BRIAN CARLTON:
Josh Frydenberg is the Federal Treasurer, joins me. Good morning, Treasurer. How are you?
JOSH FRYDENBERG:
Good morning. Nice to be with you.
BRIAN CARLTON:
This is December…
JOSH FRYDENBERG:
Happy new year, Brian.
BRIAN CARLTON:
And to you ‑ and to you, and I hope you got over your dose of ‑ of Omicron. How bad was it, by the way, just before we get into the chat?
JOSH FRYDENBERG:
Oh, look, it wasn't fun. It was, you know, pretty equivalent to a bad dose of the flu, although it lingers on a bit longer than the flu does. We had a family that was struck down. My wife and my five‑year‑old son also got it. I had about three days of cold sweats and headaches and aches, sore throat. It affected even my near‑term vision. But every day it's got better since and obviously hundreds of thousands of fellow Australians have also contracted the virus and my thoughts are with those who have got more serious illnesses and are in hospital but obviously also with those amazing health professionals who are helping them through.
BRIAN CARLTON:
You're ‑ you sound like you're still recovering a bit from it. Is long COVID a concern for you?
JOSH FRYDENBERG:
Look, for me it's not, but obviously there are some lingering effects into the second week. But everyone responds differently, and we have one family member that didn't get it. And I know lots of people who have a family member who they may have been in regular contact with but who also didn't get it. Some people have…
BRIAN CARLTON:
It's bizarre, isn't it?
JOSH FRYDENBERG:
Some people have stronger reactions than others. So, it can be a bit of a luck of the draw.
BRIAN CARLTON:
Treasurer, the unemployment numbers came out yesterday too, lots of nuts and bolts economic stuff, and it's ‑ it's almost ‑ as I said, it's almost from a parallel universe. Can you explain to people who are caught up in things like supply chain issues or maybe staying home from work because of COVID, or ‑ or generally out there in economic malaise, how we can end up with unemployment rates like here in Tassie of 3.9 per cent during a pandemic? How is that possible?
JOSH FRYDENBERG:
Well, the unemployment rate is one of the key economic indicators which shows that Australia's economy has been remarkably resilient and actually that the rebound and the recovery has been very much on. And I don't think we should lose sight of the international perspective here, Brian. Australia, in terms of both employment outcomes but also in terms of overall economic activity outcomes, has performed better than any major advanced economy in the world. Let's also not forget that early on in the pandemic, Treasury thought and feared that the unemployment rate could reach as high as 15 per cent. There would be more than…
BRIAN CARLTON:
We had a ‑ Treasurer, absolutely. We had a discussion about that back in the beginning of the pandemic and it was absolute doom and gloom stuff which is why I'm suggesting that this December number is almost from a parallel universe. People are kind of reading it and going: how can that possibly be right? And it's ‑ it's just doing people's heads in, including mine.
JOSH FRYDENBERG:
One of the reasons why the unemployment rate has come down is because economic activity has picked up and we've put extra money into the economy, whether it's through tax cuts, whether it's through infrastructure spending, whether it's our skills programs. We've got, for example, over a million people now employed in manufacturing. Under Labor one in eight jobs were lost in manufacturing. We've got 220,000 Australians in a trade apprenticeship. That's the highest since those numbers began being recorded back in 1963. I'm not saying that there are not challenges across the economy. There are real challenges and many people are still doing it very tough. And there are supply chain pressures as a result of Omicron. I've seen that first hand, for example, in the Coles distribution centre in Victoria or a trucking business that I recently visited. But Australians have good reason, Brian, to be confident. Tasmanians have very good reason to be optimistic about the year ahead because their economy, whether it's at investment levels, housing, business, or whether it's in relation to the labour market has seen very strong results.
BRIAN CARLTON:
There's a couple of potential knock ons here if this very low unemployment continues to trend into ‑ into next month and into the next quarter, first half of next year, calendar year ‑ sorry, this calendar year. There'll be some threat or pressure on wages in an upward direction I would have thought, and do you think the Reserve Bank will have a bit of a crack at whacking up interest rates at some point a little earlier than scheduled?
JOSH FRYDENBERG:
In the mid‑year economic update that we released at the end of ‑ at the end of last year, there were upgrades to the wages outlook, which is welcome, and it's a function of a tighter labour market. I mean that 4.2 per cent unemployment rate, that's the lowest in more than 13 years. And that's going to put pressure on wages upwards because employers will be competing for ‑ for the best workers.
BRIAN CARLTON:
Correct.
JOSH FRYDENBERG:
With respect to interest rates, the Reserve Bank obviously independently sets monetary policy, but they've been very clear that they need to see the inflation rate sustainably within what they have as a band of between 2 to 3 per cent, and inflation hasn't been in that band until now, since 2015. They want to see that it's sustained. They also want to see upward pressure on wages as a result of that tighter labour market. I think they've been cautious with comments as to what they'll be doing on interest rates.
BRIAN CARLTON:
Yeah. Well, the other interesting element here is under‑employment has declined and I'm just wondering, given the lack of international job arrivals, are we seeing Australians who otherwise wouldn't move into the workforce to take some of those positions that are available because we've not been able to import foreign workers?
JOSH FRYDENBERG:
We've certainly seen more Australians in work. 1.7 million more Australians are in work today than under Labor. One million more women are in work compared to under Labor. More people are taking those jobs. And under‑employment, youth employment, unemployment is all lower today…
BRIAN CARLTON:
Extraordinary.
JOSH FRYDENBERG:
…than under Labor.
BRIAN CARLTON:
Absolutely extraordinary during a pandemic, I've got to say, a global pandemic, where economies all over the world are going belly up and we're seeing record ‑ record good unemployment numbers. Treasurer, appreciate your time today. Thank you, and I hope you fully recover from your episode of COVID. Thank you.
JOSH FRYDENBERG:
Thanks Brian. Look forward to seeing you in Tassie soon.