NEIL MITCHELL:
On the line, federal Treasurer, Josh Frydenberg, good morning.
JOSH FRYDENBERG:
Good morning, Neil, and good morning, listeners.
NEIL MITCHELL:
People are organising boycotts of China, some businesses are recommending boycotts of China. Should they do that?
JOSH FRYDENBERG:
I don’t support that. The China-Australia relationship is an important one. It’s obviously going through a pretty challenging time right now. The two-way trade is worth over $200 billion a year and, as you know, Neil, it’s mutually beneficial. Our iron ore has helped underpin China’s economic growth, which has lifted hundreds of millions out of poverty.
NEIL MITCHELL:
But you asked last week for respectful engagement. They’ve now censored our Prime Minister. Is that respectful?
JOSH FRYDENBERG:
Well, certainly that I thought, was unnecessary and disappointing, to see the deletion of the Prime Minister’s WeChat message. What he was doing in that message is making it very clear that we are proud of Australian servicemen and women in our Defence Force, that we obviously are following up on those allegations with a transparent, official process. But the challenges that we’re having with China right now don’t diminish the respect that we have for the Australian-Chinese community but also for the Chinese people.
NEIL MITCHELL:
No, that’s true. Has anybody in Government, including yourself, thought of ringing up people like Andrew Robb, Paul Keating, John Brumby, Alexander Downer, all of whom have had close links with various business operations within China, which they’re entitled to do. But what about ringing them and saying, “Hang on, hang on, can you broker a peace deal here?”
JOSH FRYDENBERG:
Well, again, this is a bilateral issue between Australia and China and…
NEIL MITCHELL:
Yes, but they’ve got contacts there.
JOSH FRYDENBERG:
Well, so do business community leaders and other community leaders and, no doubt, those contacts are continuing. But from the Government’s perspective we’ll remain calm, we’ll remain patient. We will not resile from those issues that were raised by China and their list of 14 separate grievances, which go to the heart of our democracy, the heart of our society, including the free press in which you are speaking on right now and, indeed, the democratically elected right of politicians to speak their mind and, of course, the foreign investment framework which I am in charge of, which is being strengthened to ensure that our national interest is protected.
NEIL MITCHELL:
There are a number of reports in papers today about the Office of National Assessments saying that much of the Chinese press working within Australia is, in fact, part of the Communist Party. Will we look at that? Will the Government look at that?
JOSH FRYDENBERG:
Look, I’m not going to comment on those individual matters.
NEIL MITCHELL:
Okay. Do you agree that Australian business, Australian exporters, have to now start seriously looking for new markets as a matter of insurance if nothing else?
JOSH FRYDENBERG:
Well, I think they already do. I think Australian business…
NEIL MITCHELL:
Do you help them? Do you help them?
JOSH FRYDENBERG:
Well, we certainly do, and we do that through Austrade and we’re making further investments in that regard. But one of the real achievements of the Coalition Government since we came to office has been that we’ve taken our two-way trading relationships and expanded them with free trade agreements. So free trade agreements covered 26 per cent of our two-way trading relationships when we came to government. Now it’s more than 70 per cent. Countries like Japan and Korea, we’ve entered new agreements with. Indonesia and, of course, that comprehensive multi-lateral arrangement which takes into account 30 per cent of the world’s economy and population. So we are looking for new markets all the time, but China does remain an important economic partner for us.
NEIL MITCHELL:
Do you think the Chinese students will come back?
JOSH FRYDENBERG:
Well that will one, depend on the lifting of international border restrictions and getting the virus under control. But we have a great offering in our international student market. It has been a significant part of the economy and I’m confident that student numbers will come back.
NEIL MITCHELL:
Are you aware that one of your members, Gladys Liu has been accused of supporting an organisation which involves a man who is now facing charges, a Chinese man facing charges, in this country?
JOSH FRYDENBERG:
Look again, I’ve seen those media reports. But what I can say about Gladys Liu is she feels as strongly as I do and as the Prime Minister and our colleagues about what we saw with that doctored photo that was put up about the Australian digger and that young child and how offensive that was. So, you know, Gladys has been a staunch advocate…
NEIL MITCHELL:
Yes, but she needs to be a bit more careful on who she’s endorsing, doesn’t she?
