BRIAN CARLTON:
Treasurer, good morning. How are you?
JOSH FRYDENBERG:
Nice to be with you, Brian.
BRIAN CARLTON:
I hear you’ve got a bit of a struggly voice, so if it gets a bit scratchy, don’t hesitate to bail out.
JOSH FRYDENBERG:
Look, Tasmanian Manuka honey is doing wonders.
BRIAN CARLTON:
It’s good stuff. Okay. Look, you started off in Launceston this morning with a chat to the Chamber of Commerce. One of the things, I guess, is being pitched around by Launceston is the attempt to turn us into one of the greatest regional cities on earth. I guess you probably heard that phrase a couple of times at the meeting this morning. How do you think we could actually go about doing that?
JOSH FRYDENBERG:
Well, obviously the Morrison Government is committed to the Launceston City Deal and that’s $198 billion contribution to revitalise the, sort of, city square there, to improve the rivers health, to invest in the University of Tasmania. I think you’ve got a number of really strong opportunities in Launceston with agriculture and technology, with the tourism industry, with the innovation hub that is being created out of UTas. And obviously, traditional strengths like Forestry. So, with the booming middle classes in Asia and particularly on our doorstep in China, there is real opportunities for the Tasmanian economy and for Launceston in particular.
BRIAN CARLTON:
Yeah. The other two cities you will be visiting today, Burnie and Devonport, have each had their own successes and difficulties over the years. There is a sense, though, that the north-west coast is in line for a bit of a boom. What will you be talking about to both Burnie and Devonport today, Treasurer?
JOSH FRYDENBERG:
Well, I’m just going to be talking about what we promised in the election, the various election commitments, the infrastructure projects, the community projects. I’ll be talking about the overall economic plan for the Coalition, the investment in skills, lower taxes. With hundreds of billions of dollars already flowing to the people of Tasmania, from Hobart down to Launceston to Burnie and Devonport, they’re all benefiting from the low taxing agenda of the Coalition.
BRIAN CARLTON:
In terms of Tasmania broadly, we’re now according to many of the economic indicators, one of the better performing states. What are the three highlights, do you think, of the economic performance of Tasmania over the past four to five years?
JOSH FRYDENBERG:
Well, tourism is up there. The fact that you are building your economy through stronger tourism, I think is one. Secondly, agriculture. There’s a lot of new opportunities that have come from selling your exports into the region. And yesterday I was in Hobart and I was talking to people in the construction sector who were pretty upbeat about the level of development that’s going on across the state. Your forecasting a surplus in both 18-19’ and 19-20’. That would be the first (inaudible) budget surplus in a row which is a pretty good achievement from the Hodgman Government. One of the challenges, though, that the Tasmanian economy has is population. We always want to see growing population growth and while there has been some in Tasmania, that’s something to continue to watch because that will help the overall economy.
BRIAN CARLTON:
Yeah. The COAG meeting late last week was focusing on jobs training and TAFE funding, those sort of issues. That’s a bit of an identifiable gap in our capacity to do many of those construction jobs that you’re talking about. There’s a fair bit going on in the north of the state, as you’ll no doubt find out today. There is a constant sense that we’re just not generating the number of skilled trainees through formal training processes to take up many of these jobs in construction and peripheral industries. But, is that a fair call? And what can the federal government do to help?
JOSH FRYDENBERG:
Well, Brian, it’s funny you say that because when I was just meeting with a restaurant owner this morning in Launceston, I was commending her on the quality of her staff and just how pleasant they were and professional they were and she said that there is actually a bit of a skills shortage in hospitality in Launceston and that is one of the areas that the city needs to focus on. What we’re doing is we’re contributing nearly $20 million extra to skills initiatives over the next five years in Tasmania, which includes the Job Ready generation package as well as putting nearly $500 million into quality schools which is part of the recurrent schools funding and more than $30 million for a national skills and workforce development as well as nearly $10 million in early childhood education. So, we’re increasing school funding to Tasmania. We’re focusing on new skills initiatives and new skills packages and that, I think, will help bridge the skills gap which we’re hearing about from employers.
