KARL STEFANOVIC:
Treasurer, good morning to you, nice to see you this morning.
JOSH FRYDENBERG:
Good morning guys.
KARL STEFANOVIC:
There seems to be some good news around. The Financial Review leads with ‘economy bounces out of recession,’ is that true?
JOSH FRYDENBERG:
Well there is some good news. We have seen consumer confidence up for 10 weeks straight, Karl, and we saw consumer sentiment numbers yesterday again positive for three straight months. And we saw Australia's AAA credit rating recently reaffirmed, we’ve seen 446,000 jobs being created over the last four months, and we’ve heard from the Reserve Bank Governor just last week that the Government has the right policy in place. So there is some positive news but we are not out of the woods yet. This is a very big hit to the Australian economy that the pandemic has caused, and the road ahead will be long, hard and probably pretty bumpy.
ALLISON LANGDON:
How much of this current confidence is linked to all the vaccine talk?
JOSH FRYDENBERG:
Some of these surveys were taken well before the recent announcement from Pfizer. But certainly that is going to create a boost across community sentiment and as it should do. I mean, those trials look very positive. They are not there yet, but certainly the Government has put in place a series of agreements, five in fact, with various providers to ensure that we can have 134 million-plus doses of vaccines available for the Australian public as soon as it's medically safe to do so.
KARL STEFANOVIC:
It is pretty tough to base any kind of solid numbers on the outcome of a vaccine though, isn't it? Surely that is too difficult?
JOSH FRYDENBERG:
Well Treasury actually do some forecasting, and obviously there are challenges with that in this environment, but they put in the Budget that if a vaccine is found in the first half of next year, as opposed to being rolled out by the end of next year, that could be a $34 billion boost to the Australian economy. So let's just see what happens. We don't get ahead of ourselves when it comes to a vaccine. But there certainly is some positive news out there about the trials.
ALLISON LANGDON:
Because I assume our economy can’t properly pick up until our borders reopen, certainly our international borders?
JOSH FRYDENBERG:
Well again, there will be specific sectors, like aviation, like tourism, which depend heavily on having those international borders open. But we can only do so when the medical advice is that it is safe. And we have seen second waves of cases right across the world and if you look at the United States, they are having tens of thousands of new COVID cases every day. Fortunately here in Australia, we've been able to suppress the virus, and that's taken a lot of hard work and a lot of sacrifice. That has helped put us in a better economic position than nearly any other country when it comes to the recovery, which is well underway.
KARL STEFANOVIC:
JobMaker passed Parliament last night, older workers missing out?
JOSH FRYDENBERG:
No. This is a program that is focused on younger workers. We have other programs like Restart which is focused on older workers who have been unemployed. But what we did do, Karl, is we looked back at Australia's experience in previous recessions, particularly the 1990s, and it took a full decade to get the unemployment rate back below 6 per cent from where they started. But when it came to young people it took a massive 15 years to get the unemployment rate back from where they started before that recession. And right now the unemployment rate for people who are aged 15 to 34 is 10.2 per cent, whereas the employment rate for those who are aged 35 to 44 is 4.7 per cent. We know how important it is both to the economy, but also to society to get those younger people into work and to keep them in work and that’s what this program is designed to do.
ALLISON LANGDON:
I don't think that anyone denies that you do need to be doing something to help those younger workers. You know, employers would get $200 a week if they hire someone between the age of 16 and 29. But what is to stop employers sacking older workers so that they qualify for this scheme?
JOSH FRYDENBERG:
There are significant legislative protections in place Ali, in terms of the legislation that went through the Parliament last night, which is a big win for the job prospects of hundreds of thousands of young Australians. There needs to be an additionality in terms of both the headcount and the payroll of that business when it takes on a young person who is eligible for the JobMaker Hiring Credit. Also the Fair Work Act and its provisions apply and that is really important. And there can't be any contrived schemes designed to get around the rules in this program and the Tax Office will come down on those who try that with penalties attached. So we are very much focused on putting in place the protections in this program. It is embedded in the legislation and unfortunately, there was a bit of grandstanding in the Parliament last night, but the reality is somewhat different than what was put by our political opponents.
KARL STEFANOVIC:
Look, there’s a lot of water under the bridge between now and Christmas even though it is a month away. If the borders don't reopen, what sort of a dent does that put in the country economically?
JOSH FRYDENBERG:
Well again, we said in the Budget that we expected the borders gradually to open over time and that there would be pilots of particular, for example, students and others, who would come over time. But again, we are going on the medical advice, Karl. We can't do anything else. We have seen how damaging it has been to have a second wave in Victoria. How much that has cost the community and the economy. So we are not taking any chances. We're proceeding very cautiously and based on the medical advice.
ALLISON LANGDON:
And your thoughts on who is going to win the third State of Origin?
KARL STEFANOVIC:
Queensland, obviously.
ALLISON LANGDON:
It’s a blue tie...
JOSH FRYDENBERG:
Can I say Victoria? Look, as you know, it’s a Queensland New South Wales thing, and you should know better than asking a Victorian detailed questions about that State of Origin.
KARL STEFANOVIC:
Okay, what about this, Stan has got the tennis now, who would have thought? That’s a thumbs up, see you at Roland-Garros. I know you love your tennis.
ALLISON LANGDON:
Thanks Treasurer.
JOSH FRYDENBERG:
Thanks guys.