RAF EPSTEIN:
Thanks for joining us.
JOSH FRYDENBERG:
Nice to be with you Raf.
RAF EPSTEIN:
What do you think is going to happen to those two million people who won’t get JobKeeper after October?
JOSH FRYDENBERG:
Well, hopefully many of them will retain their jobs in firms that have been struggling through in the early months of this year but as the restrictions are eased and I’m talking particularly outside of Victoria, that their businesses that they work in are becoming a lot more viable. You see really at the moment, we are living in one country and two different stages. Outside of Victoria, restrictions are being eased and the jobs numbers that were out last week showed that 210,000 jobs were effectively created over the course of the last month, and the good news was 60 per cent of those were women and 50 per cent were young people. But here in Victoria, where we’ve seen the lockdown for some weeks, then the story is quite different and I think businesses and employees in Victoria will be receiving more of the JobKeeper pie going forward.
RAF EPSTEIN:
So you are saying though, aren’t you, that if your business has a 20 per cent reduction in turn over, but not 30 per cent reduction, you’re on your own? Those businesses essentially just have to sink or swim on their own.
JOSH FRYDENBERG:
Well there’s been other supports that we have been providing to businesses, like a $30 billion cash flow boost which is based on the size of their payroll and it’s putting money into the business’ hands to spend, not only on their labour force but also on other activities…
RAF EPSTEIN:
Oh look, I’m not accusing you of cruelty, it’s just that that Treasury review says there’s a risk you’re supporting businesses ‘whose longer term viability is not assured.’ You want to remove the support from businesses that aren’t going to survive don’t you?
JOSH FRYDENBERG:
Well the key point is, we want to put in place an eligibility test that is reapplied so that businesses that are doing it tough continue to get support and those that are doing better can stand on their own two feet. But there will be some businesses that are being kept in business effectively by the JobKeeper program that may not survive on the other side. But we want to give everyone their best chance of surviving.
RAF EPSTEIN:
Why do you think it is fair to ask people from next month to start looking for a job if they’re on JobSeeker? We’ve kind of got disastrous unemployment rates. Why do you want people to get out there and look for jobs?
JOSH FRYDENBERG:
Well the first thing to say is we’re actually seeing improvements outside of Victoria in people coming back into work. I think that’s really important to keep in mind when we’re speaking on Victorian radio. The situation in Victoria is quite different to the rest of the country. And we…
RAF EPSTEIN:
But the unemployment situation, you’re the one that keeps pointing out that the headline unemployment rate doesn’t reflect the real situation that nationally it’s about 11 per cent. So why are you forcing new tests on people in such a tough economic time?
JOSH FRYDENBERG:
Well actually that number has improved. So you’re right, it’s about 11.3 per cent today, that’s the effective unemployment rate. So that’s not only those who are officially unemployed, but those who have also left the labour force altogether or who are on zero hours. That was as high as 15 per cent back in April. So it’s come down and it will come down further as restrictions are eased. But the measures we put in place were temporary and what we’ve outlined today is a transition, an additional six months beyond the end of September so that businesses can plan for their future. I don’t think anyone can complain about the size of this program, bearing in mind it’s around $86 billion, the JobKeeper program. Right now it’s supporting around 3.5 million workers or around 30 per cent of the pre-COVID private sector workforce. It’s the biggest such expenditure item that any Australian Government has ever undertaken and it has really made a difference in being a lifesaver for so many businesses and their staff.
RAF EPSTEIN:
But it really means, doesn’t it, if a couple of million people come off JobKeeper, JobSeeker is going to be the number one most important thing for a lot of people isn’t it, for years, it’s going to be the key way you support people.
JOSH FRYDENBERG:
Well we’re going to live with elevated unemployment for some time. And the size of this economic shock is unprecedented in Australia and indeed it’s unprecedented for many other countries around the world. But what we’re trying to do is support the economy through this period, buy some time for businesses who will be viable on the other side to keep going and obviously it’s just one of a suite of many measures that we’re putting in place Raf. I mean we announced last week a major skills package to support apprentices, to support more than 300,000 new training places. That is going to be an important part of the message. The IR flexibility changes that we’ve introduced to go alongside JobKeeper are making a difference in workplaces as well, helping to keep people in work. There are a lot of things that we’re doing in addition to JobKeeper and JobSeeker.
