks, it’s inevitable, the JobKeeper scheme had to be rushed together and I get that. But there are so many people within your Party who will be saying we need to help this particular group, we will need to help that particular group. So, will you consider looking at people who have fallen through the cracks or industries that need further help and use that money to that effect?
JOSH FRYDENBERG:
When you say they’ve fallen through the cracks, if they’re not on the JobKeeper payment, they’ll be on the JobSeeker payment. So they are still getting substantial support. What I’ve said, we’re not about to make wholesale changes. We’ll conduct a review of the program through the month of June and if there are changes that need to be made as a result of that review, we will do so. But, we will obviously continue to implement this, but as well as many of the other initiatives that we’re doing as well. We’ve seen an unprecedented and comprehensive economic response at a time of crisis and when Treasury was forecasting, Nick, the 6.5 million people would be covered by the JobKeeper payment, the health restrictions and the spread of the coronavirus was a lot greater than it is now. The reason why we’ve seen less people on the JobKeeper payment is because the economy has not deteriorated as much as Treasury thought when they were putting together their forecast. In the week leading up to the announcement of the JobKeeper payment on the 30th of March, we were seeing the number of daily cases for coronavirus in Australia increase by more than 20 per cent per day. As you know, we’ve got that dramatically down and now we’re starting to see the easing of restrictions.
HEIDI MURPHY:
Treasurer, it’s good to speak to you. Thank you very much. Can I just ask you about the arts which everybody knows I’m particularly passionate about. But you mentioned the arts before so I do want to take you to that. This applies in a lot of other industries but we will take the arts as an example. There is a lot of people out there who literally work contract by contract. So they may in fact be employed by a good part of the year, but they’re not working for any one individual company for a 12 month period. They have definitely fallen through the cracks. In other countries, there has been instances where – I think it is Italy and a few places like that – artists are allowed to be paid at the rate, instead of as JobKeeper or JobSeeker, a percentage of their previous declared salary for the year. Have we looked at anything along those lines?
JOSH FRYDENBERG:
We went for a flat payment on the basis of Treasury’s advice as opposed to a percentage of someone’s income because we wanted that to be the fairest possible way. So if you earned more, you weren’t necessarily going to get paid more than the flat $1,500 payment. In respect to the arts community, we’ve announced targeted support for some regional arts initiatives as well as Indigenous arts initiatives and as well as other support programs. But we also announced a $30 billion cash flow boost which was designed to give small business additional support based on the size of their payroll and that money could be used for their employees to keep them in a job at a difficult time…
HEIDI MURPHY:
But, Treasurer, with respect on that, a lot of these people are contract by contract to different companies so they’re not an employee of anyone in particular for an on-going period. So, they’re certainly not within that 12 month limitation. They might be working on a show, for example, the prop master or something like that on a show, for four weeks or eight weeks or three months.
JOSH FRYDENBERG:
And that is where you got programs like the cash flow boost which put money in the pockets of businesses, whether they’re entertainment businesses or others that can be used on the support for people who are working on particular programs, can be used for other fixed costs. I understand the different employment relationships, Heidi, that you’re alluding to but what we went for was a definition in the Fair Work Act about a long-term casual; somebody who has been connected with their employer for 12 months or more and the purpose of that was to keep that formal connection between employee and employer so that on the other side of the coronavirus pandemic, we could bounce back stronger than ever and I think that’s really important.
NICK MCCALLUM:
You’ve indicated JobKeeper and JobSeeker will end in September. Will you now consider, particularly because you’ve got this extra money that you could borrow, extending that because clearly, sadly, the economic impacts will only just be started to be felt really, the major part of it in September, October, November, the end of the year, will you now consider extending that because a lot of people are going to fall off a cliff once that disappears?
JOSH FRYDENBERG:
Well Nick a couple of things. The first is, we understand that some sectors will respond or recover faster than others. And that will depend on the health restrictions being eased. So for example, where, and we’ve seen an announcement today from the Premier in Victoria is more people are allowed to go out, go to their gyms, go to their hospitality venues, that will start to see more people back in work and more money flowing through the economy. That’s going to be really important. But in other sectors like tourism, where you’re going to have the international borders closed for I think an extended period of time, then obviously it’s going to be harder for them to recover. So we’ll look at all those issues in the context of the program, particularly when we’re doing the review. But we have to assess where the economy is at at a particular point in time and it’s Treasury’s estimate that the lifting of the restrictions agreed to by National Cabinet, those three stages of restrictions being lifted, will add $9.4 billion to the Australian economy each month and that’s why it’s important to get kids back at school and starting to get the venues open and certainly getting the domestic borders open.
NICK MCCALLUM:
As you mentioned earlier, for JobSeeker it doubled Newstart. Do you now concede that trying to actually exist on Newstart as it was, which for some people about $275 a week, is impossible and there is a good argument to increase it when we get back to normal, whatever normal will be? You will need to lift the basic levels of Newstart.
JOSH FRYDENBERG:
Look I’m aware of all those comments and arguments that are being put by ACOSS and others. The Prime Minister, myself, the Finance Minister we’ve also been very consistent about the specific measures that we’ve announced in the context of the coronavirus. That is, that they are temporary, that they’re targeted and they’re proportionate to the challenge that we face. That is not a decision that we’re reversing, the announcements that we’ve made are temporary and targeted, but of course I’m very conscious of those arguments that you’ve raised.
