GRAEME GOODINGS:
Joining me now is Federal Treasurer, Josh Frydenberg. Treasurer, how’s the economy looking at the moment?
JOSH FRYDENBERG:
The Australian economy is holding up remarkably well, Graeme. It has shown an underlying resilience which has even defied some of the more expert watchers from Treasury and the Reserve Bank. Yesterday, we saw the unemployment rate fall to 4 per cent, the lowest in 14 years, and female unemployment has now fallen to 3.8 per cent, which is the lowest level since 1974. The same cannot be said for a lot of other countries around the world. Australia’s economic recovery has been faster and stronger than the United States, the United Kingdom, Canada, Japan, Germany, Italy, France and others. And I think it is a real testament to our economic plan working, but also the wonderful contribution of 26 million Australians to this effort.
GRAEME GOODINGS:
The cost of living is on the rise. Fuel prices have brought about a lot of that. Any suggestion of tax reform, any tax relief?
JOSH FRYDENBERG:
Well, as you know, we have provided around $30 billion of tax relief since the pandemic began, and that focused on low and middle‑income earners. That’s been really important in ensuring that people keep more of what they earn, that we reward effort and encourage aspiration. We’ve also been reducing electricity prices down by eight per cent in the last two years, as well as putting more money into childcare, which has supported families. In the Budget in just over a week’s time, we’ll have additional measures which will help alleviate some of those cost of living pressures, which are very real.
GRAEME GOODINGS:
Can we look forward to relief at the bowser?
JOSH FRYDENBERG:
Again, Australia is a price taker when it comes to the price of petrol. We import a lot of our fuel and, as you know, prices have spiked per barrel of oil as a result of the geopolitical tensions across Europe and the war in Ukraine, and so that’s flowed through here in Australia, but it’s pleasing to see a little bit of that price increase having come off in recent days.
GRAEME GOODINGS
Debt is at a national all-time high. Will there be a budget strategy to help bring it down?
JOSH FRYDENBERG:
Well, we did change our budget strategy when the pandemic first hit. It was required because, as you know, we were staring into the economic abyss. Treasury said to me, Graeme, that the unemployment rate could reach as high as 15 per cent and more than two million Australians could be unemployed. Programs like JobKeeper helped save the economy, the cashflow boost, the $750 payments to pensioners, veterans, others on income support, the HomeBuilder program, they all helped stabilise the economy to the point that now the unemployment rate has recovered, and it is well below what it was going into the pandemic. So, now is the time to move to that next phase of our fiscal strategy, which means reducing debt as a share of the economy and what you’ll see in those numbers released at budget time is an improvement in the bottom line as a result of a growing economy.
GRAEME GOODINGS:
Has the east coast flooding, sort of, dented your prospects? Has that made things difficult because it’s put, added, pressure on the economy overall?
JOSH FRYDENBERG:
Well, it has certainly impacted the Budget and it’s required significant extra spending, but, obviously, our thoughts are first and foremost with those communities who have been affected. We’ve lost lives and livelihoods as a result of this natural disaster. This is my fourth budget, and, in that time, we’ve been dealing with an ongoing drought, fires, floods, a pandemic, and, of course, the war in Ukraine. So, there’s been many challenges that those four budgets have had to deal with, and this one is no different.
GRAEME GOODINGS:
I think everyone realises and appreciates that we had to go into greater debt because of some of the things you’ve just outlined, but you chat with people, and they sort of say, “The debt will go beyond my children, my grandchildren.” Can we see some time in the future where we’ll get that debt level under control?
JOSH FRYDENBERG:
Well, we can manage that higher debt burden because even when it peaks, it’s less than half of what it is in the United States or the United Kingdom as a share of their economy. But again, you’ll see in the numbers that come out with the Budget, in just over a week’s time, a real improvement in our debt position as a result of the growing economy. In the Final Budget Outcome for 2021, the bottom line improved by about $80 billion on what I had forecast when I delivered the budget just a matter of months earlier in 2020. That was because more people were in work and, therefore, less people were on welfare. And that is the secret sauce here. That’s what we’ve got to seek to achieve; a better and stronger economy that produces that fiscal dividend of having more people in work paying tax and less people on welfare requiring spending.
GRAEME GOODINGS:
The election has to be held before the end of May. Your Budget is coming out ahead of that time. Can we expect some election sweeteners?
JOSH FRYDENBERG:
Well, it’s about what is good for the economy going forward and, as you say, alleviating some of those cost of living pressures that people are feeling right now. We have an economic plan and we’re sticking to that plan. Our plan is seeing more investments in manufacturing, more investments in infrastructure, more investments in skills, more investments in the essential services that people rely on and, of course, more investments in Defence at this time of heightened national security concern, and more investments in the digital transformation, which has been accelerated through COVID. That is our economic plan that we will double‑down on in this Budget. But I remind you that our economy has come such a long way in the last couple of years. You remember those images of hundreds of thousands of Australians lining up outside Centrelink when the pandemic first hit, having lost their jobs, and many small business owners were convinced that their doors would close permanently and that their life savings would be lost. Indeed, the Labor Party Shadow Treasurer, Jim Chalmers, said the single biggest test of the Morrison Government’s management of the pandemic will be what happens to unemployment and jobs. Well the answer is now in. The unemployment rate under Labor was 5.7 per cent. It’s 4 per cent under us. Even after a pandemic, our economic plan has been working.
GRAEME GOODINGS:
Treasurer, we have the state election here in South Australia tomorrow. How closely will that be monitored in Canberra?
JOSH FRYDENBERG:
Very closely because Steven Marshall has been a very good Premier, a successful one. He has steered his state through the trying times of the pandemic, and let’s not forget that your unemployment rate is at 5 per cent. It was 6.3 per cent at the start of the pandemic, and so you’ve seen more people in jobs as a result of his policies, and Commonwealth support has contributed to that as well. So, I think he has been a very successful Premier, and I would encourage South Australians to support him come election day.
GRAEME GOODINGS:
Treasurer, thanks for your time today.