LISA MILLAR:
Good morning, Treasurer.
JOSH FRYDENBERG:
Good morning, Lisa, lovely to be with you.
LISA MILLAR:
I want to kick off with the talk about this vaccine before we get in to the economy; the two are actually probably related. What does it mean for Australia when we absorb the news coming out of the UK this morning?
JOSH FRYDENBERG:
Well, certainly this is very encouraging news, Lisa. Obviously, the vaccine trials have been going in the right direction and this is confirmation that it will be rolled out in the United Kingdom. Obviously, their situation is somewhat different to Australia’s. They have had more than a million infections, nearly 60,000 deaths. We have the vaccine going through our own regulatory approval process and the Health Minister has said that he expects that process to conclude by the end of January and if the vaccine is found to be safe and effective, then it will be rolled out by March, but certainly we're very hopeful about the vaccine and Greg Hunt, as the Health Minister, has recently spoken to the CEO of Pfizer here in Australia.
LISA MILLAR:
What does it do to the outlook for the bottom line having a successful vaccine announced now in the UK; jabs next week?
JOSH FRYDENBERG:
Well, the economic assumption in the Budget was that a vaccine would be available to roll out across the country by the end of next year, but we also had a scenario in the Budget that if a vaccine was rolled out six months earlier, that would boost the economy by $34 billion. So that's obviously a very promising number, but there's a long way to go between now and then. But having a vaccine will be a big boost, not just to the Australian economy, but to the international economy because so many countries are now going through a second wave.
LISA MILLAR:
The RBA's Governor warned the recovery will be bumpy, uneven, drawn out. What does that look like for people who are watching and listening to you this morning?
JOSH FRYDENBERG:
Well, there'll be some sectors in the economy like aviation, like tourism, that will continue to do it tough because of the international borders being closed. There are other sectors like hospitality, recreation, hotels, cafes, restaurants, that are coming back strongly as the restrictions are eased. Obviously, Victoria, as a quarter of the national economy, is critically important and the fact that the virus has been brought under control in Victoria does augur for the economic recovery. So I think yesterday's well for the economic recovery. I think yesterday's numbers should give people a lot of confidence and hope about the future. We have performed better on the health and economic front than nearly any other country in the world and the 3.3 per cent increase in the September quarter was the single largest increase in quarterly GDP since 1976 and it was driven by that increase in household consumption and that was taken before the Budget, as well.
LISA MILLAR:
Yes, granted as Michael was just saying it's better to have an increase and see the economy improving, but you're coming from a very low base and a lot of the money being spent, that big jump in household consumption which makes up 60 per cent of the Australian economy, its JobKeeper, JobSeeker money, what happens when that runs out?
JOSH FRYDENBERG:
Well, it's been the expectation and the forecast in the budget that the unemployment rate will continue to trend down next year even as JobKeeper comes off. Our principle has always been going into this crisis that those economic supports would be temporary, they would be targeted, they'll be scalable, proportionate and also use existing systems and that's what JobKeeper has been. So it's always been our intention that as that payment comes off, other economic supports would take effect and, as you know, we have legislated through the Parliament tax cuts for more than 11.5 million Australians, we have also legislated the JobMaker Hiring Credit which will provide support to employers who take on younger people who have been unemployed. And there are a host of other measures including business investment incentives which will particularly support small business. There's a lot there that will support the economy when JobKeeper ends.
LISA MILLAR:
Treasurer, I want to ask you about China. We don’t have a lot of time left. Anthony Albanese says the Government is presiding over a complete breakdown of the relationship overnight. We learned that WeChat has removed the message from the Prime Minister that was meant to try to help this situation. How bad is this? How do we break the impasse?
JOSH FRYDENBERG:
Well, certainly a very challenging situation and what the Prime Minister did in his WeChat message before it was disappointingly deleted was that he made it very clear that Australia is proud of its servicemen and women who wear the uniform, that we have established a transparent process to deal with those matters and despite the challenges in the bilateral relationship, in no way diminishes our great deal of respect and admiration for the Chinese-Australian community but also the people of China. So the China-Australia bilateral relationship is critical. China is our number one…
LISA MILLAR:
Are you presiding over a complete breakdown in that relationship as Anthony Albanese says?
JOSH FRYDENBERG:
If the Labor Party want to play politics with this, it's only fair they explain which of the fourteen grievances that China has listed that they would back down on? I mean, when it comes to a free press, that goes to the heart of our identity and our society. When it comes to a democratically elected Parliament and the ability of Parliamentarians to speak their mind, that's also at the heart of our democracy. When it comes to foreign investment and putting in place protections for the national interest, I'm sure they have bipartisan support and when it comes to other elements of national security and foreign interference, what we have done is try to defend and preserve and enhance the national interest as you'd expect us to do.
LISA MILLAR:
Yeah, Treasurer will have to leave it there. But thanks for your time.
JOSH FRYDENBERG:
Thank you.