JOSH FRYDENBERG:
Good morning. There was a collective sigh of relief across the country today as news that little Cleo had been found. This is news that warms the heart of every Australian. Indeed, our smiles are a little bit brighter today as a result of that news. A very big thank you to both the state and the federal police authorities for their incredible forensic work in helping to find this little beautiful girl. This is wonderful news, and I’m sure after more than two weeks with her missing there’d be no happier people in the world than her family today. In less exciting news yesterday the Governor of the Reserve Bank made some comments about monetary policy. The cash rate has remained at an historic low of 10 basis points. There was also a lot of talk about inflation. Let me be very clear: the inflation genie is not out of the bottle. It’s true internationally we have seen a rise in inflation, and the expectation is that inflationary pressures will be more persistent than originally thought. But here in Australia inflation has been more moderate. Underlying inflation is at 2.1 per cent – at the bottom of the RBA’s target band. And the contributing factors, including supply chain constraints, are expected to be transitory. In yesterday’s statement the Governor of the Reserve Bank made it very clear that the outlook for the Australian economy was positive. Indeed, the Reserve Bank has upgraded its growth forecast for Australia for next year from four and a quarter to five and a half per cent. This reflects that our economy is opening up as restrictions are eased and those extended lockdowns have come to an end in our two largest states of New South Wales and Victoria. Yesterday, we also saw consumer confidence numbers up again; seven out of the last eight weeks consumer confidence has been on the rise. Job ads are now more than 30 per cent higher than they were at the start of the pandemic, and Australia has maintained its AAA credit rating from the three leading credit rating agencies, one of only nine countries to do so. The Reserve Bank has made it very clear that the labour market here in Australia is resilient and, indeed, they see unemployment being below 4 per cent for a sustained period of time. This will be the first time since the 1970s that we have seen a sustained period of unemployment at those levels. Let’s not forget what the predictions for unemployment were at the start of the pandemic last year. Treasury thought that unemployment could reach as high as 15 per cent and there could be very significant scarring of the labour market. In the 80s and the 90s recessions we saw it took years before the unemployment rate came back down to where it began in those recessions. In the 1980s it took some eight years to get the unemployment rate back down and in the 90s recession it took a full decade. This time around in the first recession Australia has seen in nearly 30 years it took just over a year to get the unemployment rate back to where it started going into the recession. The Australian economy is in good shape. Australians can look forward to a bright summer. Our country is opening up and, as we saw in data from our leading airlines – Qantas and Virgin – just days ago there is really strong demand from Australians for airline ticket sales, both domestically and internationally, with Qantas indicating that they had sold 500,000 tickets in a two-week period compared to selling just 20,000 tickets over a two-week period in August, and Jetstar having sold 75,000 international seats in just the last 72 hours. And Virgin has also seen very strong demand. There is good news across the economy. We still face some major challenges with COVID, but our economy is opening up. Australians are getting back to work, and businesses are reopening, too. Are there any questions?
JOURNALIST:
Treasurer, we’ve been told that you’ve told Tim Smith that he can survive the drink‑driving scandal. Yes or no? Do you think Tim Smith should resign? And why?
JOSH FRYDENBERG:
I’ve made it very clear to Tim Smith that he should carefully consider the words of his state leader in Matthew Guy. He should take that time for some reflections. He should take some time to think through his future. I’ve known him for a long time. Tim is extremely dedicated to his local community. And he has taken the fight up to Daniel Andrews at a time when, you know, some others may not have. He’s done that, and he deserves credit for the way he took up some of those battles. But at the same time, what he did in drink driving was unacceptable. It was dangerous. And he, in his comments today and in his earlier state, has admitted this massive failure and error of judgement. Thankfully in this case nobody was injured, but he now needs to take the time to consider his own future, do a bit of soul-searching and reflect on the comments of this state leader, Matthew Guy.
JOURNALIST:
With respect, it was a yes or no question, though. Do you think he should resign, or no?
JOSH FRYDENBERG:
With respect, he’s a state member of parliament. I’m a federal member, and I’m also the Treasurer. He needs to now think through his own career and those decisions that he now needs to take himself and his state leader has made some very strong comments. My advice to him has been to think through his career choices and to think through those comments from his state leader, Matthew Guy.
JOURNALIST:
It sounds like you’re encouraging him to just wait out the scandal. He says he’s had federal support to stay in his seat. You’ve said now he’s a state member. The state leaders of the Liberal Party are telling him to resign and that his position is untenable. Are you not worried he’s going to have a drag on your vote in Kooyong?
JOSH FRYDENBERG:
I can tell you that what he has done has been wrong. And I’ve said that very clearly. But these are decisions that he now needs to take. And these are decisions that he needs to personally reflect on in light of his conduct. And that conduct is not without consequence, including the fact that he has stood down from the shadow cabinet. Now, Matthew Guys is his state leader. As I’ve said, I’m the federal member and I’ve made very clear to him that he needs to take this time to reflect on his career. He can do so over the coming weeks as they lead into the process for their own preselections in the state seat of Kew. But he has, I think, done the right thing in standing down from the shadow cabinet. But at the same time he does need this time to think through his longer term career choices.