BRIAN CARLTON:
Obviously you mention tourism and certainly in terms of investment and things like significant dairy farms we are exposed to Chinese capital quite significantly. Is there any risk to Tasmania broadly if, I use this term very reluctantly, these sort of hostilities between us and the Chinese escalate any further? Is there any risk to the Tasmanian economy? Say for example if tourism numbers start to dry up as a result of the argy-bargy, and I use that term advisedly.
JOSH FRYDENBERG:
Well, obviously the tensions between China and the US are weighing negatively on the global economic outlook. And what concerns us is that it spills over, not just in the trade area, but to investment and to capital flows and that would be problematic because Australia is a net importer of capital, one in five Australian jobs are related to trade, and as a country of $25 million people, we very much benefit from having a transparent, open, rules based trading system where we capitalise on those booming middle classes in our regions. And yesterday, with Bridget Archer, I caught up with the Bass Mayors and they were everyone from Dorset to the other areas and we were told that some of them in the forestry industry have seen a reduction in woodchip exports into the region as a result of these trade tensions. So they were feeling it already. So, we’re not immune and that’s why we’ve called for cool heads to prevail and that’s why we don’t want an overreaction, we want everyone to come back to the table and hopefully negotiate their differences.
BRIAN CARLTON:
You’re speech over the weekend, suggesting that we have a sort of duty, if you like, to continue to back America if we have to choose were very nuanced and, I think, a useful injection into the argument, because quite simply, strategically, we’re not able to align with China in the same way that we traditionally have with the United States. That would be a fair comment, would it not?
JOSH FRYDENBERG:
Well, what you’ll hear from the Prime Minister, myself, the Foreign Minister and others is the importance of the China relationship. And we have a two-way trading relationship which was over $215 billion last year and one third of our exports go to China and it’s not just in agriculture and resources, but increasingly in services which make up 70 per cent of the Australian economy. So, China is a critical partner for Australia. At the same time, the Americans have raised legitimate issues, Brian, around intellectual property and the transparency of their trading relationship with China and the importance to adhere to global rules. So, that is all very relevant but our relationship with America is based on shared values and a shared history and they are our number one investor in Australia and we are an alliance partner from the United States. So my message at the Australian American Leadership Dialogue is the same message to your listeners which is we want America deeply engaged in our region. We benefit from America’s strong security presence and we need to ensure that that relationship only deepens over time across the economic, political and strategic realms in a way that is consistent with our values, consistent with our objectives and faithful to our history.
BRIAN CARLTON:
Treasurer, one final one if I may and I’ll let you go. Your voice is starting to struggle a little bit there, clearly…
JOSH FRYDENBERG:
I’ll get some Manuka honey.
BRIAN CARLTON:
Get some more of that Manuka. One more quick one. About a month ago, I found myself in the headquarters of the Palestinian Liberation Organisation in Ramallah on the West Bank. And the question was put to the spokesperson they rolled out as to why Australia spends any money on an organisation or aiding an organisation such as the Palestinian Liberation Authority, who pays salaries to martyrs and “pays to the families of martyrs,” martyr technically being someone who kills a Jew or more than one Jew. The more they kill, the more money they get. The bigger the sentence they get if they do go to jail, the more “salary” the families get. I put it to them that Australians have major issues with our funding towards those sorts of things, so I note that the Government is reviewing the $80 million commitment we make to the UN Agency, UNRRA, which administers all of this. The Palestinians responded, by the way and just for the record, Treasurer, that they ring fence the payments from countries like Australia and they do not go towards those sorts of salaries and I’m not quite sure I believe that.
JOSH FRYDENBERG:
You always leave the easy questions to last, don’t you, Brian?
BRIAN CARLTON:
I do. I try to, Treasurer. I try to keep it simple at the end, yeah.
JOSH FRYDENBERG:
Well, I’ll give a simple response which is I’ll leave that diplomatic tip-toeing exercise to the Foreign Minister. We obviously contribute to important humanitarian objectives around the world, including in the Middle East, but at the same time, we set standards for where that money goes and how it’s used and we would expect that any money that goes to any of our recipients in the aid program is used for the objectives for which we intended and the Australian taxpayer expects.
BRIAN CARLTON:
A very diplomatic answer, Treasurer. Appreciate your time today, thank you and enjoy your time in Tassie.
JOSH FRYDENBERG:
All the very best to you and your listeners.