PETER STEFANOVIC:
Joining me live now is the Treasurer in Sydney, Josh Frydenberg. Treasurer, good morning to you, thanks for your time.
JOSH FRYDENBERG:
Good morning, Pete.
PETER STEFANOVIC:
Before we get to the flood assistance that was announced yesterday, you've just got off a call with your Five Eyes partners. What was decided? What was discussed?
JOSH FRYDENBERG:
Well, it was an important opportunity, Pete, to get together with my American, British, Canadian and New Zealand counterparts to discuss our united response to Putin and Russia's aggression in Ukraine. Obviously we're turning the screws on the Russian economy. We've seen the ruble in free fall, we've seen the stock market in Russia closed. The central bank in Russia has not been able to access its $600 billion of foreign reserves. And together we've put sanctions on hundreds of individuals as well as entities and other restrictions are now in place. And it's been a full‑court press. So today we discussed the further actions that we could potentially take, but also what we need to do more…
PETER STEFANOVIC:
Such as?
JOSH FRYDENBERG:
Well, we're looking at all manner of options. But we're focusing on oligarchs as well, and tracing their assets around the world, but we're also focusing on the long‑term consequences and impacts of what has transpired in the Ukraine, particularly the importance of having supply chain resilience and working together in those critical industries where we can't leave our supply chains to chance or to the geopolitical risk, which is now heightened around the world.
PETER STEFANOVIC:
Okay. Speaking of long term, and this is going to be an announcement by the Defence Minister and the Prime Minister later on this morning, but we're going to have a troop surge for our forces over the next 20 years. That is part of a long‑term strategy. But in the short term, where the threat now is, we just you've talked about that, are we exposed and weak on national security?
JOSH FRYDENBERG:
Exactly the opposite. It was this Coalition Government that has dramatically increased spending on our Defence Force. When we came to Government, Pete, defence spending had fallen to its lowest level since 1938. That's a telling year. That was the year of appeasement – 1938. 1.56 per cent of GDP was the equivalent defence spending under the Labor Party. We've now taken it above 2 per cent. We've invested very significantly in new weapons systems, in new defence capability, whether they be naval or air force or army. We've also entered into these important international partnerships like AUKUS and the Quad, which are going to be important in enhancing our national security.
And today's announcement where more than 18,000 additional members of the Australian Defence Force workforce will be taken on will take the Defence Force workforce above 100,000. And that is going to come at a cost of nearly $40 billion, and it's part of our long‑term strategy to secure Australia.
PETER STEFANOVIC:
Extra federal flood relief is coming. But several neighbouring LGAs in affected regions have missed out, Treasurer. We were just speaking to a business owner who is in one of those affected regions that has missed out. How is that fair on them? Where did you draw the line?
JOSH FRYDENBERG:
Well, the line was drawn in terms of these new payments based on the catastrophic events that we saw, for example, in Lismore. And so we've been working with the expert agencies on those matters. But we've made support available right across Queensland and New South Wales to the flood‑affected areas. More than 300,000 claims have been processed costing more than $400 million from the Federal Government. We've announced a package of support with State Governments which is seeing money flow to small businesses, to primary producers. The Prime Minister yesterday made announcements around mental health, child care support, a whole manner, legal assistance, a whole manner of different initiatives which are designed to alleviate the pain and suffering that, of course, these communities are going through right now. We will stand by the communities of Queensland and New South Wales that have been affected by flood, and we will help rebuild those communities that have been most affected, particularly, for example, in Lismore.
PETER STEFANOVIC:
Okay. Just a final one here, Treasurer, you made a speech last night in which you said there will be costs borne by Australians in defending our values. We are, as you know, already seeing those at the petrol pumps at the moment and at supermarkets too. How long do you expect these higher prices to last?
JOSH FRYDENBERG:
Well I see petrol prices remaining elevated for some time as a result of these geopolitical tensions. And, as you know, a barrel of oil up to around $130 will have a major impact on the price of petrol at the bowser. We're already seeing prices above $2 a litre. We, obviously, in Australia will stand by our friends and allies and partners in putting the pressure on the Putin regime. But what this heightened geopolitical risk is doing is lifting the price of commodities. Everything from coal, thermal coal, for example, has nearly doubled in just the two weeks of this invasion. We've seen European gas prices nearly triple and we've seen oil prices go up by around a third. So there has been a dramatic impact on the price of commodities. That flows through to consumers. But that is a reflection of the challenges that we face, the very uncertain, the very dangerous times that Australia is now in.
PETER STEFANOVIC:
Treasurer Josh Frydenberg, thank you for your time. We'll talk to you soon.
JOSH FRYDENBERG:
Thank you.