WALEED ALY:
Thank you for your time tonight, Treasurer.
JOSH FRYDENBERG:
Nice to be with you.
WALEED ALY:
Can we start with people on basically full time, 20 hours per week, for the moment. What's the thinking of reducing the JobKeeper payment to them?
JOSH FRYDENBERG:
We had Treasury undertake a review at the mid-way point of this legislated 6-month program. And what they found is that JobKeeper had been doing its job, namely maintaining the formal connection between employers and employees and saving jobs and businesses, but there were some people, about a quarter of those recipients, who were receiving more money through the $1,500 a fortnight flat payment than they were receiving pre-COVID.So what we've sought to do based on hours worked is have two-tiers to better reflect what people's pre-COVID income may have been, and this has been welcomed as a reasonable response.
WALEED ALY:
So Treasurer I understand the two tiers but I'm just talking about the top tier. Because everyone gets less here. It's not just people who are getting more than they otherwise would have. Why do you want to reduce everybody's payment? So even just those who are on full time work?
JOSH FRYDENBERG:
Well, the point about the JobKeeper program is that it's temporary and it's to deal with an economy and a labour market that is in transition.We're clearly seeing more people find work, now that's happening gradually. But last week's job numbers were double the expectation of what the market had said they would be, with more than 210,000 people finding a job in the month of June and 60 per cent of them being women and 50 per cent being young people. So clearly outside of Victoria, because that's a special case with the 6-week lockdown, we're seeing the economy start to come back and that's why JobKeeper and the announcements today are based on a transition and a 6-month extension.
CARRIE BICKMORE:
You mention that Victoria is not in that transition phase yet. So should the Victorian rate be kept at the higher amount given that they're still in lockdown and a lot of businesses can't reopen?
JOSH FRYDENBERG:
I think the Victorian businesses will benefit greatly from what was announced today. At $1,200 it's still 80 per cent of the minimum wage and it will be of great support to those businesses. Clearly, the Victorian economy is doing it very tough. The state government has made some welcome announcements as well about support for business and we've also got the cash flow boost which is providing $30 billion to small businesses depending on the size of their payroll. So this is just one of many initiatives. But I do want to underscore the fact that the JobKeeper program, now at around $86 billion, is the largest single economic measure any government in Australia's history has undertaken and I think that that will be of great relief to many people.
WALEED ALY:
Sorry Treasurer I have to confess, I don't quite follow the argument. Because the qualifying criteria is the same as far as the drop off in business that's required is concerned – a 30 per cent drop off from pre-COVID levels. So these businesses are in just as much trouble as they were before. Your answer to that seems to be, well, it's about the economy picking up.But Carrie has just given you the Victorian example where the economy isn't picking up. So surely, at the very least in Victoria, the measures should be the same. And you could argue that more broadly, it should be the same, at least for full time employees because they're in just as much trouble?
JOSH FRYDENBERG:
Well, I think the key point Waleed and Carrie is that the original $1,500 payment, that will continue until the end of September. And as you know, the lockdown goes to mid-August. In terms of the coronavirus supplement and the JobSeeker payment, again, that will go through to the end of legislated period at the end of September at $550. And then it will slide down to $250 after that. So what we're talking about is those three months and six months after the legislated period has ended. And you know, we are confident that the economy will gradually get back on track, and of course we know how tough it is for people, but the Government has to be very careful with taxpayers’ money, and we have already announced unprecedented amounts of spending in order to cushion the blow for people to get through this crisis.
RYAN FITZGERALD:
Can we talk about the poverty line, Josh? According to an ACOSS and a University of New South Wales report, the poverty line is around $457 a week.Some of these people will be getting $400 a week on the new JobSeeker rate. That sends people below the poverty line. Is that fair?
JOSH FRYDENBERG:
What we've sought to do is increase what is called the income-free area where you can actually work up to $300 a fortnight and actually not affect your base payment. So we've made allowances for people who can do a bit of part time work, as well as receiving the JobSeeker payment. As you know, there's also rent assistance that is provided, an energy supplement and other payments on top of the base payment. So we're very conscious of the fact that this is a most difficult time for people, but we have increased the support that's available. The Prime Minister leant into the issue today when he said closer to the end of the year when we have a better sense of whether the labour market dynamics are, we'll make a decision about the extension of the coronavirus supplement. And there is a genuine expectation that that will be continued at some form and at some rate.
WALEED ALY:
On the JobSeeker thing, you've made the point of re-introducing the mutual obligation thing so people having to prove that they're out there looking for jobs. That's the old model, that’s the pre-COVID model. Why are you doing that at a time where there are just so many more people looking for jobs than there are actual jobs that are out there? I mean, it's like you're painting this picture that there are these people who are on JobSeeker who are just bludging, effectively. They're not out there looking for jobs, when the real problem seems to be on the figures, that the jobs are not there?
JOSH FRYDENBERG:
Waleed, we're gradually introducing the mutual obligation tests. So from the 4th August, you'll be required to make up to four job searches a month, and to engage with your JobActive provider. And of course, there will be an understanding of the situation for people in Victoria where the opportunity to find jobs in the current environment is certainly not going to be the same as it is in other states. So we've absolutely taken into account the current circumstances. We ended those mutual obligation requirements during the heat of the coronavirus pandemic. But as the economy starts to open up and as I said, last week's job numbers were certainly showing better signs of economic activity, it's only reasonable when you're spending taxpayers’ money that there is a mutual obligation in place but it's certainly not what it would be in the pre-COVID era.
WALEED ALY:
Alright Treasurer, thank you very much. We appreciate your time tonight.
JOSH FRYDENBERG:
Nice to be with you.