NEIL BREEN:
Treasurer Josh Frydenberg joins me on the line. Good morning, Treasurer.
JOSH FRYDENBERG:
Nice to be with you, Neil.
NEIL BREEN:
These are good figures. These are very, very good figures. But obviously us going into debt has helped. We’re going to pay for this in the future.
JOSH FRYDENBERG:
As you know, there was no alternative but to respond to that economic crisis when it hit. Treasury came to me, Neil, last year and said that unemployment could reach as high as 15 per cent. That would be more than 2 million unemployed. Fortunately we responded with JobKeeper, the cash flow boost and the coronavirus supplement and a whole range of other measures. And now up employment is at 4.6 per cent, a 12‑year low. And you’re right, there is an increased debt burden, but at the same time the best way to deal with that is to grow the economy, to get more people into work and less people on welfare. And we’ve already started to see an improvement in the budget bottom line as more people are getting jobs and, therefore, paying taxes, and our welfare bill has come down as a result.
NEIL BREEN:
I suppose one of the things now is to go full bore for a full recovery. Australia’s at 80 per cent double vaccination rate. Look, the government got really hammered over the rollout of the vaccines, but we’re now better than the United States and Israel. It’s a remarkable story. But in Queensland businesses are worried, Josh Frydenberg, because we are going to open up to the rest of Australia and they think there’s a lack of clarity around rules with regards to vaccinated and unvaccinated people.
JOSH FRYDENBERG:
As you know, New South Wales and Victoria opened up first. They got their vaccination rates through that 80 per cent threshold. And now they’ve started to see their case numbers come down. So too with the other states, vaccinations offer the best form of defence. We can’t eliminate the virus and we can’t live in lockdowns forever. We have to learn to live with COVID, as the rest of the world is and are. Australia must open up. Australia must and the states must allow people to travel more freely across those states. You know in Queensland how important the tourism industry is in terms of economic activity and jobs. Those businesses are heavily reliant upon tourists coming from New South Wales, coming from Victoria, coming from overseas and other parts of the country. And we want those businesses to thrive. We’ve supported them extensively through these recent outbreaks, and we’ll continue to support them, but we want those borders to open and remain open.
NEIL BREEN:
One of the things in here, I suppose we’ve all walked around the high streets or main streets and we’ve seen shops boarded up or closed. It’s happened everywhere as they’ve tried to struggle along with rents and everything. But the number of trading businesses in the Australian economy grew by 3.8 per cent in the year. Can you understand why businesses grew? Like, opportunists or people seeing opportunities for when we get going again?
JOSH FRYDENBERG:
I do think that businesses see the upside of this recovery and they see the new opportunities that are being created. And it might surprise your listeners to know that there is $340 billion that’s been accumulated on household as well as business balance sheets that was not there at the start of the pandemic. Now this is a combination of government support but also money that wasn’t spent as the health restrictions, you know, started to bite. That is money that is really going to generate economic activity going forward. And I understand a lot of businesses see that as an opportunity. I’m looking optimistically. I’m looking with great confidence at the Christmas period and the New Year. The Reserve Bank, Neil, just upgraded its economic outlook for next year with growth which was at four and a quarter per cent now they’re expecting at five and a half per cent. And we also know that unemployment at 4.6 per cent is at a 12‑year low. I’m feeling pretty good about Australia’s economy going into the new year.
NEIL BREEN:
The next thing we need is some solid wages growth across the board. And I know that was a key thing of your last budget, the May budget. Any signs that wages are growing?
JOSH FRYDENBERG:
As the labour market tightens and you see more competition for workers, then that does put pressure on wages. And we’re already starting to see that in some sectors. There is a demand for workers in construction, in mining, in IT and also in the hospitality industry as well. But the best way to get wages up is to get unemployment down, and that’s what we’re focused on. We’ve also got a number of skills initiatives that we’re rolling out, whether it’s supporting for apprenticeships or whether it’s the other job trainer programs as well as infrastructure spending, cutting red tape, cutting taxes. That’s all going to combine, Neil, to drive economic activity, drive more jobs and therefore higher wages.
NEIL BREEN:
Treasurer Josh Frydenberg, thanks for your time on 4BC Breakfast.
JOSH FRYDENBERG:
Always a pleasure.
NEIL BREEN:
Hey, before you hang up, though, do you feel old sometimes, Treasurer?
JOSH FRYDENBERG:
Always, with every year.
NEIL BREEN:
Well, I’m going to make you feel old, okay? I’m going to play a song. This song’s 50 years old today, Treasurer.
JOSH FRYDENBERG:
I’m 52.
NEIL BREEN:
You’re 52, I’m 53, and this song’s 50. Say happy birthday to it. Thanks, Treasurer.