JOURNALIST:
Are you backing Matthew Guy, then, and his calls for Tim to step away from politics altogether, or are you encouraging him to wait out the scandal?
JOSH FRYDENBERG:
I think your characterisation of those comments are wrong. What I’m saying is that he should take the time to consider his future and make a decision in his own time. I understand he’s going to be standing up today, so you’d better direct some of these questions - you’re best to direct some of these questions towards him. As for Matthew and I, I saw it reported that this has somehow created tensions between us. I wish those journalists would contact me before they wrote that because that is not the case. Matthew and I have had some good discussions. We’re also close colleagues and people who have worked together in the past and will together in the future. And he, as the state leader, has made some pretty strong comments, and those are comments that Tim should reflect upon.
JOURNALIST:
Just on support, are you one of the high-powered federal Liberals who are supporting Tim Smith at the moment?
JOSH FRYDENBERG:
Well, I think I’ve answered the same question in the same way before, which is that what Tim did was wrong. What Tim did was dangerous. What he did was unacceptable. And it’s a timely reminder for everybody not to get behind the wheel if you’ve been drinking. At the same time his state leader has made some strong comments. My view to Tim personally and privately is the same as I’d say to you publicly – he now needs to take the time to consider his future, do a bit of soul-searching, reflect on the comments of his leader and then make a decision. It’s not a decision I can make for him. Indeed, it’s not a decision that another politician at a state level can make for him. It’s a decision that he now needs to take and make in his own time.
JOURNALIST:
So you don’t support his actions, but you do support him in politics?
JOSH FRYDENBERG:
Again, you may want to characterise what I’m saying in a number of different ways. What I can say to you very clearly is this is his decision, not mine. His decision, which he should take in the time that he has available up to the time when preselection applications come in.
JOURNALIST:
Treasurer, overnight Malcolm Turnbull in Glasgow made some comments regarding Morrison. He accused him…
JOSH FRYDENBERG:
The Prime Minister.
JOURNALIST:
Apologies, the Prime Minister. He accused him of being a liar and of shocking conduct regarding the French submarine deal. What’s your reaction to that?
JOSH FRYDENBERG:
I can only talk about my personal relationship with the Prime Minister as the Deputy Leader and as the Treasurer. My relationship with the Prime Minister is respectful, it’s a relationship that is based on trust. Sure, it has some pretty frank conversations at times and we don’t agree on every course of action or every policy, but we have those discussions behind closed doors. And it’s been a very productive and constructive working relationship. That’s my relationship with the Prime Minister. I’ve made it very clear that when it came to the submarine deal the Prime Minister acted in the national interest. He took a decision – indeed, the National Security Committee of cabinet took a decision. It was a decision that was based on the best expert advice that was available to us. It was a decision that took into account a number of the considerations that go into such a major decision. It was a decision that sees Australia partner with the United Kingdom and the United States in an historic relationship, a tripartite relationship, one that will give Australia access to the latest technologies, not just nuclear submarine technology but artificial intelligence technology, cyber security technology, other new weapons systems. And these are two longstanding allies and friends in the United Kingdom and the United States, and obviously we have the existing ANZUS relationship as well. This was firmly in Australia’s national interests at a time when our geostrategic environment is becoming increasingly challenging. With respect to the French, they’re deeply disappointed. And that’s understandable. This was a major contract that has come to an end. But, again, as the Prime Minister has made clear, the French were aware that we were considering our options. We were looking at alternatives, and the Prime Minister made clear that those conventional submarines were not fit for our purposes for the longer term national security interests of Australia.
JOURNALIST:
Do you think, though, Mr Turnbull – do you have any specific reaction to his comments? Do you wish that he would clearly stop commenting publicly?
JOSH FRYDENBERG:
Again, I can only speak to my personal relationship with the Prime Minister, and it is a very good one. It’s a very strong one. And obviously it’s at the heart of the government as the Leader and the Deputy Leader of the Liberal Party.
JOURNALIST:
What’s your reaction to the High Court decision today regarding the backpacker tax?
JOSH FRYDENBERG:
Again, I’ve just seen early reports of that, and I understand that the ATO will be working through the implications of the judgement. And, of course, once they’ve done that and Treasury and we’ve received some further advice, we’ll have more to say.
JOURNALIST:
Did Barnaby Joyce and the government make a mistake introducing the backpacker tax in the first place?
JOSH FRYDENBERG:
Well, again, it’s not about an individual minister; governments take decisions about spending and revenue matters and implement them through a budgetary process. And like I said, I’ve just seen the reports of the decision and I’ll get further briefings in due course and have more to say about that.
JOURNALIST:
Just back on Tim Smith again, he’s called for, you know, many Labor ministers and MPs to resign scandals, including a drink-driving charge. Do you think he should follow his own advice?
