TONY JONES:
Good morning, Treasurer.
JOSH FRYDENBERG:
Good morning, Tony, and good morning to your listeners, as we approach Christmas.
TONY JONES:
Yeah, when do you start taking a break?
JOSH FRYDENBERG:
Well, I’ve got a busy week ahead with the mid-year economic update on Thursday and then I’ll be working right through till Christmas and then Boxing Day. I’ll be sitting back and watching a bit of the cricket.
TONY JONES:
Yeah, that’s right. We dipped out on getting a second test match. That’s going down to Hobart.
JOSH FRYDENBERG:
Well, we lost out on a couple of grand finals as well. So, you know, the MCG has been more empty than usual.
TONY JONES:
Yeah, well, that will change, of course. Yeah, that’s right, so you tend to holiday, you’ve got a house down there at Lorne, haven’t you? Because I remember last summer you were doing a number of crosses on the breakfast TV shows in your board shorts.
JOSH FRYDENBERG:
Well, not so much my board shorts, but on the beach maybe, or at the local oval. Yeah my family goes regularly down to Lorne. We’ve been doing that for many, many years. It’s a great spot on the coast and, you know, it’s great to see people get some well-earned relaxation time with their families after what’s been a pretty torrid couple of years.
TONY JONES:
Yeah, exactly. I’ll get to this new initiative at the moment, or this latest initiative to help bolster small businesses, but are you noticing, because I mentioned also earlier this morning – I think there’s a report in the Financial Review – 60 per cent of people are planning to stay local this summer rather than travel interstate. Do you notice that?
JOSH FRYDENBERG:
Absolutely. I think people are a bit worried about whether their bookings will be able to be kept and, you know, there’s so many great places to holiday close to home if you’re a Melbournian in our own great state. And so I think many people are taking up those options. And, you know, good on them. But at the same time the news that Queensland’s opening their borders is good news, and it’s a welcome Christmas present for hundreds of thousands of people across Queensland who rely on that tourism industry for their jobs.
TONY JONES:
And you might have put a little something else under the tree there for small businesses with the extension of this loan scheme.
JOSH FRYDENBERG:
Well, that’s right. We’re announcing today that we’re extending a small business loan scheme for another six months. So if you’re a business with a turnover of under $250 million you can go to one of 19 lenders and get loans of up to $5 million for up to 10 years in length. You can use them to refinance existing loans or to go and purchase new equipment. So if you’re a tradie going to get some new tools or you’re a cafe getting a new kitchen or if you’re a manufacturer upgrading a production line. And we’re going 50-50 with the banks in guaranteeing those loans. We put that loan scheme in place, Tony, since pretty much the start of the pandemic, and it’s seen more than 80,000 loans worth more than $7 billion being provided. So we’re expecting billions of dollars of extra money will now make its way to small businesses. And it’s not free money; it’s money that has to be paid back. But what it enables these businesses to do is to back themselves to grow and to hire, to innovate, and that is going to be really important as part of this recovery. We want the private sector to be taking the baton and to run hard with it.
TONY JONES:
So of the $7 billion that you’ve handed out already, how much of that have you got back already? Have you worked that out?
JOSH FRYDENBERG:
Well, the loans tend to be on average about four years in length. Early on we saw the average loan around $90,000, and that reflected the fact that there was real caution out there. But then as the recovery has picked up the average size of the loans have been more than $250,000, and that’s a sign that people are now feeling more confident that not only will this money be very useful for them but they’ll be in a position to pay it back as expected. So most of these loans are longer term loans as opposed to shorter term ones.
TONY JONES:
So what about, I mean, the sad fact is of what we’ve experienced over the past couple of years, even with this chop out there’s going to be some businesses that still go bust. So what happens in those situations with the repayments?
JOSH FRYDENBERG:
Well, if it comes to that then we go 50-50 in sharing that burden with the banks. But the fact that we’re there as a government helping to guarantee 50 per cent of that loan means those banks are more likely to take on the customers and their risk appetite is a bit higher, which means more people can get those loans. But the proof has been with similar schemes in the past that there has been a very high degree of repayment because you still have to go through the normal processes with your banks. You still have to be assessed as you would normally do. But the fact that this extra money is available is certainly good news for the small businesses. And, Tony, it’s not the only measure that we’ve put in place. As you know, we put JobKeeper there which helped the small businesses keep their workers on. We put the cash flow boost which was worth $35 billion to help them meet some of their ongoing payments even though their doors were closed. We worked with the states and landlords to get rental relief and then we worked with the banks to ensure that some $250 billion of loans didn’t have immediate repayments so businesses and households could get through the worst of the crisis. So it’s been a full-court press from the government to try to help businesses get through this pretty tough period.
TONY JONES:
And pretty wide-ranging. There doesn’t seem to be, I don’t know, just on face value what you were saying there, Treasurer, about what the money can be used for, it appears to be reasonably wide-ranging.
JOSH FRYDENBERG:
It is.
TONY JONES:
I mean, for tradies; tools. For coffee shops; it might be a new coffee machine etc. So is there no real limitations?
JOSH FRYDENBERG:
New vehicles. No, there’s not that sort of restriction on it. And, you know, speaking to one of the bank CEOs yesterday they told me their customers love this program and it’s been very useful for them. They were talking to me about one fishmonger who, you know, has bought some new vehicles with the money. They’re told me about a pasta shop who’s used the money to expand their business. And they’ve got many others, you know, local tradies who are painters, people who are in other trades who have benefited from these programs. So it’s right across the board, as you would imagine, with 80,000 loans already being provided.
TONY JONES:
Alright, I know you’ve got a leadership meeting to get to, so we’ll let you go. But, before you do that, I saw your mate Greg Hunt get his booster shot last night on the news.
JOSH FRYDENBERG:
He did. And he, like every other Australian who’s eligible, should take the opportunity. We’ve brought the period back from six to five months between, you know, your second dose and now your booster shot. That was based on the medical advice. And more than 600,000 people have already had their booster shots across the country. And by bringing it forward to five months, an extra 2 million people should be able to have their booster shot before Christmas, which will be very good news. So the vaccine has proven to be a very effective defence, Tony, against the virus. And even though we’ve got Omicron now, which is not the first and not the last variant that we face, the early signs are encouraging. Even though it’s a transmissible variant of the virus, it doesn’t seem to be as severe as first thought. So it’s still early days, but some of the early signs are encouraging, which means that your listeners can be pretty confident about Christmas and look forward to catching up with their friends and family.
TONY JONES:
Okay. Now, just quickly, we were talking before we came on air, and I just got the sense, what are you more excited about, Treasurer, let’s be honest, the fact that you can hand out these loans again, the fact that the booster shots are coming early or the fact that Patrick Cripps is looking like an absolute man mountain at the moment.
JOSH FRYDENBERG:
He does look ripped in some of those photos that have been put out by the club. And I know under the new coach Michael Voss they’re training hard. They seem to have got a pretty fair draw, and, you know, as Carlton supporters, we’re awaiting eagerly the start of the season. So let’s hope, because we’ve been waiting a while, but we’ve got a good list, a great coach and certainly some of those photos indicate the boys have been training very hard.
TONY JONES:
Can you stop sending them though? It’s getting a little awkward now.
JOSH FRYDENBERG:
The club sends them.
TONY JONES:
Okay. Okay, good to talk to you.
JOSH FRYDENBERG:
All the best.