7 January 2020

Interview with Tom Tilley, RN Breakfast, ABC Radio

Note

Subjects: National Bushfire Recovery Fund; Budget surplus; insurance claims

TOM TILLEY:  

The Treasurer, Josh Frydenberg, joins us from Parliament House on RN Breakfast. Treasurer, thank you so much for joining us.

JOSH FRYDENBERG:

Good morning Tom. 

TOM TILLEY: 

Josh Frydenberg, we've seen more than 25 people killed. We've seen people's livelihoods wiped out, millions of hectares of bushland burnt. Why only now is your Government offering significant action?

JOSH FRYDENBERG:

Well, there has already been, significant steps that have been taken to get immediate support to those communities that are in need. As you know, the Defence Force has been working for some time. We have Chinook helicopters and Blackhawk helicopters ferrying firefighters and emergency service personnel to, to those most difficult areas. We've had our largest amphibious vessels evacuate people from places like Mallacoota and we've had an unprecedented callout of up to 3,000 Defence Force reservists. On top of that, the Government has been making a number of payments under existing disaster recovery allowances, which has seen already $25 million go out the door and over $100 million of commitments.  And this $2 billion that we announced yesterday is an initial and additional contribution, which will be administered by the new National Bushfire Recovery Agency, under the leadership of Federal Police Commissioner Andrew Colvin.

TOM TILLEY:  

Treasurer, I think a lot of Australians would argue that you haven't made significant action until this big announcement yesterday, until the announcement of the 3,000 troops on Saturday. People have been really angry at your Government, saying they've shown a lack of leadership, that you didn't act quick enough. Why did we have to wait for the Prime Minister to get back from Hawaii, the Defence Minister to have to get back from Bali, before you made these significant announcements?

JOSH FRYDENBERG:

Well, in fact, the Defence Force and Emergency Management Australia, the Bureau of Meteorology and other relevant federal agencies, have been working very closely with the state counterparts. Indeed, some time ago, you know, we were getting briefed about, about what has been, happening on the ground. The Prime Minister's been talking directly with his state, with the state premiers on a regular basis, and you heard from Daniel Andrews himself, the Victorian Premier, say that anything that he has asked the Federal Government for he has been given, and he only had praise for the relationship that he has with Prime Minister Scott Morrison and the support that he has been given.

TOM TILLEY: 

OK, so are you arguing that the Federal Government has acted completely proportionately to the response? Or do you admit that there have been some mistakes and some of this support is coming too late?

JOSH FRYDENBERG:

Well, there has been significant support. And as you know, there are joint responsibilities for natural disasters such as these. There will be lessons to be learned, there's no doubt about that. And there'll be a time to have the proper inquiry, which the Prime Minister has foreshadowed, into these bushfires, and we'll do that in conjunction, and in consultation, with the states. But what we are seeing is a hotter, drier climate, and we've seen an extensive drought season. We've seen the build-up of fuel in, in, in the forests and surrounding areas and, you know, we've seen a number of contributing factors to what has been disastrous fires with, as you indicated, loss of life, loss of property, and there are still people battling those fires as we speak now, and these fires will go for some time yet.

TOM TILLEY:

What do you say to the people who are frustrated at the lack of leadership from your government, and that this action has taken this long? What do you say to those people, as individuals affected?

JOSH FRYDENBERG:

Well, as the Prime Minister has said, whatever it takes and whatever it costs. Our focus is not on the bottom line for the Budget. Our focus is on the bottom line of getting support to people. And the Prime Minister's involved in daily briefings with the Defence Force. Yesterday, the Cabinet discussed the, the most recent activities and made the approvals for yesterday's announcement. David Littleproud, the relevant minister, is, he's working around the clock. We are all focusing on supporting those communities who are in need, because people have really suffered greatly as a result of this tragedy.

TOM TILLEY:

Josh Frydenberg, as you announced yesterday, the Government's stumping up an additional $2 billion for the new bushfire recovery agency. Can you tell us how the money will be spent? And how quickly it will get to the people that really need it?

JOSH FRYDENBERG:

Well, this is modelled on our response to the North Queensland floods, where we set up a recovery agency and we put in place a coordinator and we got additional support to those existing, recovery payments and allowances. This will go towards small businesses, primary producers, who need to restock, replant. This will go to a major mental health initiative, to give, to give support to people in the relevant areas, helping to rebuild social and economic infrastructure, which is going to be critical. Environmental protection and sustainability will be critical, particularly for the wildlife that has been so badly damaged in these fires. We've had enormous loss of wildlife and there will be an important part of the recovery as well.  So whether it's the environment, whether it's infrastructure, whether it's health or other aspects of this response for our farmers and small businesses, we'll be there for them.

