CHRIS SMITH:
The Treasurer is on the line. Josh, good morning.
JOSH FRYDENBERG:
Good morning, Chris. Nice to be with you and your listeners.
CHRIS SMITH:
Good to have you with us. We have better GDP than expected. We’ve got better post-pandemic recovery than expected. Why do we keep bouncing back? Can you work this out?
JOSH FRYDENBERG:
Well, the Australian economy’s remarkably resilient. It’s very diverse. As you know, we’ve got the big mining and agriculture sectors, but we’ve also largely focused on services as well, whether it’s financial services, whether it’s health services, whether it’s education services, it’s a very diverse economy. And the fact that we’ve avoided the scarring of the labour market – in other words, the long-term unemployment – that was characteristic of the recessions in Australia in the 1980s and the 1990s I think is a real tribute to all Australians I mean, unemployment today, Chris, is lower than when we came to government after this first recession in nearly 30 years. And it’s going to go even lower. Today I’m going to talk about unemployment getting down to four and a half per cent by mid next year and then going lower still. This would only be the second time since the 1970s that Australia has had an unemployment rate sustainably in the low fours.
CHRIS SMITH:
You’re going to announce that we’ll see one million jobs created over four years. Are you over promising because we’re coming into an election phase, or are you under promising?
JOSH FRYDENBERG:
This is Treasury’s estimate. This is what we expect the Australian economy will generate in terms of jobs – one million new jobs over the next four years. And look at our track record, Chris – as I said, unemployment today lower than when we came to government. We have seen under the Coalition a record number of people get into work and a record number of women get into work. The gender pay gap started to narrow under us compared to what it was under Labor. Workforce participation for women reached a record high under us. We’ve seen more younger people in work. Across the board we’ve helped create jobs. Look at manufacturing – one in eight manufacturing jobs were lost under Labor. We now for the first time have a million jobs in manufacturing. And one of the more pleasing numbers that I’ll announce today is the 16 per cent boost to business investment this year and next. We’re seeing businesses take advantage of the tax incentives that I announced in previous budgets. And whether it’s a cafe getting a new kitchen, whether it’s a manufacturer getting a new production line, whether it’s a tradie listening to your program this morning getting new tools or getting a new ute, that’s what we’re seeing right across the economy. And it’s a sign of people’s confidence and the recovery gaining momentum.
CHRIS SMITH:
Have Treasury officials sat down with the Chief Medical Officer to talk about Omicron before we release these figures today?
JOSH FRYDENBERG:
Well, we have assumed in this budget update that Omicron won’t delay the reopening of the economy in a COVID-safe way, nor will it lead to new lockdowns that we obviously be saw with the Delta variant. But, again, you’ve got to listen to some of the health experts. And we’ve heard from Sharon Lewin, who’s the head of the Doherty Institute who played a real pivotal role in laying out the road map for Australia’s high vaccination rates and then subsequent opening, say that people shouldn’t panic. This is what they’ve been expecting – there will be new variants, and it shouldn’t automatically lead to a closure of borders. You’ve heard from Australia’s Chief Medical Officer saying that while Omicron is more transmissible than perhaps previous variants, it’s early signs are that it’s more mild than other variants and that the vaccine is actually an effective defence against serious illness.
CHRIS SMITH:
Especially if we go out and get our booster shots. Now, one thing that is overdue and we’ll hear today is that wages are set to grow faster than expected. About time.
JOSH FRYDENBERG:
Well, that’s what you get from a tighter labour market. The way to drive higher wages is when businesses are competing for labour. And as you know, job ads are at a 13-year high now. And employers are actually crying out for staff, whether it’s in the hospitality sector, whether it’s in the agriculture sector, whether it’s in mining or construction or, indeed, professional services who need IT staff and the like. There is a high demand for workers out there and that is driving some upward pressure on wages.
CHRIS SMITH:
But we’re all worried about debt. You know, in fact, gross debt is on track to hit 1.5 billion by the end of the decade. Surely we can’t keep spending. We’ve got to pay it off because our children, their children, they’re the ones who’ll suffer down the track.