JOSH FRYDENBERG:
Well, again, you know, Gladys has been a very staunch advocate for Australia’s interests through these challenging times.
NEIL MITCHELL:
So, are we still, are we indulging in respectful engagement or is it one way?
JOSH FRYDENBERG:
Well, we haven’t changed, Neil. I think that’s important for your listeners to understand.
NEIL MITCHELL:
But is China being respectful in return?
JOSH FRYDENBERG:
Well, I don’t think their conduct with that tweet was respectful and we’ve made that very clear.
NEIL MITCHELL:
Recovery, we’re not really recovered, are we? We’re on the way back, but we’re not there. I mean, when we talk about a huge surge, well, it’s a significant surge, but it comes from a pretty low base after, what, a seven per cent drop?
JOSH FRYDENBERG:
Well, you’re certainly right that in June the GDP number was down by seven per cent, which was the largest drop on record and that’s as a result of a once-in-a-century pandemic and an economic hit that we haven’t seen the likes of which since the Great Depression. To put it in perspective for your listeners, during the GFC, the global economy contracted by just 0.1 per cent. Now it’s expected by the IMF that the global economy will contract by 4.4 per cent, so a multiple of what we’ve seen previously. You’re right, the recovery is far from over. It has a long way to go and the road ahead will be pretty bumpy and hard.
NEIL MITCHELL:
Do you accept that more businesses will go under, that more people will lose jobs?
JOSH FRYDENBERG:
There will certainly be some businesses that can’t be saved and jobs that will be lost. But always right through this crisis our intention has been to give every business and every Australian worker the best possible chance to remain in job, to remain in business and then if they’re out of a job, to find one.
NEIL MITCHELL:
Is there any chance of extending JobKeeper beyond March? Because that’s going to hurt, isn’t it, when it goes?
JOSH FRYDENBERG:
Well, there’s a couple of things there. The first is JobKeeper’s been a remarkable success. In September Neil, there were 3.6 million Australians who were on JobKeeper. But the ATO data for the month of October shows that there are now around 2 million fewer Australian workers on JobKeeper and 450,000 fewer businesses on JobKeeper in October compared to September. That’s because the recovery is underway. But our intention is for that program to end in March and there are other supports that we have in place, like the extension of the HomeBuilder program, like the supports that we announced recently for travel agents, like the JobMaker hiring credit which is now being legislated.
NEIL MITCHELL:
But it’s going to hurt, isn’t it? It is going to hurt when JobKeeper ends. I mean, as you say, it’s been extremely successful.
JOSH FRYDENBERG:
There are other programs…
NEIL MITCHELL:
As generous, as strong as JobKeeper?
JOSH FRYDENBERG:
Well, they are of a different nature. JobKeeper is a wage subsidy. As you know, that was tapering down, and it has always been our intention that our supports would be temporary, they’d be targeted, they’d use existing systems and they’d be proportionate to the challenge that we face. But now with the restrictions being eased and the economy picking up, we are seeing a lot of businesses and a lot of workers graduating from JobKeeper.
NEIL MITCHELL:
Do you want us to spend? If we’ve got money, and not everybody has, do you want us to spend, get out and spend?
JOSH FRYDENBERG:
I think, Neil, it’s inevitable that your listeners will be spending more as their confidence comes back and as the restrictions are eased. What we saw in the numbers for the September quarter was a big jump in spending in cafes and restaurants and hotels, on transport, on recreation. That didn’t even take into account the full easing of the restrictions in Victoria. So once we get to the December quarter numbers I’m expecting to see a rebound from Victoria as people start to spend the money that they have put aside during the crisis.
NEIL MITCHELL:
What do you want us to spend it on? Presumably it’s not Chinese TVs?
JOSH FRYDENBERG:
Well, it’s going to be matters for them. I don’t think it’s appropriate as the Treasurer to tell them what to spend it on.
NEIL MITCHELL:
Peter Costello told us to have babies. You can at least tell us what to spend it on.
JOSH FRYDENBERG:
Well, again, I support population growth. I also support economic activity. But I’ll leave it to up your listeners to make those individual decisions.
NEIL MITCHELL:
It would be fair enough to say buy Australian wine rather than French, wouldn’t it?
