LEON BYNER:
Now, new figures are showing that the budget – that’s the Federal Budget – is $80 billion better off with the jobs recovery and fewer people relying on welfare. That’s got to be a good thing. So what I did, I did the obvious and spoke to the Treasurer Josh Frydenberg.
The budget is 80 billion better off because of the jobs recovery and fewer people relying on welfare, but that figure is before New South Wales, Victoria and the ACT were forced to lockdown as a result of the Delta wave. So what impact do you think these lockdowns will have given the Federal Government’s had to spend billions of dollars helping people who’ve lost work during this time?
JOSH FRYDENBERG:
Well, we’ve estimated that these lockdowns from Delta are costing the economy about $2 billion a week. And we have been spending about one and a half billion dollars a week with our COVID disaster payment and our business support packages. And, as you know, the bulk of that money has gone into the locked‑down states. But we’ve also entered into bilateral agreements with the state governments in South Australia, in Western Australia, in Queensland, Tasmania, the ACT and the Northern Territory as well. So it’s costing the taxpayer an enormous amount of money to help cushion the blow from the outbreaks. But that is why these emergency payments need to come to an end, Leon.
LEON BYNER:
Yeah.
JOSH FRYDENBERG:
That is why once we get to these vaccination rates – the targets of 70 and 80 per cent double dose – we start to see an easing of restrictions and we also start to bring an end to our economic supports.
LEON BYNER:
Now, the final budget outcome is being delivered today, shows that the Australian economy is not in that bad a shape despite COVID. So what is our debt and deficit position?
JOSH FRYDENBERG:
Well, in terms of net debt you’ll see today that it’s just under $600 billion and just under 30 per cent of GDP, and gross debt is just over $800 billion – $817 billion – and just under 40 per cent of GDP. It’s an improvement on what we were expecting going into this Final Budget Outcome based on the numbers as recently as May. But obviously there is a higher debt burden than we did have and that is a result of the emergency measures we needed to put in place, Leon, to support the economy, to support families, to support businesses. But if you look at our overall debt burden compared to other comparable countries around the world like the United Kingdom, like the United States, like Japan, our debt is just a fraction of what they have. And I believe we can manage it, but we can’t spend an extra dollar that shouldn’t be spent.
LEON BYNER:
Now, I know that our position is greatly improved by our exports and, of course, one of them that’s big for us is coal and gas. Those exports are powering. This, of course, puts more pressure on you and the Prime Minister as you try to reach consensus on net‑zero emissions by relying less on fossil fuels.
JOSH FRYDENBERG:
Well, in terms of the transition, you will see a change in the energy market. You’ve seen that in South Australia, you’ve seen that nationally, and you’ve seen that globally. But there will still continue to be a role for gas as a key transition fuel. There will be countries that continue to rely on coal. But what we are increasingly seeing is more forms of renewable energy come into grid that being balanced off – that wind and solar, for example – being balanced off by big pump hydro schemes or new batteries that have come into the market. But for your listeners, it’s really important to understand that Australia has reduced its carbon emissions by more than 20 per cent since 2005. This is much faster and much stronger than you’ve seen in New Zealand, in Canada, Japan, the United States and the United Kingdom. So we’re on track to meet and beat our Paris commitments. We’re obviously working through the net zero by 2050 issue and thinking about the consequences and the implications that it has more broadly. But I made a speech last week where I talked about how the financial markets are already moving, that they’re already taking into account the impact that a net zero world will have on their investment, their assessment of risk, their allocation of capital. And that matters to Australia because we rely so heavily on foreign investors, our banks borrow from overseas and our government bonds are bought in significant numbers by overseas investors. So it’s important that we understand this issue holistically, we understand it from an economic perspective, we understand it from an energy and engineering perspective and we also understand it, of course, from an environmental and scientific perspective.
LEON BYNER:
Now, disaster payments, Josh, are being tapered off for individuals and businesses once full vaccination rates reach 70 per cent. The reason you’ve decided to do this?
JOSH FRYDENBERG:
Well, again, it’s aligning the economic support payments with the national plan, and the national plan says that you start to see obviously less people getting sick, less – tragically – less people dying as a result of higher vaccination rates. And at 70 per cent the locked down states are easing restrictions; at 80 per cent they’re easing restrictions even further. And we want to see them continue to open up. Because as I’ve been saying for some time, Leon, including on your program, we need to learn to live with the virus. We can’t eliminate it. And people need their lives back. Kids have been out of school in Victoria for the better part of a year or more. We have seen small businesses close. We’ve seen a massive spike in teenagers turning up at emergency departments with mental health issues.
LEON BYNER:
Yeah.
