RAY HADLEY:
Treasurer, good morning to you.
JOSH FRYDENBERG:
Good morning to you and your listeners, Ray.
RAY HADLEY:
Well, Josh, I've firstly got to commend you and the Government, and this goes across State borders as well, for the energy you're all displaying. I don't know how you get up every morning and deal with this but you are doing an incredible job as a Federal Government, as a State Government in New South Wales and Queensland. It's apolitical. It doesn't matter whether they're Labor, Liberal or anywhere in between. But, by gee, we needed you and we need you right now. So, well done.
JOSH FRYDENBERG:
Thanks, Ray.
RAY HADLEY:
I'm a supporter of JobKeeper but I've got a few questions I need to share with you. When we first had a yarn about this off air, you explained to me that, you know, there'll be some people better off and some people worse off and people have just got to cop that. You know, some part-time and some casual will get the $1,500 a fortnight and others who are full-time and working 38 to 40 hours will be a little worse off as the case may be. But that's, I mean, it's just part of spending $130 billion, which is unprecedented. You keep telling us that the employer can top it up. So if he's got someone on $2,000 a fortnight, he can chip in another $500 as well as your $1,500 and make it back to $2,000. The question being asked by people; if the company is not in a position to top it up, so to speak, is there a requirement for the worker to still work on a full time basis for the 38 or 40 hours they were working previously or is it by negotiation?
JOSH FRYDENBERG:
Well, you've basically got to pay them the hourly rate you were paying them. You can reduce the number of hours, and obviously that's to be worked out between the employer and employee. But, to put it very clearly, if an employee is earning $3,000 per fortnight for a 38 hour week, then the JobKeeper subsidy will pay $1,500 and the employer is obliged to pay the additional $1,500 if they still want that employee to continue working all those hours. And the point of this is to ensure that the costs of employing someone comes down. That's why it's a wage subsidy and we want to keep more Australians in a job, Ray. We want to make it easier for businesses to keep Australians in a job because we know there's going to be the other side of the coronavirus and we just want to get everyone there.
RAY HADLEY:
Now, would there be companies, for their own reasons, who won't participate in this? That they just think that, look I'm not making any money, it's not as if I've dropped 30 per cent, I've got no income, and there's no point being part of it because, at the end of the day, there's no future for my company. Are those problems that you'll encounter through this JobKeeper program?
JOSH FRYDENBERG:
Well, Ray, what I'd say to those businesses that may have closed their doors, for example, because of the social distancing laws and the health restrictions that have been put in place, is that we obviously want you to bounce back on the other side. So you will still have employees that are on your books. You are eligible to apply to the ATO on, effectively their behalf, to get that $1,500 payment per fortnight per employee. And I'd encourage those businesses to do so because that maintains that formal connection between the employer and the employee and, obviously, will provide a significant amount of money to those staff to help them through this difficult period.
RAY HADLEY:
Now, one of the questions I keep getting asked, and this goes to the very heart of it, and I know the person involved here and I've known them because they are working in pyrotechnics and they're one of the biggest businesses in New South Wales in relation to celebrations at grand finals and over Christmas, and obviously with the fires in New South Wales they were doing it tough before the pandemic. Now, the problem they have is this; everything I read on JobKeeper says businesses need to continue to pay since mid-March to the end of this month to receive the $1,500 a fortnight. Now, given that my business has suffered a 100 per cent reduction in revenue and we are forced to close, we've got no money coming in for months and months ahead. All our staff have been stood down since mid-March, we can't pay our staff because we don't have any money, we have no cash in the bank. We have, that was after the bushfire season, and he says the events and entertainment industry, one of the first to shut down, and this is a recurring question, given that you're saying to people who employ people "look, you give them the money, the $1,500, between now and the end of April and as of the 1st of May, we'll give it back to you." What if they have no capacity to pay that money, none whatsoever? How do they battle through until the end of this month?