JOSH FRYDENBERG:
Well, of course, you always want to support Australian businesses. There’s no secret in that.
NEIL MITCHELL:
Victoria, $153 billion state debt we’re headed to. Too much?
JOSH FRYDENBERG:
Well, again, states need to spend on the areas that will support their economic recovery. What we did see in the Victorian Budget was a reflection of the big challenge that Victorians face as a result of the second lockdown. That was hugely damaging and the growth forecasts for the coming year in Victoria are to see a contraction which is more than double the national average, and that’s unfortunately a reflection of where Victoria’s economy is at.
NEIL MITCHELL:
So are you happy with the Victorian Budget?
JOSH FRYDENBERG:
Well, there were some aspects of it that I support. Obviously more investment in infrastructure, it’s appropriate that states are spending on affordable housing, that’s primarily their responsibility. But at the federal level we’ve done the bulk of the heavy lifting. You’ve seen that with $130 billion that has already gone out the door, and in Victoria more than $35 billion has gone from the Federal Government to Victorian families and businesses.
NEIL MITCHELL:
Could I just suggest to you the taxpayer has done the bulk of the heavy lifting, not the Government. We’re paying for it.
JOSH FRYDENBERG:
Well, you’re absolutely right. It is the Australian people who will face a major burden in the future as a result of Australia going through this crisis. But from the Federal Government’s perspective the targeted measures that we’ve undertaken have been designed to help Australians get back into work.
NEIL MITCHELL:
Is it a bit better than you expected?
JOSH FRYDENBERG:
Yes.
NEIL MITCHELL:
Good.
JOSH FRYDENBERG:
And better than the market expected too, Neil. The market was expecting GDP growth in September of 2.5 per cent. It’s ended up being 3.3 per cent. Victoria was the only state to contract. The other states and territories saw strong growth. If Victoria had achieved the growth levels that we’d seen in other states, that number wouldn’t have been 3.3 per cent, it would have been five per cent.
NEIL MITCHELL:
So that’s thanks to Daniel Andrews again.
JOSH FRYDENBERG:
Well, it was a devastating second wave that, as you know, didn’t need to happen.
NEIL MITCHELL:
Okay. Just quickly, the vaccine, I was talking to a WHO official just before you came on and he said we’re in a position in Australia and New Zealand and other parts of Asia, in fact, to sort of take a breather and not jump at the first vaccine that comes along. Would you agree with that?
JOSH FRYDENBERG:
Well, we welcome that development in the United Kingdom. But I note that their situation is different to Australia. They’ve had more than a million infections in the United Kingdom, nearly 60,000 deaths…
NEIL MITCHELL:
Yes, but what about here? I mean, we’re talking about March, aren’t we? Bu which we might have three on the table or four on the table by then. Do we have to take time to assess it? There’s no reason to rush into it, do you agree?
JOSH FRYDENBERG:
Well, community safety comes first. The timeframe is that the regulatory approvals will run through the course of January. If the vaccine is proved to be effective and safe then the health minister has said we could see a rollout from March. That’s obviously a positive timeframe compared to what we’d expected in Budget. We’d expected the rollout to occur by the end of next year. So this is certainly better than we were expecting and does reflect the positive trials.
NEIL MITCHELL:
Okay and just finally, when you were on the tennis circuit did you have a world ranking?
JOSH FRYDENBERG:
No, I didn’t get a world ranking. But I played in a lot of world junior tournaments and tried my hand. But, as I’ve said to you probably in the past, Neil, what I learnt from my year on the tennis circuit is that my ambitions were far greater than my talents. While I enjoyed my year, I was more realistic about my future career prospects after it.
NEIL MITCHELL:
I was going to ask you, though, with the Australian Open, they’re talking about five hours to practice outside each day. Is that enough at that elite level?
JOSH FRYDENBERG:
Well, again, I think it is. They have to make these bespoke arrangements for the Open due to COVID. As you know, Djokovic got COVID, so it’s been a live issue for the tennis players, but I’m really glad the Open is going ahead. It’s one of those dates on the calendar that all Australians love and indeed, that puts Melbourne on the international map.
NEIL MITCHELL:
Take care. Thank you very much for speaking with us.
JOSH FRYDENBERG:
Great to be with you.