FRAN KELLY:
Treasurer, welcome back to Breakfast.
JOSH FRYDENBERG:
Always a pleasure, Fran.
FRAN KELLY:
You’re relying on $12 billion in accelerated tax cuts to pump-prime the economy over the next seven months. That’s the plan as I understand it. That’s great if you have a job. What about all the people who will be out of work when JobKeeper ends in twelve days’ time? Tax cuts won’t help them, will they?
JOSH FRYDENBERG:
The first thing to say is that the labour market has been remarkably resilient. What we’ve seen is about 94 per cent of the 1.3 million Australians who either lost their jobs or saw their working hours reduced to zero at the start of the pandemic, now back at work. The unemployment rate has come down to 6.4 per cent, bearing in mind that when the pandemic hit, Treasury told me that it possibly could hit 15 per cent, which would be more than two million unemployed. The labour market is showing resilience. There’s still a way to go and it will be bumpy when JobKeeper comes to an end. It’s not just the tax cuts that are a weapon in our arsenal, we’ve got a whole series of measures that are designed to boost economic activity, whether it’s the JobMaker hiring credit which provides an incentive for people who are unemployed and under the age of thirty-five, to be hired by employers. Or whether it’s the infrastructure that we’ve brought forward or the new ones that we’ve announced. Whether it’s the apprenticeship announcement just the other day by the Prime Minister and the Skills Minister, Michaelia Cash which will create tens of thousands of new places for younger people to get into the trades or other areas. Or even the tourism package that we announced which is built around half-priced fares as well as low cost loans. These are all measures to support economic activity and keep that momentum which we’re seeing.
FRAN KELLY:
Okay, but in the meantime, JobKeeper will end at the end of this month. It currently supports about 1.3 million workers. I am presuming Treasury has modelled how many jobs will be lost when JobKeeper is withdrawn. What is that number?
JOSH FRYDENBERG:
What Treasury have said is that the unemployment rate will steadily come down at the end of JobKeeper, so has the RBA…
FRAN KELLY:
The rate will come down at the end of JobKeeper, so there won’t be a blip in unemployment?
JOSH FRYDENBERG:
The most recent numbers are from the RBA. As I said, unemployment today is at 6.4 per cent. They have said that by the end of the year, unemployment will be at 6 per cent. Now, if the participation rate stays at its current level of just over 66 per cent, that’s 50,000 fewer unemployed people by the end of the year then there is now. So even though JobKeeper comes to an end, there are other support measures that are in place. It’s very important for your listeners to understand that JobKeeper was always a temporary emergency payment. We initially scheduled it for six months, Fran, we extended it to a full twelve months. At around $90 billion, it’s the most expensive program that any Australian Government has ever undertaken. Treasury’s advice to me is that if you leave it in place, it actually starts to have an unintended consequence across the economy in [inaudible] the efficient allocation of workers.
FRAN KELLY:
Of course, JobKeeper can’t stay on forever and I think businesses understand it. I, over the weekend, spoke to a number of small businesses who are very worried about it and there are plenty of predictions that when JobKeeper ends, there will be an immediate transfer of people onto the unemployment queue. What I’m asking you is how many will it be? The University of Melbourne Professor, Jeff Borland, predicts it could be up to 250,000. The Commonwealth Bank puts the number at more than 100,000. What does Treasury say?
JOSH FRYDENBERG:
I’m not denying it’s going to be bumpy but the most recent Treasury…
FRAN KELLY:
But how many?
JOSH FRYDENBERG:
The most recent Treasury numbers are those that were contained in our Mid-Year Economic and Fiscal Outlook at the end of the year. That said that in March, the unemployment rate would be around 7.5 per cent. It’s obviously lower than that. By the June quarter, it would be 7.75 per cent. So that is the key point, that even as JobKeeper comes off, it might be bumpy for a month or two, I’m not denying that at all…
FRAN KELLY:
So that will be people without a job and without JobKeeper?
JOSH FRYDENBERG:
But the steady trajectory is going down. If you look at what happened at the end of the September quarter, we reduced fiscal support from the Federal Government by half, yet 350,000 new jobs were created. Since September, 2.7 million people have come off JobKeeper. Of course, there are some on JobKeeper who are going to struggle into other jobs, but overall, there is going to be a steady momentum in the right direction over time.
FRAN KELLY:
I think you’ve got a message for the states in the speech you’re delivering today, too, that once JobKeeper is gone, any state that slams shut its borders due to a COVID outbreak will have to stand on its own two feet. What does that mean? There will be no financial help, no bail outs for any of the sectors, even if the health advice demands a border closure?
