KARL STEFANOVIC:
Treasurer Josh Frydenberg joins me now from Hawthorn in Victoria. Treasurer, good morning to you. Thanks for your time this morning.
JOSH FRYDENBERG:
Nice to be with.
KARL STEFANOVIC:
That is a hell of an accusation. Did he lie?
JOSH FRYDENBERG:
No, and the Prime Minister has refuted that claim, as you just saw there, Karl. What the Prime Minister has done is secured a groundbreaking deal between Australia, the United Kingdom and the United States. We're living in a pretty tense geostrategic environment. Technology is advancing very rapidly, and Australia has now been able to secure a new partnership with two major allies and friends in the United States and the United Kingdom and in doing so, gain access to the best technology to enhance our national security – not just nuclear submarines, Karl, but also artificial intelligence, cyber security. So that is what the Prime Minister was talking about as being in our national interest.
KARL STEFANOVIC:
I understand that, but did he lie to Emanuel Macron?
JOSH FRYDENBERG:
Well, he's made very clear that he hasn't. And, of course, there's disappointment on the French side. This was a major defence contract that they wanted to see through to completion. But, of course, it wasn't compatible with the new AUKUS arrangement that we entered into.
KARL STEFANOVIC:
Why would he say – I mean, this is not – this is not some cheap bagging. This is on an international stage saying an Australian Prime Minister lied to him. Why would he say that if that wasn't true?
JOSH FRYDENBERG:
Well, I'm not going to get into, you know, the details of what's in President Macron's head and behind his comments. What I can tell you is that the Prime Minister has very clearly refuted those claims. Now, that contract has come to an end. What has begun, though, is the AUKUS arrangement, and that is very much in Australia's interests because, as I said, Karl, we're a country of 25 million people, and we need partnerships with major allies and friends like the United States and like the United Kingdom.
KARL STEFANOVIC:
It's one thing to be bitter; it's one thing to be upset about someone rolling over on a contract. I get all that. But then to come out and to say that someone's a liar is a serious escalation diplomatically.
JOSH FRYDENBERG:
Well, it's obviously challenging diplomatically, and it has been, you know, since the announcement. But we're going to work through that. It was good that they had that – the two leaders had that call the other day. There are areas where we can work together and increase that level of cooperation. But, of course, with respect to the AUKUS deal, that sets Australia up for many years ahead, and that is why it is so important to Australia's national interests
KARL STEFANOVIC:
It was important they had the call the other day, but I think that's all out the window now.
JOSH FRYDENBERG:
I wouldn't say that. I'd actually say there is now a pathway for our two countries to continue to work together. Let's not forget there's already an existing set of defence arrangements and contracts that are place. The two‑way trade between our two countries is worth nearly $8 million a year but…
KARL STEFANOVIC:
Josh, Josh…
JOSH FRYDENBERG:
…the people‑people relationship is significant.
KARL STEFANOVIC:
He called our Prime Minister a liar.
JOSH FRYDENBERG:
And our Prime Minister has…
KARL STEFANOVIC:
He called a Prime Minister a liar.
JOSH FRYDENBERG:
Karl, and our Prime Minister has refuted that.
KARL STEFANOVIC:
So categorically he did not lie to the French President.
JOSH FRYDENBERG:
He has said that. And that is very clear in the Prime Minister's response.
KARL STEFANOVIC:
Okay. Things are opening up here at home today. There are still plenty of communities extremely nervous obviously about all this, especially in regional New South Wales today. It's going to be a big day, isn't it?
JOSH FRYDENBERG:
It's a great day. It's a day for celebration. More freedoms are coming back. If you're travelling internationally and you're an Australian citizen or resident, you're not having to go through those home quarantine arrangements. You can more easily now travel interstate between New South Wales and Victoria and within the ACT. And, of course, within our own states we can move more freely now between the cities and the regions. So this is all good news for the economy. I was speaking to Alan Joyce yesterday and Jayne Hrdlicka from Virgin, both were talking about how their ticket sales are going gangbusters. I mean, Qantas has sold more than half a million tickets in the last two weeks. Back in August they were selling just 20,000 tickets over a two‑week period. Same with Virgin – they've seen very strong ticket sales. That's good news for our economy.
KARL STEFANOVIC:
You've also said in the papers this morning you're concerned about China, especially given the potential impact on iron ore sales with the downturn there in the housing sectors. How much of a hit to the bottom line is that going to cause Australia?
JOSH FRYDENBERG:
Well, we did see the iron ore price, Karl, come down from over $200 earlier in the year to around $100. And it's stabilised there for now. But we've got a pretty conservative estimate of the iron ore price in our budget at $55 a tonne. So we've actually built in some buffers there. But what I was pointing out is that the Chinese economy is starting to slow for both cyclical and for structural reasons, and the housing sector, which is a large part of their economy, has seen a bit of a slow down as well.
KARL STEFANOVIC:
All right. Have you spoken to – I know he's a friend of yours – Tim Smith after what happened over the weekend in Victoria, his drink‑driving crash?
JOSH FRYDENBERG:
Yeah, I did yesterday. And, you know, my comments would be the same whether it was a friend or foe – drink driving is dangerous, it's unacceptable. Thank goodness in this instance nobody was injured, but it's a very sober and powerful lesson to anybody watching your program today. If you have been drinking, don't get behind the wheel because you don't only endanger your lives; you endanger others as well.
KARL STEFANOVIC:
All right, especially given it's a very festive time of the year in Melbourne – the Cup tomorrow. Are you heading along?
JOSH FRYDENBERG:
I'm not. I'll be spending my time with my family. Last night it was trick or treating. Tomorrow it will be watching the Cup. But it's great to see the – it's great to see the crowds coming back and Melbournians moving more freely in their own state.
KARL STEFANOVIC:
What did you get dressed up as – a French President?
JOSH FRYDENBERG:
I was there as a dad, eating more than my fair share of lollies. But it was great to see so many families putting in huge efforts. Kids walking around with their buckets, pumpkins everywhere, skeletons all over the place. People really got into the festive spirit. And I'm really looking forward to summer. You know, Karl, it's been a pretty tough year…
KARL STEFANOVIC:
It has.
JOSH FRYDENBERG:
…for so many of your viewers, this morning. But today there's good news – our economy's opening up, and the jobs are coming back.
KARL STEFANOVIC:
All right. Good to talk to you, Treasurer. Appreciate it.