PATRICIA KARVELAS:
The Treasurer, Josh Frydenberg, joins me this afternoon. Treasurer, welcome.
JOSH FRYDENBERG:
Nice to be with you, PK.
PATRICIA KARVELAS:
Australia's unemployment rate fell to 5.8 per cent in February from 6.3 per cent. That's a pretty good result but the question is JobKeeper is about to end, what happens to unemployment after that?
JOSH FRYDENBERG:
It has been the forecast to both Treasury and the Reserve Bank of Australia that even when JobKeeper ends, there will be a trajectory downwards in our unemployment rate closer to the end of the year. We will update the forecasts in the May Budget but what we saw today, with the unemployment rate falling to 5.8 per cent, was a result that was significantly better than what the market was expecting. In fact, with 88,700 new jobs, Patricia, that was nearly three times what the market was expecting and what was particularly pleasing was that all those new jobs were full-time jobs - more than 80 per cent of those jobs went to women and more than 40 per cent of those jobs went to young people. We are very conscious that there are regions and sectors across the economy who are doing it tough. The job is far from done but the economy has recovered a lot better than what we were forecasting at the end of last year.
PATRICIA KARVELAS:
Absolutely but the key question is, when you say the unemployment rate will be lower at the end of the year, what happens before that? Are you expecting a rise in the unemployment rate and what is your modelling telling you about what will happen in the next couple of months?
JOSH FRYDENBERG:
I think it will be bumpy because you will have a transition. You have got around a million people who are still on JobKeeper in this March quarter. That means 2.7 million people have actually graduated off JobKeeper. Having been in Queensland last week and visited the tourism sectors of Cairns and Townsville and other parts across Brisbane and knowing what is happening in our CBDs in Melbourne and Sydney and other capitals, there are many businesses, whether they are cafes, restaurants, tourism operators, they are doing it tough. That’s why we have sought to respond with more targeted programs like that aviation and tourism package, which has half price airfares, but also cheap loans that can help businesses that back themselves get to the other side of this crisis.
PATRICIA KARVELAS:
You used the word "bumpy" - it is a good word but we don't know what that means. Are you saying we should expect a sharp rise in the unemployment figure in the next couple of months?
JOSH FRYDENBERG:
Let's wait and see...
PATRICIA KARVELAS:
You must know you're the Treasurer, you are getting advice. What is your advice?
JOSH FRYDENBERG:
My advice is that the unemployment rate will continue on a trajectory downwards over time. We saw from the Reserve Bank of Australia just a couple of days ago when they released their minutes for the March period that they actually said the end of JobKeeper will not lead to a sustained increase in the unemployment rate. They are the economic experts who are advising Government. They have also made it very clear through Treasury that JobKeeper must end because it has a number of characteristics in the program that, as the economy strengthens, would have an adverse impact on the economy more broadly if it was left in because it would prevent labour mobility and prevent workers moving from one job to another more efficiently and it may, indeed, prop up businesses that are unsustainable in the long term. So we have to keep a context for what the Government is doing here. JobKeeper was always a temporary emergency measure. It was there for six months, we extended it for 12 months.
PATRICIA KARVELAS:
Is your message to Australians watching be prepared for unemployment to rise because it will go down again by the end of the year?
JOSH FRYDENBERG:
My message to Australians is that the job is not done. We are very conscious that there are sectors and regions who are doing it tough. While today's unemployment numbers are very much a step in the right direction and should be very encouraging for the economy and for Australians more broadly, we are going to continue to need that economic support.
PATRICIA KARVELAS:
Next time you won't be here in an interview with me having a celebration are you? You’re going to actually be announcing increases in unemployment because of the policy decision you've made?
JOSH FRYDENBERG:
I think you have to understand that JobKeeper at $90 billion is the most expensive program that any Australian Government has ever undertaken, so we cannot keep that going forever. The economy has to be able to find its new level. We have to allow a transition in the economy as it strengthens. I think people should understand that our recovery is happening at least twice as fast and six months earlier than we first expected. The labour market is so much more resilient today than it was back in the 1990s recession or the 1980s recession where there was, in economist terms, a real scarring of the labour market. We haven't seen that. For female employment, we have actually seen the levels now get back to higher than they were pre-pandemic. That is a very encouraging sign, Patricia, and it is something that we can take a lot of confidence in going forward.
PATRICIA KARVELAS:
Let's just talk about industrial relations. The Federal Government has passed the industrial relations legislation through the Upper House this afternoon but you were forced to gut the legislation after facing opposition. Is broader reform or changes to industrial relations now dead because you have pretty much gutted almost all of it?
JOSH FRYDENBERG:
We obviously didn't get what we wanted...
PATRICIA KARVELAS:
Understatement...
