MATT DORAN:
Treasurer, morning to you. Thank you for your time, look normally we would be here celebrating a 12 year low in unemployment, but what do these numbers tell us about the state of the economy right now?
JOSH FRYDENBERG:
The first thing is, it is always better when the unemployment rate goes down as it did yesterday to 4.6 per cent, a 12 year low, and you are right, Matt, we would normally be celebrating that fact, but with millions of our fellow Australians in lockdown, and the economy being hit pretty hard, it is not a cause for celebration. These numbers really show; one, the underlying strength of the economy; but two, the tale of two cities. In NSW, these numbers take into account the second and the third week of the lockdown, you saw a 7 per cent fall in the number of hours worked. Whereas in Victoria, where they were emerging out of lockdown during the time that the survey was done, you saw a 9.7 per cent increase in the number of hours worked. It does show that once restrictions ease, the economy does bounce back and we know that there is a lot of pent‑up demand as people have saved the money that they would otherwise spent and they are waiting for those restrictions to ease.
MATT DORAN:
That’s what we hope. The underemployment though, as you’ve touched on there, the big worry. The job slump in NSW is larger than what we saw during Victoria’s second wave. It is expected to get worse in August and also September. Are we heading for another recession?
JOSH FRYDENBERG:
We are only halfway through the September quarter, but as I have said many times publically, it is Treasury's best estimate that the economy will contract in that September quarter. As for the December quarter, we are hoping we can get on top of this virus and that restrictions can be lifted and people can get about their normal lives in a COVID safe way. As the experience of Australia has shown over the course of the pandemic, our economy does bounce back, and we know that confidence today, even despite the lockdowns, is around 30 per cent higher than it was at the same time last year and we do know that people have saved, businesses have saved money over the course of the pandemic, and that is money that can be spent when restrictions are eased.
MATT DORAN:
Treasurer, The NSW Premier has warned that Australia is going to, at some stage, have to open back up while we still have cases in the community. At the same time, other premiers are clearly pursuing this zero case agenda. Where does that leave the Federal Government here? Do you have to step in and look at providing financial assistance for states in lockdown?
JOSH FRYDENBERG:
We are certainly doing that right now, more than $3 billion has gone out the door in the COVID disaster payments, including to more than 800,000 people across NSW. We have also entered into an agreement with the NSW Government on a 50‑50 funding split to provide support for businesses, as well as for sole traders. That is very substantial. The NSW Government has put in place relief for commercial tenants, I have spoken to the Tax Office, they’re providing relief to taxpayers who are in hardship, and the banks who are also providing relief with deferrals of mortgage repayments. A lot is being done right now, but Gladys Berejiklian is absolutely right, we have to live with this virus, it’s a fallacy to think we can eliminate this virus, there will be more cases in the future, there will be deaths, but ultimately, the economy will open up. If you look at the United Kingdom, Matt, they have got a vaccination rate above 75 per cent, yet in any one day, they are getting 30,000 cases and more than 100 deaths. But they have opened up, our goal is to reach that 70 to 80 per cent vaccination target. The good news is momentum is really building. We had 309,000 vaccinations in just one day and that target is now in sight. It is hoped that once we get to that target, that lockdowns become unlikely as the Doherty Institute has advised us.
MATT DORAN:
I guess the challenge for the Government, Treasurer, is slashing that red tape to get that assistance flowing through to those small businesses quicker than it is now. We are grateful for your time this morning. Treasurer, Josh Frydenberg.
JOSH FRYDENBERG:
Good to be with you, Matt.