STAN GRANT:
Treasurer, good to have you with us.
JOSH FRYDENBERG:
Good evening.
STAN GRANT:
You've had to deliver so much bad news this year. To deliver some news with a smile is a welcome break, I'm sure. But you would know that people who've lost their livelihoods, they're unemployed, you’ve seen the lease signs in shop windows, they don't feel as if the recession is over, do they?
JOSH FRYDENBERG:
Well technically the recession is over but the recovery is not, Stan. These were encouraging numbers that we saw today. A 3.3 per cent increase in GDP growth in the September quarter was the largest increase in quarterly growth since 1976. This was the economic recovery that Australians have worked so hard for and made great sacrifices for. But as the Governor of the Reserve Bank said today, the road ahead will be lumpy and bumpy, it will hard, it will be long. There'll be some sectors, like aviation and tourism with the international borders being closed, that will do it tough for some time yet. But…
STAN GRANT:
Yes.
JOSH FRYDENBERG:
…generally, the numbers are better than expected.
STAN GRANT:
And that road ahead will lead to March, and in March, JobKeeper and JobSeeker come off. And that’s going to make things even more difficult, isn't it? I mean, part of what's held the numbers up here is consumption and people going out and spending. What happens when we hit that point?
JOSH FRYDENBERG:
Well, you're right that consumption has driven the numbers today, a 7.9 per cent increase in the quarter for consumption after a fall of 12.5 per cent last quarter. And this is a reflection of the easing of restrictions, people have started going out spending money on transport, hotels, cafes, restaurants and recreation that they couldn't do early in the crisis. JobKeeper has been a remarkable success program. It has helped sustain 3.6 million workers in the month of September. But in the month of October, the latest ATO data shows, Stan, that two million fewer Australians are on JobKeeper. And so the economic recovery is under way. But I don't want your viewers to see JobKeeper as the only economic support program that we have across the economy.
STAN GRANT:
No, indeed, the Reserve Bank has intervened to also keep interest rates low. And all of this goes to the stimulus measures that have helped to get us to the other side here. But all of that has to change eventually. How long can we maintain this stimulus cycle?
JOSH FRYDENBERG:
Well, the JobKeeper program has been consistent with our principles that we set out early in this pandemic. Namely, that those measures would be temporary, they would be targeted, they'd be scalable, they'd be proportionate to the challenge we face, and that they use the existing systems. So it was always the intention that that program would end. We extended it for another six months and it has been the glue between employers and employees. But as you know, in the Budget, which I delivered on October 6, there were tax cuts for more than 11.5 million Australians. There were business investment incentives. There's the JobMaker Hiring Credit, all of which have been legislated through the Parliament. We've brought forward infrastructure spending. We've invested heavily in apprentices. That's going to help support the economy next year and the year after.
STAN GRANT:
I want to ask you about China. How long can this spat continue and how much damage is this going to do to our economy, if it deepens?
JOSH FRYDENBERG:
Well, China is our number one trading partner. It's worth more than $200 billion a year and actually, goods exports to China effectively doubled since we came to Government...
STAN GRANT:
… and right now they're hitting our exports, and right now our relations are at a record low. How much damage is this doing?
JOSH FRYDENBERG:
Well, it is damaging and it's very challenging as well to have these trade tensions with China, given the importance that that market is for Australian exporters. But let me say, it's a mutually beneficial relationship as well. Our iron ore has underpinned China's economic growth. Our agricultural produce….
STAN GRANT:
Yes, it is...
JOSH FRYDENBERG:
…is among the best in the world. Now we would like to resolve some of these issues with China bilaterally. We have said publicly that we would like to sit down and have a mutually...
STAN GRANT:
That's the problem. …
JOSH FRYDENBERG:
…respectful dialogue….
STAN GRANT:
….we can't have that dialogue. You can't pick up the phone now and call your equivalent in Beijing. You've wanted to get this relationship back on an even keel. Have we made mistakes? How much have we contributed to this, the Australian Government, contributed to this?
JOSH FRYDENBERG:
Look, Australia's position hasn't changed. When it comes to those fourteen grievances that China outlined, they included our free press. They included the right of democratically elected parliamentarians to speak their mind. They talked about our foreign investment framework. In all those issues, they go to the heart of our identity, in some cases to our national security...
STAN GRANT:
But what you're…
JOSH FRYDENBERG:
...and you wouldn't expect us to trade that away.
STAN GRANT:
But what you're outlining there is something that’s intractable then. If we keep making demands of each other, both Australia and China, that neither side can meet, how do you break this cycle right now? What's the circuit breaker?
JOSH FRYDENBERG:
Well again, we have said, very publicly, that we are very pleased to sit down and have a mutually beneficial dialogue. If we can't do that bilaterally and these trade tensions can't be resolved that way, we reserve our right and our options to use multilateral forum. And that's what the Trade Minister has alluded to as well.
STAN GRANT:
Yes, with the World Trade Organisation and others. Can I just turn to this announcement about Pfizer, and rolling out the vaccine in the UK, as early as next week. What does that mean for Australia? Have we had conversations with Pfizer about bringing it here, fast-tracking the release here?
JOSH FRYDENBERG:
Well, our Health Minister Greg Hunt, who's worked so hard throughout this crisis, he has had a conversation tonight with the CEO of Pfizer here in Australia. And we welcome that development in the United Kingdom. Of course, the UK's position, Stan, is what different to Australia. They've had more than a million infections, more than 50,000 deaths as a result of COVID. Right now in Australia today, there is no one in an ICU unit or on a ventilator as a result of COVID. Now, we have our vaccines going through our own approval processes and that will take its normal course.
STAN GRANT:
So we're not likely to see this in the near future? It is not something we can bank on early in the New Year, for instance?
JOSH FRYDENBERG:
Well again, Greg Hunt has talked about that. He hopes to see that approvals process concluded around the end of January. But again, we've got to ensure the community safety with respect to these vaccines and with respect to those trials.
STAN GRANT:
Only got about thirty seconds, but what would it mean economically if we were to get a circuit breaker like a viable vaccine?
JOSH FRYDENBERG:
Well, actually we had some scenario in the Budget, Stan, we actually had one scenario that if a vaccine was rolled out across the country six months earlier than expected, and the expectation was by the end of next year, then that would be worth $34 billion to the Australian economy. So there is definitely an economic uplift in the event that we find a vaccine. But I have to say, Australia has done remarkably well on both the health and the economic front, and you wouldn't want to be in any other country but Australia right at this time.
STAN GRANT:
Treasurer, good of you to join us, thank you.
JOSH FRYDENBERG:
My pleasure.