GRAEME GOODINGS:
Joining me now is Federal Treasurer, Josh Frydenberg. Treasurer, you held talks with your US counterpart overnight to discuss financial sanctions against Russia. Will you be tightening the screws even further?
JOSH FRYDENBERG:
We’ll look at further options to take additional economic actions which can isolate Russia from the international financial system. Australia has very limited exposure, Graeme, to Russia and the Ukraine economically. Russia and Ukraine represent just 0.2 per cent of our total trade and we have very limited financial system exposure, whether it’s in debt or equity. That is very different to the European nations, like Germany for example, they get more than half their gas imports from Russia and across Europe, it’s around 40 per cent more broadly. So there’s a heavy dependency in Europe on Russian energy supplies, something that is not akin to Australia’s situation.
GRAEME GOODINGS:
How do you see the effectiveness of the sanctions that have been imposed internationally so far?
JOSH FRYDENBERG:
Well, I think they will have an impact. More than 350 individuals have been sanctioned by Australia, including Vladimir Putin himself. We’ve seen the Russian stock market fall by more than 40 per cent over the last week. We’ve seen their currency devalued by more than 10 per cent, and it’s clearly going to have a flow‑on effect across the broader Russian economy. The relationship between China and Russia is a very strategic one and I think Russia will turn more to China to buy its exports and to partner with it in the economic sphere as many western liberal democracies turn the screws on Russia.
GRAEME GOODINGS:
Vladimir Putin has upped the ante. He has asked his nuclear warfare people to be on standby. How do you assess that?
JOSH FRYDENBERG:
I don’t think can you dismiss anything that Vladimir Putin says or does because many people did not expect him to invade a peaceful country in Ukraine, but he did. And now hundreds of thousands of people are trapped in a humanitarian disaster looking for safe haven. There are people cowering in bomb shelters as we speak in Kyiv, and he has a couple of hundred thousand troops that are amassed on the border and missiles are flying, and this is a very concerning situation. America has about 100,000 troops across Europe. Joe Biden has moved an additional 14,000 troops in the vicinity of Ukraine as the conflict has started and, clearly, we are worried about what this will mean for the international rules-based order going forward because this is the first major conflict, Graeme, on European soil between states since the Nazis were defeated. Russia has been the aggressor. Ukraine posed no threat to Russia. Russia has not acted in self-defence but merely has engaged in a very criminal act here.
GRAEME GOODINGS:
Do you think the Russians, in particular Vladimir Putin, are surprised by the level of resistance from Ukraine?
JOSH FRYDENBERG:
That is too difficult to judge from afar because we just don’t know how long that opposition will go for. What we do know, though, is that the Ukrainian leadership has stood firm. They’ve been very resilient in the face of these threats and the Russian people will fight and people will die, as they already have, and that is a tragedy of war and that’s why it should be avoided at all costs.
GRAEME GOODINGS:
While we’re waiting for the impact of the sanctions to take hold, it’s been suggested by a number of experts that we’ve spoken to that another major step that could have an impact on Russia is forcing ambassadors out of the country. Has any thought been given to that?
JOSH FRYDENBERG:
Well that’s a live option for Australia, removing the ambassador, and something Marise Payne has alluded to, but we would work in concert with our allies and our partners before taking such a step. But it does underline the fact that we are greatly concerned by Russia’s actions and we will take further actions building on what we’ve already done to date.
GRAEME GOODINGS:
Petrol prices are nudging $2, largely brought about what is happening in the Ukraine. Can we do anything about that?
JOSH FRYDENBERG:
Well, we are a price taker when it comes to petrol because so much of our petrol is imported. It’s different when it comes to gas. But with respect to petrol, these geopolitical tensions are putting upward pressure on the price. That flows, therefore, through to inflation and higher cost of living expenses. That is going to be, unfortunately, one of the negative flow-on effects and impacts of this crisis. We have seen in Europe gas prices rise very dramatically, over 50 per cent in the last week alone, and we’ve seen wheat prices increase by 16 per cent over the last week alone because Russia is the largest wheat exporter.
GRAEME GOODINGS:
We’ve seen the human toll that the fighting so far is causing in Ukraine. Tens of thousands are fleeing the area and many thousands have gone into Poland. Will Australia give any thought to helping or making a new home for displaced Ukrainians?
JOSH FRYDENBERG:
We are absolutely working on plans to provide further assistance to alleviate some of the humanitarian consequences of this crisis, and we’ve already said that Ukrainians here in Australia who are on temporary visas will get further support. And we’ll work with our international partners in helping to alleviate the humanitarian crisis. There are some 40,000 Ukrainians in Australia, or people of Ukrainian descent. They make really important contributions across the country, and we understand how difficult it is right now, Graeme, for so many people in Ukraine.
GRAEME GOODINGS:
The Prime Minister announced initially non‑lethal aid to Ukraine. That has now changed to lethal aid. What does that mean?
JOSH FRYDENBERG:
Well again, we are working through the detail with our NATO partners, particularly the US and UK about the nature of that equipment. We’ll have more to say in due course.
GRAEME GOODINGS:
Federal Treasurer, Josh Frydenberg. Thanks for joining us today.