DANICA DE GIORGIO:
Treasurer, good morning. Thank you for joining me. How does Australia compare to the rest of the world?
JOSH FRYDENBERG:
Extremely well, Danica. We actually outperformed all major advanced economies over the course of the last year. We saw the UK economy contract by around 10 per cent, the Canadian economy around 5 per cent, US economy by more than 3 per cent, yet here in Australia, our economy contracted by just 2.5 per cent. Today’s announcement from the International Monetary Fund of a full percentage point increase in Australia’s expected GDP growth to 4.5 per cent in 2021 is another proof point of our strong economic recovery. It comes off the back of those lower unemployment numbers which saw the unemployment rate fall to 5.8 per cent. Let’s not forget that Treasury thought at one point during the height of the pandemic that the unemployment rate could reach as high as 15 per cent which would mean more than two million unemployed. To see that unemployment rate come down, to see Australia maintain our AAA credit rating, consumer and business confidence to get back to where it was pre-pandemic, business investment to increase off the back of Government incentives, is again, another very positive sign of how well the Australian economy is performing in the face of this biggest economic shock since the Great Depression.
DANICA DE GIORGIO:
The IMF warns that the biggest risk to economic recovery is the pandemic and has warned countries not to pull stimulus too soon. JobKeeper just ended here. Is that a major risk to the economy powering ahead?
JOSH FRYDENBERG:
Actually, the numbers from the IMF factor in the end of JobKeeper. It was always a temporary program. We always said it would be an emergency payment. Initially it was for six months, we extended it for a full year. We tapered it off, we created a two tiered payment. It saved, according to the Reserve Bank of Australia and Treasury, 700,000 jobs. It was a very successful program, supporting more than 3.6 million Australians at its peak. But now, we move to the next stage of our economic recovery. We’ve rolled out targeted programs for the aviation and tourism sector. Those half-priced tickets, Danica, have been going off like hotcakes. We’ve seen more than 300,000 sold already. We’re providing specific support to the arts sector for grants for them to host live events, as well as the tax cuts flowing through, the business investment incentives, the infrastructure programs we’ve brought forward, the 340,000 new training places – all measures we announced in last year’s Budget which will continue to support the economy long after JobKeeper has ended.
DANICA DE GIORGIO:
The IMF also said a faster vaccine rollout could speed up economic recovery. Do you concede that our economy could bounce back faster if we reached our jab targets?
JOSH FRYDENBERG:
Australia’s situation in terms of the virus is quite different to other nations. As you know, we’ve been able to successfully suppress the virus. Yes, we’ve had outbreaks and that’s led to localised lockdowns and, last year, state-wide lockdowns. But we’ve done so much better than other countries. Now, we’ve already seen more than 850,000 people get the jab. We’ve got the domestic sovereign capability with CSL to produce the AstraZeneca vaccine. That’s going to see more supply, which of course, will see more distribution. So, the vaccine rollout is gaining momentum, but you want to distinguish about the situation Australia finds itself in, compared to, for example, the UK or the US where the virus ran rampant. You can see that in the numbers. I mean, Australia has tragically lost 35 people for every million persons in our population to the COVID virus. Whereas in Canada, it’s more than 500 per million of the population, in the US it’s more than 1,500. So, Australia has outperformed on both the health and the economic front. That’s something more than 25 million Australians can be very proud of.
DANICA DE GIORGIO:
Just finally, Treasurer, on the New Zealand-Australia travel bubble announced just yesterday. There are fears that it will not give us that burn that we were hoping for. People coming over will likely stay with family and friends. Are their tourism dollars going to go where it is most needed?
JOSH FRYDENBERG:
Absolutely. We’ve seen that in the pre-pandemic numbers with more than $1.5 billion injected into the Australian economy from New Zealand tourists. This is our busiest international route; more than 7 million people travelling on it a year pre-COVID. That’s good news for the economy that we’ve now got this Trans-Tasman bubble and it’s a credit to both countries how they’ve managed the virus. So, I am confident and we’ve seen Qantas announce that they’ll ramp up more than 120 flights a week with their Jetstar services, as well. You’ve seen Air New Zealand making announcements about their number of flights, as well. So I am confident that this will provide a boost to both the New Zealand and Australian economies and to the tourism sectors at a time when they absolutely need it.
DANICA DE GIORGIO:
Good to hear. Josh Frydenberg, thanks for joining me this morning.
JOSH FRYDENBERG:
My pleasure.