JOSH FRYDENBERG:
We always have to follow the health advice, but what Gladys Berejiklian has shown so effectively through this crisis is that even when you have outbreaks like in the northern beaches, you don’t have to have a state-wide lockdown. It’s those state-wide lockdowns that are so destructive, not just to confidence, but also to jobs and broader economic activity. Alan Joyce, the head of Qantas, told me that he cancelled 1,500 flights into Queensland alone in the month of January after those border closures. That’s hundreds of thousands of passenger bookings. So we can provide the cheap fares, we can provide the economic benefits to tourism companies and travel agents, but unless you keep those borders open, then those jobs will be lost…
FRAN KELLY:
Is the reality though that a lot is going to depend on the vaccine rollout that states and, indeed, consumers, all of us, might not have the confidence of travel until we’re all vaccinated. States might not have the confidence and the resilience to keep their borders open until most people are vaccinated. Is that what you’re concerned about? Now we have this fresh doubt over the AstraZeneca vaccine, with Germany, Italy and France overnight all announcing their pausing their rollouts there because of their concerns around blood clotting. It’s a reminder, isn’t it, the economic crisis is still a hostage to the health crisis?
JOSH FRYDENBERG:
Business and consumer confidence are now back at their pre-pandemic levels. When it comes to Australians booking flights, we’ve seen over the last month more than a 30 per cent boost in bookings with Qantas and Jetstar. I think that is a trend that will continue, as long as we keep those borders open. With respect to the vaccine, the European equivalent of the TGA, Fran, as well as the World Health Organisation, have said that the AstraZeneca vaccine is effective and they see no evidence of causation between the vaccine itself and the blood clots. In the case of the United Kingdom, they have already distributed more than 12 million doses of the AstraZeneca vaccine and they haven’t seen those trends or patterns across their community. Last night, the Prime Minister, the Health Minister, myself and the Chief Medical Officer and other senior members of the Government were briefed on what was happening with the vaccine rollout and it still the Government’s intention to roll it out as we’ve said.
FRAN KELLY:
Treasurer, you’re also the Deputy Liberal Leader, thousands and thousands of Australian women protested yesterday against violence. Were you moved by the numbers of women who turned out to protest and what change is going to come from this in terms of the Government and for the country?
JOSH FRYDENBERG:
I thought it was a very powerful statement yesterday and, obviously, people who were demonstrating were making their voices heard and that is important. I thought Grace Tame put it so well when she said sexual abuse is an abuse of power. That’s what we have to tackle. That is what the Government is committed to doing. We’ve put in place a billion dollars to reduce violence against women. That is frontline services, Fran, that’s safe places, that’s counselling. As you know, we’ve just released a new information campaign to build awareness across the community. The statistics are absolutely horrendous. To think that one in four Australian women over the age of 15 will experience some form of intimate partner violence is completely unacceptable. So we must do better, we will do better. The Prime Minister is determined to act.
FRAN KELLY:
The Prime Minister is still attracting a lot of criticism from women who feel that he doesn’t get it. That was a theme at the march I was at outside Parliament House yesterday. Anthony Albanese in the Parliament said it’s not so much a tin ear the Prime Minister has, as a wall of concrete. The Prime Minister made those comments yesterday about in other countries, such marches are met with bullets. I mean, do we really have to be grateful that we live in this vibrant democracy? It’s not about the right to march, it’s about what governments do when we raise our voices, isn’t it?
JOSH FRYDENBERG:
Of course we have to be thankful we live in a vibrant democracy, it’s precious…
FRAN KELLY:
Yes, but we all participate in that and we are allowed to, I think, take that for granted. It’s then what happens when people come to the streets and raise their voices in this democracy, that’s what is crucial, isn’t it?
JOSH FRYDENBERG:
That’s why I thought it was a powerful moment yesterday outside the Parliament to see those speeches, to see the large number of women not just gathering here in Canberra, but across the country. It is a very broad issue and it’s a very important issue. It’s a scourge. Domestic violence, violence against women is a scourge in our country and it’s a challenge for our country. We’re putting in place new systems, new programs designed to tackle this, building on what we’ve already done and as the Prime Minister said in the Parliament yesterday that it was the Gillard Government that put in place that first national action plan to reduce violence against women and children. That’s what we’re continuing through with more funding.
FRAN KELLY:
Josh Frydenberg, thank you very much for joining us again on Breakfast.
JOSH FRYDENBERG:
My pleasure.