TONY JONES:
As I said from the outset and I’ll say it again, I’m forever bagging Sydney for this, bagging Sydney for that, wanting to run the world, right? But in this situation, there’s no time for that. There’s no time for talking about karma or anything. There’s no time for talking about a silver lining or talking about, ‘Oh, they’ve got their comeuppance’, because it does affect us in the long run, right? Maybe not in the immediate future but certainly down the track, it will affect us in a financial sense, and we’ll get an idea of that when we speak to the Treasurer Josh Frydenberg now. In fact, we spoke to him a little earlier on this morning, mainly about this Intergenerational Report, but we also touched on a number of other subjects. Now, that Report is being handed down by the Treasurer today. What it essentially does is give us a snapshot of Australia over the next 40 years. It predicts things, the economy, population, debt, the long-term impact of COVID, and what it’s also showing is that Australia is getting, older, smaller and certainly more in debt. But anyway, the Treasurer outlined all that for us and told us how important this Intergenerational Report actually is.
JOSH FRYDENBERG:
Well, the Intergenerational Report, Tony, comes out every five years and it highlights key demographic and economic trends across the economy. It’s not a prediction of what will be, but it’s an insight into what could be. What this year’s report does show is that the Australian economy continues to grow, that our debt levels remain low by international standards, but there are some warning signs, particularly the pressures that will come on the Budget from an ageing population as more health and aged care spending is required and we have a lower workforce participation because we have an older population. Also, the longer-term impacts of COVID and particularly the size of our population, which is not expected to be as big as previously thought because of those closed international borders, which is seeing population growth at its lowest level in 100 years.
TONY JONES:
So if we’re going to be aged-heavy in terms of our population, why is it that we are not having more children as we would have done sort of a generation or two ago?
JOSH FRYDENBERG:
I think it’s lifestyles are different. There are more women that are in the workforce as well today. But the fertility rate has come down. Australia hasn’t been having a fertility rate at the replacement rate since 1976, which is 2.1 babies per woman. Right now it’s at 1.65 and it’s expected to fall even lower still over the next four decades. So, there’s a number of reasons why the fertility rate has come down, and when you combine that with what we’ve seen with COVID and the closed borders, it will impact on the size of our population going forward.
TONY JONES:
So how do you actually have a report like this looking into a crystal ball when the last time this report would have been done, I assume, that nothing would have given any hint of a warning that COVID was about to hit?
JOSH FRYDENBERG:
Well, you obviously have all those caveats attached and it is a useful document. It’s one that was initiated by Peter Costello when he was Treasurer because it does require modelling and assumptions about particular economic trends and it does highlight in this case how important productivity and economic reform will be to Australia’s economic growth, because without that productivity, we will see higher debt, lower wages and fewer jobs. So, the things that we are pursuing, whether it’s around skills, business investment, infrastructure, tax reform, are all really important to ensure that the Australian economy continues to grow.
TONY JONES:
So how does the economy cope with an older demographic in terms of welfare?
JOSH FRYDENBERG:
Well, you do see a greater demand for health spending and aged care spending. In fact, health spending is the largest single biggest change in this Intergenerational Report occurring over the next 40 years. Many of our programs are demand-driven and in order to guarantee those essential services, the economy needs to remain strong. So, that’s why fiscal discipline is important and that’s why economic reform is important. So, in that sense, this Report, Tony, provides a few warning signs for our economy and the need for governments to continue to act.
TONY JONES:
Okay, Treasurer, you’ll be shocked to learn there’s a few other issues I want to ask you about, not least, and it’s certainly not a laughing matter, is the situation in New South Wales at the moment. I read this morning that a two‑week lockdown, they’re two days into it now, $2 billion to the economy, that will cost?
JOSH FRYDENBERG:
Well, again, it’s too early to say what the full impact will be, but it does have a significant impact because there’s less economic activity. Think of all those hospitality venues which have had to cancel bookings. You can think of the people whose travel into New South Wales or out of New South Wales has been impacted. You can think about the people who are having to adjust to work from home and the impacts that that has. Lockdowns, even those that are contained to particular regions and particular areas, do have negative economic consequences, but in the event that we can suppress the virus, we need to take medical advice and take the necessary steps.
