RUBY:

From Schwartz Media, I’m Ruby Jones, this is 7am.

As the government reveals the extent of the budget deficit, Scott Morrison has become increasingly short in answering questions.

He no longer meets with his virtual party room, and some MPs say he doesn’t like being asked to explain what’s happening.

Today, columnist for The Saturday Paper Paul Bongiorno on the economic forecast and the prime minister’s mood…

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RUBY:

Paul, this was a week of sort of rolling economic updates. Let's start at the beginning with Tuesday's announcements. Can you tell me about what Scott Morrison and Josh Frydenberg had to say?

PAUL:

Well, Ruby, I have to tell you, first of all, this was a freezing press conference. It was held in the prime minister's courtyard in Canberra. The press pack was shivering and the wind chill factor was about six degrees.

Archival tape -- Scott Morrison:

“Well good morning everyone, the Treasurer is going to join me…”

PAUL:

The prime minister was half an hour late. And when he turned up, he held an hour-long press conference.

Archival tape -- Scott Morrison:

“Welcome, Treasurer. It's nice to have you here…”

PAUL:

Treasurer Josh Frydenberg’s hands were blue with the cold as he stood alongside Morrison at a separate lectern, which is, of course, what you do these days for social distancing in this Coronavirus era.

Archival tape -- Scott Morrison:

“One of the great challenges that all countries are facing in dealing with the Covid-19 pandemic and the recession that has been consequential to that, has been that things change and they change quickly.”

PAUL:

The PM was fatalistic. He said the virus would take its own direction and create its own chaos.

Archival tape -- Scott Morrison:

“I think there is a genuine understanding in the community that this is a virus that will plot its own course and it will have it and wreak its own havoc where it will choose to do so…”

PAUL:

He tried to set a resolute tone, though, saying there were certain aspects that our politicians can control.

Archival tape -- Scott Morrison:

“Who we are is an innovative, adaptive people supporting each other, reaching out to each other. Drawing us all through not for survival, but to be on the other side in a position where we can emerge strongly.”

PAUL:

Morrison announced that JobKeeper would continue for another six months, although cut down to twelve hundred dollars a fortnight, and fall further to one thousand dollars early next year, and it would be much more tightly targeted. And part time employees who were previously getting the full fifteen hundred dollars a fortnight would go down to seven hundred and fifty dollars. He also said the JobSeeker payment would extend, but be cut back to four hundred dollars a week til the end of the year. And we don't know what he's going to do with it beyond that.

Archival tape -- Scott Morrison:

“This is the next step in our journey and it's the step on the journey that is back to keep Australia in a position where we have been able to mitigate, we have been able to prevent the worst of the impacts of this crisis wherever possible and we will continue to work night and day to ensure that's the case.”

RUBY:

And in that Tuesday press conference, Paul, was there anything that stood out? If not in the numbers, in the way in which the Prime Minister spoke? Was there an indication of his mood?

PAUL:

Well, Ruby, one moment really did stand out when Morrison took great umbrage at a question from Sky News’ Andrew Clennell. You know, it gives you a sense of the sort of pressure the prime minister's under and the sensitivities that's creating.

Archival tape -- Andrew Clennell:

“Prime Minister, we’ve seen now a year of JobKeeper, could we see some manifestation…”

PAUL:

Clennell asked the prime minister if some version of the JobKeeper scheme would be kept in place till the next election, and then he asked if there might be an early election

Archival tape -- Andrew Clennell:

“...and is it possible that the next election could be later next year or are you committed to going a full term?”

PAUL:

Morrison clearly didn't like the question.

Archival tape -- Scott Morrison:

“Andrew, politics is nowhere near my mind. I mean, I don't think Australians could care less when the next election was and, frankly, right now it's got nothing factoring into my thinking not at all.”

PAUL:

As he answered, he became even more indignant.

Archival tape -- Scott Morrison:

“I mean, we have got an outbreak in Victoria, and people are dying, and you're asking me questions about when the next election is. I think we need to focus on what the real issues are here and it’s not when the next election is.”

PAUL:

Clennell couldn't see a denial in the answer. He and others in the gallery see a logic in an election late next year - before then would be difficult, unless Morrison manufactures a double dissolution trigger. The earliest he could call a poll of half the Senate and the House of Representatives would be from August next year. And the idea really isn't far fetched. The political wisdom would be better to go while you're ahead.

RUBY:

What did other people in Canberra make of that exchange between the two?

PAUL:

Well, some Liberal MPs certainly believe Morrison would have to be weighing all his options. I spoke to one who said elections are always on the prime minister's mind. He's a politician, isn't he? And he then added, ‘It's like asking if a monk prays’.

RUBY:

We'll be back in a moment.

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RUBY:

Paul, this is a week of economic announcements. Let's keep walking through, day-by-day. Can you tell me about what happened yesterday on Thursday?

PAUL:

So yesterday, Josh Frydenberg, the Treasurer, gave his long awaited economic update. This, of course, comes after the budget was delayed from May, and so is really key to us understanding what's happening with the country's economy.

Archival tape -- Josh Frydenberg:

“Today, we stand here in a very different world. Australia and the world are now experiencing the most severe economic crisis since the Great Depression.”

PAUL:

All week, Frydenberg has been softening us up for the bad news, talking about eye-watering, huge numbers.

Archival tape -- Josh Frydenberg:

“Every resource available to the government has been marshalled to defend the nation against the coronavirus.”

PAUL:

And then yesterday, he gave us two years’ worth of forecasts, and as predicted, the news was terrible.

