KIERAN GILBERT:
Let's bring in the Treasurer Josh Frydenberg now. Treasurer, let's start with this quarterly number. In your mind does this mean we've dodged a second recession?
JOSH FRYDENBERG:
Well certainly it's a solid growth number for the June quarter and it's better than what the market was expecting. Indeed, if you look at the financial year 2021 we have seen growth that is stronger than what we forecast in the budget as recently as May. The number did take into account the impact of the lockdowns, particularly because 29 days in the June quarter saw lockdowns at least in one part of the country, and four of our largest states have actually been in lockdown over the course of that June quarter. That being said, the full impact of the lockdowns in New South Wales and Victoria will be seen in the September quarter, which as I've said before, Kieran, is expected to be negative and to see the economy contract by at least 2 per cent. As for the December quarter, that is yet to be seen too but we're very hopeful that the economy will bounce back strongly in the December quarter once restrictions are eased, particularly as we're getting very close to those 70 and 80 per cent targets.
KIERAN GILBERT:
Given how much the health story is central to the economic story, how much has the vaccine roll‑out, the slow vaccine roll‑out, how much has that cost GDP?
JOSH FRYDENBERG:
Well the vaccine roll‑out's actually been gaining pace and we've seen people right across the country…
KIERAN GILBERT:
Not before time.
JOSH FRYDENBERG:
…roll up their sleeves. Well obviously the vaccine hesitancy was real and that has started to decline, and no doubt driven in part by the lockdowns…
KIERAN GILBERT:
And supply issues were real.
JOSH FRYDENBERG:
…that millions of people, and millions of people in New South Wales and Victoria, and supply issues are real. The fact that the PM was able to get the extra doses from Singapore, the extra doses from Poland, and of course the other contractual agreements that we've had with the other suppliers has meant that more supply is coming online and that is helping to see those vaccination rates increase quite dramatically. The Delta variant has changed the game. You heard today from Premier Daniel Andrews an admission that the virus can't be eliminated, that the Delta variant, unlike previous variants, can be suppressed but not to the point where you can totally get it under control. That is a welcome acknowledgement of what is a very difficult situation around the country.
KIERAN GILBERT:
Yeah, I'll ask you about that. I'm very keen to explore that because that's a pivotal moment in this pandemic response. But on the slow vaccine roll‑out, have you had numbers done in terms of the impact of not getting supplies when we wanted them, the impact that that's had on our economic growth? Because we're in the severity of the lockdowns now because we haven't had the supply earlier. It's as simple as that, isn't it?
JOSH FRYDENBERG:
Well we made some assumptions in the budget as recently as May and one of those assumptions was that everyone would be able to access the vaccine by year end. We're on track to do that. We're making up good ground with the vaccine roll‑out. Another assumption was that the international borders would gradually open from mid‑next year. Now again we will revisit those assumptions based on the medical advice and based on the developments on the ground. But certainly the vaccine roll‑out is really building momentum and we've now got a plan, a very clear plan that was set out at National Cabinet. It was agreed at National Cabinet. It was based on the best medical advice from the world leading Doherty Institute. And just today, Kieran, you've seen 80 of our largest business organisations go public with their call for state premiers and chief ministers to stick to that plan, because our plan gives their businesses hope and certainty.
KIERAN GILBERT:
Do you agree with the Attorney‑General, because it's relevant to the point you're making about the businesses and saying stick to the plan, do you agree with your colleague Michaelia Cash where she says that the Constitutional power of the states diminishes in shutting their borders once we get to that 80 per cent threshold?
JOSH FRYDENBERG:
Well Michaelia Cash has been very clear that we don't have any plans to bring Constitutional challenges in relation to those border issues. What we have said is that we want the states and the territories to re‑open in accordance with the plan, and at 70 per cent and then again at 80 per cent you see that easing of restrictions. It would be ridiculous, Kieran, that we would open international borders for someone from New South Wales or Victoria to go to Canada before they could go to Cairns or that somebody could go to Bali or Singapore before they could go to Perth. We know that there are many tourism businesses in the Gold Coast, on the Sunshine Coast, up in Cairns or indeed in Broome or other parts of Western Australia that are doing it tough right now because of the lockdowns in the southern states and because people can't move more freely across borders.
KIERAN GILBERT:
Yeah, okay.
JOSH FRYDENBERG:
So it's in the economic interests of those states to lift those borders according to the plan.
KIERAN GILBERT:
I want to move though away from, you know, the discussion about whether or not there'd be court action and specifically go to your view. Now the national plan isn't explicit about state border closures. Is it your view that they should end at 70 or 80 per cent vaccines or is it a matter for the states?
