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16 April 2021

Interview with David Koch, Sunrise, Channel 7

Note

Subjects: Labour force; JobKeeper; superannuation guarantee;

DAVID KOCH:

Treasurer, good morning to you.

JOSH FRYDENBERG:

Good morning.

DAVID KOCH:

A year ago economists were tipping unemployment would get above 16 per cent. It is remarkable how the jobs market has bounced back.

JOSH FRYDENBERG:

It absolutely is Kochie and Australia has come so far from the depths of the crisis when we were standing on the edge of the economic abyss, Treasury were warning not just of those very high unemployment numbers, but also growth to fall into a big hole, but 25 plus million Australians have come together at this critical time, and as a result, the Australian economy has really bounced back very strongly. There is a long way to go, but there is a light at the end of the tunnel.

DAVID KOCH:

You look at the detail of yesterday’s figures though, we’re working more hours, underemployment has dropped significantly and also a big slice of the new jobs went to women, in fact female unemployment is a lot lower than male unemployment at the moment.

JOSH FRYDENBERG:

Well you’re right, more than 2000 new jobs were created every day, and we're seeing a recovery in the labour market that is more than four times faster than the recovery we saw after the 1990s recession. Female employment is up significantly now, it's above where it was going into the pandemic. The participation rate is at a record high. Hours worked are up and there are more Australians in a job than ever before. So there are a lot of very positive signs out of yesterday's numbers, and they come off the back of very strong consumer confidence and business confidence numbers earlier in the week, so our plan is working.

DAVID KOCH:

Yes, alright. The sceptics will say these are the March figures, the final month of JobKeeper, and the doom and gloomers are saying the jobs market is going to fall off a cliff. And what are the indicators that we should be more positive about it? Because job vacancies are up, aren’t they, as you say, consumer confidence up?

JOSH FRYDENBERG:

Well job ads now are at a record level, so that’s a positive sign, and it's not just the labour market that is strong, it’s, as I said, it's consumer confidence, business confidence, the housing market is strong with a lot of new building starts underway. Motor vehicle sales are strong, retail sales have picked up as well. So we’re seeing a broad-based recovery. There are still, of course, sectors and regions that continue to do it tough, that's why our economic support continues to roll out, and that's why in the Budget we will continue to provide the support to those who need it most. But Australians can look to the future with a lot of confidence and hope.

DAVID KOCH:

Are you expecting a bounce back up in unemployment in the next month or two?

JOSH FRYDENBERG:

Well even if you see a bit of choppiness around the numbers over the next month or two, it’s Treasury and the Reserve Bank of Australia’s expectation that the unemployment rate will trend down over the course of the year, even after the end of JobKeeper, and it has been Treasury’s very firm and clear advice to us Kochie, that JobKeeper had to end. It was always a temporary program, it was an emergency support payment, it was costing more than $2 billion a month over the course of the March quarter, and so for us, it was a line in the sand, we needed to move to the next phase of our transition into the economic recovery.

DAVID KOCH:

Alright. Okay, just quickly, you’re going to increase the compulsory superannuation contribution, half a percent to 10 per cent, that's employers basically giving their staff a half a per cent pay rise. But it’s going to go into their super, not into their pay packet, they can't eat their super. Do you reckon they prefer it to go into their weekly pay?

JOSH FRYDENBERG:

Well again, I’ve seen lots of speculation about what may or may not be in the Budget, I can tell you that that guarantee, that superannuation guarantee, is legislated, but we've seen a number of voices, whether it's the Reserve Bank or whether it’s the Grattan Institute or others, who have talked about the adequacy of the retirement incomes at 9.5 per cent. We had an independent report that was undertaken, all of that information is feeding through to the Government's thinking, but that legislated increase is there, currently in place.

DAVID KOCH:

Okay. Treasurer, appreciate your time, thank you.

JOSH FRYDENBERG:

Good to be with you.