MATT DORAN:
Treasurer, a very good morning to you. Thank you for being with us on a very busy morning. We’ll get to the economy in just a minute, but first I wonder if I can ask you for your reaction on this latest cluster. It has prompted swift reaction from other states.
JOSH FRYDENBERG:
The New South Wales health authorities have moved swiftly themselves and put in place immediate precautions. There were more than 10,000 tests yesterday, more than 250,000 Sydneysiders have been asked to stay at home. As the health authorities go about their contact tracing and their world-class testing regime, we do know that there will be more cases. The question has never been whether we had eliminated COVID-19, the question was always been how will we respond to the new cases as they arise. New South Wales has been the gold standard so we should have confidence in the New South Wales system, obviously this is a developing situation and the state premiers and chief ministers will take their actions based on medical advice, but I would just ask everyone to monitor the situation closely, to follow the medical advice, but also to have faith and confidence in the ability of the New South Wales health system.
MATT DORAN:
What impact economically would a hard lockdown have right now if the states were to look at more severe measures?
JOSH FRYDENBERG:
I don't want to pre-empt such actions, because what we did see yesterday, Matt, was an improvement in the economic numbers, which were very encouraging going into Christmas. That was a result of the Australian economy opening up, restrictions being eased, the virus being successfully suppressed, Australians going back to work and then spending more freely and we did see this in yesterday's numbers. We want to keep that momentum going. We have seen 14 out of the last 15 weeks consumer confidence rising, the one week where it didn’t was when South Australia put in place those restrictions, so we really need to keep that momentum going.
MATT DORAN:
As you’ve mentioned, Treasurer, some pretty good news in the Mid-Year Outlook for our economy. So much is going to depend on consumer confidence, as you’ve touched on. Iron ore prices seem to have been really vital to the state of our economy right now. How concerned are you that China will impose trade sanctions on our iron ore, given our fractured relationship with China in so many other industries?
JOSH FRYDENBERG:
The economic relationship with China is very much mutually beneficial, nowhere is that better illustrated than when it comes to iron ore. We supply more than 60 per cent of China’s iron ore needs and it has helped underpin their economic growth story, where they’ve lifted hundreds of millions of people out of poverty. So, our iron ore is world-class, suppliers elsewhere from Australia are few and far between. There is obviously iron ore that comes out of Brazil, but there have been some supply constraints there. There are efforts in Africa to develop new mines but that will take some years. So, our iron ore is required by the Chinese authorities to not only make steel for their domestic consumption, but also they’re major exporters of steel. We obviously are seeing some tensions in the relationship, we’d like to work those through bilaterally. Where we can’t do that, we reserve the right to use multilateral forums.
MATT DORAN:
Certainly some positive signs, 90,000 jobs created in the last month. So we’re certainly tracking in the right direction. Treasurer, thank you for your time this morning.
JOSH FRYDENBERG:
Nice to be with you and your viewers, Matt.