LEON BYNER:
Josh Frydenberg, pleasure to talk to you and thanks for your time.
JOSH FRYDENBERG:
Nice to be with you, Leon.
LEON BYNER:
The economy grew 0.7 of a per cent in the three months to June. These numbers are backward looking. Since then and as we speak, key states are still in lockdown. What are you expecting the next set of growth numbers to look like?
JOSH FRYDENBERG:
We are expecting, from Treasury’s perspective, to see a decline or a contraction in the economy of at least 2 per cent in the September quarter, and that reflects the fact that our two largest states, New South Wales and Victoria, have been in sustained lockdowns. But in the numbers yesterday for the June quarter, 29 days of that quarter saw lockdowns in one part of the country or another, including in our four largest states. So, the fact that we saw the economy grow in the June quarter does underline its inherent resilience and its ability to bounce back. We did see household consumption increase off the back of the tax relief we’ve provided. We have seen more investment in housing off the back of programs like HomeBuilder, which has supported the construction industry; and we did see a big jump in machinery and equipment purchases, which are up more than 20 per cent since October’s budget last year, and that is the fastest rate of growth in that category for nearly 20 years.
LEON BYNER:
Do you think we’ve avoided another recession?
JOSH FRYDENBERG:
Well, again, I’m focused on delivering Australia out of the challenges that it faces, and right now we are in the September quarter, which as I said, Leon, is expected to contract, but the next quarter and the December quarter will highly depend on the easing of restrictions consistent with the road map, consistent with the plan that was agreed at National Cabinet.
LEON BYNER:
Now, Queensland and WA are causing trouble. The two Labor states have signalled that they won’t reopen even after the 70 or 80 per cent of the population are fully vaccinated, arguing zero COVID should still be the goal. How worried are you about this rhetoric?
JOSH FRYDENBERG:
Well, zero COVID is an unrealistic goal. It’s not supported by the medical evidence. It’s not supported by the medical experience. What we do know is that other countries around the world are learning to live with COVID. It’s something we have to do here and we can do so safely based on a vaccination rollout. And that’s why it’s so pleasing to see that 70 to 80 per cent vaccination target now come into sight. But the numbers of vaccinations in Queensland and Western Australia are lagging the southern states and it’s so important that Queenslanders, Western Australians and indeed South Australians listening to your program this morning go out and get the jab, because it is our ticket out of this crisis.
LEON BYNER:
Now, Queensland Premier Annastacia Palaszczuk said in State Parliament yesterday that she’s worried that reopening could spread the virus to children. We know that children are less susceptible to the virus. We also know vaccinations aren’t available or approved for kids under 12. What do you say to that?
JOSH FRYDENBERG:
Well, again, I think it’s denying the reality of the situation and the medical advice. The medical advice is that kids 12 to 15 should get vaccinated and we’ve set out a timetable for doing so. But the advice is also that the plan agreed at National Cabinet, based on the Doherty Institute modelling is that our economy and our country and can reopen safely at 70 to 80 per cent, and they took into account the impact of COVID on children. The children’s hospital has a number of leading researchers, so too does the Murdoch Institute in Victoria, and there have been studies of the impact of COVID on children and it’s found that the illnesses are far less severe. So, of course, as a parent, as a political leader, I am focused on the wellbeing of our children. But that also means taking into account the mental health implications of keeping lockdowns going longer than they otherwise are necessary.
LEON BYNER:
Which brings me to the next point, Josh. Would you like to see the country back to normal by Christmas?
JOSH FRYDENBERG:
Absolutely. I think we’ve got to turn that corner at Christmas, if not before, and that we need to see people being able to get about their lives, attending the funerals and weddings of loved ones, travelling freely within their own country, seeing the kids back in the classroom and, of course, businesses reopen.
LEON BYNER:
Now, are you concerned somewhat about a lopsided opening as some states will open and others will maintain restrictions?
JOSH FRYDENBERG:
That’s why it’s highly dependent on getting all states to keep up their end of the bargain.
LEON BYNER:
Just on JobKeeper, there’s been a lot of talk that the Federal Government should have done more to claw back money from businesses that didn’t need it. How hard is it given those businesses didn’t really break any laws?
JOSH FRYDENBERG:
Well, there’s a lot of politics being played here, Leon, with the greatest respect. You will remember when we announced JobKeeper in March of last year, that there were hundreds of thousands of our fellow Australians lining up outside Centrelink in images that for many were reminiscent of the Great Depression. And we announced JobKeeper and immediately it stemmed the tide of job losses. It gave businesses the confidence to keep their staff on. It immediately saw an increase in consumer and business confidence and people could start planning for their future. So, not only did it stem the tide of job losses, it actually helped support the economic recovery where the unemployment rate is at 4.6 per cent, a 12-year low. And we’ve avoided repeating the experience of the ‘80s and the ‘90s recession where there was a scarring of the labour market where people ended up being long term unemployed. In this recession that hasn’t been the experience. And one of the reasons is because JobKeeper was such a success. Now, if the Labor Party want to start getting that money back from small businesses, because 98 per cent of the recipients of JobKeeper were small businesses, then good luck to them because we’ll oppose it. And they’ve already tried to get the tax commissioner to dump the private taxpayers confidential data from receiving JobKeeper in the Senate, breaking the well and time‑honoured conventions that we protect private confidential taxpayers’ information, and there just seems to be a whole lot of politics that denies the reality JobKeeper was an introduced when our economy was standing on the edge of the economic abyss, and recovery has been supported strongly by programs such as JobKeeper.
LEON BYNER:
That’s the Treasurer, Josh Frydenberg who’s, and good on him, he’s always willing to talk and give us the information.