PETER STEFANOVIC:
Treasurer, Josh Frydenberg. Treasurer, good morning to you, thanks so much for joining us.
JOSH FRYDENBERG:
Good morning Pete.
PETER STEFANOVIC:
It was 30 years ago that Australia last had a recession, it took us seven years to recover from that, how long do you expect us to recover from this one?
JOSH FRYDENBERG:
Well we’re already starting the recovery with the easing of restrictions Pete, based on what was agreed by National Cabinet and Treasury believe that that will put 850,000 people back in a job and increase the economic activity across the economy by more than $9 billion a month, but the economy has weathered a storm, we’ve had flood, we’ve had fire, we’ve had drought, we’ve had coronavirus and not withstanding all of that, the economy has been remarkably resilient. It contracted by 0.3 per cent in the March quarter, but if you compare that to the United States, which contracted by 1.3 per cent, France by 5.3 per cent and China by 9.8 per cent, not only have we progressed on the health front far better than many other countries, but on the economic front as well we’ve avoided the fate of many other nations.
PETER STEFANOVIC:
Can you guarantee a recession won’t lead to a depression?
JOSH FRYDENBERG:
Well we’re absolutely focused on getting as many people back in a job and that’s why I’m on a building site soon to be joined by the Prime Minister and the Housing Minister because we recognise that the coronavirus has had a significant impact on a number of industries and we want people back at work, we’re ready to provide the support necessary, but we also recognise that by lifting the restrictions we’re going to make it much easier for people to engage in what they were doing pre-coronavirus.
PETER STEFANOVIC:
So a no to a depression, or is it possible?
JOSH FRYDENBERG:
Well we recognise that this is a challenging time but we’re absolutely focused on ensuring the recovery, and the recovery is underway and we’re much better placed than many other nations. We were on the economic cliff Pete, I mean we were facing a number of coronavirus cases increasing in Australia of more than 20 per cent per day. Treasury were contemplating a fall in GDP of more than 20 per cent in the June quarter, and we’ve avoided that economist’s version of Armageddon. We’ve avoided it because of the progress on the health front so we’re confident that the recovery will continue, there are some tough days ahead, the numbers will get worse before they get better but we are absolutely better placed than other nations.
PETER STEFANOVIC:
Ok, it’s all about the pathway out now, and it’s this HomeBuilder stimulus package that you point to, that you’re announcing in a short while from now, how do you stop the rorts?
JOSH FRYDENBERG:
Well firstly, we believe that this program will see hundreds of thousands of people get work as a result of this initiative and the other initiatives that we’ve taken across the economy. We know that the housing industry, and the housing sector more broadly is worth more than $100 billion to the Australian economy, and we’ve got lots of tradies out there, sparkies, plumbers, painters, all of whom are itching to get back into work and so this program is designed to get people to invest in a new property. But when it comes to the rorts and the integrity measures, we have put them in place. We’re working through the states, through existing systems, builders will have to demonstrate that the price that they are offering is based on a price of a comparable product from July last year, so we’re absolutely focused on putting in place good integrity measures.
PETER STEFANOVIC:
Well to qualify someone has to spend upwards of $150,000 to $750,000, what sort of uptake are you expecting given the country is in such poor economic shape at the moment?
JOSH FRYDENBERG:
Well we’re budgeting on between 25,000 and 30,000 new builds and significant renovations. As you say, a renovation needs to be above $150,000 and a new build of a home up to $750,000. There are income caps, you have to have an income of below $125,000 if you’re a single, and below $200,000 if you are a couple. But we know a lot of people have stood on the sidelines who are preparing and planning to build or to renovate, but because of the economic times, they’re just not going to go ahead with those plans, and so this is designed to increase that activity at a time when that sector needs it most.
PETER STEFANOVIC:
30 seconds Treasurer, why not extend it to social housing?
JOSH FRYDENBERG:
We already have $1 billion program for social housing through what is called NHFIC, and that is providing loans for thousands of dwellings, and that is providing an important service to the community. But also the states have a role to play here and we welcome the initiatives they’ve made to date, about investments in social housing, so this is a joint effort Pete, Federal and State Governments.
PETER STEFANOVIC:
Just a quick one word answer here Treasurer, the Treasury secretary yesterday said it was a U-shaped recovery that he was expecting, what letter is it going to be for you? Is it V, W or L?
JOSH FRYDENBERG:
It’s an R, meaning it’s a recovery. That’s what it’s going to be.
PETER STEFANOVIC:
Ok, Treasurer, Josh Frydenberg, thanks for your time. Talk to you soon.