QUESTION:
Treasurer, some unemployment news out yesterday, 5.1 per cent. Super reforms through, you said they’re the biggest in years, but overshadowed by a change in the medical advice again on ATAGI. Are you disappointed it has been overshadowed?
JOSH FRYDENBERG:
There are some things you can control and some things you can’t. Obviously, the challenges with the AstraZeneca vaccine are not isolated here in Australia, they’re challenges that have been faced by other countries around the world. The medical advice has served Australia well to this point in time, we’ve been very successful as a nation in suppressing the virus. So when ATAGI provided that advice yesterday to the Health Minister, we were very quick to accept it and to go public with that advice. I note that it’s quite cautious advice because the AstraZeneca vaccine being available to those aged 60 and over here in Australia, compared to the UK where it’s available to those aged over 40. In Korea, it’s those aged 30 and over. Indeed, in Germany, it’s available to those aged 18 and over. But we’ll continue to roll out the Pfizer vaccine as well. There is more than 2 million of those vaccines that are now available, and more than 3 million by the end of July. Of course, we can get the vaccine out as quickly as possible as that supply keeps coming online.
QUESTION:
Why did you not buy more Pfizer last year?
JOSH FRYDENBERG:
Again, we adopted an approach, David, to get as many vaccines from as many sources as possible. We are contracted to get even more Pfizer vaccines over the course of this year. We’ll roll it out as it becomes available. But as you know too, David, our agreement to manufacture vaccines on shore was with AstraZeneca through CSL and being able to manufacture those vaccines on shore is a great asset.
QUESTION:
We’ve seen quite a few states move to already putting restrictions for people travelling from Sydney or the eastern suburbs. What impact does this have on the economy and how much have you planned for states to shut their borders?
JOSH FRYDENBERG:
Again, it would be good if the borders remained open as much as possible. Again, it has got to be consistent with the medical advice. We want people to move more freely across borders and across the country. We saw an outbreak in Victoria, we saw a lockdown in Victoria. We’ve seen now small outbreaks in NSW. I’m confident the authorities can quickly get on top of this with contact testing and tracing. But you’ve got to continue taking that medical advice.
QUESTION:
The Victorian Chief Health Officer wanted to impose restrictions down in Melbourne. He had a 25 kilometre ring, decided he wanted to come to Canberra for a dinner. What do you make of that decision from Victoria’s Chief Health Officer?
JOSH FRYDENBERG:
I think a lot of Victorians are probably scratching their heads as to why he made that journey, but that’s a question for him and for him alone to explain.
QUESTION:
Treasurer, the Reserve Bank of New Zealand this week announced changes aimed at slowing down house price growth in that country, after that decision from the Ardern Government. You had a major report this week suggesting the Reserve Bank’s remit be extended to take into account what is going on in the property market. Have you considered or looked at what our closest neighbour is doing in that regard?
JOSH FRYDENBERG:
I’ve been talking, Shane, with the Governor of the Reserve Bank, with the head of APRA, about our housing market and the need to watch it very closely as housing prices have increased. This is not an Australian only phenomenon. We’ve seen globally historically low interest rates which has spurred the increased demand. We’ve also had programs like the HomeBuilder program, on top of state programs, which have increased demand for housing at this time. But by and large it’s been owner occupiers that have been coming into the market. I’m pleased more first home buyers are coming into the market, the largest number of first home buyers in more than a decade.
QUESTION:
But they’ve been dropping off the last two or three months as investors are coming back. Is that a worry for you?
JOSH FRYDENBERG:
Again, we’re watching that closely. By and large, they have been owner occupiers, but it is the view of the experts that we’ll see more investors coming on board. The Council of Financial Regulators recently met. Again, they discussed this issue. I’ve discussed it with them. Future actions will be taken if necessary based on the housing market. But right now, they have decided not to take any further actions.
QUESTION:
Have you urged them to look at it, to take action? Do you have a feel about how the market is going and whether it is sensible for it to keep going like it is?
JOSH FRYDENBERG:
Again, I think it is important to monitor it very closely and to ensure that we can continue to keep the focus on owner occupiers because that’s what we would like to see come into the market. I am keeping those consultations going, those discussions going with the Reserve Bank and with APRA. As you know, Shane, they’ve taken actions in the past to prevent an overheating of that market. I remind people that household assets is five times is household debt and, for most people, their number one asset is their home and it’s a good thing when the price of their home goes up, gives them more confidence to consume. Many small businesses mortgage their home to invest in their small business. Overall, it’s a good thing for the economy when house prices go up as opposed to going down.
QUESTION:
But don’t you worry that the next generation won’t be able to – your kids, my kids – won’t be able to afford their own home?
JOSH FRYDENBERG:
As you know, house prices and competition in the housing market is both a function of demand and supply. On the demand side, programs like HomeBuilder have been very important through the pandemic. Other initiatives in the Budget include the home loan guarantee to enable families to get into the market with a deposit as low as 5 per cent. We’ve also had the initiative for single parents who can get into the market with a deposit as low as 2 per cent. We had the changes around the downsizer system so that people can downsize…
QUESTION:
(inaudible) under control?
JOSH FRYDENBERG:
What it does do is…
QUESTION:
Within reach.
JOSH FRYDENBERG:
That downsizer contribution changes will enable senior Australians to downsize their home, but more money into super that can free up more supply. There’s also the supply side and the levers for that rest on states and territories and with local government; whether it’s planning, whether it’s zoning, whether it’s new land release. So they’re issues that they need to focus on, as well. But I’m confident, David, more first home buyers are coming into the market. That’s a good thing. But to Shane’s point, we do need to monitor prices. We need to ensure that it’s not overheating and that is what APRA and the RBA are doing.