TONY JONES:
I suppose one of the steps in suppressing the virus is acting quickly.
JOSH FRYDENBERG:
Yes.
TONY JONES:
Has Gladys Berejiklian acted quickly enough with this one?
JOSH FRYDENBERG:
Well I think she has acted very quickly across the course of this pandemic and the fact that her state has avoided major state-wide lockdowns, for example, like we’ve seen in other states, has been a credit to her. But we’re dealing now with a more contagious variant in the Delta strain and that is going to pose new challenges for state governments. Obviously, they worked hard to prevent a full lockdown, but the virus continues to be very stubborn and dangerous and that’s why they’ve taken the steps that they have.
TONY JONES:
You’ve got the National Cabinet meeting on today and obviously this comes on the back of a weekend where, I don’t know, I don’t want to be an alarmist, but you just sort of get this feeling that as a nation we’re on the brink at the moment.
JOSH FRYDENBERG:
Well we have been very successful as a nation in suppressing the virus and that’s why, Tony, our economic recovery has been ahead of the world and there’s more people at work in Australia today than before the pandemic and our economy is bigger today than before the pandemic. Other advanced economies have not had a recovery like Australia, but it is a reminder that the virus remains with us, that there are these new dangerous strains and it’s important to roll out the vaccine and for people who are eligible to get the vaccine shot. More than 7.3 million doses have already been distributed. That means more than 28 per cent of the eligible population have received their first dose, and importantly, Tony, we’re focused on the more vulnerable cohorts. So, the over‑50s, more than 50 per cent of the population has received their first dose. For the over‑60s, nearly 60 per cent of the eligible population has received their first dose and for the over‑70s, nearly 70 per cent of the population has received their first dose. But if you look at the United Kingdom, it’s pretty instructive; they’ve had more than 80 per cent of their population receive their first dose and nearly 60 per cent of the population receive their second dose, yet they saw just yesterday 18,000 new COVID cases in the United Kingdom. So, it is challenging with these new variants.
TONY JONES:
Well yeah, and once you start talking about percentages of vaccinations, those who have been fully vaccinated that’s only around 5 per cent, isn’t it?
JOSH FRYDENBERG:
Well, again we’ve had challenges with supply of AstraZeneca because of the impact it was having on particular age cohorts. That was the vaccine that we were manufacturing here under licence through CSL. As more Pfizer vaccines come on stream and we make those available to the states and to the GPs, more than 300,000 a week have been coming in and that will be ramping up to 600,000 a week, and it will be important that everyone who is eligible goes out and gets their shot. Because where the vaccine makes a real difference is preventing hospitalisation and serious illness or indeed death, and again it’s important to understand that here in Australia just one person, I’m advised, is in an ICU unit today, from COVID, so we’ve been much more successful than other nations to date on both health and the economic front.
TONY JONES:
Someone else who’s been in ICU recently through not COVID but through a nasty fall was the Premier Daniel Andrews. He’s back on deck today. What’s the top of his agenda, do you think, Treasurer?
JOSH FRYDENBERG:
Well, I welcome him making a full recovery and obviously I wouldn’t want anyone to be subject to the terrible injuries that he has obviously been subject to, so I wish him all the best. And obviously this is a challenging time and regardless of your - whether you’re Liberal or Labor, we’ve got major national interests at stake and no doubt he will be talking to the Prime Minister as they restart the National Cabinet agenda in the Victorian seat.
TONY JONES:
Alright. I know you’ve got a lot to do and not least just informing us about this Intergenerational Report, so looking in that crystal ball for the next 40 years. I just wonder as I let you go, whether you can see Carlton winning a flag in that 40 years?
JOSH FRYDENBERG:
Certainly. More than one! How’s that? Especially after that welcome win over the Crows there, Tony. That was good to see Patrick Cripps sign on for a number more years at the club, and no doubt it’s been a challenging time for the Blues, as it has been for a lot of the teams this year, but the best is in front of us.
TONY JONES:
Don’t you come alive when you start talking about Carlton on the back of a win?
JOSH FRYDENBERG:
It’s better to be in the winner’s circle as someone once said.
TONY JONES:
Exactly. Good on you. Nice to talk to you.
JOSH FRYDENBERG:
Thank you.