Budget 2020: ‘Open your borders and purse strings’, says Josh Frydenberg

Josh Frydenberg says his government is prepared to do still more to support the recovery should it falter.

Treasurer Josh Frydenberg urged the states and territories to dig deep and spend more, during a National Press Club address in Canberra. Picture: Getty Images

Fresh from unveiling the biggest-spending budget in living memory, Josh Frydenberg has said his government is prepared to do still more to support the economic recovery should it falter, as he doubled down on his push for the states to carry their fair share of the fiscal burden and urged them to reopen their borders.

Speaking at the National Press Club on Wednesday, the Treasurer expressed his frustration that the states had not committed to more stimulus measures of their own.

“I would ask the states to spend more,” he said, quoting Reserve Bank governor Philip Lowe, who has said the states can afford to collectively spend an ­additional $40bn over the coming two years.

“There’s talk in Western Australia of a surplus,” Mr Frydenberg said. “I mean, we’ve just run the biggest deficit. So I would say to all state premiers and all state treasurers: please dig deep, support your communities, spend more through this crisis, and share some of that burden.”

The Treasurer’s renewed appeal came as the Board of Treasurers, which includes the treasurers of all states and territories, issued a statement that “governments should support the economy with additional sustainable public investments”, but gave no explicit commitments.

A Victorian Treasury spokesman told The Australian his state had spent nearly $13bn in fiscal support through the pandemic, “including billions of dollars in ­direct support for Victorian businesses and workers”.

Mr Frydenberg on Wednesday said the federal government was “taking nothing for granted” when it came to the post-COVID recovery. “As we have done throughout this crisis, we will continue to adapt our response as circumstances evolve,” he said. “We are taking the steps today based on what we know today, but we will continue to take temporary and targeted measures to drive down unemployment.”

Budget projections for a rapid recovery in 2021 rely in part on the opening of all domestic borders, aside from Western Australia, by the end of the year.

But on Wednesday that assumption was thrown into doubt, after Queensland Premier Annastacia Palaszczuk said she would stick to her plan to only open the state’s southern border once NSW had recorded 28 days with no community transmission of the virus.

In response, Mr Frydenberg again appealed to the states and territories to relax restrictions of movement around the country, saying “closed borders cost jobs”.

“The quicker those borders are open in a COVID-safe way, the better; not just for local communities and those particular states, but across the country,” he said.

“Queensland has a very dynamic and large tourism sector, and that tourism sector is being hurt by those border restrictions.”