ALI MOORE:
Josh Frydenberg, good morning.
JOSH FRYDENBERG:
Good morning, Ali. Nice to be with you.
ALI MOORE:
I’m a little confused because I picked up the newspapers this morning and the headlines say that you back net zero by 2050, and then I read the speech that you’re giving today and I can’t see that. So can we just clarify: are you very specifically backing net zero emissions by 2050 for Australia?
JOSH FRYDENBERG:
Well, the Government hasn’t taken a formal decision…
ALI MOORE:
I’m not asking about the Government, Josh Frydenberg; I’m actually interested in what you think.
JOSH FRYDENBERG:
Well, I’m a part of the Government and, in fact, the Deputy Leader of my party and the Treasurer and I’m working internally on that particular issue and we’re making good progress. And when we’re ready to announce a decision, we will do so. But the point of my speech today is to make it very clear that the financial markets are seeing significant change as a result of climate. Whether it was the industrial revolution or more recently the digital age, financial markets have factored in a new reassessment or understanding of risk and value based on these structural systemic changes, and climate is no different. And this impacts upon Australia because we’re so reliant on foreign investment, we’re so reliant on those foreign investors who provide capital for the Australian markets. And around $4 trillion of foreign investment is right now here in Australia, and we’ve also got about half of our government bonds being purchased by international investors and about 20 per cent of the banks’ borrowing and funding is coming from offshore sources. So I want to make sure that we’re not disadvantaged by these developments in financial markets – but, to the contrary, we’re actually advantaged by them and we’re capitalising on these opportunities getting investment in new renewables, new sustainable sectors as well as ensuring that people understand what we’re doing to reduce our carbon footprint.
ALI MOORE:
And you say in your speech, “We cannot run the risk that markets falsely assume we’re not transitioning in line with the rest of the world.” Why would markets falsely assume that?
JOSH FRYDENBERG:
Well, in terms of our Paris targets we committed to a 26 to 28 per cent target…
ALI MOORE:
And that’s not good enough for the markets? Is that what you’re saying?
JOSH FRYDENBERG:
No, I’m not sure everyone appreciates that we’ve actually reduced our emissions by more than 20 per cent in pursuit of those targets, which is around double the OECD average and faster than the emissions reductions we’ve seen in New Zealand or in Canada, the United States…
ALI MOORE:
But isn’t the bottom line, Treasurer, the problem that you won’t sign up to zero by 2050 as more than 100 countries have done, as virtually every big company in this country has done, as every state and territory has done?
JOSH FRYDENBERG:
Well, that’s what I was actually pointing out in the speech – that 129 countries have signed up to this net zero by 2050…
ALI MOORE:
So why can’t you just do it? I’m really sorry to interrupt you, but I’m just confused as to why you to come up with a speech like this. Just a few weeks ago Scott Morrison was still talking about not signing a blank cheque. Just last night Barnaby Joyce was on the television refusing to give any commitments. Why is it so hard?
JOSH FRYDENBERG:
Because when you commit to a target such as that you need the plan to back it up. And that is the – that is the important point. It’s not…
ALI MOORE:
But, Treasurer, no‑one…
JOSH FRYDENBERG:
It’s not simply just an aspiration; it’s actually a target that when Australia signs up to one it seeks to meet and to beat. And so…
ALI MOORE:
And, Treasurer, I appreciate that, but no‑one has the technology and the plan and the detail in exact terms of how we’re going to get to zero by 2050. The point is, isn’t it, as every company has done, you set the long‑term target and you set short‑term targets and you work your way to getting there. I mean, do you think that BHP or Rio Tinto or Coles or any of those big companies that have signed up to net zero by 2050, have their boards written a blank cheque?
JOSH FRYDENBERG:
What their boards have done is outline their processes and their plans. And just as governments should do as well. And that’s what we’ve been working on internally – how do we actually meet these targets that we’ve committed to. And that’s why we announced a technology investment road map. That’s why we’ve entered into global partnerships with the United States, the United Kingdom, Singapore, Germany and others to share new technologies and to focus on hydrogen. And that is why we have seen in Australia the largest uptake of solar panels on people’s roofs on a per capita basis anywhere in the world. Because we’re investing in these technologies. We’re actually walking the talk. And when it comes to net zero by 2050 that discussion, those plans are being worked on within government.
