GARETH PARKER:
The Federal Treasurer is Josh Frydenberg. He joins me on the program. Treasurer, good morning.
JOSH FRYDENBERG:
Good morning. Nice to be with you on this very important day for WA.
GARETH PARKER:
Indeed. It is an important day. You and I have talked about borders on many occasions in the past. How do you feel now that the day has finally arrived?
JOSH FRYDENBERG:
Well, closed borders cost jobs, so open borders create jobs, and I think it’s really important and significant that Western Australia is joining the rest of the country. Free at last, free at last, free at last! And families can be reunited and workers can move more freely and, obviously, people need to get the jab and follow the medical advice, but it is a very significant day for WA and the country.
GARETH PARKER:
The national economy bounced back in the last quarter of last year according to the National Accounts you released yesterday. Western Australia’s growth not as strong as the lockdown states, but that’s obviously because our economy remained open, isn’t it?
JOSH FRYDENBERG:
Well, it didn’t have to come back from a Delta lockdown as New South Wales and Victoria did, which is where the main sources of growth came from. But the numbers were really impressive. To see quarterly GDP growth of 3.4 per cent, which was the equal strongest quarterly growth in some 46 years and to see the calendar year growth for 2021 at 4.7 per cent was, I think, very pleasing for Australians, particularly after they’ve sacrificed so much. But it also shows that our economic plan is working. Our investment in skills, manufacturing, infrastructure, transport and energy infrastructure as well as obviously guaranteeing the essential services and ensuring that the health response is world‑class.
GARETH PARKER:
How important is the mining industry to that national recovery and the fact that our economy is, in fact, now bigger than it was going into the pandemic?
JOSH FRYDENBERG:
Well, I think the mining sector is absolutely indispensable to our economy, a major source of jobs as well as income, and our commodities help fuel the world’s industrialisation and, therefore, moving people into the middle classes and beyond. That’s what our mining sector does and whether it’s our iron ore or whether it’s our gold or whether it’s our coal, it plays a very important part in the global economy, including our gas, dare I say it, which is going to be increasingly important as Russia, a big gas producer, is subject to these international sanctions. But, the international comparison of economic growth in employment outcomes since the start of the pandemic really shines a light on how well Australia has performed. We have outperformed all major advanced economies. The United States have 2.9 million fewer Americans in work today than at the start of the pandemic. Australia has 260,000 more people in work today compared to the start of the pandemic. And Germany and Italy and Japan and the United Kingdom are all smaller economies today than going into the pandemic, whereas Australia’s economy is bigger by 3.4 per cent.
GARETH PARKER:
The reason I ask the question about mining, I mean, it’s obviously a new era. We go back to some sort of normality today with borders open, but do you concede the point that the Premier would make in this state that keeping the borders closed allowed the mining industry to continue uninterrupted?
JOSH FRYDENBERG:
I wouldn’t necessarily agree with that, because the mining sectors in other states also continued and so did critical sectors across the economy. What has happened though now on the east coast is that people have learnt to live safely with COVID. Yes, there are a number of cases, but the hospitalisation numbers, the ICU admissions, have come down significantly. There’s been an impact on workforce as a result of the absenteeism, but that has started to ameliorate and so has the pressure on supply chains. We have got some data from the first two months of this year, Gareth, spending data, which shows that Australia’s consumer spending is up by four per cent on the corresponding period the year prior, which shows that Omicron hasn’t derailed our economy or derailed our recovery.
GARETH PARKER:
You mentioned Russia and Ukraine. We’ve got a couple of headwinds here it would seem. Perhaps some opportunities for gas producers, for grain growers, but overall it’s obviously an uncertain situation. Do you believe that the conflict is going to have a material impact upon our Australian economy going forward?
JOSH FRYDENBERG:
Well, there’s lots of questions there. Firstly, we will see elevated prices for some key commodities. For example, wheat has been up by more than 20 per cent in the last two weeks. European gas prices up by more than 70 per cent in the last couple of weeks. Oil prices have now gone beyond $100 a barrel for the first time since 2014/15. Now, some of these prices will flow through to the Australian market and, therefore, to inflation. But, at the same time, we have exporters that compete against Russian companies for markets, and they will, you know, benefit from some of these higher prices. But what I’m most concerned about, obviously, with the Ukrainian situation is what the broader impact will be. Tragically, 44 million Ukrainians are under siege from an aggressive Russian Army and my thoughts and prayers are with them, but it also brings into question the future of the international rules‑based order that has underpinned stability and prosperity across Europe for the last 70 years through Vladimir Putin and Russia’s flagrant breach of the UN Charter.
GARETH PARKER:
Are you worried about inflation in Australia, that that inflation genie could be unleashed as we’ve seen, particularly in the United States?
JOSH FRYDENBERG:
Absolutely focused on where inflation is and where it is going. At 3.5 per cent, it’s higher than we initially thought, but it’s also less than half what it is, for example, in the United States, which has seen 40 year highs of 7.5 per cent. Electricity prices have been coming down in Australia by about eight per cent in the last two years. That’s a key cost of living expense. We’ve invested significantly in child care, which has seen the cost of child care come down for families, particularly with two or more children in child care. And then we have provided tax relief, which has helped boost household disposal income very significantly with some $30 billion being dispensed over the last few years. So, we’re taking measures, Gareth, to help put more money into people’s pockets and help protect them from the rising cost of living pressures.
GARETH PARKER:
Open borders means they’re open to politicians, too, ahead of a federal election due in May. Anthony Albanese is coming this way. The Prime Minister would have been coming this way but for his COVID diagnosis, I’m sure he’ll be here soon. Anthony Albanese has told The West Australian this morning that your Government has ignored Western Australia. He thinks he can pick up three seats.
JOSH FRYDENBERG:
Well, that’s just a bald‑faced lie. It’s bollocks. It’s politics at its worst. I mean, he probably couldn’t read the numbers but if he did, in the Budget, he would see that we’ve dispensed more than $14 billion to the people of Western Australia since the start of COVID, and that has really shown our commitment from the Federal Government to helping Western Australians who have been challenged over the last couple of years. As you know, we’re not the party who proposed a mining tax. That was Labor. That was Anthony Albanese as a senior member of the Labor Party that proposed a mining tax on Western Australian miners. We weren’t the party that proposed a carbon tax. That was Anthony Albanese and the Labor Party that proposed a carbon tax and, certainly, our Prime Minister has never believed or advocated for death duties. That’s the alternative Prime Minister, Anthony Albanese. So, I think when he’s in Western Australia, it would be a good opportunity for Western Australians to ask him about his commitment to higher taxes and, of course, his commitment to higher spending which we have seen through this pandemic with Labor’s proposals of more than $80 billion of additional spending, which obviously would hurt the budget bottom line. So I think what he says and what he does are two very different things and I think that sort of comment is just a bald‑faced lie.
GARETH PARKER:
Well, the campaign is on. I’m sure we’ll see you on this side of the country soon, Treasurer. Thanks for your time.
JOSH FRYDENBERG:
You certainly will. All the best.