KARL STEFANOVIC:
Treasurer Josh Frydenberg joins us now in the studio. Josh, good morning to you. Nice to see you.
JOSH FRYDENBERG:
Morning Karl, good morning, Ally.
KARL STEFANOVIC:
Look, the Treasury Secretary this morning says you need to rein in the spending. When exactly will you do that? Post-election?
JOSH FRYDENBERG:
Well, it was actually quite an upbeat speech, Karl. What he did say, is that Australia’s economy is recovering even stronger than we first thought. That there’s quite a positive picture about our debt sustainability, our ability to manage that increased debt burden that’s come with the biggest economic shock since the Great Depression. But he also said that it would be too early to pull back any of that spending because it could have long-term costs to the economy. So he was quite clear in what he had said.
KARL STEFANOVIC:
He seems to have a path towards that, though, and you don’t at this point.
JOSH FRYDENBERG:
Well, we certainly do have a path to manage that debt, and it actually reduces each and every year compared to what we forecast in last year’s Budget as a proportion of the overall size of the economy. The key is to get more people into work. And the good news for Australians is that half a million jobs were created since last year’s October Budget, and this Budget has our plan to create another 250,000 jobs.
ALLISON LANGDON:
But you’re still talking about deficits for at least the next 10 years. What happens if we have another pandemic or global crisis in that time?
JOSH FRYDENBERG:
Well, we have to rebuild those fiscal buffers, but Australia did approach this pandemic in a much stronger position than other countries, which allowed us to spend…
ALLISON LANGDON:
Yes, but if we keep going with the size of the deficits that we are, it means that when there’s another one we won’t be in that position.
JOSH FRYDENBERG:
Well, again, what we are starting to see is our debt compared to the size of our economy come down over time. And the best way to repair the Budget is to repair the economy. But there’s no secret to the fact that 1.3 million Australians lost their jobs or saw their working hours reduced to zero last year, and our economic recovery is stronger than what we’ve seen anywhere else in the world. Europe’s gone into a double-dip recession. But we now know there are more Australians in work than before this pandemic began. So both on the health front and on the economic front, you wouldn’t want to be in any other country in world right now.
KARL STEFANOVIC:
Jim Chalmers has been very vocal in the last couple of weeks, lurking with intent, some might say over the Labor side. He says there’s no way the phase 3 tax cuts will go ahead. He says a lot of things will not survive post-election. How do you deal with that criticism? Is he right?
JOSH FRYDENBERG:
Well, he’s absolutely wrong. We’re absolutely committed to the implementation of those tax cuts. But they are legislated. They’re law. And the Labor Party at the time said they supported the tax bill that went through the Parliament, and now they are trying to have a bet each way. I mean, we know that at the last election, Karl, we talked about it a lot, there was two contrasting views that were put to the Australian people about the economy. Labor’s policies to increase your taxes on your superannuation, on your housing, on your retirement incomes, indeed, on your incomes per se, whereas the Coalition had a plan to lower people’s taxes. We won the election, we legislated and now they are law. So the Labor Party can’t have a bet each way. They’ve got to come clean about their plan to increase Australians’ taxes.
ALLISON LANGDON:
Why are you going ahead with the gas power plant in the Hunter Valley?
JOSH FRYDENBERG:
Because we saw in Victoria when Hazelwood closed that prices went up by 85 per cent. And we know that when Liddell closes that that could lead to a less reliable and stable grid, so at times of high demand through summer when you go to turn on your power switch, there could be some problems. At the same time prices will spike, and that will be a problem not just for job creation but for households too. So it’s really important that we put in place this additional what is called dispatchable power, power that is on demand. We said to the market, “You go and build it and we won’t build it,” and the market didn’t go and build it. So we have worked with Snowy Hydro to put in place this 600 plus megawatt gas plant, because that’s going to be really important in lowering people’s prices and keeping the lights on.
KARL STEFANOVIC:
It is old school, though. Isn’t it more expensive, too?
JOSH FRYDENBERG:
No. This is the best possible plan in order to create a more reliable grid. And, Karl, I don’t want to be having this conversation with the people of New South Wales in a few years’ time when they say, “Why didn’t you take that decision back in 2021?” We are taking this decision now because we want a stronger grid and lower power prices in a few years’ time.
ALLISON LANGDON:
What did you make of the Virgin boss’s comments about borders the others day?
JOSH FRYDENBERG:
Well, look, I respect Jane Hrdlicka; I know her very well. Indeed, she is a constituent of mine in Melbourne. But I think those choice of words if she had her time again may be a little bit different. What she was trying to say is that over time we need to open the borders. But what we make no apologies for, and the Prime Minister’s absolutely right when he said this, is for keeping people safe. Our job is to reduce the likelihood of an outbreak, because we’ve seen how costly that can be on the economic side but also what it can mean in terms of the loss of lives and livelihoods. It might surprise your viewers to know that if Australia had the loss of life that was equivalent to countries across the OECD, more than 30,000 Australians would have died. And tragically, just over 900 have died, 90 per cent of whom were in Victoria, sadly. But we have done so much better than the rest of the world in suppressing the virus.
KARL STEFANOVIC:
The boss of Fox is on the program after 7 o’clock this morning. You’d know him pretty well. He’s pushing for a quarantine facility at Avalon. There’s a number of other places in Victoria that they’re looking at, and maybe you’re looking at some of them more favourably than others. The Wagners are trying to do the same in Toowoomba in Queensland. Why not? If you’ve got the support of big business, why not go ahead and do these things?
