PETER STEFANOVIC:
Joining us is the Treasurer Josh Frydenberg. Treasurer, before we get into economic matters, I do want to ask you about our top story this morning, and I want to get the government's reaction to Vladimir Putin's claim that eastern regions of Ukraine should be independent.
JOSH FRYDENBERG:
Putin's latest move escalates the crisis and brings invasion one step closer. It's not going to help to reduce the tensions in what is really a very dangerous and disturbing situation. Vladimir Putin's a strong man, and he's now trying to strong arm his neighbours. And Ukraine hasn't provoked this, but Russia has been the aggressive actor. And we've called it out here from Australia. But, of course, there are many other countries who are much closer to the action in Europe and, indeed, the United States with a vested interested in seeing that stability is achieved.
PETER STEFANOVIC:
Yeah, and Peter Khalil just referred to it a short time ago as a tsunami of disruption that this could cause. What sanctions could this trigger and how would it affect us, Treasurer?
JOSH FRYDENBERG:
I've already seen that Poland has called for sanctions, the Europeans more broadly have made it very clear that this is unacceptable behaviour by the Russians. And President Biden has talked about a swift and a severe response should an invasion occur. Australia would be part of a global effort when it comes to sanction actions. We already do have some sanctions in place, but obviously they would be increased in light of a further destabilisation by the Russian regime. You know, this is not just going to have an impact in terms of the national security situation and, indeed, lives will be lost – indeed, maybe thousands of lives would be lost. But what it would have is a broader economic impact, too, Pete. Russia is the largest supplier of gas into Europe – about 40 per cent of Europe's gas supplies coming from Russia. Germany is heavily reliant. We've already seen the price spiked, and I think it would have a broader impact on the global financial system, on equity markets and stabilisation.
PETER STEFANOVIC:
Okay, just a few other issues, Treasurer. Should the seven‑day isolation period for asymptomatic close contacts be abandoned so people can go and get back to work?
JOSH FRYDENBERG:
I think it's inevitable that restrictions will be further reduced over time as we learn to live safely with the virus. We have made real gains of late when we've reduced those relevant isolation requirements for various cohorts of people. And that has helped alleviate some of the pressures we've seen in the workforce, particularly over the January period when we saw high levels of absenteeism due to Omicron cases. Now the case numbers have come down, hospitalisation and ICU numbers have come down and people are getting about their daily lives. And I think it's really important that people get back to work in the CBDs, too. Hundreds of thousands of people are employed by the CBDs across the country and in related industries. And we've seen the level of occupancy fall below, you know, 15 per cent, for example, in the January period in Adelaide, in Brisbane, in Sydney. In Melbourne it was as low as 4 per cent in Melbourne and 7 per cent in Sydney. Now, think about the knock‑on effect to all those services being provided to office workers. I think it's important that other states follow the lead of New South Wales and I understand today, Victoria, to enable more people to go back to work in the CBDs and get back to our life as normal.
PETER STEFANOVIC:
Mike Cannon‑Brookes, he says it's actually the higher load of renewables that has decreased energy prices over the past few years in Australia. Would you like or would you support his takeover of AGL?
JOSH FRYDENBERG:
One thing I certainly agree with him on is that energy prices have come down, Pete. They've come down by 8 per cent in the last two years. They doubled under the Labor Party. Don't look at what they say – look at what they actually do. And when they were last in government energy prices doubled. We welcome more renewables into the system. Indeed, we're facilitating that. We're encouraging that, we're investing in that particular outcome. But we also have a responsibility to ensure that the energy grid remains stable and that electricity prices remain affordable as we reduce our carbon footprint. And we're very conscious of the experience when Hazelwood closed, which represented about 25 per cent of Victoria's electricity generation. We saw the wholesale electricity price increase by around 85 per cent. And the most impacted families were those in the poorer socioeconomic groupings because they spend a higher proportion of their disposable income on electricity than the wealthier households. And that also saw Victoria go from being a net energy exporter to actually being a net energy importer as times of peak demand. We've got to smooth out the supply. And the wind doesn't always blow and the sun doesn't always shine, so you do need dispatchable power, and that's where gas plays a key role today and increasingly into the future. We want to get that balance right. But as for the bid from Mike Cannon‑Brookes and Brookfield, that will be looked at by the board. So far the board hasn't accepted it. Obviously it needs to get shareholder approval then it needs to get regulatory approval. I think it's got a long way to go.
PETER STEFANOVIC:
A long way to go. Okay, Treasurer Josh Frydenberg, thanks, as always, for your time. We'll talk to you soon.