JOSH FRYDENBERG:
Well when we get to 80 per cent I cannot see the need for state borders to be closed. I believe that at 70 and 80 per cent we'll see restrictions eased across the country, but when we get to 80 per cent those borders should be open. One of the key economic issues facing the Western Australian economy right now is labour force shortages. You've seen very prominent and influential Western Australians like Kerry Stokes and Rob Scott who runs Wesfarmers come out publicly and say that Western Australia, like the other states, should follow the plan. So there are real issues in the economies of Queensland and Western Australia that are coming as a result of those border closures. That's why it's in their economy's interests, and of course in the national economy's interests that everyone sticks to the plan together.
KIERAN GILBERT:
Annastacia Palaszczuk said today, "You open up this state", i.e. Queensland, "And let the virus in here and every child under 12 is vulnerable". What do you say to that?
JOSH FRYDENBERG:
Well of course we've got to be cautious about the virus with respect to the whole population, and particularly so when it comes to children. But again the medical advice has been clear to date on this issue, that the virus is not as serious and the illnesses are certainly not as severe in children as they are in adults and other members of the population. Their advice is contained in the Doherty report. They've taken into account the situation of children in recommending a COVID‑safe reopening of the economy at 70 of the 80 per cent. So we've taken into account the impact on children of the virus, and of course we've got to have mitigation measures in place. That's envisaged in the plan, that there will continue to be some health restrictions in place. But Kieran, as a dad, you're a dad, we know how impactful, how serious the consequences of the so‑called shadow pandemic is, and it's not just the outcomes with respect to COVID that we should be thinking about, we should also be thinking about the health outcomes with respect to mental health issues and depression and anxiety and related eating disorders, and all those other issues which are now very much coming to the fore in the context of our younger people being subject to these lockdowns. I think it's a really serious issue and that's why I say that the plan needs to be stuck to, not just for the economic imperative but for the broader health imperative as well.
KIERAN GILBERT:
Yep, and that's as you alluded to earlier in the day, Patrick McGorry calls it the shadow pandemic. Should psychiatrists be involved in these decisions now in terms of reopening, Not made by just the Chief Health Officer but have the Chief Psychiatrist with them?
JOSH FRYDENBERG:
Well the public health orders decisions are taken at a state government level, but I would assume and hope that those officials are taking into account the broad range of medical advice, including that that affects people's mental health. Because we've seen some of the numbers that have been revealed, Kieran. More than 340 teenagers a week are turning up at hospitals in Melbourne as a result of mental health related issues. This is more than 160 per cent increase on the numbers that we were seeing pre‑pandemic. In New South Wales it's around a 50 per cent increase.
I can tell you about the letters and the emails and the phone calls that I've received as a local Member of Parliament, no doubt exactly the same is happening with other local members, that the lockdowns are having a very severe mental health impact on not just young people but on the broader population. And that's why we must get the balance right and that's why the announcement today by Premier Andrews was so welcome, because we can't eliminate the virus, we have to learn to live with it.
KIERAN GILBERT:
Yeah.
JOSH FRYDENBERG:
And that means getting our kids back into the classroom as soon as it's COVID‑safe to do so.
KIERAN GILBERT:
Okay. Well finally on that point, the Victorian concession. You've been critical at times, quite famously critical on the floor of Parliament and so on, now on this day, when we'll look back at this day at the end of the pandemic, you know, finally when we get there at some point in the future, but it was a pivotal moment, the Premier saying that they won't be able to eradicate this thing. Is that a positive step in your mind because it means that the state and the nation is starting to grapple with the reality?
JOSH FRYDENBERG:
Today was a turning point in Victoria, make no mistake. A recognition by the Premier and therefore by his Health officials that they continue to try to suppress the virus but they can't eliminate it. There's no such thing as COVID zero with Delta. You and I don't know what the next strain will be, some time next year or even sooner. What we do know though is we have to live with COVID, and that means having an honest conversation with the Australian people as to the consequences of that decision. There will be serious illness, there will be hospitalisation. Tragically there will be deaths. But if we don't live safely with COVID, certainly our economy can't afford it. The impact on businesses big and small will be immense, and particularly people's livelihoods and more importantly their well‑being will be hugely impacted. Therefore we've got to follow the lead of other countries around the world as our vaccination rates get to that 70 and 80 per cent and live safely with COVID.
KIERAN GILBERT:
Treasurer, I appreciate your time, thanks.
JOSH FRYDENBERG:
My pleasure.