JOSH FRYDENBERG:
Well, it’s good to be out of isolation, double vaxxed and triple-negative and back out in my electorate. Today, Australia’s AAA credit rating has been reaffirmed. Fitch credit rating agency has upgraded its economic outlook for Australia, saying that the economic recovery will continue and that they are expecting a strong bounce back in Australia’s labour market. Australia is one of only nine countries in the world to have a AAA credit rating from the three leading credit rating agencies. Today we also got the jobs data for the month of September. The unemployment rate is at 4.6 percent, slightly better than what the market was expecting. Although the headline unemployment rate doesn’t tell the full story of the impact on the labour market of the lockdowns in our two largest states of New South Wales and Victoria. The participation rate was down and there are still many Australians who are doing it tough and who, indeed, have been stood down on zero hours. Ninety percent of the jobs that were lost in the month of September were in Victoria where hours worked fell and there are now 173,000 people in Victoria who have been stood down on zero hours. This is a telling reminder of why we must stick to our plan agreed at National Cabinet to reopen our economy safely. And in New South Wales we have some preliminary economic data which is positive. It shows that since New South Wales has reached the 70 percent double-dose vaccination rates more than a half a million people have come off the COVID Disaster Payment. It’s still early days, but the signs are very positive. When you open up your economy, people get back to work. The quicker you open up the economy, the quicker the recovery takes hold. This is a critical message. Finally, the Australian economy has shown remarkable resilience in the face of the biggest economic shock since the Great Depression. Job ads are still more than 20 percent above where they were going into the pandemic, and over the course of the last week we’ve seen business and consumer confidence increase. There are some positive signs there in the Australian economy that once we open up fully, jobs will come back and our recovery will even gain further pace. Australians have a good reason to look forward to a great summer. Are there any questions?
JOURNALIST:
A couple of questions if that’s alright Treasurer? The COVID disaster payment [inaudible] will there still be meaning a lot of people won’t be able to get vaccinated? How many people will be without [inaudible]?
JOSH FRYDENBERG:
Well, what we’ve seen is the COVID disaster payment has been emergency support for those people who have been in need. We’ve seen around 700,000 people in Victoria having received that payment and we’ve seen over a million in New South Wales at various stages of this Delta lockdown. But these are emergency payments and they can’t go on forever, just like lockdown can’t go on forever. So what we have said is that at 70 percent double-dose vaccination rates people will need to reapply on a weekly basis for that COVID disaster payment. We’re already seeing a boost to economic activity across New South Wales as they have reached that target and are starting to open in a COVID‑safe way. We’ve also said once you get to the 80 percent double-dose vaccination rates that there will be a tapering down. And we’ve already made announcements in that particular regard. But the cheapest form of stimulus to the economy is vaccination, and that’s why it’s so pleasing to see the ACT, a first-dose vaccination rate above 95 percent. In New South Wales, above 90 percent. In Victoria, above 85 percent. And Queensland and Western Australia are, of course, catching up, too. So, it’s really important that Australians see the vaccination as their ticket out of this crisis and that we open up in a COVID‑safe way.
JOURNALIST:
Do you know how many workers will be without an income when the support is taken away?
JOSH FRYDENBERG:
Well, we’re expecting to see a strong come back in the labour market. I point out to you what happened earlier this year in Victoria: when they opened up after their initial lockdowns we saw in the month 9.7 per cent increase in hours worked. So it’s very clear that those COVID disaster payments have helped provide people in their hour of need. But once we start to open up and the jobs come back and then people don’t need that emergency support, but of course, our welfare system is always there as another safety net.
JOURNALIST:
Employment and hours worked dropped below pre-pandemic levels with the jobs [inaudible].
JOSH FRYDENBERG:
Well, what was pretty telling in these statistics was that in non-lockdown states we actually saw employment pick up. So in Queensland, in Western Australia, in Tasmania we saw jobs coming back and, indeed, more jobs being created. That is a positive sign as to what happens when you’re not in lockdown. So, our sense is that the labour market will have a strong recovery, but it’s, of course, contingent upon those restrictions being eased. And it was very pleasing to see those restriction being eased in New South Wales. I would hope Victoria follows suit because Victoria and its restrictions being eased at 70 and 80 percent don’t replicate New South Wales. New South Wales has gone further than Victoria. I would like Victoria to follow New South Wales. I would like Victoria and the Victorian government to provide their citizens with the same freedoms that the people in New South Wales have received.
JOURNALIST:
Gas and coal prices are at record high, but the price of iron ore is falling. How significant is this increase in gas and coal to Australia’s economic growth?
JOSH FRYDENBERG:
Well, the iron ore price does fluctuate, of course, and we’ve seen highs this year above $200 a tonne then below $100 a tonne. But we had it in the budget at a pretty conservative estimate, a forecast of around $55 a tonne. So when it’s above that rate, which it is today, that is of benefit to the budget bottom line. With respect to gas, with respect to coal, there’s still strong demand, both metallurgical coal and thermal coal, as well as gas. And, of course, we’re seeing some of the price pressures across Europe right now.
JOURNALIST:
What happens if the Nationals are unable to come to an agreement [inaudible]?
JOSH FRYDENBERG:
Well, firstly, as you know, we’re going through internal discussions and conducting an internal process on that particular issue of reaching net-zero by 2050. I want to be respectful to that process and obviously respectful to my colleagues. I’ve spoken about the impacts in financial markets of the net-zero targets and how investors and central banks and, indeed, commercial banks have been factoring that into the way they allocate their assets into the way they price risk. That movement is underway. It’s a long-term structural shift; it’s not a short-term shock. And Australians need to be very conscious of the impacts of that change in financial markets because Australia heavily relies upon foreign investors. $4 trillion worth of foreign investment here in Australia, about half of our government bonds are bought by overseas investors, around 20 percent of commercial bank lending is supported by their borrowings overseas. It goes to the heart of the price you pay on your mortgage or your small business loan, it is about banks’ access to capital globally. I want Australia not to be disadvantaged by those movements internationally but actually to be advantaged by them. And I want us to capitalise on the opportunities that are being presented to our economy by a lower emissions future.
JOURNALIST:
Do you think the Prime Minister will be able to land a deal before Glasgow summit?
JOSH FRYDENBERG:
Well, again, we’ve had a number of conversations both at cabinet level as well as at leadership level. We’ll continue to work through these issues with our colleagues. But these are very important issues. And like other important issues in the Coalition, we go through, we consider them in a methodical way, in an evidence-based way. And there is a strong economic aspect to all these issues with respect to net-zero and a lower emissions future. What Australia chooses to do into the future will have a big impact on our economy in a positive way. And that is what I’m working to.
JOURNALIST:
Even if the majority of the joint party room is on board with net-zero, what’s the risk we’ll see a version of the national energy guarantee play out again? Will the small but loud minority get their way or will it be different this time?
JOSH FRYDENBERG:
Well, you can bowl that one off stump, but I’m not necessarily going to have a slash. I would say to you that we are working through those issues in a methodical way and a considered way, looking at the evidence. And you can ask me that question in so many different ways, but the reality is these are internal discussions and I’ll respect that.
JOURNALIST:
On IBAC, Labor MP Anthony Byrne will physically return to Canberra next week [inaudible]?
JOSH FRYDENBERG:
Again, they’re questions that you can direct to his leader, Anthony Albanese. I’m obviously watching those processes unfold with great interest, but, again, that’s a matter for Anthony Albanese to defend. Thank you very much.