PETER STEFANOVIC:
Treasurer, good morning, good to see you. Thanks for joining us this morning. So, in the last 12 hours…
JOSH FRYDENBERG:
Good morning Pete.
PETER STEFANOVIC:
…or so the case numbers of COVID have increased in the Northern Beaches around Sydney. What's your reaction to that?
JOSH FRYDENBERG:
Well obviously the question has never been whether there'll be new cases of COVID-19 across Australia, the question has always been how would we respond to those cases. And we know that New South Wales has been the gold standard when it comes to contact tracing and testing and we know that their health system has performed admirably through this crisis which has allowed their economy to remain open. So, I think it is premature for borders to be closed. I think that Premiers and Chief Ministers should obviously monitor this situation very closely, but we should also have faith in the New South Wales health system's ability to deal with these new cases as that has been their proven track record.
PETER STEFANOVIC:
Are you worried about that, economically speaking, that WA has now imposed restrictions, Queensland's doing the same, Northern Territory, Tassie as well?
JOSH FRYDENBERG:
Well, Pete, we're being consistent in our opposition to close borders and we saw in yesterday's mid-year economic and fiscal update that the economy is rebounding back and rebounding back strongly off the back of increased consumption, lower numbers of people on JobKeeper, and people travelling more freely across the country. And we want that momentum to continue, particularly as we go into the Christmas period. We've seen consumer confidence increase in 14 out of the last 15 weeks. The one week where there was a bump was when South Australia went into lockdown for those few days. So consumer and business confidence is very much dependent upon our successful suppression of the virus and our ability to deal with these new cases when they arrive.
PETER STEFANOVIC:
What is the economic impact going to be though, as far as you can tell at this early stage, with WA imposing restrictions, with Queensland doing the same and the other states as well?
JOSH FRYDENBERG:
Well the impact is not going to be very substantial from what we announced yesterday. We did make an assumption though that next year there will be no internal border restrictions. When it comes to international borders, we have assumed that they will remain closed. While there'll be some tourism and some international students coming, they'll be very small numbers by even the end of next year. We have always worked on the assumption that there will be a vaccine to roll out by the end of next year, but we do know that Australia has made great progress, and in yesterday's update the unemployment rate was lower, the growth rate was higher, and the Budget had improved from that which was forecast at Budget time just 10 weeks ago. And that is really a reflection on our ability, our success in monitoring and suppressing the virus to date.
PETER STEFANOVIC:
I just want to bring you back though to the border restrictions that are being imposed now, from WA and Queensland in particular, leading up to the busy Christmas period. It's going to involve a whole lot of travel, a whole lot of cancelled Christmas plans. That will have a serious impact, will it not?
JOSH FRYDENBERG:
Well again it's going to disrupt people's Christmas plans, as you say, and many people had been looking forward to a break at the end of the year. Now states will take the decisions around the borders but what we have made very clear is that these decisions should be made on the basis of health advice and also the ability of New South Wales to have successfully in the past over the course of this year suppressed the virus and put in place their contact tracing and their testing regime. I mean just yesterday, Pete, they tested thousands of people and they've worked very hard to try to try and contain these hot spots.
PETER STEFANOVIC:
Yes, but I mean, the Victorian Premier you were quite critical of and he was basing his decisions on health advice.
JOSH FRYDENBERG:
Well, I'm not going to relitigate what happened in Victoria, you know that was the harshest of lockdowns, not just with the very severe economic impact but also a very severe human impact on people. But what I can say is that Australia is in a good position going into the Christmas period when it comes to our economic recovery. We saw that yesterday. We've seen very strong growth numbers over the September quarter and in fact, the labour market just yesterday saw 90,000 new jobs being created, 84,000 of those being full time jobs. And so we have seen real improvements in our labour market as restrictions have eased and we have suppressed the virus.
PETER STEFANOVIC:
Your update yesterday was dependent on no more border restrictions so is it already out of date? Did you go too early on that?
JOSH FRYDENBERG:
Again, that was just a small fraction of the relevant factors playing into yesterday's update. What really drove the improvement yesterday were people coming back into jobs and we saw two million fewer Australians who were on JobKeeper, Pete, in the month of October compared to the month of September. And as I said, we saw a strong labour market performance yesterday with the unemployment rate falling from seven per cent down to 6.8 per cent. And we know that in previous recessions it's taken a lot longer for the unemployment rate to get back to the level it was pre-recession and what we've seen in yesterday's numbers is that the forecast for that to occur now is about four years. And that is significantly better than what happened in the 1980s recession when it took six years, and the 1990s recession when it took 10 years to get the unemployment rate back from where it started.
PETER STEFANOVIC:
Treasurer Josh Frydenberg, appreciate your time as always. We'll talk to you again soon, thanks for your time this morning.
JOSH FRYDENBERG:
All the best.