SYLVIA JEFFREYS:
And the Treasurer joins us now from Canberra. Treasurer, good morning to you.
JOSH FRYDENBERG:
Good morning, Sylvia.
SYLVIA JEFFREYS:
We will get to those issues in a moment, but first I would just like to ask your reaction to that awful tragedy in Tasmania yesterday.
JOSH FRYDENBERG:
Well, like every Australian this morning I’m heartbroken. As a dad, as somebody with young kids myself, I can feel the pain of, obviously, those parents and the local community. It’s such a tragedy. And I just hope everyone rallies around those families and that those who are injured make a full recovery.
SYLVIA JEFFREYS:
It’s impossible to comprehend, isn’t it, what that community is going through this morning.
JOSH FRYDENBERG:
It is.
SYLVIA JEFFREYS:
Our thoughts, our prayers, our hearts are with them all. Okay, let’s talk about, if we can, the mid‑year budget. It brings everything into sharp focus, doesn’t it, what happened in Tasmania yesterday. But let’s talk about this message you delivered.
JOSH FRYDENBERG:
It puts it into perspective, yeah.
SYLVIA JEFFREYS:
It does all rely, all these forecasts that you’ve put out there, it does all rely on the state Premiers sticking to the national reopening plan. And that is something that you have no control over, isn’t it?
JOSH FRYDENBERG:
Well, Treasury’s forecasts yesterday were based on the best medical advice that has been provided to the government. And the Chief Medical Officer has said very publicly that while this Omicron variant looks to be highly transmissible it’s perhaps less severe than other variants and that our vaccine is a defence against the virus and so, too, are our treatments.
There is no need to panic here. The Premiers need to keep their heads and to stay calm and obviously to proceed with the national plan. And that means reopening in a COVID‑safe way. We have real momentum now in the economic recovery. We saw 366,000 jobs, Sylvia, created last month. That’s the single largest number of jobs that have been created in any one month on record. Around 60 per cent of those jobs went to women, around a third went to young people, and there are now 180,000 more Australians who are in work today than before the pandemic began. So, we really have had the strongest economic recovery of any advanced economy in the world, and with one of the highest vaccination rates of any country in the world and one of the lowest mortality rates of any country in the world, Australians can go to Christmas with confidence and hope.
SYLVIA JEFFREYS:
Premiers are at this stage holding their nerve, but localised lockdowns are not completely off the table in New South Wales, in Queensland. What effect would that have on the bottom line if they do go ahead with localised lockdowns over Christmas?
JOSH FRYDENBERG:
Well, in yesterday’s budget update we did model a couple of extra scenarios; an upside scenario and a downside scenario. In the downside scenario we forecast that potentially there could be those localised lockdowns and that could hurt the economy to the tune of around $20 billion and see unemployment higher than what has been forecast. At the same time, Sylvia, we forecast an upside scenario where we are able to keep the health outcomes under control and that Australians started to spend more than was forecast in yesterday’s numbers, and in that case we’d see an extra $30 billion boost to GDP and economic activity over the next two years. So, there is a great deal of uncertainty. No‑one should understate the fact that we’re still in the middle of the pandemic. But given our track record to date with our resilient economy and given the momentum that we’re now seeing, I do believe there is good cause for optimism.
SYLVIA JEFFREYS:
It’s a challenging time. So much uncertainty still as we head into another year.
JOSH FRYDENBERG:
It is.
SYLVIA JEFFREYS:
Are you planning a big round of pre‑election tax cuts?
JOSH FRYDENBERG:
Well, again, our government’s track record has been to cut taxes at every opportunity. But I’m not going to get this morning into speculation about what may be in or not in the budget. But what I can say is that we have seen over 11 million Australians get more than $10 billion of tax relief, focusing on low and middle income earners over the last quarter. Small businesses are seeing their lowest company tax rates in 50 years. And we’ve put in place business investment incentives which are seeing farmers get new harvesters or cafes get new kitchens or, indeed, tradies getting new tools. And that has boosted investment and, therefore, economic activity across the economy. So, we’re trying to use our tax system to encourage aspiration, to reward effort and to generate more activity and jobs across the economy.
SYLVIA JEFFREYS:
You are, meantime, forecasting a budget improvement of $106 billion over four years. But that money’s already been spent. A lot of Australians are worried that the country is spending beyond its means. Are we?
JOSH FRYDENBERG:
Well, firstly, we needed to spend on programs such as JobKeeper, which saved 700,000 jobs, or the cash flow boost which gave small businesses hope through the crisis or, indeed, the $750 payments to pensioners and veterans and carers and others on income support, all of which helped put Australia into the strong position that it is now. But we’ve ended those emergency payments. Indeed, we were criticised when we brought JobKeeper to an end and we brought the COVID disaster payments to an end. But what we saw, Sylvia, in the numbers yesterday was that our deficits will halve over the next four years as a share of the economy and that by growing the economy, getting more people in work, means less people on welfare, and that’s how you improve the budget bottom line.
SYLVIA JEFFREYS:
Finally, Treasurer, I just want to ask, you’re in Victoria. Case numbers are rising there. There is, of course, a threat of isolation if you’re a close contact. This is something that a lot of people are living with right now – concerns over that prospect. Are you confident that you’ll be able to celebrate the holidays with your family?
JOSH FRYDENBERG:
I’m hoping to do so down the beach at a place called Lorne in Victoria. And, you know, all families, I think, should have the opportunity to reunite at Christmas. And that’s why I welcomed the backflip from the Queensland government when they initially put all those people who were in that plane going into Queensland, they put them into quarantine till Christmas. And that would have been, you know, very, very unfortunate. I’m glad that that was reversed. Because we do need the Premiers and the Chief Medical Officers to show compassion, to show common sense, to show a sense of understanding that we must learn to live with this virus. Because we do have, you know, a very strong economic recovery. People’s lives and livelihoods depend on that momentum continuing.
SYLVIA JEFFREYS:
Treasurer Josh Frydenberg, we appreciate your time this morning. And we do wish you and your family a happy and safe Christmas.
JOSH FRYDENBERG:
And to you, too, Sylvia. Thank you.
SYLVIA JEFFREYS:
Enjoy the holidays.