LAURA JAYES:
Welcome back to the program. The Federal Treasurer, Josh Frydenberg, joins us now on this very happy day. Cleo Smith, Treasurer, has been found. What was your reaction?
JOSH FRYDENBERG:
Well, this is wonderful news that warms every Australian’s heart. When I actually got the news I had goosebumps to be honest. Because as every day of the search got extended, people started to fear the worst. Certainly, I did. And as a dad, as a member of the community, I just feel, you know, enormous happiness today because it’s really great news. A big shout out to the police because obviously their incredible investigative work has helped produce this wonderful result.
LAURA JAYES:
Yeah, it is great policing work. We don’t have the details just yet. We don’t know what support Cleo and her family will need. Is there anything that could be on offer from governments?
JOSH FRYDENBERG:
Well, certainly whether it’s the Western Australian government or the federal government, we’re there to provide any additional support that we can. And, as you know, Federal Police were actively involved in this search, so they did their part, working with the state police authorities. But this has clearly been a wonderful team effort which has produced a wonderful result. And I think every Australian today has an extra smile on their face as a result.
LAURA JAYES:
They certainly do, goosebumps indeed. At risk of bringing the mood down, let’s talk about Glasgow. What was actually achieved? Because the big emitters don’t seem to be on the same page.
JOSH FRYDENBERG:
Well, 130 countries have agreed to the net zero by 2050 target, and obviously Australia is one of those. And we’re doing our part. I do think there was progress in that countries are committing to a road map to reduce their carbon footprint. In Australia’s case we’re focusing on technologies, and also in Australia’s case we have delivered on what we have been committing, whether it was the Kyoto target, whether it’s our Paris target of a 26 to 28 per cent reduction by 2030 on 2005 levels, we’ve made great progress. But it’s not a binary choice, Laura, between reducing emissions and growing our economy because we have reduced emissions by more than 20 per cent since 2005 at the same time our economy’s grown by 45 per cent. Our focus is on hydrogen, carbon capture and storage, soil carbon, solar cell technology, a whole host of measures to obviously invest heavily in the technologies that will get us to a net zero world.
LAURA JAYES:
I don’t wish to be uncharitable, but looking at the last 48 hours, it looked like a whole lot of nothing. It doesn’t seem like anyone’s on the same page. It does look like a collapse. I mean, Australia went there with a binding target. India’s going to do it 20 years later. China’s asking for a trillion dollars help to try and get their emissions down. Some of the Pacific nations say we’re not doing enough. I mean, what was the point of it? What was actually achieved from Glasgow?
JOSH FRYDENBERG:
Well, again, it’s a global problem, so it requires a global solution and getting everyone on the same page is, of course, very difficult. You’re right – India has set a different time frame. China didn’t bring anything new to the table and, of course, Brazil and Russia weren’t there. All of that is true and at the same time we’ve seen emissions go up in particular countries like in Russia and, sorry, India and like in China. But at the same time there is a strong move by many countries across the world to reduce their carbon footprint, and Australia is one of them.
LAURA JAYES:
Let’s talk about the RBA. It says now interest rates will start to go up before 2024. Do you welcome that news?
JOSH FRYDENBERG:
I certainly welcome what the RBA Governor had to say yesterday about the economy because they upgraded their economic growth forecasts from four and a quarter per cent for next year to five and a half per cent. And they have said very clearly that they expect unemployment to remain below 5 per cent for some time to come. That is good news for the economy. It’s a sign that the government’s economic plan is working. It’s a sign that the labour market is very resilient. With respect to inflation, as you know, underlying inflation is at 2.1 per cent, which is at the bottom of the RBA target band. And inflation in Australia has been a lot more moderate than it has been in other countries. I don’t believe that the inflation genie is out of the bottle. I do believe that a number of the contributing factors, like supply chain constraints, are actually transitory in nature. That’s the expectation, at least from many economists. yes, we have seen a moderate increase…
LAURA JAYES:
Okay, so the supply chain constraints and the bottlenecks we’re seeing, you think that will wash through the system pretty quickly?
JOSH FRYDENBERG:
Well, that’s the expectation.
LAURA JAYES:
Okay.