JOSH FRYDENBERG:
Well, the Victorian Government actually have a detailed proposal that’s before us right now. It’s looking at a designated quarantine facility…
KARL STEFANOVIC:
If you say yes to them, though, why wouldn’t you say yes to the others?
JOSH FRYDENBERG:
Well, again, we’re happy to talk to the other states. But if this facility from Victoria goes ahead, it’s between 500 and 2,000 beds, it would be a designated facility. The other thing that we’ve said to the states is that we would welcome proposals, we’d look favourably upon proposals about bringing cohorts of international students in, but it would have to be above the quarantine cap. It would have to be ticked off by their Chief Medical Officer. We make no apologies about keeping Australians safe, and that means having an effective quarantine policy in place.
ALLISON LANGDON:
Why are we only just talking about these quarantine camps now? Why aren’t we seeing them in action considering how long this pandemic’s been running?
JOSH FRYDENBERG:
Well, we’ve actually announced a half a billion dollars of new spending to upgrade the Howard Springs quarantine camp in the Northern Territory, taking it from 850 beds to 2,000 beds. So we’re getting on and doing that. But National Cabinet, Ally, took a decision back in March that the states would implement the quarantine facilities under their public health orders because they had responsibilities around logistics, health care and, of course, law enforcement. And but for the situation in Victoria, by and large quarantine has been very effective. More than 300,000 people have come through quarantine since March of last year. There’s been around 3,000 cases of COVID. They’ve been isolated. And the result is that Australia is much better off than the UK, the US or many other comparable countries.
KARL STEFANOVIC:
We’ve got a real issue with convincing people to get this jab. The latest poll says 30 per cent of Australians don’t want to get it. What sort of damage does that do to the recovery process?
JOSH FRYDENBERG:
Well, it’s not just in Australia, Karl. In the same poll you’ve seen the United States, nearly half the population being very cautious about having a jab, too. Look, it’s understandable that some people are hesitant, but ultimately the more people that get the jab the better. I haven’t had it yet because I’m proudly still under 50, but not for long. But, you know, I think everyone should roll up their sleeves, get the jab and, therefore, we’ll have a safer place.
KARL STEFANOVIC:
Is that going to be enough, though? I mean, it’s almost as if you need something else to encourage people. I mean, are passports going to be the answer?
JOSH FRYDENBERG:
Well, the Prime Minister has been talking about exactly that, Karl. He’s been talking about how when we get the vaccine rollout to more people and ultimately we get the virus under control then we can start to see changes around restrictions for people with the vaccine either domestically or internationally when they travel. So there will be incentives that are in place over time.
KARL STEFANOVIC:
It would go down like a lead balloon, wouldn’t it, telling someone from Gympie in Queensland you need a passport to cross the border to go into New South Wales. I mean, that kind of stuff is hard to police. It’s very harsh. I mean, how’s that, is…
JOSH FRYDENBERG:
We’re all one country, and that’s one of the problems actually with the statewide lockdowns. It’s great to be here in Sydney because this state has not gone down the path of other states with the statewide lockdown, even though you’ve had outbreaks, for example, in the Northern Beaches. And, you know, a big cheerio to Gladys Berejiklian for the job she’s done.
KARL STEFANOVIC:
Well, of course, the Queensland Premier says she’s not got enough supply to look of her own state.
JOSH FRYDENBERG:
Well, more supply is coming on. So that’s a good sign.
ALLISON LANGDON:
We’ve seen the Prime Minister out and about a lot over the last couple of days. Does he know something we don’t?
JOSH FRYDENBERG:
Well, he knows that the Australian people want to hear more about the Budget and that the Budget’s good for them, that that means tax cuts and business incentives…
ALLISON LANGDON:
You know that’s not what I’m asking.
JOSH FRYDENBERG:
Well, both of us are travelling a lot, and he’s been in Queensland; I’ve been through Victoria, now New South Wales and soon off to Tasmania. Just yesterday I went to a great Australian success story, Cochlear.
KARL STEFANOVIC:
It’s incredible.
JOSH FRYDENBERG:
You know, 41 years old, started with four employees, now more than 4,000, exports to 180 countries, helping people repair hearing loss, and there in Sydney are these amazing technicians, scientists, engineers developing the latest technology. And we had in the Budget an initiative called the Patent Box, which means that if they design new patents here in Australia and register them with Australian know-how and ingenuity then that means that they’ll pay a lower tax rate and that will encourage more innovation, more jobs and high-paying jobs.
KARL STEFANOVIC:
Will the election be before your 50th birthday?
JOSH FRYDENBERG:
No.
ALLISON LANGDON:
How soon’s your birthday?
JOSH FRYDENBERG:
It’s July.
ALLISON LANGDON:
Okay.
KARL STEFANOVIC:
See, we got something, just got breaking news there.
ALLISON LANGDON:
There won’t be an election before July, great.
JOSH FRYDENBERG:
Well, not that I know of. But it’s not my choice.
KARL STEFANOVIC:
Josh Frydenberg, the Treasurer, confirms an early election, well, early-ish. Good to see you, Josh.
JOSH FRYDENBERG:
Great to see you guys.
KARL STEFANOVIC:
Happy 50th for next year.
JOSH FRYDENBERG:
This year.
ALLISON LANGDON:
This year.
KARL STEFANOVIC:
This year. We like to get in early.