ALI MOORE:
Well, it sounds to me from what you’ve just said that you’ve got the plan.
JOSH FRYDENBERG:
Well, we’re working through our options. Angus Taylor has been doing a lot of work on those particular issues. And this is, you know, a difficult one because there are different views. And you want to take as many people as you can with you and you also want to explain what the impact is going to be across the economy. As stewards of the national economy we have a responsibility, Ali, to ensure that we take decisions that are in the national interest…
ALI MOORE:
Of course you do. But at the same time this is not a new issue. And all those business that is have signed up, so many of them have told me they need more ambition from the Government to help set the framework. And they need a government that changes the narrative. Again, I’m just going to play the Prime Minister from just a matter of weeks ago.
SCOTT MORRISON:
I won’t be signing a blank cheque on behalf of Australians to targets without plans.
ALI MOORE:
I mean, it’s – I go back to why is it a blank cheque? Why can other countries do it? Why can corporates do it? Why can states do it? Why can territories do it but for some reason the Coalition can’t do it?
JOSH FRYDENBERG:
Well, Ali, what I was pointing out to you is that if you look at New Zealand or Canada, they’ve barely moved the dial on emissions reduction based on 2005 levels whereas we’re down by more than 20 per cent. When it comes to our road map on technology investment, we’ve committed around $20 billion which could leverage three to four times that from the private sector. Whether it’s Snowy 2.0, whether it’s the Battery of the Nation projects, whether it’s the interconnectors and the new distribution transmission networks that we’re supporting around the country, we are taking practical steps to ensure that we have a reliable, affordable and lower emission grid. That’s what we’re seeking to do. Now, what I spelled out in the speech is the way that we can adapt to these changes in financial markets is, one, by ensuring that we’ve got a proper regulatory framework so that investors can take timely and informed decisions so that they can better understand the transition risks, the physical risks that goes with various assets and portfolios, and at the same time we can pursue our own programs and our own plans to reduce our emissions consistent with international targets. And that’s the purpose of the speech. And, as you say, it’s going to the narrative of the Government, and the narrative of the Government, which I’m articulating this morning, is that we are very much committed to these international plans and we’re very much committed to international targets.
ALI MOORE:
Just back to that blank cheque, Treasurer, I have got a number of texts now…
JOSH FRYDENBERG:
I’m sure you have.
ALI MOORE:
Pointing out, though…
JOSH FRYDENBERG:
The bots and the trots.
ALI MOORE:
No, but the Government has signed a blank cheque for nuclear submarines.
JOSH FRYDENBERG:
Well, in terms of the nuclear submarines, I wouldn’t call that a blank cheque. What I would say…
ALI MOORE:
Well, there’s no amount on it, is it? And the Prime Minister has been very clear that there’s no cost at the moment that we can talk about. I mean, is that not the definition of a blank cheque?
JOSH FRYDENBERG:
No, it's not. What we're talking about with the submarines is getting access through the new AUKUS arrangement to a special deal with the United States, with the United Kingdom, two steadfast and strong long‑term allies…
ALI MOORE:
So how much is it going to cost?
JOSH FRYDENBERG:
Well, in terms of the final cost they haven’t actually been determined, but what I can say…
ALI MOORE:
So you’re committed to it, but you don’t know how much it’s going to cost. Is that not a blank cheque?
JOSH FRYDENBERG:
No, it’s not. Because you’re very aware that when it comes to Defence projects they have big numbers attached to them and often they exceed those amounts. But what I can tell you is that we’ve got a commitment to spending at least 2 per cent of GDP on Defence. When we came to government it was down at 1.56 per cent, the lowest level since 1938. That was a real shame for Australia. And we will obviously have to increase that Defence spending and that envelope to take into account these new subs. But that is, you know, unequivocally in Australia’s national interest to partner with these allies, to get access to the best technology. Sure, a few noses may be out of joint, but the reality is we make no apologies for defending and pursuing the national interest.
ALI MOORE:
Just don’t expect any gifts from the French in the short term, I guess. You’re listening to the federal Treasurer Josh Frydenberg. And, Josh Frydenberg, just a couple of other issues, of course, in Victoria where you are based.
JOSH FRYDENBERG:
Sure.
