Josh Frydenberg reveals private savings war chest after criticism of business support

Treasurer Josh Frydenberg has revealed the eye-watering amount Australians saved during the pandemic after coming under fire over business support.

Federal Treasurer Josh Frydenberg has pointed to a $424 billion war chest of private savings to prop up the economy after coming under fire for not chipping in to support states.

The NSW government on Sunday attacked its federal counterparts for not contributing to a $1 billion rescue package for small and medium businesses.

Under the support measures, the government will cover 20 per cent of the payroll of small businesses that suffered a 40 per cent decline over January.

During the announcement, NSW Treasurer Matt Kean took aim at Prime Minister Scott Morrison and Mr Frydenberg for not contributing.

NSW Treasurer Matt Kean said it was disappointing the federal government hadn’t come to the table to assist with the small business recovery scheme. Picture: NCA NewsWire / Adam Yip

“What we want to see is rather than the Commonwealth government stepping aside, we want to see the Commonwealth government stepping in like the NSW government is doing to support small business and in so doing, supporting our national economy, because that’s in everyone’s interest,” Mr Kean said on Sunday.

In response, Mr Frydenberg said more than $424 billion in private savings – which grew throughout the pandemic – would fuel the nation’s economic recovery.

The money is made up of $245 billion in household savings and $179 billion in business savings.

The treasurer said it had been saved through a combination of ways.

“Firstly, people not being able to travel as much, people not being able to go to cafes and restaurants … the tax cuts that have flowed into people’s pockets … and of course people have also been more cautious,” Mr Frydenberg told 3AW.

“Their savings rate has increased. We’re starting to see that money being spent.

“Business investment, for example, is particularly strong despite the pandemic.”

Federal Treasurer Josh Frydenberg says household savings will help drive the economic recovery. NCA NewsWire/Sarah Matray

Mr Frydenberg said the government has invested enough over the past two years to keep Australia afloat, and the onus was now on people to spend what they have amassed.

“As we move to the next stage of the pandemic, and Omicron is obviously less severe than Delta, we learn to live with the virus,” he said.

“It gives people confidence that there is that buffer, that money there that can be spent and generate economic activity and jobs.”

He told the Nine Network that NSW had wanted to halve the bill for its latest business support package, but the federal government had other spending priorities.

“Every single day of the pandemic, we’ve been supporting businesses and families right across Australia. In NSW alone we have delivered more than $63b and we continue to roll out economic support,” Mr Frydenberg said.

“South Australia just yesterday announced a small business support package, they didn’t come to the Commonwealth asking to go 50/50, they just did it alone.

“Every state will do it differently. We welcome NSW making this contribution, but we recognise the federal government has done the bulk of the heaviest lifting when it comes to economic support rolled out across the country.”

NSW Premier Dominic Perrottet said he would have liked to have been supported by the federal government.

“I’d like them to provide financial support just as they have in the past,” Mr Perrottet said on Sunday.

“We put people before the budget.”