KIERAN GILBERT:
Treasurer Josh Frydenberg, thanks for your time.
JOSH FRYDENBERG:
My pleasure.
KIERAN GILBERT:
This result for the September quarter, it’s the worst of all the 28 OECD nations that have reported thus far. They all had Delta outbreaks as well. Why is ours the worst?
JOSH FRYDENBERG:
Well, more than 80 countries, Kieran, have seen lockdowns over the course of the Delta outbreak. But we had our two biggest states – New South Wales and Victoria – in extended lockdowns. And the New South Wales economy contracted by six and a half per cent for the September quarter. But the good news is those lockdowns are behind us. Since that time we’ve seen 350,000 jobs come back since the start of September. We know that job ads are more than 30 per cent higher than going into the pandemic. Business investment is more than nine per cent higher through the year, and business investment intention in the non‑mining sector are the highest on record. And consumption is coming back. In the recent retail sales numbers we’ve seen it up by more than 4.8 per cent for the October period. So they’re pretty good signs for the economy going forward.
KIERAN GILBERT:
But the 28 nations in the OECD that have reported so far for September, we’re the worst result. Why is that?
JOSH FRYDENBERG:
Well, we had a Delta outbreak.
KIERAN GILBERT:
But so did they.
JOSH FRYDENBERG:
They didn’t have as longer lockdowns. But then we had lockdowns that didn’t go as long as them last year and into early this year. Kieran, we –
KIERAN GILBERT:
So it’s the states’ fault?
JOSH FRYDENBERG:
Kieran –
KIERAN GILBERT:
Is it New South Wales and Victoria’s fault?
JOSH FRYDENBERG:
– it’s the virus’s fault. We are living now with the virus. But we saw the Australian economy rebound stronger than any other advanced economy into the beginning of this year. Then we were hit by the Delta outbreak. As you know, the Morrison government responded with extensive economic support, whether it was the $13 billion we partnered with the state governments, whether it was the COVID disaster payments that went to individual households and families. We responded, and the good news is the economy is now turning. We’re looking to a strong quarter –
KIERAN GILBERT:
But you said that again – you said that after last downturn as well.
JOSH FRYDENBERG:
Well, the good news –
KIERAN GILBERT:
Can you see why people might be sceptical this time?
JOSH FRYDENBERG:
Well, Kieran –
KIERAN GILBERT:
We had another downturn of quite significant magnitude.
JOSH FRYDENBERG:
Kieran, I think everybody understands that COVID, Delta outbreaks, they’re major threats. And now we’re dealing with a new variant of the vaccine, but we’ve got to keep our heads with that, with Omicron. But the key point is the prospect for the Australian economy is very positive. We’ve seen stronger labour market recovery than initially expected. We’ve seen household consumption pick up‑
KIERAN GILBERT:
But that labour market is almost –
JOSH FRYDENBERG:
– we’ve seen business investment numbers which are positive.
KIERAN GILBERT:
In a way, you know, you talk to businesses every day of your working life. They are all saying they’re dealing with labour shortages.
JOSH FRYDENBERG:
Workforce –
KIERAN GILBERT:
So how important is it to reopen those borders to skilled migrants on December 15?
JOSH FRYDENBERG:
Well, it’s really important that we open the borders when it’s safe to do so. And we took what I think was a precautionary measure, a sensible measure – it’s one that’s had bipartisan support – to put the pause on for two week. I don’t think it’s a radical action; I think it’s a proportionate one. At the same time we’re looking to open our borders as soon as it’s safe do so. We’ve already made some adjustments for Australian citizens and residents. But, Kieran –
KIERAN GILBERT:
So you’re hoping December 15 will be the resumption?
JOSH FRYDENBERG:
Well, obviously that will depend on the medical advice. But some of the early signs are positive. We’re obviously focused on the transmissibility of this new variant, the severity of this new variant, and the ability of vaccines to be a defence against this new variant. But again, I come back to the labour market and unemployment. When we came to government unemployment was 5.7 per cent. Today it’s 5.2 per cent, even after the first recession in nearly 30 years. And we’ve got the RBA forecasting that the unemployment rate will go down into the fours at a sustained level for only the second time in half a century. You know, we’ve avoided the scarring of the labour market with long‑term unemployment that was so characteristic of the recessions in the 1980s and the 1990s. We’ve avoided that –
KIERAN GILBERT:
So far.
JOSH FRYDENBERG:
– and our economic support has played a big role.
KIERAN GILBERT:
So far.
JOSH FRYDENBERG:
I’m optimistic.
KIERAN GILBERT:
But you say the lockdowns are behind us. But we don’t know that, do we? We hope so, but we don’t know that, because this virus is diabolical.
JOSH FRYDENBERG:
Well, the Delta lockdowns are behind us, and obviously with the vaccination rates higher than ever and also one of the highest in the world it does auger well for the future.
KIERAN GILBERT:
Now, one of the huge issues hitting people’s budgets, personal budgets, is petrol prices. Can you do anything about that? Because right now we’re head into Christmas. People are going to be driving all over the country, and those petrol prices will bite.
JOSH FRYDENBERG:
Well, of course, higher petrol prices goes to the heart of people’s disposable income. They often have no other choice but to, you know, get to and from work, and obviously courier around their family –
KIERAN GILBERT:
Are you helpless in dealing with that?
JOSH FRYDENBERG:
Well, we have the ACCC as a cop on the beat to ensure that competition law is upheld and that there’s no cartel behaviour and no manipulation of the price. International factors are most often at play here when it comes to petrol prices –
KIERAN GILBERT:
So, there’s not a lot you can do?
JOSH FRYDENBERG:
– because of the supply issues and because of some of the big producers.
KIERAN GILBERT:
So, people just have to grin and bear it, I guess?
JOSH FRYDENBERG:
Well, what we saw in today’s numbers was that household disposable income had lifted. And if you talk about energy prices, more broadly electricity prices are down by 10 per cent since December 2018. They doubled under Labor. Since December ’18 they’re down by 10 per cent under us.
KIERAN GILBERT:
A couple of other quick issues that I’ve got to ask you about. A story we’re running this afternoon: were you aware that a friend of the Prime Minister, Scott Briggs, was involved in setting up a private quarantine proposal to run next year with his company’s scoping costs picked up by the Department of Home Affairs?
JOSH FRYDENBERG:
Well, those matters in relation to quarantine are matters that come under Home Affairs, so you’re best directing that to the relevant minister.
KIERAN GILBERT:
But we’ve been told the Home Affairs Secretary said in a call with business organisations that the Prime Minister, Treasurer and the government were very interested in this private quarantine proposal. Is that a fair characterisation?
JOSH FRYDENBERG:
Well, Kieran, you know better that you don’t believe everything you hear. I certainly know better than to believe everything I hear from a journalist. I don’t know what –
KIERAN GILBERT:
No offence taken.
JOSH FRYDENBERG:
I don’t know what Mike Pezzullo said on that call. You’re best directing those questions to the Home Affairs Minister.
KIERAN GILBERT:
And, finally, your great mate, the Health Minister, Mr Hunt, sounds like he might be calling it a day?
JOSH FRYDENBERG:
Well, I’ll leave any comments on such matters to Greg himself. He is a great mate. We’re the godfather to each other’s children. He has been an outstanding health minister during this once‑in‑a‑century pandemic. The fact that Australia has one of the lowest fatality rates and one of the highest vaccination rates in the world is a real credit to him.
KIERAN GILBERT:
Treasurer, appreciate your time, as always. Thank you.
JOSH FRYDENBERG:
Thank you.