PETER STEFANOVIC:
You were talking about the fact that businesses could go and get a pizza oven, or they could get a coffee machine or whatever, up to the space of about $150,000 right? So for those who aren’t aware of it, can you explain very simply what businesses can do to get that money back?
JOSH FRYDENBERG:
Well firstly you have to be a business with a turnover of less than $500 million and you can use this instant asset write-off multiple times and it is for goods that are purchased up to $150,000 and then it’s written off your tax bill. So of course it’s of great benefit to businesses because they may have put off a purchase for some time, because normally they would need to depreciate it over a number of years, but now that they can do it all in year one, it makes it a lot more tax effective for these businesses to go out and get that equipment and that will help the economic activity across the economy.
PETER STEFANOVIC:
So this scheme has been in place for some time…
JOSH FRYDENBERG:
It has.
PETER STEFANOVIC:
Why are you extending it? Is it because the take up has been slower than you might have originally thought?
JOSH FRYDENBERG:
Well we’ve actually had very strong take up, hundreds of thousands of businesses have used this program in the past. In last year’s Budget, I announced that it was extended to businesses for a purchase of more than $30,000, but what we did in the first tranche of the stimulus package in relation to the COVID crisis was to extend it for purchases up to $150,000 and that was a very significant change. We also increased the number of businesses that were available to get it and what we want to do now at a time when people are getting back to work and maybe demand is a bit slower than it was pre-crisis, is to encourage businesses to go out and to grow and to invest and to hire and this is one of the measures to do just that.
PETER STEFANOVIC:
Are any figures available yet on what the take up has been since it has risen to $150,000?
JOSH FRYDENBERG:
No, not as yet because we’re not at the end of the financial year. Once we’re at the end of the financial year we’ll be able to get those numbers. But extending it to the end of this calendar year will be seen as a very welcome move by businesses right across the country.
PETER STEFANOVIC:
Okay, so what you’re basically trying to do is you’re trying to get businesses to spend. But for so many businesses the money is just not there at the moment.
JOSH FRYDENBERG:
Well that’s right, for a number of businesses it is very tough, but businesses are not just looking at today, they’re looking at tomorrow and they’re looking at the restrictions being eased, people getting back to work and getting back to their normal lives and economic activity as it was. And so this initiative has a view to the future and it’s encouraging businesses to take that next step to buy the equipment or the tools that they need and to help them grow, help us become more productive as a nation as well.
PETER STEFANOVIC:
Just on the HomeBuilder announcement from last week Treasurer, have you got any information yet on how many people might be looking to take that up?
JOSH FRYDENBERG:
Sorry, say that again?
PETER STEFANOVIC:
Your HomeBuilder announcement, yes, bear with us folks, we look like we’ve got some connection issues here again. Your HomeBuilder announcement that you announced with the Prime Minister last week, has there been any information that’s come to you about how many people might be looking to take that up?
JOSH FRYDENBERG:
Well the Housing Industry Association, the Property Council and others not only welcomed this, but they’ve also been saying in recent days that there has been an increase in the level of activity and interest. I have been speaking to home builders over the course of the weekend and certainly their activity has picked up in just a few days since the announcement. We saw on the Treasury website more than 50,000 hits just on that day alone that the initiative was announced as people want to get more information. So I’m confident that this will be used by the people who need it, and importantly, it will help again stimulate the activity for our vital construction sector.
PETER STEFANOVIC:
Just on to a few other issues before we lose this link Treasurer. Childcare help is phasing out, is this the beginning of the winding back of other sectors?
JOSH FRYDENBERG:
Well in terms of JobKeeper we are doing a review at the mid-way point over the course of this month, and we will announce the outcomes of that review when we provide an economic and fiscal update on 23 July. With respect to the childcare announcement made yesterday by the Minister, when we put in place the package of support, it came at a time Pete, when the viability of our childcare sector was threatened and we needed to provide additional support to ensure that many (inaudible)… the support we needed across the economy and the community at that time. Our support package has worked, 99 per cent of childcare businesses remained operational, which was a good thing. But now that the coronavirus curve has been flattened, people have started to get back to work, we have seen an increase in demand, demand is around 74 per cent of what it was pre-Covid, and we are phasing in with a transition plan, the changes that we announced yesterday, including easing the activity test. So if your income was affected by the coronavirus or you are still out of work, you will receive that additional support provided you meet the criteria.
PETER STEFANOVIC:
Okay, just finally Treasurer, just on these protests that have taken place on the weekend. I’m just wondering what you think about all of this? State Governments have been accused of double standards when it comes to placing restrictions on businesses and what not, and then these protests are allowed to take place, these Black Lives Matter protests are allowed to take place. What’s your view on this? Particularly in your home state of Victoria where fishermen in the Mornington Peninsula have been told to get off the pier because of restrictions, but then there’s a protest that’s allowed to take place.
JOSH FRYDENBERG:
Well I think people are scratching their heads and asking on the one hand how can you not allow me to go to the pub in the numbers that we were previously or go to a sporting fixture or indeed go to work, but at the same time thousands of people can gather, and I think they are legitimate questions to be raised. I think it also reflects an unjustified complacency among certain parts of the community about the end of the coronavirus. We are not at the end of the coronavirus. In fact we are very concerned about a second wave of cases. And everyone needs to be vigilant, everyone needs to be patient and everyone needs to follow the medical advice. It has been a great success for our nation that we have all come together, those front line health workers and the community at large, with governments across the geographical and political divides to ensure that we flatten that curve, and now we are the envy of the world with what we have achieved. Let’s not put that at risk. I understand the legitimate grievances that people have and their want to demonstrate and to air their views, but there must be a better way, there needs to be a better way. We need to preserve the success we have had in flattening that curve.
PETER STEFANOVIC:
Alright, now the Prime Minister did promise that childcare, JobKeeper, would last for six months. That promise had to be broken. Will there be more promises broken when it comes to JobKeeper and how much, how long, it can be paid for.
JOSH FRYDENBERG:
Well the commitment we gave to the Australian people was to ensure that we would provide the support that they needed to build the bridge to the recovery phrase, and that is exactly what we’re doing. What we’ve got here with the childcare sector is a transition to the system that existed pre-Covid and it has been strongly welcomed by them. It has been strongly welcomed by the Childcare Alliance, by the Early Learning Council and by other groups within the childcare sector. This is what they wanted, this is what we have delivered and we are providing that additional support for people whose incomes have been affected.
PETER STEFANOVIC:
Treasurer, thanks for bearing with us there. Appreciate we got you over two breaks today, talk to you soon.
JOSH FRYDENBERG:
Thanks Pete, all the best to you.