Josh Frydenberg joins 7.30 to discuss the increased COVID-19 support payments

FRAN KELLY (March, 2021): The Morrison Government will today signal a switch in economic strategy. Once JobKeeper is gone, any state that slams shut its borders due to a COVID outbreak will have to stand on its own two feet. What does that mean, there will be no financial help, no bailouts.

JOSH FRYDENBERG, TREASURER (March, 2021): What Gladys Berejiklian has shown so effectively through this crisis is that even when you have outbreaks like in the Northern Beaches you don’t have to have a state-wide lockdown.

LAURA TINGLE, PRESENTER: Within months, Victoria was pleading for more assistance after the state was again plunged into lockdown.

JAMES MERLINO, ACTING VICTORIAN PREMIER (May 2021): The answer from the Prime Minister and from the Treasurer has been no.

LAURA TINGLE: The Government argued it wasn’t its responsibility to pay for what was initially a one-week lockdown.

SCOTT MORRISON, PRIME MINISTER (May 2021): I note that the Queensland Government and the West Australian Governments when they were in similar circumstances took on those responsibilities having decided to go into those lockdowns.

JOSH FRYDENBERG: Well, the pandemic is not over and neither is the support from the Morrison Government.

LAURA TINGLE: When the lockdown extended into a second week, the Government softened its stance and brought in $500 cash payments for those left out of pocket.

BEN FORDHAM, 2GB: Business owners and workers are holding their breath as we wait anxiously for a rescue package to come from the New South Wales and Federal Governments.

LAURA TINGLE: With no end in sight to Sydney’s lockdown, the Government today announced cash boosts for households and businesses but stressed that the rules have changed for every state.

SCOTT MORRISON: What I’m announcing today is not just a partnership with New South Wales, what I’m announcing today is an upgrading of the Commonwealth Government’s national response.

LAURA TINGLE: And the Treasurer, Josh Frydenberg, joins me now live from Melbourne.

Treasurer, thanks for joining us tonight. The May budget assumed there would be no more extended lockdowns. The PM has today conceded that the largest economy in the country will be in an extended lockdown. What’s going to be the economic impact?

JOSH FRYDENBERG, TREASURER: Look, it will be significant obviously. You get border closures, you get supply chains’ disruptions, you get investment decisions that are delayed and when you get a state or parts of a state that are in lockdown, you get workers who can’t turn up at the office or turn up to the normal vocation.

This will have a significant impact on the economy and Treasury expect that the New South Wales lockdown is costing about $700 million a week.

LAURA TINGLE: What will it mean in terms of employment growth figures, though?

JOSH FRYDENBERG: We’re getting some job numbers later this week. That won’t take into account what’s happened in New South Wales, Laura, but it will take into account what happened in Victoria with their shorter two-week lockdown.

But the Australian economy, both in terms of economic growth but also in terms of the labour market outcomes, has surprised on the upside. We have seen unemployment go down to 5.1 per cent which is where it was last February.

And…

LAURA TINGLE: We’ve heard those figures before, Treasurer. We’ve heard those figures before.

JOSH FRYDENBERG: They are important figures, Laura.

LAURA TINGLE: Yes, they are important figures but if the biggest part of the economy is about to go into lockdown for a long period of time, the question is what impact is it going to have on growth?

JOSH FRYDENBERG: No-one’s dismissing the significant impact it will have on confidence, on investment, and then in terms of growth and even potentially labour market outcomes but we’ll just have to wait and see.

As you did say in your introduction, we anticipated in the budget that there would be further outbreaks and further lockdowns but not of the lengthy duration we are now seeing in New South Wales.

But we’ve responded today with a very significant support package in partnership with New South Wales. It’s both a cash flow boost which directly supports businesses based on the size of their payroll, as well as extending the individual payments to households, to workers to $600 a week or to $375 a week, depending on the number of hours a week that has been lost.

LAURA TINGLE: And the trend in the infection numbers in New South Wales is really terrible. Do these measures take account of the fact that the New South Wales economy may go into an even bigger lockdown, a more fulsome lockdown?

JOSH FRYDENBERG: These measures are in place for as long as those extended restrictions remain and I’m talking particularly about the designated hotspot areas that the Commonwealth has maintained. When it was in Victoria, we designated some areas that were hotspot areas and so too done that in New South Wales and our individual payments are based on those designated hotspot areas.

So hopefully the New South Wales Health authorities can get on top of this outbreak as soon as possible but it does look like it’s very challenging.

