LEIGH SALES:
Thanks for being with us Treasurer.
JOSH FRYDENBERG:
My pleasure.
LEIGH SALES:
Even though the employment number fell today, business confidence and investment is taking a battering because of Australia's continual in and out of lockdowns. How can you avoid a recession with that level of uncertainty at play?
JOSH FRYDENBERG:
Well there is no doubt these lockdowns are going to have a significant impact on the September quarter and economic growth. In fact, Treasury is thinking of at least 2 per cent contraction in that quarter. But today's unemployment rate which fell from 4.9 down to 4.6 per cent, which now sees the unemployment rate at its lowest level in 12 years, does remind us of the underlying strength of the Australian economy. And there was a tale of two states in these numbers. In New South Wales, we did see the impact of the lockdowns, the number of hours worked fell by 7 per cent in the month. There was an additional 230,000 people who were employed on zero hours, whereas in Victoria where it was emerging out of lockdown, we actually saw hours worked increase by 9.7 per cent and 170,000 fewer people in Victoria who were employed on zero hours. So that does show the economy can bounce back when restrictions are eased. And I’ve got confidence that as it has done before Leigh, it will do it again.
LEIGH SALES:
As we just heard in Laura Tingle's package before, there's criticism the economic support on offer is a patchwork quilt. Why don't you just go back to the clarity and simplicity of JobKeeper?
JOSH FRYDENBERG:
Well I think right now we have actually economic payments on both the business side and on the household side that are fit for purpose now with the economy and the state economies particularly going in and out short and sharper lockdowns. What….
LEIGH SALES:
But it is more confusing, isn't it?
JOSH FRYDENBERG:
Well let me just take the COVID disaster payment. Because more than $3.1 billion has gone out the door. That's a lot more flexible in fact than JobKeeper, because it's based on hours of work that have been lost with $750 payments per week as opposed to giving people a payment based on the turnover decline of the business that they work for. We also know that these payments are being made very quickly in as little as under an hour in many cases. Whereas with JobKeeper they were paid two weeks in arrears and through your employer and we also know that the cohort, Leigh, of people receiving this COVID disaster payment is broader than JobKeeper, with casuals, not just permanent or long‑term casuals, receiving the payment, but all casuals.
LEIGH SALES:
So when Australia hits the 70 per cent vaccination rate, will the Federal Government continue to enable state governments to have lockdowns by paying these kinds of income support payments?
JOSH FRYDENBERG:
Well firstly, the 70 per cent target rate is based on the medical advice of the Doherty Institute and these are the best researchers in the field, not just…
LEIGH SALES:
Yes, but are you going to keep paying income support payments?
JOSH FRYDENBERG:
But the key point though Leigh, is that at 70 per cent, they say that stringent lockdowns will become unlikely, that the transmissibility of the virus reduces and that the chances of getting a serious illness or the number of people who get it reduces. So there should be no expectations on the part of the states…
LEIGH SALES:
But if they do call lockdowns, they're on the record, Mark McGowan in WA, saying he might do that, so will you keep paying income support payments?
JOSH FRYDENBERG:
Well there should be no expectations that the Commonwealth will continue to provide emergency economic assistance to the quantum, to the size and to the scale that we're doing right now. billions of dollars are going out the door each and every week but the country needs hope, the country has a plan, the Premiers and the Chief Ministers agreed with the Prime Minister on that plan and with the high number of vaccinations that we are now seeing, 309,000 in the last 24 hours alone, we now have that 70 per cent target in sight. And that is what we should be shooting for.
LEIGH SALES:
But how can you execute any kind of plan when Australia's basically being run by state premiers running their individual races?
JOSH FRYDENBERG:
Well they are in charge of those public health orders. That's why the Prime Minister worked very hard to get them all to agree to this national plan. And this national plan has a two‑key approach. You need a 70 per cent in a particular state, but you need a national 70 per cent vaccination rate and given the momentum building in our vaccination program, that target is now in sight and when we get to that target, stringent lockdowns will be unlikely according to the Doherty Institute.
LEIGH SALES:
Okay. So let's talk about when we get to that target. If you look at Israel, a country with a population of about 9 million people, so a third as many as Australia, they're at 80 per cent vaccination, and their 7‑day average of COVID cases is more than 6,000 and their 7‑day average of deaths is 19. So 80 per cent vaccination delivers nothing like zero COVID. Is any Australian political leader going to square with the public and say, "Listen, living our lives free of lockdown at 80 per cent means we will have to get used to hearing of thousands of COVID cases in Australia every day?"
JOSH FRYDENBERG:
It's a fallacy to talk about the elimination of COVID. Based on the medical advice today and what we know about the efficacy of the vaccines but the transmissibility of the virus, we are going to be living with COVID for a number of years to come. That’s why…
LEIGH SALES:
With thousands of cases circulating in Australia?
JOSH FRYDENBERG:
With cases and of course, with deaths and serious illness. And the idea is to get as many people vaccinated as possible to reduce and mitigate that threat. And that's why it's so pleasing to see the vaccine hesitancy reducing across the country as more people get both the Pfizer vaccine and mRNA vaccine but also the AstraZeneca vaccine. We need to learn to live with COVID and we will do so once we start to hit those 70‑80 per cent targets. The restrictions will ease, the economy will open back up and people can have hope about their future.
LEIGH SALES:
Josh Frydenberg, thank you.
JOSH FRYDENBERG:
Thank you.