JOSH FRYDENBERG:
There is a massive consequence for the economy and for people’s wellbeing of these lockdowns. And they shouldn’t go a day longer than they have to.
LEON BYNER:
Look, are you worried that some businesses, especially in New South Wales and Victoria, may never reopen as a result of the harsh lockdowns and need extra support?
JOSH FRYDENBERG:
Well, we have been providing extra support.
LEON BYNER:
Yeah.
JOSH FRYDENBERG:
We have been and will continue to provide that support until we reach those targets. But also state governments have at their disposal the ability to provide other supports that they see fit.
LEON BYNER:
Yeah.
JOSH FRYDENBERG:
In New South Wales they’re focusing on that, and one would imagine that maybe Victoria will too.
LEON BYNER:
Do you think that we’ll optimistically reopen by the end of the year, economically?
JOSH FRYDENBERG:
Yes. And I think Australians will be able to travel much more freely internationally and domestically. If you look around the rest of the world, Leon, I mean, your listeners would be turning on the TVs to watch sporting events in the United Kingdom or the United States, they’d be speaking to family and friends who are abroad. They know they’re getting on with their lives. But here in Melbourne we’re just enduring the longest lockdown in the world.
LEON BYNER:
I know, Melbourne’s become –
JOSH FRYDENBERG:
Think about that.
LEON BYNER:
Melbourne has become lockdown central.
JOSH FRYDENBERG:
Well, it’s gone from being the most livable city in the world to the most locked down city in the world, and that’s not a very enviable title.
LEON BYNER:
Look, once the country does reopen, hopefully by the end of the year, what are you expecting on the jobs front?
JOSH FRYDENBERG:
Well, as you know, the unemployment rate has come down to a 12‑year low at four and a half per cent.
LEON BYNER:
Yeah.
JOSH FRYDENBERG:
And very much surprised on the upside. But there’s no doubt the jobs numbers have taken a big hit as a result of what we’ve seen with the Delta variant. So I suspect people who have been stood down on zero hours, many of those will go back to work as they normally were. There will be some changes for some people. But we’ve been doing everything possible to give them the best possible chance to get back into the workforce.
LEON BYNER:
Yeah. Look, there’s one question I need to ask you, because we’re talking here of a…
JOSH FRYDENBERG:
It sounds like there’s been a dozen questions you need to ask me.
LEON BYNER:
I know. Former Prime Minister Turnbull gave Scott Morrison a bit of a serve at the National Press Club yesterday saying that abandoning the French subs deal was deceitful. He also wouldn’t say if he plans to vote Liberal at the next election even though he’s a former Liberal Prime Minister. Do you think he should just quit the party and move on rather than throw barbs along the way all the time?
JOSH FRYDENBERG:
Well, I’m a, I’m sentimental in this respect, which is the fact that you’ve been a Prime Minister of our country – in his case, as in previous Prime Ministers, they’ve led the Coalition in government, I think that you should continue to be associated with the party. But at the same time, I’m not going to fuel this debate. But what I will defend every day is this decision that the National Security Committee of Cabinet and subsequently the Cabinet and the Government took, which is to enter into the AUKUS arrangement and to see that Australia gets access to the best possible technology to protect our national security. And that means the alliance relationship we have with the United States and the new AUKUS deal including the United Kingdom.
LEON BYNER:
Tell me, what’s your – what’s your position or understanding of how our state, South Australia, is going on the jobs and economic front and also how we’re travelling as an economy?
JOSH FRYDENBERG:
Look, I think you’re certainly picking up and you’ve avoided the harsh lockdowns that we’ve seen in New South Wales and Victoria. And I know Steven Marshall and his team, Rob Lucas, are doing everything that they can to support your economy. So I understand that there’s good progress in terms of the overall economy. Obviously you rely to a great extent on tourism and domestic and international visitors and so the quicker we can open those borders the better off the South Australian economy will be.
LEON BYNER:
Yeah, and on that question – tourism and bed nights have suffered badly for reasons we all understand. Are you considering any more assistance or are you putting a lot of good optimism into the fact that things will reopen before Christmas – fingers crossed hopefully – and we’ll get back to some kind of reasonable normal?
JOSH FRYDENBERG:
Well, the cheapest form of stimulus is confidence – consumer confidence and business confidence. And you get that when you ease restrictions. And so that’s why I think it’s critically important that we are able to open up, we are able to see borders – border restrictions removed and people travel more freely. And that will be the best way to support the South Australian economy.
LEON BYNER:
That’s the Treasurer Josh Frydenberg. I really do think this guy’s a class act, and I think his opposite, sometimes, finds it difficult. You know, Jim Chalmers is a good man, no question. But I think – I know that on the other side of politics that Josh Frydenberg is one of the most respected ministers, and I – and I’m sure you can detect why.