JOSH FRYDENBERG:
...through the Parliament but that is a function of the fact we don't have the numbers in the Upper House and you have got to enter into pretty difficult negotiations with cross benchers and indeed the Labor Party took a very ideological position and even though this set of reforms was worked through extensively with both the union movement and employer groups, they holus bolus opposed the legislation…
PATRICIA KARVELAS:
Does it mean changes to industrial relations are now dead? This is it, the Government is finished on this?
JOSH FRYDENBERG:
The Government will always seek to advance the reform agenda where possible but we have tried. We have got some reforms but we haven't got all of our reforms and far from it, as you say. It is what it is now and we will have to rethink other areas where we may be able to get some reforms but...
PATRICIA KARVELAS:
Like what? What do you think you could try and do?
JOSH FRYDENBERG:
For example, the greenfields sites. In this Bill, there was an attempt to double the length of which an enterprise agreement could be in place for a greenfields site. That would mean that when you're building a big infrastructure project, it might be a resources project, that the builders, the constructors wouldn't have to renegotiate halfway through a new enterprise agreement, therefore be held to ransom. That is a sensible reform that encourages more investment in our country. Ultimately it creates more jobs. You would think the Labor Party would support such a measure, they didn’t.
PATRICIA KARVELAS:
So you would like to keep pursuing that element. Is that the only one? How about the planned crackdown on wage theft? You have dumped that?
JOSH FRYDENBERG:
I won't tick a box on each element of the program. You know it had significant reforms in compliance, significant reforms with respect to awards simplification, enterprise agreements.
PATRICIA KARVELAS:
But now an employer who steals wages won't face criminal penalties.
JOSH FRYDENBERG:
There are already a series of penalties in place but when it comes to what we did get through, as you know, we got a pathway to take someone from casual to permanent work and also we got some other changes through but it wasn't everything we hoped for.
PATRICIA KARVELAS:
We might go towards an election season soonish. Does that mean workplace - your workplace agenda is dead going into that campaign?
JOSH FRYDENBERG:
The Prime Minister made it very clear in the press conference today, he's passionate about creating jobs but our political opponents are not because this was a job creating set of reforms...
PATRICIA KARVELAS:
Sure but it doesn't look like you're willing to fight for it, does it?
JOSH FRYDENBERG:
We fought pretty hard.
PATRICIA KARVELAS:
Did you really though, I have seen you fight harder on other things, I will be honest.
JOSH FRYDENBERG:
I am fighting on a number of fronts but obviously this was one front that we didn't get everything we wanted but there are other reforms that I have before the Senate in my own portfolio which I am hopeful of getting through and I am engaged in discussions with crossbenchers. We have got other significant reforms that we have already legislated through the Parliament, like the biggest changes to insolvency law in 30 years, like the biggest changes to foreign investment laws in 50 years, like the immediate expensing provision that is lifted business investment and the dwelling investment improvements we have seen, all of which are coming through government reforms that we’ve passed through the Parliament.
PATRICIA KARVELAS:
Your own colleague, Russell Broadbent, has written to the Prime Minister urging him to convene a summit of women's peak organisations and mandate a requirement for gender impact statements on all policy and legislation. Will you do it?
JOSH FRYDENBERG:
I haven't seen that letter and I will let the Prime Minister respond.
PATRICIA KARVELAS:
Do you think it is a good idea?
JOSH FRYDENBERG:
Again, I will let the Prime Minister respond. I haven't seen that letter.
PATRICIA KARVELAS:
You're the Deputy Leader of the Labor Party, do you think you need to take this issue...
JOSH FRYDENBERG:
I would hope I'm not the Deputy Leader of the Labor Party because that would see me in opposition.
PATRICIA KARVELAS:
Liberal Party. That is what they call misspeaking, Treasurer. It would be worse if it happened to you, let's be honest. It happened to me not you.
JOSH FRYDENBERG:
It is allowed at this time of the day, it is okay.
PATRICIA KARVELAS:
You are the Deputy Leader of the Liberal Party, do you think it should happen?
JOSH FRYDENBERG:
I am absolutely focused on creating more jobs for women, getting that work force participation rate up which was at a record high pre-pandemic, trying to bridge that gender pay gap which got down to a record low before the pandemic. As I said today, more than 80 per cent of the jobs that were created in February, the new jobs, went to women. We had a Women's Economic Security Statement in the last Budget, we will continue that focus. We will continue those programs, trying to encourage entrepreneurship and trying to create job creation for women and that is a focus for the Government. It has been and it will continue to be.
PATRICIA KARVELAS:
I know you have to go but what did you think of this idea of a consent app?
JOSH FRYDENBERG:
I didn't like it.
PATRICIA KARVELAS:
Why not?
JOSH FRYDENBERG:
I know everyone wants to use new technology. I have just read the story of how it was put forward by a law enforcement figure in New South Wales. It's an idea but the Government's not contemplating it. It didn't seem, to me, to be the best way to go about what is dealing with a very serious issue of consent.
PATRICIA KARVELAS:
Thank you so much for joining us.
JOSH FRYDENBERG:
My pleasure.