Prime Minister
DAVID KOCH: Prime Minister Scott Morrison joins us now live from Kirribilli House. Prime Minister, good morning to you.
PRIME MINISTER: Good morning, David.
DAVID KOCH: Overnight, the World Health Organization has declared a pandemic. Basically, you've said it's been a pandemic for a couple of weeks. Is that announcement going to change the way you act?
PRIME MINISTER: No, because as you said, we called this 2 weeks ago and they've called it today. We welcome that. But we've been planning on that basis for the last two weeks as we've been working together on this package today to provide support to keep Australians in jobs, to keep businesses in business. But importantly, on the other side of this, because there is another side of this, when we bounce back, the economy will bounce back strongly and the Budget bounces back as well. So that's what we're, that's what the package today is all about.
SAMANTHA ARMYTAGE: Okay. You've targeted small business in this package. Why do you think they'll be hardest hit by coronavirus?
PRIME MINISTER: Well, the cash flow effects of what we're going to see in the months ahead is really going to hurt the small and medium sized businesses the most. And that's why we've done a number of important things. The first one is, is for those apprentices, around 120,000 of them working for these businesses of less than 20 employees, paying half their wages. And that will be done going back dated from the 1st of January of this year. And we're also going to provide immediate support through the BAS system of some $25,000 grants up to that for small and medium sized businesses, up to a turnover of $50 million. With that support, those businesses that employ Australians and that will give them some additional cash flow support as they go through these next few months over this, over that June quarter. The other thing we're doing, as you've said, is the instant asset write off. Now, this is something that's been incredibly successful for us over over recent years as we've encouraged small and medium sized businesses to invest. It used to be for businesses up to $50 million with purchases of some $30,000 dollars, now we've supercharged that to $150,000 and it will go to businesses with a turnover of up to $500 million. So it's about ensuring cash flow, investment and jobs are protected and supported over what will be a limited period of time crisis. This is a health crisis. It is not a financial crisis. It certainly has very real economic effects. And that's what we're addressing today.
KOCH: And the cash splash, if you like, is going to be done through welfare recipients. Newstart and pensioners will get a boost?
PRIME MINISTER: We will make an announcement about that later today David, and the details that are being reported on that are a bit off, by the way, but the important thing-
KOCH: Is it going to be more generous?
PRIME MINISTER: Well, well, in a few hours time, we'll release those details. But what it is about, as you'd know, is getting a cash injection into the economy through those, particularly older Australians. I mean, pensioners make up the majority of these arrangements and that they can go and put that money straight into the economy. And that will support businesses as well by injecting that cash into the economy when it's needed. And that will complement what is the majority of the package, which is all about supporting small and medium sized businesses, the cash flow crunch that they'll likely experience in the months ahead. It's about getting ahead of this. We have already seen some of those economic impacts already, particularly in the tourism industry, the travel industry, parts of our export sector.
KOCH: Are you going to help pensioners out with deeming rates?
PRIME MINISTER: Yeah, well, we're going to cut the deeming rates by 50 basis points so it’ll go down to 50 basis points, 0.5 at the lowest level and 2.5 at the higher level. So that's bringing it down 50 basis points. Now, that is actually a response to the most recent decision of the Reserve Bank, I mean, it goes along on the same day that announcing this package, but that is a longer term measure obviously, you change deeming rates, it has an impact over the cycle of the Budget and beyond. But that's an important point, David, because what we're doing here is we've worked hard to get this Budget back in balance. And what we're doing today are temporary measures, things that hit now and over the next 6 to 9 months, which ensures that on the other side of this, we don't hold the budget down for a decade under water with big spending programs, insulation batts and all that sort of stuff. That's not what this is. This is targeted, it's proportionate, and it's to happen now to support jobs right now, particularly those young apprentices.
ARMYTAGE: Okay we don't know how long this health crisis is going to last or how how deep it will run. Is there more money in the kitty, if we need, if you know, if we need more stimulus? Have you got it as a government?
PRIME MINISTER: Yeah, well, that's why we've worked so hard to get the Budget back into balance is so we can set ourselves up to make these responses. I mean, yesterday we announced $2.4 billion as part of our health response. So dealing with the health issues, dealing with the economic issues today, it's a clear plan to ensure people stay in work, but also upfront, to ensure that the health system- supporting the states, the pop up clinics, the telehealth, getting the medicines out to people who might be self isolated, particularly older Australians who need their prescription medicines. A lot of practical things there. This is a very practical plan. It's designed for the fixed period that we will see this virus impact Australia. And we're not alone in this as you know, I mean, there's over 100 countries that are dealing with this and so far we've been able to get ahead. But you've got to stay ahead. But most importantly, all Australians have got to keep their head.
KOCH: Yeah, exactly. Alright Prime Minister, thank you for joining us. Appreciate it. Look forward to that stimulus package this afternoon.
PRIME MINISTER: Thanks a lot, David.