Treasurer Josh Frydenberg tells Daniel Andrews to get on board to rebuild
Treasurer Josh Frydenberg has demanded Premier Daniel Andrews get on board with a construction-led economic recovery from the coronavirus pandemic as he prepares to hand down the federal budget.
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Treasurer Josh Frydenberg has flagged a construction-led recovery from one of Australia’s worst economic emergencies, and has demanded Premier Daniel Andrews gets on board.
In an exclusive interview with the Herald Sun ahead of Tuesday’s federal budget, Mr Frydenberg revealed the government would double its popular first-home loan guarantee, opening the scheme up to thousands more Victorians.
From Tuesday, 10,000 new places will be opened up in the first-home loan deposit program, although they will be limited to new houses.
The Herald Sun can also reveal Mr Frydenberg’s federal budget will show Melbourne’s coronavirus lockdown — which is about to enter its 10th week — has already slashed a whopping $14billion from the national economy.
Describing the Victorian second wave of coronavirus as “devastating”, the senior Victorian MP urged Daniel Andrews to “get on with approving” major infrastructure projects, including the controversial East West Link, and to wipe payroll taxes owed by businesses.
Infrastructure spending will be central to the economic recovery, but while the federal government has offered $4 billion to build the East West Link in partnership with the private sector, the Premier has refused to change his tune on the project he cancelled in 2014.
Mr Frydenberg said it remained a priority, along with the airport rail link and fast rail to Geelong.
“The more projects that Daniel Andrews undertakes in Victoria, the better,” he said.
“Funding has been provisioned for all these projects and we just want the Victorian government to get on with it.”
He also hit out at the Premier for deferring $1.7 billion worth of payroll taxes, creating a debt burden for businesses to cover next year.
“Payroll tax is a tax on jobs and the Victorian government should move to waive more of the payroll tax burden,” Mr Frydenberg said.
Three days out from the budget, which is expected to reveal a deficit of more than $200 billion, Mr Frydenberg said: “It’s all about the here and now, it’s all about getting people into jobs.”
Treasury data produced for the budget will show COVID-19 restrictions in Victoria cut 2 per cent out of the national economy over the last three months, totalling $14 billion, with the pain set to continue as restrictions remain in place.
“It’s been devastating to see what’s happened in Victoria, and to Victorian families and businesses,” Mr Frydenberg said.
He would not be drawn on extending the JobKeeper wage subsidy scheme — which runs until March — if Victorian businesses lagged behind, saying it was “always a temporary measure”.
“Our focus is to move to the next phase of the economic recovery,” Mr Frydenberg said.
“We’ve been there for the Victorian people with a record amount of support.”
The Treasurer also talked up accelerated income tax relief for families and called for a baby boom to help kickstart the economy.
He acknowledged the budget would include tax relief for families and businesses, and said he was confident consumer spending would pick up as health restrictions eased.
“We want people to keep more of what they earn and it’s for them to determine the priorities with which they spend their money,” Mr Frydenberg said.
With Australia’s fertility rate at an all-time low, Mr Frydenberg said: “The more kids, the better, but it’s also a function of people’s economic circumstances.”
“As the virus is suppressed and jobs come back and the economy strengthens, the fertility rate will improve over time,” he said.
He also revealed Treasury research showed “a young person entering into the labour market as a result of COVID will tend to earn 8 per cent less than they would have otherwise earned in the first year of work, and 3.5 per cent less after five years, and that’s if they have a job”.
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