JOSH FRYDENBERG:
And, of course, no‑one can guarantee what the particular inflation number will be in the months and years ahead. But right now from where we sit and on the evidence that we have and the facts that we have, it does appear that the inflation increase has been moderate. It’s certainly at the bottom of the band and that a number of the contributing factors are expected to be transitory. That’s what we know today. But we also know that whether it’s petrol prices or whether it’s construction materials for housing and the like or whether it is those supply chain constraints, they are contributing to a slight uptick in prices.
LAURA JAYES:
Okay, let’s look at staff shortages. It’s a huge problem – both skilled and unskilled. Before Covid we welcomed about 160,000 migrants a year. What are you envisaging, what are you hoping for and what will you put in the budget in terms of skilled migration?
JOSH FRYDENBERG:
Well, Laura, population growth has been its lowest in more than a century, and that’s a factor of the closed borders as well as a structural decline in our fertility rate, which is a challenge for our country and it does mean an ageing of the population. We did see in 2019‑20, so just at the tail end of the start of the pandemic, we did see 194,000 people come to Australia in that year of ‘19‑20. The expectation for ‘21-22 is to see net overseas migration go negative – that is, more people leaving the country than actually coming to it.
LAURA JAYES:
Okay.
JOSH FRYDENBERG:
But we did have in the budget that we would gradually get back to 235,000 people a year at the end of the forward estimates period. Our expectation is that once borders reopen – and obviously with high vaccination rates that’s making it possible – that we will start to see the people come back, and that includes skilled migrants, that includes international students and, of course, that includes tourists as well.
LAURA JAYES:
All right. Tim Smith – should he stay or should he resign?
JOSH FRYDENBERG:
Well, as Tim Smith has said today, he’s considering his future, and Matthew Guy has had some strong words to that effect. And, you know, Tim needs to consider carefully what his state leader has said. Drink driving is unacceptable. It’s dangerous. Whether it’s something that a politician does or someone in the media does, Laura, or, indeed, a general member of the public.
LAURA JAYES:
Indeed.
JOSH FRYDENBERG:
Thankfully in this case no-one was injured. But it is obviously an event that has consequences. Tim’s already stood down, and rightly so, from the shadow cabinet and now he has to carefully consider his future. And he should have the time to do that.
LAURA JAYES:
But would you encourage him to fight and stay on?
JOSH FRYDENBERG:
Look, as I have said to him privately and as I say publicly, he needs to carefully consider his political future, and particularly the comments of his state leader, Matthew Guy. And, you know, that’s obviously a decision for him, but it will obviously be something that he’ll need to decide upon in the coming weeks.
LAURA JAYES:
Look, fair enough, but he has said that his future largely does depend on support from his federal colleagues, meaning you. So do you support him?
JOSH FRYDENBERG:
Well, I haven’t seen him say that. So I don’t know what you’re referring to, because I’ve seen plenty of things reported in the media that have been inaccurate in that respect.
LAURA JAYES:
Fair enough, but you’re saying…
JOSH FRYDENBERG:
So, I mean, if you can point to his exact comments on that…
LAURA JAYES:
No, you’re saying that Matthew Guy has really cast a shadow him. Is it tenable for him to be able to stay and fight on if his own leader doesn’t seem to be backing him?
JOSH FRYDENBERG:
Well, again, Matthew is his state leader. I believe that Tim’s obviously got commitments to fulfil in his local community, and he should fulfil those commitments in his local community as their elected representative. But what he did was unacceptable. It’s something that he has obviously made a strong statement apologising for, but drink driving is dangerous and, at this particular time as we go into the Christmas period it’s a timely reminder to everyone – if you have been drinking don’t get behind the wheel because you not only endanger your life, you endanger others.
LAURA JAYES:
I mean, is it a democracy, Josh Frydenberg. Maybe his electors should decide.
JOSH FRYDENBERG:
Well, the Liberal Party is a democracy. We know that. And people do get to – as members do get to choose their local representative. But Tim’s clearly got some soul‑searching to do.
LAURA JAYES:
Yes.
JOSH FRYDENBERG:
He’s got to consider his future, and he’s said as much today.
LAURA JAYES:
Josh Frydenberg, it’s been a while. Thanks so much for joining us on AM Agenda.
JOSH FRYDENBERG:
My pleasure.