NICK MCCALLUM:
Do you think Queensland’s made the right decision by keeping their borders closed at the minute?
JOSH FRYDENBERG:
No I don’t. And you’ve heard the Deputy Chief Medical Officer say there’s no medical reason for those borders to be closed, so we don’t see a reason for those borders to be closed. The tourism industry in Queensland employs lots of people and as those international borders remain closed, more people are going to look for their domestic tourism opportunities and I would’ve thought for Queensland, that’s a good opportunity for them to create jobs and get people back into work.
NICK MCCALLUM:
And the same with South Australia too. Because no-one’s mentioning that. I can’t visit my daughter at the moment unless I’m prepared to go into iso for two weeks.
JOSH FRYDENBERG:
Well you can join her on FaceTime or Zoom I’m sure like many people are doing to date. I mean, the same argument applies across the country, the Deputy Chief Medical Officer made it clear, there’s no medical reasons why the borders should be closed and I’m pleased to see that the states are starting to lift the restrictions that they’ve had in place in their own states.
NICK MCCALLUM:
Any way you look at it, the accounting blunder from the ATO and Treasury was enormous. Will there be repercussions?
DARREN JAMES:
It was a good one.
NICK MCCALLUM:
But it doesn’t matter Darren, if they screwed it up…
DARREN JAMES:
It was a beauty. It was a ripper.
HEIDI MURPHY:
No I’m with Darren, it’s a good one and it’s the right way. At least it wasn’t..,
DARREN JAMES:
It was a good one wasn’t it Josh? It was excellent.
NICK MCCALLUM:
Wouldn’t it be nice though…
DARREN JAMES:
We’ve got a cash till full of money.
NICK MCCALLUM:
Wouldn’t it be nice though if we had someone in the ATO, in the Treasury who can actually analyse these things and get it right, so will there be repercussions within the ATO and the Treasury?
JOSH FRYDENBERG:
Look, I’m not seeking to blame the ATO and Treasury, and they’ve put out an extended statement to explain what happened. And let me just explain it for your listeners. Two things have happened, first is, Treasury did a forecast on JobKeeper as to how many people would take up the program and how much it would cost. And it was done in the context, as I said earlier, of a dramatic increase in the number of cases. They expected the impact on the economy to be a lot greater than it has and the economy to deteriorate. That’s why it’s no longer going to be costing $130 billion, but costing $70 billion. The second thing that happened, is that when people went to enrol in JobKeeper, the various businesses, there was a form that said how many employees do you think in your business will be covered by JobKeeper? And of the 900,000 plus businesses that formally enrolled, about 1,000 of them incorrectly filled in that box and instead of putting, ‘McCallum Enterprises, I’ve got two staff,’ they put, ‘McCallum Enterprises, 3,000.’ Meaning, they thought they were going to get $3,000 for those two staff instead…
NICK MCCALLUM:
Obviously then a confusing form, and a lot of the businesses did say, didn’t they, that it was, the whole forms, everything was confusing and…
JOSH FRYDENBERG:
And the ATO has effectively said as much. But what that meant, when the ATO was informing Treasury and the Government about the number of people they thought were being covered by that program, they incorrectly got that number of 6.5 million when it was really 3.5 million. But it is also important to understand Nick, that nobody was overpaid or underpaid as a result of that incorrect box being filled in and that is really important. So the Tax Office has said they haven’t underpaid or overpaid anyone, but they had incorrectly advised the Government about the number of people being covered. So those two things were happening and as both Heidi and Darren said, this is good news for the tax payer because we don’t have to go and borrow on international bond markets an extra $60 billion that would take years to pay back. In fact, one of my colleagues sent me a message and said, it took Howard and Costello a decade to pay back $96 billion of Labor’s debt and we’ve affectively saved ourselves $60 billion in increased debt overnight.
HEIDI MURPHY:
There’s always a silver lining.
DARREN JAMES:
There’s always a silver lining. And Josh, there’s a lot of difference between a million and a billion. You know how long a million seconds is? It’s 11 days. Guess how long a billon seconds is? 31 years. There’s a big difference.
HEIDI MURPHY:
Wow. Huge.
NICK MCCALLUM:
There you go. There’s a fun fact for the Treasurer.
JOSH FRYDENBERG:
Let me just tell you…
DARREN JAMES
And you haven’t coughed once this morning.
JOSH FRYDENBERG:
Well this week has been a good opportunity to spend at home in Melbourne. But can I just say, I do think it’s pretty opportunistic and shameful of the Labor Party to be out there saying this is a big blunder when…
NICK MCCALLUM:
And you would never do that in Opposition, no, of course you wouldn’t.
JOSH FRYDENBERG:
Hang on, their last three…
NICK MCCALLUM:
Tony Abbott would never criticise the stimulus of Kevin Rudd for instance…
JOSH FRYDENBERG:
Can I just say their last three budgets, they got their forecasts wrong by $70 billion.
NICK MCCALLUM:
Yeah, yeah.
JOSH FRYDENBERG:
$70 billion last time I looked…
NICK MCCALLUM:
Welcome to politics Treasurer, I’m sure you understand.
HEIDI MURPHY:
But that was the Treasury rather than the ATO so Josh we’re not blaming you mate.
NICK MCCALLUM:
Thanks Josh for joining us on a Sunday.