KIERAN GILBERT:
The unemployment rate down today to 4.6 percent, 366,000 jobs created. You’re hoping to create a million jobs across the forward estimates. Given today’s result, should you be more ambitious on that?
JOSH FRYDENBERG:
Well, this is certainly better than what Treasury or the market were expecting. These are an incredible set of job numbers, Kieran. As you say, 366,000 jobs created in a month. That’s the single largest monthly increase. We know that 180,000 more people are in work today than at the start of the pandemic. And what was pretty pleasing about these job numbers was that even after the Delta outbreak and the lockdowns across our two largest states, the economy has shown remarkable resilience. And the unemployment is at 4.6 percent. When we came to government it was 5.7 percent. And in today’s budget update we’re forecasting for the unemployment rate to even fall further, and it would only be the second time since the 1970s that Australia has seen an unemployment rate sustained in the fours.
KIERAN GILBERT:
On today’s document you’ve got more than $100 billion in revenue since the budget, more than a $100 billion in expenditure as well. I just want to get a bit of clarification here on where this is going. You’ve got $26 billion or thereabouts NDIS, similar in terms of the COVID response, about $16 billion in decisions taken and not yet announced. From what we’ve looked at in this document there’s about $30 billion that isn’t identified. Where is that $30 billion going?
JOSH FRYDENBERG:
Well, it’s actually clearly identified that we’re spending extra on infrastructure. There are a series of major programs from METRONET in Western Australia to the upgrade to the Bruce Highway to the Coffs Harbour bypass. There’s a lot of important infrastructure projects that are being supported. There’s extra funding for the PBS as some of the prices of those drugs being listed have increased. There’s extra money going into schools. There’s a number of extra additional programs for skilling the workforce, whether they are older workers who need to be reskilled to find new jobs or younger workers who are coming into the workforce for the first time. There are programs to support them. We’re extending the wage subsidy for apprentices into the second and third year at a tapered lower rate, which will be very important. There’s also extra energy investments, for example, $500 million of equity funding that’s going into the Clean Energy Finance Corporation. So it’s all laid out there, Kieran. It’s extra funding in the areas that matter most. But the biggest items have been the economic support measures that we outlined in response to Delta, which was the business support payments and the up to $750 a week payment to households who had lost work, as well as the increased cost of the NDIS at $26 billion extra over the forward estimates.
KIERAN GILBERT:
On the Omicron variant, how much of the forecasts and our outlook generally into the new year depends on this being a milder form of the virus?
JOSH FRYDENBERG:
Well, certainly, the momentum, the speed, the trajectory of our economic recovery does depend on us keeping the virus under control and living safely with the virus. We know that from the medical experts that the early signs are quite positive about the Omicron variant in terms of its severity compared to previous variants. It is highly transmissible, but it has led experts to say right now that the vaccine is an effect defence against serious illness and that the treatments are actually an effective defence against the virus as well. So when I’ve listened to the Chief Medical Officer of the Commonwealth or Sharon Lewin, the head of the Doherty Institute, their message has been a reassuring one – we don’t need to panic. We don’t need to overreact. We need to have a proportionate response. We need to have a response from the state Premiers that is both compassionate and common sense and that will allow our economy to continue to open because when it does the jobs come roaring back, as we’ve seen today. Today is a jobs boom. And those numbers are really very positive.
KIERAN GILBERT:
With the jobs, boom comes the skills shortage, though, doesn’t it? It’s obviously dependent upon the variant and the way COVID unfolds as well into 2022, but you must be desperate to get those numbers back up in terms of skilled migrants?
JOSH FRYDENBERG:
Well, the good news today, Kieran, is, as you know, we’re also seeing our borders reopen to the skilled workers and to the international students and the humanitarian intake, which was paused for that couple of weeks because we still had yet not seen enough data around the Omicron variant. Those workers coming into the country will help fill some of the skilled work shortages that are there because they’re real. Job ads are at a 13‑year high. There’s more than 200,000 job ads that are available today. So even though the unemployment rate is coming down, we’re also seeing demand for workers going up. And it is a real issue and one that we’re seeking to solve by both training up Australians for the various jobs that are available but also having skilled workers come into the country as well.
KIERAN GILBERT:
Yeah, and the good news is, obviously, that that unemployment rate hopefully says in the 4s and the low fours in terms of a percentage over the next 12 to 18 months. But you also said previously that when it gets to that level you’ll start to look at budget repair. Is that still your plan, and will we see some of the detail in terms of the budget repair in the budget in March?