JOSH FRYDENBERG:
Well, one of the reasons why Australia was able to spend as required through this crisis was because actually we’d got the budget into good shape before the virus hit. So we’d actually balanced the budget, the Coalition, for the first time in 11 years. Then the virus hit and the Australian economy went into lockdown and businesses went into hibernation. There was no alternative, Chris, than to provide programs like JobKeeper and the cash flow boost and the payments to pensioners, veterans and carers. That’s why we’ve seen a very strong recovery. JobKeeper, according to the Reserve Bank of Australia, saved more than 700,000 jobs. The reason why the Labor Party attacks it is because it was so successful and it wasn’t their program. And, you know, even though they try to claim some credit for it. So the reality is that those programs, that spending was required because of the virus. But we’ve brought to an end those emergency payments. We were criticised by Labor when we ended JobKeeper. We were criticised by Labor when we ended the COVID disaster payments. But we did the right thing. Now we’re trying to get the economy back to normal settings, and I do point out to your listeners that in the final budget outcome for the year 2021 we saw an improvement of $80 billion. Why? Because more people were in work and less people on welfare. So that is the secret source.
CHRIS SMITH:
Let’s tack to the left – Opposition Leader Anthony Albanese has criticised the government for pork barrelling. He claims that Labor seats were ignored as part of grants funding. Were marginal Coalition seats prioritised?
JOSH FRYDENBERG:
Well, let me say one thing about the analysis – it was 11 programs out of 1,700, so it’s 1 per cent. And it didn’t include the major social services programs like in disability support or Indigenous support or in health or in aged care. So it didn’t include, for example, an $87.5 million grant program for NDIS partners and communities that went into Anthony Albanese’s own electorate. So you’ve got to bear that in mind. The second thing is that I’m not going to take a lecture from Anthony Albanese on this because when Labor was in government the Audit Office condemned their management of a program in infrastructure where it talked about them abandoning the eligibility and compliance-checking processes. They waived the project eligibility criteria for projects that they wished to fund, and the approval rate of applications in Labor electorates was more than twice that for projects in Coalition-held electorates. Now who was overseeing that infrastructure program? None other than the member for Grayndler, Anthony Albanese. So this holier-than-thou attitude is very shallow indeed because look at the guy’s own track record.
CHRIS SMITH:
Yeah, it’s one of the things I think the public expect that governments have up their sleeve, especially at election time. It’s been part of – you know, the other thing is he says let’s set up an ICAC federally to stop pork barrelling. Well, how do you ever determine such a subjective equation like a swimming pool in one electorate and not another? How would – how would a federal ICAC get to the bottom of that one?
JOSH FRYDENBERG:
For example, one of these programs that was analysed in the newspapers was actually drought support. Now, the fact that most of those electorates that were affected by drought happened to be Coalition seats, and they were objective criteria like, you know, rainfall and other relevant factors. And those programs went to local councils to support those communities who were doing it tough in drought.
CHRIS SMITH:
Yeah, last question – I want to move on.
JOSH FRYDENBERG:
And they’re Coalition seats.
CHRIS SMITH:
Exactly. You’re mates with Sam Groth. You play a bit of tennis together. He obviously beats you, does he?
JOSH FRYDENBERG:
Well, look, I’m not going to give away, you know, on-court secrets.
CHRIS SMITH:
Oh, geez, you’re such a Treasurer, seriously.
JOSH FRYDENBERG:
Let’s just say it’s competitive. How’s that?
CHRIS SMITH:
He is looking for – to running for the Liberal Party in the Victorian state parliament. Have you put him up to this?
JOSH FRYDENBERG:
Well, look, as I understand it, he’s made no decisions on that. He’s a good guy. He’s got a bloody fast serve. He still, you know, runs around the court, although he’s packed on a few kilos, you have to say. But we have a competitive hit. No ground is given. But I can’t say that I’ve taken a set off Federer and others, which, you know, he’s done pretty well on centre court Wimbledon. He’s a Davis Cup champ. So whatever he decides to do, you know, I think, you know, people will support him.
CHRIS SMITH:
I think there’s been a deal. He’s your mentor playing tennis and you’re his mentor for politics. I wish you all the best today. Thank you very much for your time.
JOSH FRYDENBERG:
Great to be with you, Chris.
CHRIS SMITH:
The Treasurer Josh Frydenberg.