JOSH FRYDENBERG:
Now, the issue that you raise is a very legitimate one. Like I understand the cash flow challenges that businesses, particularly at this time, are facing. What I'd say to that is that in the event that a business does not have that money available, they do need to see their bank because the banks, through the Australian Banking Association, have put out a statement to say that banks will work with their customers to bridge these few weeks with funding till their first JobKeeper payment arrives in the first week of May, which is just a couple of weeks away. And so that is really important that they have that conversation. Now, I know some other businesses have already started to pay their staff based on what they're going to receive from JobKeeper. I got a call from a long term casual employee who I know who works for a retail business. The retail business closed its doors but they still got their $1500 payment and I'd say the more businesses that do that, the better. But for those that are struggling with their cash flow, like the one you've just mentioned, they must go and see their bank and my understanding is their bank is going to be accommodative.
RAY HADLEY:
Okay, and if the bank is not accommodating them, what's the next step? I mean…
JOSH FRYDENBERG:
Contact you and contact us.
RAY HADLEY:
Okay. So if the banks saying, "No, no, no, no" you know, despite this company, I know this company personally have a great history of producing great products, and will return to that in the future. Now, there's another strange one I've just received while we're talking, someone's listening at the moment. Now, Woolworths own pubs, the ALH, I think it is, Australian Leisure Hotel. Now they're all closed, obviously. And one of the workers applied for JobKeeper but Woolies have come back and said, "No, we're making too much money, we don't qualify" which was understandable given supermarkets remain open. So, how does it work in a large company like Woolworths which has a division which runs pubs, of course, and liquor outlets, when they put people off because the pubs are closed and then they say to the workers, "Well, sorry, you can't get JobKeeper." That doesn't seem fair.
JOSH FRYDENBERG:
Well, it depends on how that conglomerate, how that bigger company, does its tax returns because many of them will do separate tax returns for separate entities within the one group. So, for example, the supermarket will put in a separate tax return from the retail business even though they're owned by the same larger company. In that case, the Tax Office can look at those individual circumstances and provide the JobKeeper payments.
RAY HADLEY:
Well, I guess we go back to Woolies now, to the CEO, who has been very cooperative on a whole range of fronts, and say "Oh mate, you've got all these people working at your pubs who haven't struck a blow for a month or so and should be entitled to JobKeeper. Surely to goodness, even though you are owned by the same conglomerate, this is a division which is, you know, losing a lot of money, your pubs, and of course your liquor outlets to a certain extent, but moreover the pubs and the liquor outlets, and surely to goodness you can do something about that.” So I'll take that up with Woolworths. I understand it's something that you can't deal with particularly. There's another…
JOSH FRYDENBERG:
They should also speak directly to the Tax Office, Ray, because there is an element of discretion within the way the Commissioner can operate but there's also the rules that have been published.
RAY HADLEY:
When you say "they", are you talking about the employees talking directly to the ATO as opposed to the employer?
JOSH FRYDENBERG:
No, the employer should.
RAY HADLEY:
Okay. So, in other words, we go to Woolworths and say look, you better have a yarn to the ATO. I've got another one about charities, St Vinnies in particular. There's a person who's been working part-time for them, and they've been toing-and-froing and they've been cut off and they can no longer work at St Vinnies, and they were a volunteer, became a part-time nine years ago. The person in charge of all of this from St Vinnies has written back to the person and said, "I'm sorry, we don't qualify for JobKeeper so we won't be applying for it." My understanding was charities certainly do qualify. Is that not the case?
JOSH FRYDENBERG:
Well, many charities will, and let me make a couple of points here. The first is they won't know yet as to whether or not they qualify because they've got to put their application in, register it with the ATO, provide the details and then the ATO will be in contact. So I'd say to Vinnies and to the other charities and the other businesses, make that step just as over 800,000 businesses, sole traders and not-for-profits have already done. The second point is we put in place a lower threshold for those charities. So while businesses may either have to see their turnover reduced by 30 per cent or more, for charities their turnover only has to fall by 15 per cent or more. The other important amendment we made to help charities is we said that donations could be included in the definition of "turnover". So if they've seen a decline in their donations, which many have, because people just don't have as much money in their pockets to give, then that would also be a factor in making them eligible for JobKeeper. So, again, Vinnies should take that up directly with the ATO as a matter of urgency.
