CHRIS SMITH:
Josh Frydenberg, good morning.
JOSH FRYDENBERG:
Good morning, Chris, nice to be with you and your listeners.
CHRIS SMITH:
Can you just explain something for us. Unemployment is down, participation is up, but bosses are still struggling to fill their vacancies. Job ads have hit their highest point in 12 years. Do you need to get vaccinated foreign workers back into Australia quick smart?
JOSH FRYDENBERG:
We have seen some arrangements, for example, for seasonal workers to come and work in the agricultural sector, but we are putting a premium on protecting people's health, and that's why we haven't opened the borders. But with respect to job ads, you're right Chris, they've lifted significantly and there are jobs that are available. At the same time, yesterday's data showed that more people are finding work and we've actually got more Australians in work than ever before, and the recovery in the labour market is happening now four times faster than what we saw after the 1990s recession, with more than 2,000 jobs being created every day over the month of Marc
CHRIS SMITH:
Did you really think that that would happen so quickly?
JOSH FRYDENBERG:
No, we didn't. And Treasury and the Reserve Bank had forecast unemployment to be significantly higher than it is today. In fact, at the height of the pandemic, Chris, Treasury came to me and said that the unemployment rate could reach as high as 15 per cent. Yesterday we saw it fall to 5.6 per cent and it might surprise your listeners to know that the unemployment rate today in Australia is lower than when Labor left office. So it's lower today, even after the pandemic and the recession that we've just had.
CHRIS SMITH:
My economics teacher would say, therefore, wages are about to grow. Can you guarantee that that will happen?
JOSH FRYDENBERG:
Well, wages are a function of competition in the labour market. There are forecasts about wages growth, but we would obviously want it to be higher, and the best way to do that is to boost productivity, to invest in skills, to make our economy stronger, but also to get more people in work so that employers are competing for labour, and when they do that, they bid wages up.
CHRIS SMITH:
Okay. The so-called cliff will emerge when we get the figures for April. We're halfway through the month now, so the cliff that we're supposedly supposed to fall off is occurring as we speak. So what's your prediction for the unemployment figure for the month of April? If its 5.6 now, could it hold on at 5.6 for this month?
JOSH FRYDENBERG:
Well, it's important for your listeners to understand that even after JobKeeper ends, it is Treasury and the Reserve Bank's expectation that the unemployment rate would trend down over the course of the year. So there may be some movements in month-to-month numbers and right now the 5.6 per cent is a lot lower than what we had initially expected. So I'm not going to predict what it would be in April and May, but I can tell you that the forecasts that are provided to government is that even after JobKeeper ends, the unemployment rate trends down and for us, Chris, the ending of JobKeeper was a line in the sand. This was always a temporary emergency payment. Our political opponents would have been happy to keep spending more than $2 billion a month on that program because they're all in favour of higher taxes to chase their higher spending. We're in favour of emergency payments at the height of the pandemic, but as the economy strengthens those emergency payments need to come to an end, as they've done with JobKeeper, and we transition to more targeted support like the announcements that we've made for tourism, for aviation and for the arts sector.
CHRIS SMITH:
If you were offered 5.6 per cent as an unemployment figure for April, you'd take it, would you?
JOSH FRYDENBERG:
I'm not going to go there and take that bait, but you're dangling over the water's edge.
CHRIS SMITH:
Okay. What about December? You're gonna get to Christmas and some are saying you're going to be very close to five per cent unemployment. You might even reach four point something. That would be astonishing.
JOSH FRYDENBERG:
Well again, we'll print in the budget what our economic forecasts are with respect to growth, with respect to unemployment and, of course, the budget bottom line. But we have seen improvements that were not expected, even as recently as the midyear economic update which was in December last year. So we are very pleased with the momentum that is in the economy, but we don't know what's around the corner. That's why we're very cautious. That's why we continue to provide the support. We're not out of the crisis yet, people need to understand we're still in the middle of the pandemic, the global economy has been hit hard, and there are families, there are regions, there are sectors across our country that continue to do it tough.
CHRIS SMITH:
The OECD has urged Australia to consider cutting company tax to speed up economic recovery. Are you open to revisiting the corporate tax rate? I know you've taken it down. You've achieved a great deal of reform with that. Can it go down further?
JOSH FRYDENBERG:
We've no plans to do that. What we did do is we cut company tax for businesses that were at the smaller and the medium end of the scale and that was designed to enable them to be more competitive. We obviously tried with larger company tax cuts but that didn't get through the Parliament.
CHRIS SMITH:
Okay. Will there be a levy to pay for additional resources for aged care or not?
JOSH FRYDENBERG:
Well again, I've seen lots of speculation on tax, on superannuation, on individual measures. With respect to this year's budget, I don't want to ruin the surprise. We'll leave it all budget night. I'm not going to get in that rule in, rule out game, but what I can tell you, Chris, is for the Prime Minister, for our government, aged care is a priority. We're seeing $23 billion plus a year being spent on aged care and we have seen from the Royal Commission areas of increased need, and that's not just in respect to residential and home care more generally, but it's also with respect to governance arrangements, it's with respect to workforce as well. And they're the sort of things that we are also working through as a government.
CHRIS SMITH:
And finally, our female listeners, your fans are keen to get a Treasurer's diet update. How's it going?
JOSH FRYDENBERG:
Well, I've had a couple of beers…
CHRIS SMITH:
…Oh, hang on.
JOSH FRYDENBERG:
I had my first burger...
CHRIS SMITH:
You're going to blame Easter, are you?
JOSH FRYDENBERG:
Well, I should know better at this time of the year. I've got to get match fit.
CHRIS SMITH:
Yeah. You've got to get match fit.
JOSH FRYDENBERG:
So, you know, I’ve only got a few weeks to go. So I might have to cram that training into the next few weeks, Chris, as we speak in the lead-up to budget night.
CHRIS SMITH:
All right. Good luck with all of that. Thank you so much for your time this morning.
JOSH FRYDENBERG:
Thank you, Jenny Craig.
CHRIS SMITH:
Thank you very much. Josh Frydenberg, the Federal Treasurer.