JOSH FRYDENBERG:
Well, I think he’s made comments to that effect today in terms of his position on others and then, therefore, what others may say about him. I can just point you to his words on that.
JOURNALIST:
After learning in June that businesses on JobKeeper were increasing turnover, what steps did you take to see that it could be stopped earlier than September for businesses not in need?
JOSH FRYDENBERG:
I’m really glad you asked me that question about JobKeeper, because it gives me an opportunity to say this is a program that saved the national economy. At the time we introduced JobKeeper Treasury thought that the unemployment could reach as high as 15 per cent – more than 2 million Australians unemployed. Consumer and business confidence had fallen to their lowest levels on record. There was fear right across the Australian community. You remember those images of hundreds of thousands of our fell row Australians lining up outside Centrelink. For many these were images that were reminiscent of the Great Depression. We responded with the single biggest economic support program Australia has ever seen in JobKeeper. It had that immediate effect. It prevented those job separations or people losing their jobs, and it immediately started to restore confidence across the community. The success of that program is evidenced in one very clear fact – the unemployment rate has now fallen below 5 per cent for the first time in a decade – 4.6 per cent. That is an incredible achievement. It’s a national achievement, and it has meant that we have avoided the scarring of the labour market that was so characteristic of previous recessions. The Governor of the Reserve Bank – not a partisan figure in any sense of the word – has described JobKeeper as a remarkable program, having saved more than 700,000 jobs. Chris Richardson, one of Australia’s leading economists, has said it’s the finest policy-making under pressure that he’s ever seen. And we know that 99 per cent of recipients of JobKeeper were businesses with a turnover of less than $50 million or were not-for-profits. This was a program that overwhelmingly supported small businesses across our community. Indeed, just earlier this week, on Monday, I visited a local café here in Hawthorn that had 20 staff that had used JobKeeper to stay on its feet to keep its staff connected to their employer, and now the doors are reopening and people are back being served. And that is a great thing. And it’s happened right across the country. This program was enormously successful. Now I see that the ABC have thought that this is great genius that they’ve discovered that in June we were told that 15 per cent of businesses were seeing their turn overs not decline by the requisite amounts. We made it very public in a report in July that exact fact. I think in the case of the ABC there they’re trying to make something out of what was already public. It’s old news. It’s old news that that was what Treasury had found in their early analysis. Now, despite that finding, Treasury’s firm advice, which was contained in an extensive report that we made public, was that the program parameters should remain the same for those first two quarters of June and September. And as the extensive report by Treasury makes clear, the median decline in turnover of JobKeeper recipients was 28 per cent in the June quarter and 23 per cent in the September quarter. Then, as you may know, we moved to a separate phase or a distinct phase of the program for the second half of JobKeeper, which was to base it on actual decline. But the reason why it was on anticipated decline was to give confidence to businesses to keep their staff. If it hadn’t been based on anticipated decline, the money wouldn’t have got out the door quickly and it wouldn’t have had the desired impact on the recovery that it ended up doing. I’m very glad you’ve asked that question. I do note that in the ABC’s story they had one of Australia’s other leading economists, Professor Richard Holden doing a very strong defence of the program. And I think you’ll find as you go around the country 4 million Australians benefitted from JobKeeper and around a million businesses. They know firsthand what the conditions they faced last year was, and those conditions were economic Armageddon – economic Armageddon – as there was incredible uncertainty. And they have received JobKeeper, kept their staff, unemployment is now down to a 12‑year low and we have avoided the labour market scarring that was so characteristic of previous recessions.
JOURNALIST:
But was there nothing that you or Treasury could have done to have addressed businesses essentially profiting off JobKeeper? You’ve spoken about the queues around Centrelink. The fact is the individuals in those queues would have been placed under a far higher level of scrutiny than the businesses that received JobKeeper and increased their turnover.
JOSH FRYDENBERG:
Treasury did take into account the early analysis of what they were seeing with respect to the turnover of their businesses. They did. And that’s in that report that we released at the time, around July last year, which was an early report into the earliest phase of JobKeeper. And despite that 15 per cent number their advice was that the program was really important to maintaining confidence and that the recovery was weak at that time. The labour market remained weak at that time. I mean, I think you’ll find that unemployment got as high as 7.4 per cent. I think it was in July, right? The economy was still weak last year when we were keeping in place JobKeeper and then transitioning it to a second phase and an extended six months. Initially we thought JobKeeper was only going to be in place for six months and then we extended it for another six months. I find it very curious, too, for the Labor Party to be trying to attack JobKeeper and at the same time they were asking for it to be extended and then claimed credit for it in the first place and then at the time we introduced the legislation were not advocating for a claw‑back mechanism and now supposedly some on their side want to go and get that money back from businesses. Well, I tell you what – it’s not going to occur under our government. We’re not going to retrospectively change the law to start clawing back money from businesses that received JobKeeper because they followed the rules at the time. If you didn’t follow the rules – sure. But if you have followed the rules, then you have received JobKeeper and you have been part of the Australian economic recovery which has been one of the strongest recoveries in the world. Thank you.