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9 April 2020

Interview with Sabra Lane, RN Breakfast, ABC

Note

Subjects: JobKeeper package and legislation; supply chains;

SABRA LANE:

Treasurer, good morning. Are you ruling out any extension to this program given that you’ve said a line had to be drawn?

JOSH FRYDENBERG:

We’ll be implementing this program consistent with the legislation that passed the Parliament last night. As you know, Sabra, around six million Australians are likely to take up the JobKeeper payment at a cost of $130 billion. That’s a very big call on the public purse. You’ll see casuals, sole traders, those in the not-for-profit sector, as well as part-time and full-time workers, benefit from this wage subsidy scheme.

SABRA LANE:

Many politicians are pinning their hopes on a coronavirus vaccine. But it may not be discovered. A SARS vaccine was never realised. The Government’s economic support is for six months. How does the nation and businesses exit this hibernation and resume a more normal life without a vaccine?

JOSH FRYDENBERG:

We’ll continue to take the best possible medical advice and the Prime Minister is in daily contact with the Chief Medical Officer and, of course, the National Cabinet is being briefed regularly on the health situation. When it comes to our spending, we don’t want to have it going for one day longer than is absolutely necessary. That’s why we put sunset clauses in place, and we’ll continue to assess the situation as it goes on.

SABRA LANE:

But it may not be a snap back?

JOSH FRYDENBERG:

Well I think it is going to be some time before we see business as usual, and I think the Australian people are expecting that. Certainly, the Prime Minister has prepared the nation for at least a six month period in which we are struggling with the impacts of the coronavirus.

SABRA LANE:

This crisis has underscored what happens when a nation is reliant on global supply chains for its goods and services. What level of self-sufficiency does Australia need to have post-Covid crisis?

JOSH FRYDENBERG:

Sabra, I think this will be a global conversation, not just one domestically here in Australia. Because you’re absolutely right, during times of economic crisis, we’re seeing a disruption to those supply chains. So we have to have a level of self-sufficiency. It doesn’t mean we need to produce everything here in Australia, there are economies of scale that other countries may have that Australia doesn’t have. We’re pretty self-sufficient when it comes to agriculture. We have a degree of manufacturing here. But these are issues that we, as a Government, will be looking at over the course of the period after the coronavirus.

SABRA LANE:

How will Australian manufacturing capabilities be reshaped beyond the crisis? Are you leaving it to once the crisis is done and dusted, or will you put some thought into it now?

JOSH FRYDENBERG:

Look, we’re constantly thinking about these particular issues. But right now, our absolute focus is on delivering the economic support and putting in place the health measures that will keep Australians safe and that give us the best possible chance as a nation to build that bridge to the recovery phase that we know will come once the coronavirus crisis is over.  

SABRA LANE:

How will the Government identify the industries that are crucial to re-establishing Australia’s sovereignty and self-reliance? Also noting that the Prime Minister said that this is about sovereignty. 

JOSH FRYDENBERG:

Look again, these are conversations that will be had at the appropriate time. We do know that there are areas that Australia needs to be able to be self-sufficient in because when you have these disruptions to the supply chains, you don’t want to be in a situation where you can’t provide for one self in particular areas.

SABRA LANE:

Isn’t now the appropriate time to be having these conversations?

JOSH FRYDENBERG:

Well we are having conversations and we are looking at these particular issues. But our overwhelming focus at this point in time is on getting the country to the other side. As you can understand, the economic impact, Sabra, of the coronavirus has been immense. That’s why we have announced and passed through the Parliament last night a $130 billion wage subsidy that will support some six million Australians, together with the other two tranches of economic measures that we introduced, will no doubt provide a great relief and a cash flow boost to small businesses around the country, help stabilise financial markets, double the safety net for those who have tragically lost their job, as well as providing direct cash payments to more than 6.5 million Australians. 

SABRA LANE:

And the cost is immense for future generations. How will it be paid for?

JOSH FRYDENBERG:

I think the debt will be there for years to come, there is no doubt about that. But we make no apologies for spending what is required at a time such as this. We’ve gone into this economic crisis from a position of economic strength. Our debt to the size of our economy as a proportion was around a quarter of that here in Australia compared to that in the United Kingdom or in the United States. And we’ve seen Standard and Poor’s, one of the credit rating agencies, reaffirm our AAA credit rating just yesterday. So we do know that our responsible fiscal management has put us in a position to respond as necessary to this crisis. But we’re also very conscious that we don’t want the spending to be going for one day longer than is absolutely necessary.

SABRA LANE:

Mr. Frydenberg, you argued in your first speech that we need to limit the Government, our Government is too big. You’re not the Treasurer who presided over the biggest spending government program in history. Is your creed now thank goodness for big Government?

JOSH FRYDENBERG:

I think extraordinary times call for extraordinary measures, there is no doubt about that. But during this crisis, I’ve been speaking constantly with John Howard, and no one has seen politics in the way that he has over so many years. And he said to me, look, Sabra, he said to me during times of economic crisis, there are no ideological constraints, and I think that’s right. And I think what should be heartening for the Australian people is to see their Parliament coming together yesterday, reaching across the political divide, to pass the biggest economic rescue package that this country has ever seen.

SABRA LANE:

Mr. Frydenberg, thanks for your time this morning.

JOSH FRYDENBERG:

Good to be with you.