Archival tape -- Josh Frydenberg:

“As a consequence of lower receipts and higher payments, the deficit is estimated to be 85.8 billion dollars, or 4.3 percent of GDP in 2019/2020, and 184.5 billion dollars, or 9.7 percent of GDP in 2020/21.”

PAUL:

Ruby, there's no silver lining for jobs and economic recovery. Talk of a snapback was buried in a sea of red ink.

Archival tape -- Josh Frydenberg:

“We can see the mountain ahead and Australia begins the climb. We must remain strong. We must draw strength from our resilience as a nation and a people. And we will get through this. And we will get through this together.”

PAUL:

Bank economists and others put the deficit for 2021 well above two hundred billion dollars. But as I say, we'll have to wait for the October budget to see whether the Treasury agrees.

RUBY:

But, a fairly grim outlook there then Paul. What are other analysts or other experts saying about these figures?

PAUL:

Well, there's no avoiding how bad it is. Economists like the Grattan Institute's Brendan Cotes say the changes to income support payments are too steep and too soon. He told The Canberra Times that just as the government has pulled back on the JobSeeker payments, those who are no longer eligible for JobKeeper will see their incomes halve. This is pretty intense stuff for hundreds of thousands of people. And already one of the nation's biggest charities, St Vincent de Paul, says many first time clients are presenting for help.

The organisation's chief executive said there are people who have never been out of work before with commitments on their homes and cars they can no longer meet. And one way to look at the world in which we are now living is to consider that the government is facing criticism for not being more generous in its ongoing income support. And that's even after it committed just this week to an extra twenty billion dollars. That's an unthinkable cash splash just a year ago.

RUBY:

Yeah, they're huge numbers. I want to ask a little bit more about the politics of all of this. What do you make of the decision to split out these different announcements to have Tuesday's press conference ahead of Thursday's economic update?

PAUL:

Well, for reasons that weren't immediately apparent, the prime minister decided it was better crisis management to keep the relatively good news - that he decided to extend JobKeeper and JobSeeker - separate from the tsunami of red ink that swamped Thursday's grim reckoning. Certainly it gave us more time for it all to sink in. It also gave the government a cast-iron argument - excuse, if you like - that its spending was necessary and responsible. Certainly the Reserve Bank governor agrees. And there's no quibble on the quantum from the Labor opposition. And Ruby, ironically, helping Morrison in the perception stakes, at least, is the fact that many Australians would believe he's more reluctant to spend than Labor would have been - you know, a better economic manager. We keep hearing that from the Liberals, every minute of every year. Though, I have to tell you, in the last seven years of Coalition government, I don't believe that perception’s really sustained.

RUBY:

Right. And what about communication more generally? How is the prime minister going within his own ranks?

PAUL:

Well, Morrison's not sharing his thoughts as readily as he was with his own MPs. Six weeks ago, he cancelled his weekly virtual party room meetings. One Liberal MP I spoke to said, ‘Well, the prime minister didn't like the questions he was getting at these meetings.’ And certainly Morrison doesn't seem to like people asking him to explain himself. The Labor Party is convinced of it. Manager of opposition business, Tony Burke, believes it's the same reason he cancelled the next sitting of parliament that was due in a week’s time. Morrison says the reason is the Coronavirus and he's not wanting to risk transmission. And he claims that's the health advice. But Tony Burke points out that the AFL and the NRL, well, they have been able to organise Covid-safe games. So he says there's no excuse. Burke, with his tongue, I'm sure, somewhat in his cheek, says that the politicians are ‘less physical than the footballers’.

RUBY:

Paul, what do you make of Scott Morrison's decision to cancel Parliament and also his, I guess, general brittleness around being questioned on the decisions that he's making at the moment?

PAUL:

Well, look, it's not all that unusual for prime ministers and governments to shrug their shoulders and have to put up with particularly parliament and particularly Question Time. But, you know, ever since he became Prime Minister, Scott Morrison has been very ready to shut down the parliament - in fact, it was one of his first acts as Prime Minister when he wasn't sure of his numbers before the election. So I don't think he's a default parliamentarian. I think he prefers to rule by, well, decree. In fact, that's what he's been doing a lot of.

RUBY:

And what about his response to questioning?

PAUL:

Well, the brittleness is often on display. His opponents, both the Labor Party and even those who are critical of him within the governing parties, believe his style is somewhat bullying. And like all bullies, they don't really appreciate pushback.

RUBY:

Paul, thank you so much for your time today.

PAUL:

Thank you, Ruby. Bye.

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RUBY:

Also in the news...

Five more people have died from coronavirus in Victoria, taking the state's death toll to 49, with 403 new cases recorded yesterday.

There are now 201 people with COVID-19 in Victorian hospitals, including 40 people in intensive care.

And the Victorian government has announced a payment of $300 to anybody who has taken a test and needs to isolate… but doesn’t have sick leave.

If they test positive, they’re eligible for another $1500 payment.

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7am is a daily show from The Monthly and The Saturday Paper.

It’s produced by Ruby Schwartz, Atticus Bastow, and Michelle Macklem.

Elle Marsh is our features and field producer, in a position supported by the Judith Neilson Institute for Journalism and Ideas.

Brian Campeau mixes the show.

Our editor is Osman Faruqi. Erik Jensen is our editor-in-chief.

Our theme music is by Ned Beckley and Josh Hogan of Envelope Audio.

New episodes of 7am are released every weekday morning.

Make sure you don’t miss out by subscribing on your favourite podcast app.

I’m Ruby Jones, see you next week.