LAURA TINGLE: But if the economy is put into effectively hibernation, we’re back to where we were at the beginning of the pandemic when we had JobKeeper and a whole range of other supports including things like rent relief, but the New South Wales economy will not be getting that support this time round?

JOSH FRYDENBERG: Well, I think the economy is in a very different position than it was last year when we did announce JobKeeper which, of course, was a nationwide program.

The measures that we’ve announced today are more targeted in the sense that they distinguish between states. They distinguish within states in terms of designated hotspot areas, as well as depending on the size of the business, the amount of support to flow to them will be different.

When we announced JobKeeper last year, Laura, Treasury had told me that the national unemployment rate could reach as high as 15 per cent with more than two million people unemployed. Today it’s at 5.1 per cent today and it has come down even with the end of JobKeeper. So we’ve transitioned to a different phase.

LAURA TINGLE: Well, we may have but who’s fault is this lockdown? You have blamed Victoria and said the Victorian Government had to take responsibility for the lockdowns there. Is this the New South Wales Government’s fault?

JOSH FRYDENBERG: Well, as you know, you had a limo driver in New South Wales that was carrying international crew and did not have a mask and that shouldn’t have occurred, and the New South Wales Government has accepted that and they’ve changed the public health orders as a result but that definitely should not have occurred.

With respect to Victoria, it was a very different situation last year. They weren’t obviously dealing with the Delta variant. They had a massive quarantine failure. Then they had an inquiry that didn’t find that anyone took responsibility or made the decision.

LAURA TINGLE: New South Wales is dealing with the Delta variant which is much harder to deal with. If the lockdown is extended because New South Wales didn’t lockdown harder earlier, isn’t it the fault of the state government, isn’t it?

JOSH FRYDENBERG: Well, they’re going to take their medical advice as to the nature of those restrictions and as you know, they may take further decisions in the coming weeks depending on how successful they are in containing and contact testing and tracing this outbreak as it occurs.

They’re decisions that they will take but of course the New South Wales Government has done very well to date in managing the virus. If you look at the national average of the number of days lost to lockdown outside of Victoria, if you take out the first initial lockdown, it’s only around 11 days and in Victoria it’s 149 days.

LAURA TINGLE: Treasurer, Premier Andrews has said tonight that your Government’s refusal to provide more assistance to the state was a disgrace. Do the apparent double standards reflect the Government’s concern it may lose seats in New South Wales?

JOSH FRYDENBERG: Well, that’s a very cynical question and the statement from Daniel Andrews, people are sick of his whingeing and his politicking of the crisis.

I mean, the reality is that any time anyone challenges Daniel Andrews, including your colleague, Leigh Sales, you get the bots and the trots starting to troll her out of trades hall on social media.

The reality is this, we have provided more support on a per capita basis to Victoria through JobKeeper than any other state. Victoria was offered a 50-50 split and they decided to reject that.

The payments to New South Wales for the first two weeks that was experienced with the same lockdown in Victoria were exactly the same and now we’ve put in place a system with New South Wales, with New South Wales that can be extended and expanded to other states should they incur a lengthy lockdown.

LAURA TINGLE: Aren’t the current low vaccination rates a key reason New South Wales is facing an extended lockdown and would you describe the vaccine rollout as a success?

JOSH FRYDENBERG: The vaccine rollout has been very challenging. There are some things we can control and some things we can’t control, like the ATAGI advice around the AstraZeneca vaccine and the cohorts that it would be available to.

I think the fact is that Australia on the health front has avoided the fate of so many other nations. The average loss of life, Laura, across the OECD has been 30,000. Australia has had tragically but less than 1,000 lives.

LAURA TINGLE: But were you too slow to adjust those vaccine options? Should you have been talking to Pfizer globally?

JOSH FRYDENBERG: We have been seeking to get as many vaccines as possible. The good news is that, as I understand it, will be getting a million vaccine as week from Pfizer in a short period of time.

We have already seen a 9.3 million doses being delivered and distributed. We’re focused on themore vulnerable cohorts like the over-70s where more than 70 per cent have received their first dose. More than a third of the eligible population have received their first dose. More vaccines are becoming available.

General Frewen is overseeing the rollout and I’m confident that it will go the pace.

LAURA TINGLE: Treasurer, we’re out of time, but thank you for your time tonight.

JOSH FRYDENBERG: All the best. Thank you.