RAY HADLEY:
Just in terms of that drop of turnover. And look, I'll give you an example off the top of my head. A builder wrote to me and said, "Look, we had a fantastic year last year, wonderful. Things haven't been too good this quarter but we're not down on the figures by the 30 per cent." However, I wrote back and said, "Well, look, you look at your figures as of March 1 and take it through until the next four or five weeks, those are the figures you compare." Is that exactly right advice I've given that person?
JOSH FRYDENBERG:
Well, you take a month period and you compare it to the previous year and, again, there will be certain circumstances, Ray, where the ATO will use its discretion. So, for example, and a lot of your listeners would be conscious of this, last year was the drought, it was a very bad drought. So businesses that were affected would have seen their turnover be low to start with. Again, those circumstances, the Tax Office can take that into account in determining a business's eligibility.
RAY HADLEY:
Okay. So, in other words, it's not cut and dried because, as you say, those in New South Wales and Queensland particularly would have been impacted by drought in regional areas and so their turnover 12 months ago would have been down on their turnover from 2018 say, so it’s something…
JOSH FRYDENBERG:
Correct.
RAY HADLEY:
Yeah, the ATO can look at that. There's not a hard and fast rule per se?
JOSH FRYDENBERG:
I mean, look, the clear message to everyone listening to your program is we want this program to work for them. It's unprecedented to have a $1,500 a fortnight payment. That's about equivalent to 70 per cent of the median wage or, if you're working in retail or hospitality and tourism, it could nearly be a full replacement wage. So we've given the ATO the discretion to operate this program in a way that helps your listeners.
RAY HADLEY:
How hard was it sitting down with key members of your Government and coming up, I mean, when someone firstly said, "well, we'll need $130 billion", did someone eyes glaze over and say, "Look, we've been around since Federation but you're stark raving mad, we can't give away $130 billion of the country's money". And then at the same time everyone is agitating for you to do something because people in the media are saying, well, you've got to take the lead from New Zealand, you've got to do this, you've got to take the lead from the UK. I mean, when the figure was firstly mentioned, and you're a practical man, did you scratch your head and say, "Geez, I don't know about this, this is a bit over the top"?
JOSH FRYDENBERG:
Well, I took a massive gulp and a deep breath and I was talking, obviously, to the Treasury officials about it and then had to break the news to the Prime Minister. But, you know, to his credit and to the rest of the Cabinet's credit and to the Government's credit, we recognised that we needed to do this even though it had a very big price tag and even though the debt will be paid back for years to come, because it was heartbreaking to see those queues outside Centrelink. And this is a health crisis, the likes of which the world has never seen and, you know, all I'm focused about is keeping people in a job so that they get to the other side and they can preserve their lives and their livelihoods.
RAY HADLEY:
Yeah, there are others that have written to me, I'll just quickly go through them. Bailey, taxi driver, driving out of a base, sole trader, has got an ABN, registered for GST, "How do I pay myself as an employee?" And this bloke is a really honest bloke, he’s been driving cabs for 40 years. He said, "Look, I can hardly work, mate, 80 per cent of the city is closed down. Am I entitled to the $1,500?" And I said to the bloke, "Yes, you are". He's 68. “You're getting up at 3 o'clock in the morning, you go until 8.30am, then you drive till 3pm in the afternoon and sometimes you make $15.” Well, of course, this particular person qualifies as a sole trader, correct?
JOSH FRYDENBERG:
Well, you can qualify as a sole trader and obviously you need your ABN number and make the application with the ATO.
RAY HADLEY:
Okay. Well, the Taxi Council have told me that, in their eyes, they are eligible for JobKeeper. Now, I can't let you go. I thought you were very strong when I saw you yesterday on the reopening of the wet markets in Wuhan and your condemnation of the World Health Organisation. It appears today, after Donald Trump said “chewy on your boot, you're not getting $400 million from us if you're going to open the wet markets again”, that they are softening their stance. All of a sudden, the Ethiopian leader of the WHO is backing away from the earlier indications that they supported it. Hopefully that's the case but it doesn't stop the fact that the wet markets are operating again, not just in Wuhan but other parts of Asia as well, and that's a really, really, really dangerous thing, I think.
