PETER STEFANOVIC:
Joining me now is the Treasurer Josh Frydenberg, there is a fair bit to discuss. Good morning to you Treasurer, I know you’re very busy at the moment.
JOSH FRYDENBERG:
Good morning Peter.
PETER STEFANOVIC:
First of all I just want to get your thoughts on these changes to foreign ownership, when do these changes kick in?
JOSH FRYDENBERG:
Immediately. The announcement today will see, as a precautionary measure, all foreign investment proposals scrutinised, subject to my approval, where effectively removing the threshold that currently exists for many countries whose companies can make investments in Australian without the scrutiny of the Foreign Investment Review Board for purchases above, effectively, $1.2 billion. Well today we are removing that threshold completely. And Pete, what Australians are learning through this crisis is that the Government has their back, whether it’s our measures to strengthen the health system which the Prime Minster and the Health Minister announced yesterday for mental health and for telehealth and other areas, whether it’s the backing of small business and keeping employers employing Australians with our $189 billion of measures already announced, whether it’s our enhancement of the welfare safety net or today’s announcement about foreign investment restrictions. We are watching their back and we will ensure that they will get to the other side of this.
PETER STEFANOVIC:
There are two Chinese owned companies in Australia that secured medical supplies and shipped them back to China, as you’d be aware of, Treasurer are you concerned that China might be trying to exploit this crisis?
JOSH FRYDENBERG:
Well these measures are not directed at one particular country, they’re all about supporting the national interest, that’s what foreign investment must be in, the national interest. As the head of the Foreign Investment Review Board has said previously, factors that we take into account when determining the national interest are of course national security, the character of the investor, competition issues, tax issues, and indeed, China was the fifth largest investor last year in Australia with investments of around $13 billion. The United States was our number one investor with investments of around $58 billion. So we will continue to scrutinise all foreign investment proposals, reflecting the extraordinary times that we’re in and that is obviously to safeguard the national interest.
PETER STEFANOVIC:
How many Australian businesses might be vulnerable?
JOSH FRYDENBERG:
Well lots of Australian businesses are doing it tough, not just here obviously in Australia, but businesses globally are seeing their share prices diminish quite substantially and obviously having challenging times with their banks and securing the necessary debt and finance to get through this crisis and those thresholds that have previously been in place are not necessarily appropriate for right now because these are extraordinary times that we’re living in.
PETER STEFANOVIC:
Ok Treasurer, a third wave of economic reforms are upon us. One of them is the wage subsidy program, to be called a JobSeeker Allowance. Can you confirm that it will be $1,500 a fortnight that will be paid to workers?
JOSH FRYDENBERG:
Well Pete you’ll have to tune in later today because there will be a very significant announcement about what we will do to support employers and employees and this is all about ensuring that people can continue to remain in jobs. At the end of the day, we want Australian businesses and their employees to get to the other side intact. And that’s why we’re looking at this wage subsidy measure because it’s all about ensuring there’s a connection between the employer and the employee through what is a very difficult time.
PETER STEFANOVIC:
How can you be sure that businesses will pass that on to the employer? Because as I’ve read it’s the businesses that will be taking the money and it will be their duty to pass it on to the employer, is that correct?
JOSH FRYDENBERG:
Well there are legal obligations for that to occur. And of course our focus here is supporting the employee who has done it very tough and obviously needs that security, needs that surety that they will continue to get that income support. But let’s also be very clear Pete, to date the Government in its first two tranches of economic measures, announced unbelievably significant measures, unprecedented in scale and scope; enhancing the safety net, providing this JobSeeker coronavirus supplement, which is going to be available to so many Australians, our support of up to $100,000 for small businesses so that they could keep people employed and meet some of their fixed costs as well as the loans that we are helping to co-guarantee with the banks to small businesses. All very substantial measures designed to keep people in employment and businesses in business.
PETER STEFANOVIC:
Is rental assistance still on the table?
JOSH FRYDENBERG:
Well we already provide Commonwealth rental assistance and obviously that’s a significant help to many people. As the Prime Minister said last night when it comes to commercial and retail tenants, there’s a lot of work still to be done between the states and the Commonwealth. But last night’s announcement out of National Cabinet was also very significant because what it meant is that for those Australian businesses and for those Australian households who are severely impacted by the coronavirus, they cannot be evicted for not paying the rent over the next six months. That’s not to say they can’t work out with their landlord an arrangement that will suit both parties, this is a time for burden sharing as Australians go through a very difficult time.
PETER STEFANOVIC:
Well just on that, what happens in the instance that the landlord is a mum and dad investor? Let’s say it’s a unit or an apartment and that’s their source of income that’s going to steer them through retirement. Is there an option for them here to still be able to move someone on, a tenant on?
JOSH FRYDENBERG:
Well the first thing to say is, if a tenant is not affected severely by the coronavirus then they should meet their obligations under the lease. The second is, and you’ve seen this in particularly the retail sector, so many businesses have to close so therefore there are no customers coming through the door, no revenue, and therefore an inability to pay the rent. Well in that case, the landlord and the tenant need to work through the situation to get them to the other side. You see again there’s an alignment of interests here between landlord and tenant. The landlord wants to have a tenant after the coronavirus has gone through and that means ensuring that they support that tenant through this period. Likewise the tenant wants to maintain a relationship with their landlord and obviously to maintain their occupancy.
PETER STEFANOVIC:
And of course the bank has a role to play here. What do you make of the ABA’s decision to defer loans for six months today?
JOSH FRYDENBERG:
Well we welcome the announcement today by the banks and across the country. I mean we’ve been working very closely, Pete, with the banks on these measures and today their announcement that SME lenders, landlords who may have loans of up to $10 million, to have no interest or principal payments for six months, is very significant as well. That is all part of the hibernation strategy. Whether it’s with the banks and interest payments, whether it’s with the energy companies and energy bills, whether it’s with insurance companies their insurance premiums, or whether it’s in relation to wage support. What we are trying to do here is to ensure that businesses and households get to the other side and that this economic blow is cushioned for them as much as possible.
PETER STEFANOVIC:
Well Treasurer just finally, back on the JobSeeker allowance, so it is $1,500 a fortnight? I just want to confirm that.
JOSH FRYDENBERG:
Again, I’m not going to provide that level of detail on your show this morning…
PETER STEFANOVIC:
…Okay.
JOSH FRYDENBERG:
What we do have is already a JobSeeker coronavirus supplement on top of the JobSeeker payment. That was effectively a doubling of the old Newstart, an enhancement of the safety net, but there will be a further announcement today which will involve significant additional income support to Australian employees.
PETER STEFANOVIC:
The UK is going up to 80 per cent though, was that ever a consideration?
JOSH FRYDENBERG:
Again, we’ll have an Australian style system, not a UK style system.
PETER STEFANOVIC:
Treasurer Josh Frydenberg, appreciate your time.
JOSH FRYDENBERG:
Good to be with you.