PETER STEFANOVIC:
Joining us live is the Treasurer Josh Frydenberg, Treasurer, good to see you. Good morning to you.
JOSH FRYDENBERG:
Nice to be with you Peter
PETER STEFANOVIC:
So the economy is going very well with an eye-watering recovery, that’s according to the Deloitte’s Chris Richardson. Why the need then to extend the loan recovery scheme?
JOSH FRYDENBERG:
Well we’re not out of the COVID-19 pandemic just yet, and the Omicron variant is a reminder of that. And small businesses have done it tough throughout this crisis. They’ve been having their doors closed prevent shoppers coming through. And, of course, we’ve been there every step of the way for them, whether it was the cash flow boost, Pete, which was the $35 billion initiative, the JobKeeper payments which helped them keep their staff on, working with the states to get rental relief from landlords, and working with the banks so that there weren’t repayments on their loans that were due at exactly the wrong time for them. And we also put in place the small business loans of up to $5 million for up to 10 years, they could either be secured or unsecured. They could be used to either refinance existing loans or go and purchase new equipment, whether it’s a cafe getting a new kitchen, whether it’s a tradie getting new tools, whether it’s a manufacturer upgrading their production line or an office getting a fit-out. This is money that they can go and borrow from their bank, and the government has been a partner in guaranteeing those loans. So it’s really just ensuring that we can bed down, lock down this recovery, and that is going to be absolutely critical.
PETER STEFANOVIC:
Is it just a coincidence that the scheme ends after the election, Treasurer?
JOSH FRYDENBERG:
No, it’s a six month extension, and I think that is reflective of the economic circumstances that we’re in. It was scheduled to end at the end of this year. We’ve already seen 80,000 loans taken up worth more than $7 billion. And the run rate for these loans has been around 4,000 a month. And the average amount borrowed has been over $250,000 in this most recent iteration of the scheme. So we’re expecting billions of dollars to flow out to small businesses. And this is money for them to back themselves. This is not free money – this is money for them to back themselves, to hire, to innovate, to grow their own business.
PETER STEFANOVIC:
How much better – you’ve got MYEFO this week. How much better off is the budget bottom line?
JOSH FRYDENBERG:
Well, the best indication of the improvement in the budget bottom line as a result of the stronger than expected recovery is what we saw in the final budget outcome for 2021, Pete. I was expecting and had forecast a deficit of $213 billion last October. It came in at $134 billion, which was an $80 billion improvement, and the reason being is that we saw hundreds of thousands of people in work that weren’t expected to be at that particular time. So the labour market is strong, even after this first recession in nearly 30 years. Unemployment today is lower than when we came to government – 350,000 jobs have been created since the start of September. Business and consumer confidence has picked up. Our AAA credit rating has been maintained, and we’ve seen very, very strong investment from businesses.
PETER STEFANOVIC:
Okay. Are more tax cuts on the way?
JOSH FRYDENBERG:
Well, look, I’m not going to add to that speculation. As you know, we’ve always sought to cut taxes, and that’s been our track record over the last three years and, indeed, longer than that. We have passed through the parliament more than $300 billion of tax cuts for households. We’re abolishing a whole tax bracket – the 37 cents in the dollar tax bracket – 95 per cent of taxpayers will may a marginal rate of no more than 30 cents in the dollar. We’ve seen small business taxes go down to their lowest level in 50 years, and we’ve put in place these record business investment incentives to use the tax system to spur investment across the economy. It’s a clear very contrast, Pete, between what we offer the Australian people – lower taxes and more jobs – and what Labor and the Greens offer the Australian people – higher taxes and fewer jobs.
PETER STEFANOVIC:
There are a lot of assumptions that are baked into your forecasts at the moment, aren’t there Treasurer? The fact that borders have to stay open. Now, on that subject, Queensland opens up today. Have you got a message to leaders as case numbers of Omicron or Delta or just COVID in general as they rise?
JOSH FRYDENBERG:
Well, stay calm and carry on is the clear message to state Premiers. Follow the plan. Don’t get spooked. We’re going to have to learn to live with this virus and the many variants that arrive. But our vaccines have proven to be an effective defence to date. We’ve seen a reduction in hospitalisations, a reduction in deaths, and we know that people are getting about their daily lives. Now, with respect to Queensland, this is great news, just in time for Christmas. This is a Christmas present for thousands of tourism operators across Queensland. And if Queensland wants to stay beautiful one day and perfect the next, it needs to keep its borders open, and constantly so. And we have already seen the tourism industry in Queensland do it pretty tough. We’ve been there as a federal government to support them, but there are more than 200,000 jobs relying on Queensland’s tourism industry. It’s worth more than $20 billion a year, and we want Queensland to prosper because when it does Australia also prospers.
PETER STEFANOVIC:
Treasurer Josh Frydenberg, thanks, as always, for your time. We’ll talk to you soon.
JOSH FRYDENBERG:
Good to with be you.