PATRICIA KARVELAS:
Treasurer, welcome. You've made some huge changes today, but Treasurer, I want to ask this, what fundamentally changes in September? People will still be out of work, they’re just going to receive less money in the same situation under your changes.
JOSH FRYDENBERG:
Well, we saw the jobs numbers last week Patricia, which showed over 200,000 people getting back into work, that was double the number that the market was expecting, and really, we have got one country at two different stages right now. Outside of Victoria the economies are opening up, people are getting back into work, jobs are becoming gradually more available and we are ensuring that our systems and our payments are reflecting that reality. Of course, in Victoria, more than five million people are in lockdown, and that’s going to be for a matter of weeks still to come. So what we are trying to do is adopt a national approach, as opposed to state-specific or sector-specific approaches, but by reapplying the turnover test and by ensuring that even at $1,200, which is a reduction from the $1,500 payment currently, that there still will be significant support that’s going into the community and to the workers who need it most.
PATRICIA KARVELAS:
Let's drill down into some of the changes. JobKeeper recipients will be able to apply for JobSeeker as well, if they are on the part-time rate. Why is that?
JOSH FRYDENBERG:
Well of course, we’d like them to be working even more than what they may be receiving from their single employer. And I think this is a key point is that many people have more than one job if they are working part-time, or if they are working as a long-term casual. But in terms of both JobKeeper and JobSeeker, we want people who are below that income test to be receiving the support that they need. So by putting in place a lower tiered payment, we are reflecting the fact that some people were getting more with the $1,500 payment than they were pre-COVID, so this is, I think, a welcomed move that we’re doing with the two-tiered payments. But if people do not have another job and they fall below the income threshold, then they will be able to receive also the JobSeeker payment to get them through this difficult time.
PATRICIA KARVELAS:
How did you arrive at the figures? Why did you decide to make the cuts that you did?
JOSH FRYDENBERG:
Well, firstly, it’s not a cut, it’s an extension...
PATRICIA KARVELAS:
Well no, it’s a lower rate, that’s what I mean. I can use the proper language. It is a lower rate.
JOSH FRYDENBERG:
Well, Patricia, I will take you to task on this…
PATRICIA KARVELAS:
Are you?
JOSH FRYDENBERG:
This is an $86 billion initiative from the Federal Government. It’s the largest single economic measure that any Australian Government has ever undertaken. Right now there are 3.5 million workers at some 960,000 businesses that are benefiting from the JobKeeper payments. That’s around 30 per cent of the pre-COVID private sector workforce. Now, we asked Treasury to conduct a review at the midway point of this legislated six-month program. They came back and said it’s well targeted and it’s effective. And what we have done in light of some of the challenges in the labour market, even though restrictions are being eased, is to continue this program. And so we kept faith with the Australian people, until the end of September, there are no changes to this program. After September, rather than ending it, we are actually extending it for up to six months. So these…
PATRICIA KARVELAS:
There is no doubt about that Treasurer, that is a fact, but it’s a lower rate. You can take me to task, but that’s a fact.
JOSH FRYDENBERG:
It’s a lower rate than the initial $1,500 payment, but it’s an extension of what was originally legislated under this program. Now, those payments that we have chosen, at $1,200 and at $1,000, are basically coming down gradually. And at $1,200 it’s still around 80 per cent of the minimum wage.
PATRICIA KARVELAS:
Okay, so, the question on how you arrived at those figures and why, why did you make that decision?
JOSH FRYDENBERG:
Well, because...
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PATRICIA KARVELAS:
Treasurer, technical issues, welcome back. I have told them all about your overhaul, but I want to ask you the questions. On JobSeeker, why isn't the increase permanent and adequate? Long-term unemployment is with us for a long period into the future. Why haven't you opted to make it a permanent increase?
JOSH FRYDENBERG:
Well, as you know, we put in place a $550 coronavirus supplement, effectively doubling the previous Newstart payment, and that has helped cushion the blow for many Australians who have lost their job and are on income support. That will continue, that $550 supplement, out to the end of September. But as the economy is opening up, we made those changes to JobKeeper by reducing it by $300, and we are doing the same with JobSeeker by reducing that payment by $300. Now, the Prime Minister himself said that he was leaning in to a continuation of the coronavirus supplement, but he would take those decisions, and the Government would take those decisions closer to the end of the year, when we have a better sense of the dynamics in the labour market at that particular time. What we need to do is get the balance right here. We need to give people the incentive to find work, and at the same time we need to support them when they are out of work.
PATRICIA KARVELAS:
Okay, you say that, but you’ve made the decision until March for JobKeeper. You also don’t know what will be happening in January or February by that logic. Why is it different for the unemployment benefit, Treasurer?
JOSH FRYDENBERG:
Because they are two very different programs. JobKeeper is a temporary…
PATRICIA KARVELAS:
Sure, but they’re about the labour market and you’re saying you don't know about the labour market, you can’t just say you will for one scheme and not the other?
JOSH FRYDENBERG:
Actually, they’re very different programs. The JobKeeper program is a temporary one, now going out until the end of March, and this gives businesses the certainty to work their plans forward and to make the adjustments that they need. When it comes to JobSeeker, as you know, with regards to the old Newstart payment, now known as JobSeeker, that’s a permanent feature of our social welfare system, that there is an unemployment benefit, namely Newstart now JobSeeker. As for the coronavirus supplement, we will make that decision at the end of the year.
PATRICIA KARVELAS:
Okay, but let's deal with the anxieties that I know many Australians will have watching this. Will they ever return to $40 a day?
JOSH FRYDENBERG:
Again, the Prime Minister was asked that today, and what he said was that we have put in place these particular supports. They will continue to the end of the year, then we will make decisions at that point. But if somebody right now is on the JobSeeker payment, the best thing we can do for them is to help open up the economy so that they can get back into work, because that is what the program is designed for. That’s why we have reintroduced, gradually, the mutual obligation requirements, and that is also why we have announced a very significant skills and retraining package. Last week we announced…
PATRICIA KARVELAS:
Okay, Treasurer, but will you rule out returning back to that $40 a day?
JOSH FRYDENBERG:
I’m not ruling in or ruling out particular changes to payments…
PATRICIA KARVELAS:
But isn't that just a standard thing you need to do? How can you have millions of Australians on unemployment benefits and put them back on that abysmal payment?
JOSH FRYDENBERG:
Patricia, right now, we have just announced an extension of the JobSeeker payment for a further three months, after it ends its legislated increase at the end of September. As we’ve said today, very clearly, we will re-evaluate the future of that payment closer to the end of the year. My message to your listeners, whether they're on JobSeeker, whether they’re on some other program, or indeed whether they’re in work, is that we're doing everything possible to strengthen the Australian economy. It’s a full court press, everything from business investment incentives, to the support programs, to the skills packages. It's all designed to create the most dynamic and flexible labour market and employment prospects for people.
PATRICIA KARVELAS:
Treasurer, thank you so much and apologies also to our viewers for the technical issues. Lovely to speak to you.
JOSH FRYDENBERG:
Always good to be with you.