ALI MOORE:
You’re very aware of what’s been happening here and you’re also aware of the Premier’s criticism of the Federal Government for refusing to provide targeted business support for construction. In fact, Dan Andrews says that you treat federal expenditure like its foreign aid and we should all bow our heads and be grateful whenever it comes our way.
JOSH FRYDENBERG:
Well, I’m not going to take the bait and give him and his government the distraction that it’s seeking. What I will tell you and your listeners are the facts: right now the Federal Government is paying about twice what the State Government is doing to households and businesses affected by these lockdowns. We’ve put out already more than $2 billion in the COVID disaster payment, the bill that we pick up. With respect to the business support, we’re going fifty‑fifty. Now, Victoria chose not to put the construction industry in their plan that they reached with the Federal Government around business support. New South Wales had a different plan and they did have the construction industry. Now, in New South Wales they have provided additional support over and above what the Federal Government has done. That is an option that’s available to the Victorian Government if they so choose. But if you’re a construction worker who’s been laid off over the course of the next two weeks because of this lockdown, then you’ll be able to access – provided you’ve lost the required hours of work – you’ll be able to access the COVID disaster payment. That’s $750 a week from the Federal Government. So we’ve bent over backwards to support the Victorian people and Victorian businesses.
ALI MOORE:
Just on that point the Premier makes that you helped New South Wales and you’re not helping Victoria – not the personal payments, the business payments – is that wrong?
JOSH FRYDENBERG:
Well, we made no special deal in New South Wales when they closed the construction industry. So that allegation is wrong. They reached an agreement with us on a set of payments that is different from the set of payments that Victoria advocated for. They listed the businesses sectors that they wanted included. They didn’t include the construction sector. That was their decision and we decided to go fifty‑fifty with them. But, again, I’m not going to take the bait and get into an argument with the Victorian Government because that’s the distraction that they’re looking for. I’ll just tell you the facts as they are – which is the Federal Government is providing around twice what the State Government to households and businesses right now.
ALI MOORE:
Josh Frydenberg, of course, we all woke to the news this morning that John Elliott died overnight. He was a former Liberal President, obviously the Carlton boss for two decades.
JOSH FRYDENBERG:
He was, yes.
ALI MOORE:
And probably the quintessential, well…
JOSH FRYDENBERG:
Larrikin.
ALI MOORE:
Yes. What do you think his legacy is?
JOSH FRYDENBERG:
Well, I think he was a larger‑than‑life figure. I think he was a proud Victorian. I mean, he – certainly with the Liberal Party he was a strong advocate for its policies and its people. With the Carlton Football Club, as you say, he was a great supporter and very proud of the jumper and, you know, those images will last forever of him in the dressing rooms after another Carlton win with a cigarette in one hand and a Fosters in the other. You know, rumour had it that he never wanted to go into the rooms unless they had a win. That’s how determined he was to, you know, enforce that winning attitude down at the club. But I think he’ll leave a large legacy, and he certainly was much loved by many. And my thoughts are with his family. He was very proud of his Victorian, his Liberal Party, his Carlton and his corporate endeavours.
ALI MOORE:
And tomorrow night?
JOSH FRYDENBERG:
The Dees. You know, you have to go back to 1964, Ali, when they last had a win…
ALI MOORE:
I shouldn’t say this on air, but it was the year I was born. It’s that long ago.
JOSH FRYDENBERG:
Is that right?
ALI MOORE:
Yeah, absolutely. It’s that long ago. And, in fact, it’s within weeks of the date I was born, too. So there you go. They were really a long time ago.
JOSH FRYDENBERG:
It’s a long time ago.
ALI MOORE:
It is.
JOSH FRYDENBERG:
But back then, you know, the footballers had full‑time jobs; they weren’t professional athletes like they are now. You know, they probably had a cigarette at half time. Apparently the Beatles were travelling around Australia when Melbourne under Ronald Dale Barassi last one the premiership. So for me I think, you know, they’re the favourites on the field and, indeed, off the field. Obviously we all love the Bulldogs. They’ve got a great fairytale as well with their recent premiership. But when it comes to getting their dues, I think, you know, Melbourne deserves this premiership given what a long drought that they’ve endured.
ALI MOORE:
It has been a very, very long drought. Josh Frydenberg, thanks for talking to us.
JOSH FRYDENBERG:
All the best.