PETER STEFANOVIC:
Treasurer, good to see you. Thanks for your time this morning. Your fourth tweak in two months, is that a measure of you underestimating the problem in Sydney?
JOSH FRYDENBERG:
Well it's pretty tough news for millions of people across New South Wales yesterday to hear that they're going for another month of lockdowns, and we've seen that before in Victoria, these lengthy lockdowns take their toll on businesses and families. But what we have done yesterday is announce a significant boost to economic support packages for both households and for business. I think its welcome and it does reflect the lengthy nature of this particular lockdown.
PETER STEFANOVIC:
What do you do though for the businesses who perhaps aren't right in the fire at the moment in Sydney, those businesses perhaps on the Gold Coast or, you know, in the ACT or wherever that rely on tourism for people coming from Sydney or New South Wales? What's available for those businesses?
JOSH FRYDENBERG:
Well there are definitely consequential impacts of the lockdowns in New South Wales, and until yesterday in Victoria, on other States. But we also know, Pete, there was a very tight labour market going into this most recent outbreak. The unemployment rate fell to a decade low of 4.9 per cent. The message that we were getting from businesses right across the country, including in Queensland, Western Australia, South Australia, was about labour force shortages, finding it difficult to get workers. And that was exacerbated by the fact that our borders have been closed during COVID and we haven't seen foreign workers coming to this country in the numbers that they previously did. So the issues in the businesses outside of those hot spot states have been about shortage of workers as opposed to a surplus of workers. So right now our focus is on those states, particularly New South Wales, we also announced a package for Victoria too yesterday, to try to cushion the blow for those businesses and those families that have been hit hard by the lockdown.
PETER STEFANOVIC:
Gladys Berejiklian is costing you a lot of money at the moment. Are you happy with the decisions that she's making?
JOSH FRYDENBERG:
Well I think they are doing everything possible to get on top of this outbreak. Obviously the numbers are too high and we want to see them come down. Victoria, the good news is that they've come out of their two-week lockdown. South Australia out of their lockdown. It's hopeful that we can see over time New South Wales come out of their lockdown. But our role as the Federal Government is to provide support right across the country, and that is what we're doing in New South Wales to the tune of three quarters of a billion dollars a week - a very significant package of support. We increased yesterday the threshold for which businesses are eligible for these payments from $50 million in turnover to $250 million. We increased the amount that these businesses are to receive each week from $10,000 to $100,000. And as you know, we increased the income support for households from $600 to $750 a week, or if you lose less than 20 hours of work then from $375, we increased it to $450, and we also put an additional payment of $200 for people who are on welfare support but had also lost hours of work.
PETER STEFANOVIC:
Yeah.
JOSH FRYDENBERG:
So this is a substantial package of economic support designed to cushion the blow for the difficult weeks ahead.
PETER STEFANOVIC:
There's going to be more blows to come though. I mean four weeks of a lockdown extension here, it may well be ambitious, it could be much longer than that. The Prime Minister saying yesterday that there could well be lockdowns right up until Christmas. So how much of this is going to affect the Federal budget, the bottom line? What's the overall cost going to be here, $5‑$10 billion?
JOSH FRYDENBERG:
Well it's definitely going to be substantial, and we know that the hit in the September quarter is likely to be very significant and I won't be surprised if we see a negative quarter in the September period. That's not to say the December quarter will be negative, we just don't know what's around the corner.
PETER STEFANOVIC:
But an overall cost, have you got an idea of an overall figure when it comes to your budget? Is $10 billion about right?
JOSH FRYDENBERG:
Well Treasury's estimate is that the lockdowns in Victoria, New South Wales and South Australia were costing about $300 million a day, so just over $2 billion a week. That was Treasury's estimate. Now South Australia and Victoria are out of lockdown and that number will come down. But New South Wales is our largest economy. It's vitally important as part of our national economic engine and we want to see the people of New South Wales come out of lockdown and there's only one way do to that and that's to follow the medical advice to suppress this outbreak, to contact test and trace, and of course vaccination is our ticket out of this crisis.
PETER STEFANOVIC:
Yeah, well the medical advice though hasn't been ‑‑
JOSH FRYDENBERG:
And that's why it's been very pleasing to see higher numbers.
PETER STEFANOVIC:
The medical advice hasn't been exactly right all along by somewhat contributing to vaccine hesitancy.
JOSH FRYDENBERG:
Well, that's why the most recent medical advice from ATAGI, where they strongly recommend people to take the AstraZeneca vaccine rather than waiting for alternative vaccines. Obviously you've got to go and see a doctor in certain circumstances as well.
PETER STEFANOVIC:
Yes.
JOSH FRYDENBERG:
But that change in the medical advice from ATAGI now aligns, Pete, with the situation on the ground and I think that's a positive step forward.
PETER STEFANOVIC:
Now that ‑ while New South Wales and Sydney in particular is still in the grips of a lockdown that may well be extended, as I said, beyond four more weeks, Victoria has been in and out of a lockdown so is that the new standard? Are they now doing it best? Is Daniel Andrews now doing it best?
JOSH FRYDENBERG:
Well we welcome the fact that they've come out of lockdown and also that they were able to get on top of this outbreak over the course of the two-week lockdown. That being said, Victoria's had five lockdowns, more than any other State, and Victorians have spent more than 200 days in lockdown and that's been very difficult on businesses, on families, on school students who have been out of the classroom. But the good news is they got on top it and they acted early and that's welcome. But we don't know what's around the corner and we do know though that Delta is more contagious, more dangerous than previous variants and that's why I think you'll see in the future shorter, sharper lockdowns as the new default position for State Governments rather than waiting.
PETER STEFANOVIC:
Have you buried the hatchet with Daniel Andrews at all?
JOSH FRYDENBERG:
Well my name was on a press release with him and the Prime Minister and the Victorian Treasurer yesterday, so that's certainly a welcome development.
PETER STEFANOVIC:
Are you guys speaking to each other or what?
JOSH FRYDENBERG:
I haven't spoken to him for a while and obviously he was unwell and I'm very pleased to see he's back on his feet. I have a very good working relationship with my counterpart in Victoria Tim Pallas and I also spoke to Martin Pakula, the Jobs Minister. We reached an agreement on what we think is a very substantial package of $400 million of support for small businesses, with grants that are up to $20,000 in some cases across cafes and restaurants and hospitality venues and hairdressers and gyms. So we have broken bread and I think the outcome is good news for the businesses of Victoria.
PETER STEFANOVIC:
Treasurer Josh Frydenberg, appreciate your time. Talk to you soon.
JOSH FRYDENBERG:
Always a pleasure.