Treasurer Josh Frydenberg flags multibillion-dollar economic boost from faster vaccine rollout

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The federal government recently announced the rollout of the Pfizer jab would be brought forward to mid-to-late February, but that plan could now be delayed by production issues and the need for Therapeutic Goods Administration approval.

Amid growing expectations that a federal election could be held in the second half of 2021 – despite Scott Morrison’s insistence the poll will be in 2022 – Mr Frydenberg’s third budget in May will have to strike a delicate balance between continuing COVID-19 support for families and businesses and beginning to turn off the tap from which billions in government assistance has flowed, so that budget repair can begin.

Though the Treasurer wouldn’t put a dollar figure on it, he is in no doubt a faster vaccine rollout and a multibillion-dollar boost to the economy would ensure “[consumer] confidence improves and there is more certainty around border restrictions”, at least domestically.

“With unprecedented economic support from the federal government, around 90 per cent of the 1.3 million Australians who lost their jobs or saw work hours reduced to zero are now back at work,” he told The Sun-Herald and The Sunday Age.

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“We’ve seen strong growth numbers in the September quarter, we saw loan approvals for people building new homes dramatically rise and we’ve seen business and consumer confidence coming back to pre-COVID levels.”

“The economy’s performance has continued to defy doomsayers who talked it down. What they underestimated was the indefatigable Aussie spirit.”

The fall in official unemployment from 6.8 to 6.6 per cent was also welcome news and Mr Frydenberg said “unemployment is expected to recover to its pre-COVID levels in around four years, significantly quicker than what we saw in previous recessions”. In comparison, it took six years after the 1980s recession and 10 years after the 1990s recession.

The Treasurer pushed back against criticism of the JobKeeper program ending in March, highlighting billions of dollars in other programs that will continue to support Australian households and businesses through 2021.

“People who are focusing on the end of JobKeeper need to understand that there’s an enormous amount of federal government support that is continuing to flow until the end of this year and beyond – the JobMaker hiring credit, the tax cuts, investment incentives, the infrastructure projects that have been brought forward and extended, the new education and training places – these are just some examples of the billions of dollars that will continue to be spent generating economic activity.”

Former Prime Minister John Howard – who the Treasurer once worked for as an adviser in the early 2000s – had been a regular source of advice.

“I spoke regularly with him. Before JobKeeper was announced I said that this was what we were thinking of doing and he said in times of crisis like these there are no ideological constraints … he understood that we needed to get the money out the door and as Treasury has said, never before has that amount of money flowed so quickly.“

New Tax Office data obtained by The Sun-Herald and The Sunday Age details how the government’s $35 billion Cash Flow Boost program has supported more than 800,000 businesses and 8.7 million jobs, with 90 per cent of those entities being small businesses or sole traders with a turnover of less than $10 million per year.

The professional, scientific and technical services sector received $6.2 billion under the scheme, which wrapped up in the December quarter, the construction sector received $5.8 billion, health care got $3.2 billion, retail trade another $2.7 billion and accommodation and food services $2.2 billion.

The program, rolled out at the height of the pandemic, provided between $20,000 and $100,000 depending on the amount of employee PAYG, and had allowed businesses to rebuild their balance sheets and keep staff on the payroll, according to Mr Frydenberg.

After a year in which millions of Australians were hit by COVID-19 restrictions, particularly in Mr Frydenberg’s home state of Victoria, the Treasurer said – during a morning out with his family in a local park in his Melbourne seat of Kooyong, which would have been impossible several months ago – that he had received a large volume of letters from ordinary Australians about the economic and mental health impacts of the lockdowns.

“My family, like so many other families in Victoria, experienced home schooling and my wife [Amie] worked from home. We got through it – but I acknowledge this was really tough for so many people,” he said.

While the Treasurer spent much time away from his family – “I remember packing for a few days and ended up staying more than a couple of weeks” – during the height of the pandemic, in 2020 it felt like he had delivered “multiple budgets, not one, and obviously the start of the year was extremely busy with the bush fire response too”.