JOSH FRYDENBERG:
Well, you’ll see our spending and revenue initiatives in the budget. And I’m not here to pre‑empt those. What we did see, though, in the final budget outcome for the ’20‑21 financial year was an $80 billion improvement on what I had announced would be the deficit in just October last year. And the reason being is we saw a higher number of people in work. And when there are more people in work, there’s more people paying tax and less people on welfare. So it’s good news on both the revenue and on the payments side. So the key to getting our economy staying strong and growing and the key to improving the budget bottom line is actually getting more people in work. And that’s why today’s job numbers were so encouraging, Kieran.
KIERAN GILBERT:
So are you saying it’s just growing the economy that’s going to repair the budget or is there going to be budget repair? Because you did flag it previously?
JOSH FRYDENBERG:
Well, let’s be very clear: you just don’t grow the economy by, you know, clicking your fingers; it actually takes a number of initiatives in key areas to drive more investment, to increase the skills available in the workforce, to ensure that Australia is adapting to the new digital economy and capitalising on the opportunities available, to support the energy transition to a lower emissions future while also driving down electricity costs. These are the programs that we’ve been rolling out right across the country, and this is why the economy is rebounding so strongly. This is why we’re seeing the labour force and the labour market being so resilient. So all these programs and the result that we’re seeing today is a combination of initiatives which are working to our economic plan.
KIERAN GILBERT:
It also includes, does it not, spending reductions off a very high level that you might have to look at cuts over the forward estimates at some point once that recovery is secured, as the MYEFO puts it. When will we start to see that? I guess the key question is: will the government be upfront with the voters before the election if there are cuts looming?
JOSH FRYDENBERG:
Well, you’ll see our spending and our revenue initiatives in the budget. And that’s at the end of March. But we did bring to an end the emergency support payments like JobKeeper, like the COVID disaster payment. And if you remember, Kieran, we were criticised for that. You had the Labor party and, indeed, Anthony Albanese saying the economic roof would come crashing in when we brought JobKeeper to an end, so too with the COVID disaster payments. So this election is actually a contest between a Liberal and National coalition and a Labor and a Greens coalition. We’re for lower taxes. We’re for more jobs. They’re for higher taxes, more spending, and less jobs. It’s a very clear contrast. And so look at what we’ve done in terms of our economic recovery. Look at that track record of cutting taxes at every opportunity, and look at how positive and confident Australians can be about next year.
KIERAN GILBERT:
But you look at the expenditure, structural spending like the NDIS, or let’s look at aged care as well, another big cost. Don’t you need some structural reforms in order to help counter those growing costs?
JOSH FRYDENBERG:
Well, the NDIS is a bipartisan commitment, and we’re absolutely committed to fully funding the program. And, indeed, that’s what we’ve done to date and that’s what we’ll do in the future. The commonwealth is up for about 70 per cent of the total funding costs, and the program has been growing at about 10 per cent per year as a large number of people come on to the program and the average of the packages increase. So we obviously need to, you know, talk to the public about the actual cost of that program. But we’re absolutely committed to it. With respect to aged care, we had a royal commission and it found that there was a need for additional spending in key areas. So that’s what we announced – everything from training up nurses and having retention bonuses and putting that in place to extra support for those residential care providers so that they can remain viable and that we can have an equally, you know, commercial and for‑profit sector alongside a not‑for‑profit sector. What we’re seeking to do is it ensure the sustainability of our aged‑care sector with important reforms that we’ve laid out. So whether it’s the NDIS, whether it’s aged care, Kieran, whether it’s our infrastructure spending, it’s all designed to support the community as well as grow the economy.
KIERAN GILBERT:
It is, but I’m still not that clear on where the money comes from to pay for it.
JOSH FRYDENBERG:
Well, as I said, it comes from generating growth in the economy. And the fact that we saw a $80 billion improvement in the budget bottom line between what was forecast last October and what was delivered at the end of the last financial year is a sign of how you can improve the budget bottom line by growing the economy. And I do point out to you and you viewers that going into the pandemic the reason why we were able to spend as was required was because we’d balanced the budget if the first time in 11 years. We’ve got to climb that mountain again, but we’re still in the pandemic. And the programs like JobKeeper saved more than 700,000 jobs. And in the 80s and the 90s recessions, Kieran, it took eight to 10 years for the unemployment rate to get back to where it was after that recession. This time around we’ve done it in just over a year. And our performance as a nation in the economy has actually been ahead of any other advanced economy in the world. And that’s something all Australians can be proud of.
KIERAN GILBERT:
Treasurer, I appreciate your time and throughout the year as well, for always showing up on this program and many others. But I wish you and your family all the best for the holiday period.
JOSH FRYDENBERG:
Thanks, Kieran, all the best.