TOM TILLEY: 

Do you have an estimate at this stage what the total damage bill will be?

JOSH FRYDENBERG:

No, we don't. What we saw after the Cyclone Yasi and the Brisbane floods back in 2010 – 2011, was that the Commonwealth contribution was around $5.6 billion. Now, only about $360 million of that was what is called Category D. The rest of it was those recovery payments and allowances and other supports that the Commonwealth provided.  Now, this is, these have been catastrophic fires and they've not been contained to any one state. We've seen it right across the country. So the bill will be large. The states will also, no doubt, be making their own announcements about recovery funding. But what we'll, what we'll see is, is, no doubt, a significant economic impact. But, like I said, the bottom line is getting the support to those communities to help them rebuild, to recover and to become more resilient for the future.

TOM TILLEY: 

So a core promise of your government was to bring the Budget back into surplus next year. It seems like that core promise is no longer on the table. Yesterday, the Prime Minister said, "The surplus is of no focus for me." Has the Government moved away from that core promise now?

JOSH FRYDENBERG:

Well, the surplus was never an end in itself. It was all about responsible economic management, which would then allow us to have the flexibility to respond to economic shocks, wherever they may occur.  Now, this is clearly having a significant economic impact, just like the drought. We made over $1 billion of funding announcements in support for, for drought affected communities, and we've made this $2 billion announcement yesterday. That's why you have responsible economic management, so you can actually spend money in a crisis such as this. So the Prime Minister, myself and other members of the Cabinet are not focused on the bottom line. What we're focused on is getting support to the communities in need.  That's why the ADF, Emergency Services Australia, we've got Services Australia, which are providing support through Centrelink. We've got the Australian Tax Office providing deferrals of payments and other obligations for two months. I'll be meeting with the insurance companies today to work with them to process as quickly as possible the thousands of claims that are already being lodged. We will use every arm of government to support those communities as they would expect us to do.

TOM TILLEY: 

So is there any chance we'll have a surplus at the next Budget?

JOSH FRYDENBERG:

Well, I mean, again, the focus is not on the surplus. The focus is on getting support…

TOM TILLEY:

…Ok…

JOSH FRYDENBERG:

… to those communities. We have a National Bushfire Recovery Agency, under the leadership of Andrew Colvin. That will be establishing the priorities in consultation with the states.

TOM TILLEY: 

Alright, Treasurer, you mentioned your meeting this morning with the heads of the major insurance companies. Um, will you be strong-arming them to make sure they do the right thing by Australian people?

JOSH FRYDENBERG:

Well, I know that, that they are wanting to get this money out as quickly as possible. They've had around 6,000 claims already, totalling about $400 million in losses, and, and they've already put assessors and recovery specialists on the ground, where it's safe to do so, to get the support to, to people who are in need.
If there is some red tape that is inhibiting their ability to get that money out as quickly as possible, we will be working with the regulators to, to reduce that red tape. I mean that's why, at today's meeting, I'll be accompanied by the secretary of my Department of Treasury, as well as representatives of ASIC and APRA, the prudential regulator, to ensure that we get as much support to those communities working with the insurance companies.

TOM TILLEY: 

You've indicated this is going to cost the Australian economy, billions of dollars. We're now starting to see very starkly the cost of inaction on climate change. Is that a bit of a wakeup call that Australia needs to do more to the global effort to reduce emissions?

JOSH FRYDENBERG:

Well, we are part of a global effort to reduce emissions. We have a 26 to 28 per cent target to reduce our emissions by 2030 on 2005 levels.  We have seen our emissions reduce by about 12.9 per cent from 2005. That compares to a country like Canada, which has seen its emissions go down by about 2 per cent, New Zealand, which has seen its emissions go up by 4 per cent, and countries like China and India, which have seen their emissions go up in that period by 67 and 77 per cent respectively.  So what we were seeing here is Australia do what it can and do its bit to reduce emissions. We've got one in five Australian homes with solar panels, about a quarter of our energy is now being provided by renewable sources and we're continuing to invest, whether it's in Snowy 2.0 or in the Battery of the Nation down in Tasmania and a second interconnector, which we'd like to see occur between the mainland and Tasmania. We are helping this transition, but we're trying to do so in the most cost-effective way possible.

TOM TILLEY: 

Treasurer Josh Frydenberg, great to have you on RN Breakfast. Thanks for your time.

JOSH FRYDENBERG:

Good to be with you.