SABRA LANE:
The Treasurer is Josh Frydenberg. Josh Frydenberg, the forecast of an extra 150,000 jobs, is that over four years and are these well‑paid secure jobs or insecure lower‑paying ones?
JOSH FRYDENBERG:
Well, our track record has been of delivering more jobs and secure jobs, and this is over the next four years, and it’s an improvement since budget just in May. It reflects, Sabra, a very strong economic recovery better than we expected, which saw the OECD, the IMF and the Reserve Bank upgrade their growth forecast for next year. You’ll see that from us later today in MYEFO, but particularly strong has been the labour market. Let’s not forget that at the height of the pandemic, Treasury told me they feared that unemployment could reach as high as 15 per cent. It is falling, expected to be in the low fours over the next couple of years and that would be only the second time in some 50 years that we’ve seen unemployment sustained at that level.
SABRA LANE:
The Omicron variant, though, could throw a spanner in the works. What impact could that have on the economy?
JOSH FRYDENBERG:
Well, you’re right that there is a lot of uncertainty out there because we’re still in the middle of a pandemic and we didn’t forecast the impact of the Delta variant when we did the budget in May. It saw the Morrison Government deliver $25 billion in economic and health support, whether it was the business support payments or the up to $750 a week payments to people who had lost work —
SABRA LANE:
Yes, Mr Frydenberg, what about the Omicron variant? Has Treasury modelled that possibly having an impact on the economy too?
JOSH FRYDENBERG:
We’re not expecting it to lead to more lockdowns. We’re not expecting it to lead to closed borders. What we do know from the Chief Medical Officer with respect to Omicron is that it is highly transmissible, but, in his words, the early reports are that it’s milder than previous variants and that the vaccination that has been rolled out across Australia at record levels is now effective against severe disease; so too are the various treatments that we’re rolling out. So, I think we should listen to some of the medical experts like Sharon Lewin from the Doherty Institute who said we shouldn’t be panicked about Omicron. It’s what they expected as medical experts and that we need to manage these variants without locking down our borders.
SABRA LANE:
Okay. The Government is now forecasting unemployment will be in the fours next year. Budget repair would begin in those circumstances, you’ve previously flagged. When will you be up‑front with voters about spending cuts and reductions you have in mind to get the budget back under control?
JOSH FRYDENBERG:
Well, you obviously see our spending measures and various initiatives in the budget, which is scheduled for the end of March. So too in MYEFO, there’s some further investment in infrastructure, in skills, in the new digital economy. But I point out to you, Sabra, the way to improve the budget bottom line is to strengthen the economy, to get people off welfare and into work and we saw an $80 billion improvement in the final budget bottom line from what we expected last October —
SABRA LANE:
Does that mean no spending cuts and no reductions? Many voters will remember the first Abbott–Hockey budget.
JOSH FRYDENBERG:
Well, our track record has actually been to fully fund the various social services. Indeed, we’ve seen aged care spending reach a record high with more than $17 billion extra committed in the most recent budget, so too with mental health. You’ll see in today’s announcement that the NDIS will have a further $26 billion allocated to it as more than 500,000 people go onto the program. So, our track record has been of delivering a stronger economy, which includes fully funding and guaranteeing those essential services while also providing important tax relief. One of the reasons why we’ve seen household disposable income increase, why we’ve seen greater economic activity and higher consumption is because we have put more money into people’s pockets with lower taxes and business tax investment incentives.
SABRA LANE:
Just on the NDIS, the Government has been releasing figures this week about alleged cost blowouts. Is the Government also looking at the benefits to the community of this scheme; what’s the value of every dollar the Government invests?
JOSH FRYDENBERG:
It’s surely of great benefit, and we’re absolutely committed to fully funding this scheme and, as you know, it’s a bipartisan initiative –
SABRA LANE:
Sure, but to the point of that question, though, the Government keeps talking about cost blowouts; do you know the benefit of every dollar the Government invests? Have you modelled that?
JOSH FRYDENBERG:
We do know there’s great benefit in terms of not just the health outcomes, which are most important, but also the economic benefits that you get from people with disabilities fully participating in society. But to point out to your listeners, before the NDIS came in, you saw Federal and State Governments combined providing around $8 billion a year of disability support. That number is now around $30 billion a year and so we’re now spending in three months what we were spending in a full year prior to the NDIS being rolled out. And today, there are 480,000 people on the program. It’s expected to go to 670,000 and the Commonwealth will be taking responsibility for around 70 per cent of the funding of the scheme. So, it is a major item and that’s why we have to talk about it in terms of our spending priorities.
SABRA LANE:
Why not openly discuss what’s causing the alleged blowouts so that it can be tackled and not scare families who are relying on the NDIS?
JOSH FRYDENBERG:
Well, that’s the last thing we’re seeking to do. The first thing I would like to do is reassure those families listening to your program that the Morrison Government is absolutely committed to fully funding the program, but I can tell you why the funding has increased, and that is because the number of the people who are going onto the program has been more than initially thought and the average cost of the particular programs per individual on them has actually increased them as well. So, that’s what’s driving the increases.
SABRA LANE:
Would you welcome a possible future corruption commission analysing Government grants under the Coalition have been allocated given the recent report showing how Coalition seats have benefited the most?
JOSH FRYDENBERG:
Well, because you raise that analysis, let me point out to your listeners that it only addressed one per cent of the grant programs and it didn’t look at social services grants programs, which – for example, health, aged care, disability, Indigenous support programs are around 60 per cent of all grants.
SABRA LANE:
And to the point of the question?
JOSH FRYDENBERG:
To the point of the question, we do support an integrity commission. We have released legislation. It has both law enforcement and public sector –
SABRA LANE:
What about a commission analysing how the Government is spending Government grants?
JOSH FRYDENBERG:
Well, that’s what the Audit Office is for, and that’s why we’ve continued to provide significant funding to the Audit Office. But I’m not going to take a lecture from the Labor Party which the Audit Office condemned when they were last in office when it talked about how they’d abandoned eligibility and compliance checking processes and, in fact, waived project eligibility criteria to fund programs that they liked. And who was overseeing those programs that were condemned by the Audit Office? None other than Anthony Albanese. So, in that Audit Office report, it found that the approval rate of applications in Labor electorates were more than twice that for projects in Coalition‑held electorates so I’m not going to take a lecture from Anthony Albanese who is holier than thou.
SABRA LANE:
Josh Frydenberg, thanks for joining AM.
JOSH FRYDENBERG:
Thank you.