RAF EPSTEIN:
It is just that JobSeeker is going to be so important for so many people. It is going to shift from $1,100 per fortnight to $800 per fortnight in October. Will it go down again in the New Year?
JOSH FRYDENBERG:
The Prime Minister today at the press conference made it very clear that there is a strong and likely expectation that what is called the ‘coronavirus JobSeeker supplement’ will be continued beyond the end of December. But unlike the JobKeeper program, JobSeeker itself is permanent. It is a big part of our welfare system. Previously known as NewStart, now it is known as JobSeeker, whereas the JobKeeper program…
RAF EPSTEIN:
But will it be permanently higher than the old Newstart?
JOSH FRYDENBERG:
Again, the Prime Minister answered that today when he said our focus right now is getting people back into jobs and that we will assess the future of the JobSeeker coronavirus supplement at the end of the year. But what we did announce today is an extension at a lower rate to the end of the year. But we also made some adjustments, Raf, to allow people to work more and not be penalised for that, recognising that gradually more jobs will be made available in the economy, people will be offered more hours and so they will get that welfare support as well as being able to earn income from their work.
RAF EPSTEIN:
I appreciate what you’re saying that the rest of the country is looking very different to Victoria and Melbourne at the moment. But if you’re on JobSeeker, the requirements to start looking for work are going to ramp up next month in Melbourne in the middle of lockdown 2.0. Is that fair?
JOSH FRYDENBERG:
Again, there will be provisions made for people who are subject to lockdown and obviously, we fully understand that and what we’ve talked about from the 4th of August is Jobseekers being expected to participate in appointments with providers. They need to agree to a job plan, undertake a job search and attend activities if it is safe to do so. So that is the key point. If it is safe to do so…
RAF EPSTEIN:
I’m not worried about safety…
JOSH FRYDENBERG:
Well, that is the health advice.
RAF EPSTEIN:
No, I understand that. But it might be really tough for somebody to even get their life organised to get to the online zoom appointment with the job provider. Is there any leeway there?
JOSH FRYDENBERG:
Again, those issues on a case by case basis will be worked through, but we certainly understand the circumstances in Victoria are not replicated throughout the rest of the country.
RAF EPSTEIN:
How badly is the economy going right now, do you think?
JOSH FRYDENBERG:
Nationally like I said, the jobs numbers beat the market expectations, but it is fair to say that the economic shock we’ve faced with coronavirus is having a very, very significant impact. It will be seen in the numbers that we will release on Thursday with the budget update, because you will see both in the growth numbers and the unemployment numbers, the wage forecasts, obviously the debt and the deficit numbers, all of those will indicate a significant deterioration in light of COVID-19 and what we’ve…
RAF EPSTEIN:
Are you okay those numbers being the biggest in history? Is that okay because it is unprecedented times?
JOSH FRYDENBERG:
As you know, it is a once in a century pandemic. People are going through a lot of economic pain through no fault of their own. We got through a pretty tough time with the drought. We’re getting through the bushfires and the budget was actually still on track for surplus earlier this year. But COVID-19 was just one whack too many and this is a very, very sizeable hit to the global economy. I mean to put it in perspective…
RAF EPSTEIN:
I’ll try get another question in because I know you’ve got to rush…
JOSH FRYDENBERG:
I just want to tell your listeners one contextual point here which is during the GFC, the global economy contracted by 0.1 per cent. This year as a result of COVID-19, the OECD is expecting the global economy to contract by a full 6 per cent. So it dwarfs anything that the world saw during the GFC.
RAF EPSTEIN:
I was going to ask if you had any more sympathy for Wayne Swan as Treasurer during the GFC. You’ve now experienced the unprecedented and the unexpected. Got any sympathy for him?
JOSH FRYDENBERG:
I’m not looking backwards, I am looking forwards. It would be good if they were a bit more positive about the Australian economy, rather than talking it down. But I’m not focused on them, I’m focused on the Australian people.
RAF EPSTEIN:
Thanks for your time.
JOSH FRYDENBERG:
Good to be with you.