PETER STEFANOVIC:
We’re joined by the Treasurer Josh Frydenberg. Treasurer good morning to you, thanks so much for joining us.
JOSH FRYDENBERG:
Nice to be with you Pete.
PETER STEFANOVIC:
So onto this wage subsidy scheme, how many businesses have signed up for help so far?
JOSH FRYDENBERG:
More than 60,000 have already registered their interest on the ATO website and no doubt tens of thousands will do so as well today. This has had a lot of interest as you would expect, Pete. A number of businesses will need this wage subsidy to keep their employees and we want to maintain that connection between the employer and the employee because once we get to the other side of this coronavirus we want the economy to bounce back stronger than ever.
PETER STEFANOVIC:
Do you have a percentage of businesses that you think, or hope, this will save?
JOSH FRYDENBERG:
Well I think it will save thousands of businesses and more importantly, millions of employees. We know that around six million people, employees, will benefit from this scheme, that’s the expectation. And certainly at $130 billion over the next six months, Australia’s never seen income support like this and that reflects the unprecedented nature of the times that we’re in. I mean, Australia is fighting a war on two fronts, a health crisis and an economic crisis simultaneously. But Australians know that their Government has their back and yesterday’s announcement by the Prime Minister and I signalled our intent.
PETER STEFANOVIC:
Well a week ago the Prime Minister ruled out a wage subsidy scheme, so in that time, what was the catalyst for change?
JOSH FRYDENBERG:
Well the first thing to say is actually we had a wage subsidy scheme in our earlier tranches; it was confined to apprentices with a 50 per cent wage subsidy to support 117,000 apprentices. What the Prime Minister was rightly saying is he wasn’t going to go down the path of the United Kingdom scheme, developing whole new systems, he wanted to base what we do in the most effective and efficient way, having it delivered through existing tax and transfer systems. And that’s what we did with yesterday’s announcement. Our announcement is a lot broader than the United Kingdom’s scheme. Theirs applies to workers that have been stood down, ours applies to not just workers that have been stood down, but also those that continue to be working. As well as that, our scheme is a lot more generous than New Zealand’s scheme. And in the case of both the UK and the New Zealand scheme, they go for three months, our scheme goes for six months, reflecting the Prime Minister’s comments to the Australian people that they need to be prepared for the long haul and for at least six months for the coronavirus to go for.
PETER STEFANOVIC:
Will this stave off a depression?
JOSH FRYDENBERG:
This will be extremely important in supporting employees across the country. And we know how difficult it is for people who have been stood down or retrenched and we saw those heartbreakingly long queues outside Centrelink and this policy is designed to make it easier for employers to keep their employees and to make it easier for the economy to bounce back on the other side.
PETER STEFANOVIC:
But it won’t save every business. So is depression still a possibility?
JOSH FRYDENBERG:
They’re your words, not mine. I know the Australian economy is remarkably resilient. And Pete, we balanced the books, we, for the first time, delivered the first balanced budget in 11 years. That financial discipline has given us the financial firepower to now respond as we need to. A lot of other countries don’t have that flexibility that Australia does, and so the economy is resilient, people are very entrepreneurial and we’re going to come together in this Team Australia moment and we’ll get to the other side.
PETER STEFANOVIC:
It is an eye-watering amount of money Treasurer, how long do you expect it to take to pay off?
JOSH FRYDENBERG:
It will take years and years. And there’s no secret in that. It just reflects the…
PETER STEFANOVIC:
I mean, does it even matter? You’ve got to do what you’ve got to do right?
JOSH FRYDENBERG:
We have to do what is needed at this time, and that is to support the economy with this very significant wage subsidy, but it also builds on the initiatives to date. More than $180 billion worth of initiatives were previously announced by us, including giving people access to their superannuation, changing the deeming and the drawdown rates, providing cash payments of up to $100,000 to small businesses, partnering with the banks so that we could co-guarantee loans of up to $250,000 to small businesses, that wage subsidy for apprentices that I talked about earlier, accelerated depreciation and the instant asset write off being extended and expanded. All these issues are being, and these initiatives, have been very important and yesterday’s announcement just builds on that.
PETER STEFANOVIC:
Virgin wants $1.4 billion loan package Treasurer, will they get it?
JOSH FRYDENBERG:
Look, I don’t want to comment on the specifics of approaches to Government, as you would expect they are commercial in confidence. But what I do say is that we support strongly the aviation sector and that’s been reflected in our earlier announcements about more than $700 million worth of relief to the aviation sector and one of the beneficiaries of that was Virgin. But I think yesterday’s announcement Pete, will be very important for a company like Virgin, as well, because it will provide wage subsidies for many of their workers.
PETER STEFANOVIC:
Paul Scurrah says it would be part of a broader package of about $5 billion which is quite a step up from that $750 million. I mean, what’s the likelihood of that being achieved?
JOSH FRYDENBERG:
Well again, I don’t want to speculate on the specifics other than to say I have a good working relationship with both Paul Scurrah at Virgin as well as Alan Joyce at Qantas. The aviation sector is critical, not just to employment but to the operation of the economy, and in terms of the movement of people and goods around the country and indeed overseas. So we strongly support a viable, sustainable aviation sector and our actions to date reflect that.
PETER STEFANOVIC:
Treasurer I know you’ve got to go but just quickly, is there more stimulus to come? And what is it?
JOSH FRYDENBERG:
Look we’ll be making further announcements in due course about various initiatives but they won’t top what was announced yesterday. That is the most significant announcement that you will see from a Government, I’m sure for years to come. But it does reflect the unprecedented nature of the times and extraordinary times call for extraordinary measures and yesterday’s wage subsidy was exactly that.
PETER STEFANOVIC:
Well some economists have said this could take ten years to pay off, is that about right?
JOSH FRYDENBERG:
Well some economists have called this the economic security blanket for the nation. I’ll leave it to them to commentate. When it comes to my job, it’s to deliver, and that’s what hopefully we did yesterday.
PETER STEFANOVIC:
Treasurer Josh Frydenberg, appreciate your time this morning, thanks for joining us.
JOSH FRYDENBERG:
Good to be with you.