PETER STEFANOVIC:
Treasurer, good to see you.
JOSH FRYDENBERG:
Nice to see you.
PETER STEFANOVIC:
We’ve got our connection all sorted. Now, you’ve got a big speech today on climate.
JOSH FRYDENBERG:
Yes.
PETER STEFANOVIC:
Does this mean the government has settled on a plan for net zero by 2050?
JOSH FRYDENBERG:
Look, no decision’s been taken, but obviously we’re working through the issues internally, led by Angus Taylor, the responsible minister. And we’ve made good progress. And we’ve obviously taken a number of steps to invest in renewable energy, to smooth that transition. But my speech today is about what’s happening in financial markets, Pete, because whether it’s the industrial revolution to the digital age, financial markets have been impacted by significant structural and systemic change. And climate change is no different. And it does impact upon Australia because investors are reassessing risk, what they consider to be good value, and Australia very much depends on international investors, whether it’s the $4 trillion of direct and portfolio foreign investment, whether it’s the buying of our government bonds, around half of which are being purchased by overseas investors, or, indeed, whether it’s our domestic banks who source about one-fifth of their funding from offshore sources. We very much depend on foreign investors. So I want to make sure that Australia is not disadvantaged by this shift, but, to the contrary, that we actually take advantage of this shift, and we’re doing that in a number of ways, including more investment in renewable energy consistent with our targets, but also ensuring we’ve got the right disclosure frameworks so that investors can make timely and informed decisions about when and how they invest.
PETER STEFANOVIC:
In your speech you’re asking business to keep helping the traditional industries such as mining and agriculture. That’s to help them adapt. Is that to placate any concerns from the Nationals?
JOSH FRYDENBERG:
It’s actually about the national interest and it’s about the environmental interest, which, you know, are very much overlapping here. Because you don’t get to net zero without seeing a significant change across the economy. So traditional industries like agriculture, like manufacturing, like resources, are going to continue to require investment. In fact, Mark Carney, the former Governor of the Reserve Bank of the UK equivalent, the Governor of the Bank of England, has made this very point. He says you don’t actually see that transformation across the economy if you simply black list what he calls brown assets or just invest in green assets, you have to invest right across the board to smooth that transition. So I have a very important message today to superannuation funds, to insurers, to investors more broadly – continue to invest in those traditional industries.
PETER STEFANOVIC:
You’ve already had some critics out and about this morning – Matt Canavan on Twitter, he’s pushed back. He says global banks that want to control who has a job in Australia should be locked out, he says. The higher cost is worth protecting independence. What do you make of those comments?
JOSH FRYDENBERG:
If you’re a National you believe in markets. And that is important. And we want to make those markets work for Australia. That’s why we need to have the right regulatory frameworks here that inform investors and that allow them to reassess risk. And that is what they’re doing globally – they’re looking at their portfolios and they’re also looking at their new investments as well. We have to ensure that we can do that, because we want to attract that level of investment going forward. And one of my messages today, Pete, is that some of the big miners that, you know, Matt’s been such a champion of, like the Rio Tintos, like the BHPs, like the Fortescues, they’re actually at the cutting edge of innovation. Look what Fortescue is doing in respect to hydrogen. BHP wants to run mines purely off renewable energy. And this technology is world leading and as a number of consequential impacts for other industries as well.
PETER STEFANOVIC:
Just on net zero, though, have you been given any insurances from Barnaby Joyce?
JOSH FRYDENBERG:
Look, I talked to Barnaby Joyce the whole time. And, like I said, we haven’t made any specific decisions. We are working them through.
PETER STEFANOVIC:
How far off, do you think?
JOSH FRYDENBERG:
Well, again, we’re working it through. Obviously we’ve got Glasgow coming up. We’ve got –
PETER STEFANOVIC:
It’s going to happen, though, isn’t it?
JOSH FRYDENBERG:
Well, I’ll leave that speculation to you.
PETER STEFANOVIC:
But personally you believe we should be? We should be net zero by 2050, personally?
JOSH FRYDENBERG:
Well, what I’m saying right now is that being part of those global frameworks, being part of those global targets is in Australia’s national interests. And just look at what we’ve done with respect to our Paris target. It’s a 26 to 28 per cent reduction by 2030 on emissions that were in existence back in 2005, and we’ve made real progress on that because emissions are down by more than 20 per cent. That’s more than double the OECD average and it’s faster and deeper cuts than you’ve seen across Canada, the US, Japan, New Zealand and other comparable countries. So Australia’s got a very positive story to tell, and I want to make sure that the financial markets hear that.
PETER STEFANOVIC:
And just finally, Treasurer, sad news on the passing of John Elliott. I’m just wondering if you have any comments on that?
JOSH FRYDENBERG:
John Elliott made a huge impact on the corporate world, the political world, the sporting world. He was obviously a Liberal President, a Carlton Football Club President, we shared that passion. And, of course, you know, he was a larger than life figure, a real larrikin, and you were left in no doubt as to what he thought and where he sat on particular issues. And he had this wonderful relationship with his son Tom, who’s a broadcaster here in Melbourne. And I remember around the time of the last election being interviewed by Tom and by John and, you know, they were very jovial and, you know, there was great banter and they bounced off each other. He’ll be really greatly missed. He was a very proud Victorian, Pete, and, you know, a lot of people had a lot of very positive things to say about him and his legacy.
PETER STEFANOVIC:
Josh Frydenberg, thanks for your time.
JOSH FRYDENBERG:
My pleasure.