JOSH FRYDENBERG:
Well, you'd expect the World Health Organisation to be doing things that preserve our health. I mean, that's in their title, Ray. I mean, these wet markets have been the source of the swine flu and SARS and now the coronavirus and the like, and you've got health professionals around the world saying that they should close. I really do hope they do. And I obviously, you know, think that the World Health Organisation does need to lift its game. We were ahead of the World Health Organisation in calling the coronavirus a global pandemic. We also shut our borders with the travel bans to China on the 1st of February and the World Health Organisation, you know, criticised us for doing that. Yet that was really important in our response to this pandemic. So I think the World Health Organisation has made some mistakes and we'll certainly use our leverage to try to influence them to do better in the future.
RAY HADLEY:
I'm a bit confused. I know the Americans give over $400, maybe $440 million dollars annually. The next best is Great Britain. What do we physically give the World Health Organisation as a nation on a yearly basis?
JOSH FRYDENBERG:
We've given more than $40 million to the World Health Organisation but you have to recognise too that it plays an important role in our region. Like, not everything that they do in Geneva is necessarily playing out here on the doorstep in Asia, and preventing the spread of, you know, measles and malaria for example and the like, is really important for the health outcomes of the communities on our doorstep. And so I think we need to continue to support those efforts but where they trip up, we'll point it out.
RAY HADLEY:
Is there any reason you can tell me why the Ethiopian leader, the Director General, is so obliging for the communist Chinese government, kowtowing to them? You mentioned February 1, criticism of us and the United States for closing borders. What are they, have they got photos of him or something? What's the story? Why does he keep, I'm sorry but that's the coarsest way I can put it. I mean, why does he keep kowtowing and bowing to them and scraping to them? Is it because they're building a railway line in his native Ethiopia? What is it? Why?
JOSH FRYDENBERG:
Well, look, I think you'll have to invite him on your program to ask him those questions. They've done some strange things over there, including, you know, having Robert Mugabe play a bit of a public role for them. I mean, you know, that's a shocker as well.
RAY HADLEY:
Yeah. Well, there are plenty of shocking things. Look, it won't be the last time you and I talk probably, in relation to all of this but you've answered many of the questions that are put to my listeners and I can answer with some authority when they talk to me. But for those who don't have the cash at the moment, and there are quite a number of them, in fact probably dozens of them, you simply go to your bank. If the bank says no, you come to me, I go to the Treasurer and we try and sort it out. I appreciate your time. Keep going. How long since you've seen the wife and family, by the way?
JOSH FRYDENBERG:
It's been a little while but, you know, as you know, FaceTime is one of those modern technologies but, you know, it's not about me, Ray, it's actually about all your listeners and the Australian people who are doing it tough right now and we'll get through it but we must stick together.
RAY HADLEY:
Well, I read some notes of the book to be released by Malcolm Turnbull, it will make a good doorstop somewhere in my home, but I note that for all of other criticism of your fellow politicians, he says you're a very hard worker and that's high praise indeed from the former Prime Minister.
JOSH FRYDENBERG:
Well, you've obviously read more of it than I have. I haven't seen it but what I do know is I'm concentrating on the future, not the past, and my job is to serve the Australian people and that's what I'll continue to do.
RAY HADLEY:
Well, the only suggestion I'd make re the book is that people not to rush online, not to rush to bookstores and buy it at the moment because in about a month it will be on special for $2. Thank you very much for your time.
JOSH FRYDENBERG:
Ray, you take care and maybe you should get Anna Bligh as the head of the Banking Association on your program because she's working hard with her members to try to get their support to their customers ahead of the JobKeeper payments arriving.
RAY HADLEY:
It's a great idea. I'll take up that offer and I'll try and get hold of Anna Bligh. Thanks for your time.
JOSH FRYDENBERG:
All the best, Ray. Bye.
RAY HADLEY:
Thank you. Josh Frydenberg, the Treasurer.