KARL STEFANOVIC:
Josh Frydenberg joins us now, the Treasurer from Canberra. Treasurer, good morning to you, thanks for your time this morning. Are you going to give any more assistance to flood victims, given what we've seen?
JOSH FRYDENBERG:
We will be, and Bridget McKenzie as the responsible minister is working on Category C and Category D payments. We have already announced, as you know, Karl, the Disaster Recovery Payment and there has been 145,000 of those claims being made and we are processing them as we speak. We've also triggered the Disaster Recovery Allowance which is payments of up to 13 weeks in duration, which is helping people who can't get to work, for example. And we are going to help with the clean‑up effort, partnering with local governments and state governments. We have ‑ every time there has been a natural disaster, whether it's fires, whether it's cyclones or whether it has been previous floods we've been there as a federal government and that includes logistical assistance with the hard‑working members of the Australian Defence Force, 900 strong, who are on the ground helping with this flood rescue effort.
KARL STEFANOVIC:
When does that start? Because they need it pronto, don't they? I know some parts are still dealing with the emergency, but in others they have already done their bit and they've tried to get furniture out on the streets, and they are just getting on with it themselves, as we've seen part ‑ a great part of the Australian spirit. But when does your finance stuff kick in so that we can get that done as quickly as possible?
JOSH FRYDENBERG:
Payments have already been made in the tens of millions, and I was just speaking to one of my colleagues yesterday, Julian Simmonds who is the member for Ryan, and he was telling me about one of his local members who ‑ constituents ‑ who rang up, their house had been flooded, they went on to Services Australia, applied for that disaster recovery payment and within the day it was in their account. And that money is being used as part of their repair job. The money is flowing…
KARL STEFANOVIC:
Okay.
JOSH FRYDENBERG:
…and it will continue to flow even more so over coming days and weeks.
KARL STEFANOVIC:
Okay. The Federal Government, you say have you spent $17 billion in disaster relief since 2019. Labor is saying that you are fudging the figures. How much of that figure, that 17 billion, was spent on pandemic measures versus say natural disaster relief?
JOSH FRYDENBERG:
Well, as you know, it was $13 billion of disaster payments under the COVID response measures. There has also been the fire effort which is now $2.5 billion‑strong in response to those fires. There's been $1 billion for other flood events that have happened. But that $17 billion took into account what are the broader disaster recovery payments of which COVID was a part. But as you know, Karl, whenever there is a need the federal government has been there to support Australians. And that takes many forms, and we work in partnership with the state government as well as with the local government, including with the clean‑up effort which is going to be so important from here on.
KARL STEFANOVIC:
Of the $4.8 billion Emergency Response Fund, and you have earned, I think calculations are about $800 million in interest since you started that, only a small percentage comparatively has been spent on situations like we are in now.
JOSH FRYDENBERG:
As Bridget I think told you just yesterday, Karl, that is a future fund. That is to be used each and every year with a $50 million disbursement, but there is also money that is being built up there as a war chest for further efforts as required. It is on top of what we currently provide…
KARL STEFANOVIC:
Treasurer, sorry ‑ sorry to interrupt but I think most people will sit back and go, "Hang on a second, we're in the throngs of a disaster right now, I don't even understand what you mean by 'future'." Surely it's our money, shouldn't it be spent now?
JOSH FRYDENBERG:
When it was established, and dare I say it with bipartisan support from the Labor Party, it was made very specific that that money would be invested year‑on‑year, but every year there would be a dividend that would be provided into flood mitigation and resilience across disasters and preparedness. And that's what it's doing. For example, it's helped with flood levees and other measures to protest such disasters in the future. But it's just one part of our response. There is no effort that is being spared, Karl, to actually get support to people who are in need right now. And that's a partnership across the federal and the state and the local governments. And just yesterday I was in touch with the banks, and as you know the banks have provided three‑month relief. They may do more going forward, but three‑month relief for repayments on those loans that people in those flood‑affected areas have. And I think, you know, that's to be welcomed. And the banks stood up during the fires and now they are standing up during the floods and we will support those efforts.
KARL STEFANOVIC:
Just for example, I know Lismore has flooded before, but how much of that would have been spent say, for example, on trying to prevent floods in Lismore, for example?
JOSH FRYDENBERG:
Well, I don't have the specifics on Lismore per se, but I was speaking just yesterday, again to the local member there, Kevin Hogan, and he was explaining to me about the very high cost of insurance which has meant many people are underinsured and people have lost their homes. He was telling me about one of his constituents who just built a home six months ago, they were in their 30s, it was their dream home, and the water had never reached that part of his electorate and now their house is severely damaged. He was telling me about one farmer, a dairy farmer, who had his 40 cows and that was his livelihood. He built it up from scratch and basically the cows were washed down the river. There's huge, huge impacts here on people's lives and livelihoods and that is why we are triggering these further payments.
KARL STEFANOVIC:
Sorry to interrupt. But that's a good point and I'm running out of time but I need to get to this: You say the insurance premiums are too high. You are 100 per cent right about that. People can't afford it. Pensioners can't afford it. That's not just there, that's in every part of the country that's affected by any kind of natural element. Look at Cairns, for example, cyclones. It's $7,000 a year for a pensioner to ensure their house. I mean, that is obscene.
JOSH FRYDENBERG:
And you may be aware that we have actually introduced a program, an initiative, legislation, to set up a $10 billion reinsurance pool for exactly that purpose. To try to reduce the cost of insurance in the event of natural disasters across northern Australia for that very purpose that you referred to. There's a high level of underinsurance because people can't afford the premiums. This is driving down the cost of the premiums, this has been very welcomed from up north, whether it's in Cairns or in Townsville, or in other major parts of northern Australia.
KARL STEFANOVIC:
I will have to get to you call my mum because she got a quote of $7,000 the other day. I mean, it's unaffordable for a lot of people; a lot of work to do there. I will let you go back to it and call my mum at some point. But just before we go, just speaking of the Prime Minister how is he going? Because, I mean, you guys were sleeping head‑to‑tail at the Lodge there for a short while. I can't believe you haven't got it from him.
JOSH FRYDENBERG:
Actually I was in meetings with him as well just before he had his PCR test and tested positive. Fortunately for me, I've tested negative with my PCR test and before that with my RAT test, and I obviously have had COVID like you, Karl, before. He's in good spirits. I was in meetings with him yesterday; I will be in meetings with him today. He's got the symptoms of a common cold ‑ maybe plus some ‑ but he will bounce back like so many other Australians have. And I think, you know, what warmed his heart yesterday were our National Account numbers. If I can segue there to say we saw the economic growth which was equal‑highest for the last 46 years. A 46‑year strong economic growth in the December quarter which shows the economy's real resilience, even in the face of these major economic shocks, Karl.
KARL STEFANOVIC:
Yes, and we have got some cost of living pressures coming, don't we?
JOSH FRYDENBERG:
We do.
KARL STEFANOVIC:
Josh Frydenberg, appreciate your time today. Thank you.