Treasurer Josh Frydenberg on Australia’s economic future

In this exclusive interview, Treasurer Josh Frydenberg tells The Daily Telegraph what Australians can expect from next month’s Federal Budget.

Next month’s Federal Budget is tipped to focus on keeping Australia’s remarkable record of pandemic-era job creation going while providing expanding support for essential services, according to Treasurer Josh Frydenberg.

Speaking to The Daily Telegraph just hours after the release of numbers showing Australia’s jobless rate had fallen to 5.6 per cent in March, when the economy was creating some 2000 jobs a day, Mr Frydenberg said that Australia had weathered the pandemic remarkably well so far, with the post-COVID outlines of the economy already appearing.

Treasurer Josh Frydenberg in Parliament House. Picture: Gary Ramage

“COVID has seen a dramatic acceleration of trends already under way, such as the digitalisation of our economy, which has changed the way we communicate, work and shop,” Mr Frydenberg said.

“That means that many people are also looking to move to the regions for a change of lifestyle, where they can still work by maintaining a digital connection.”

According to the Treasurer, the numbers speak for themselves.

“As recently as December, they thought the unemployment rate in the March quarter would be 7.5 per cent,” he said.

“GDP has recovered twice as fast, much earlier than we expected.

“And in terms of unemployment, that is back to the pre-crisis, pre-pandemic level in just 11 months, compared to the 1990s recession, which took 49 months.”

Anthony Mundine handed out water to people in the Darlinghurst Centrelink queue in March last year. Picture: Phil Hillyard

One year later, the shops are bustling again. Picture: NCA NewsWire/Gaye Gerard

This, Mr Frydenberg said, was a reflection of consumer confidence, which has hit new highs.

“Confidence,” said Mr Frydenberg, “is the cheapest form of stimulus.”

But even with that confidence, there are warning bells.

While well-heeled Australians unable to go overseas are now spending billions — $7.5 billion in the December quarter alone — on domestic travel, more money is also surging into the property market, driving prices northwards.

Mr Frydenberg acknowledged the concern, saying that while there were record numbers of first-homebuyers and that “the vast majority” of loans were to owner-occupiers, he was “watching it closely”.

“I’ve spoken to the governor of the Reserve Bank and to the head of APRA … the regulator has shown in the past that they have the ability to put some rules in place with ­respect to bank lending, if they think the market is getting too hot.”

But Mr Frydenberg also emphasised that there was still work to be done, and that the country should take nothing for granted.

Mr Frydenberg says the country is making great strides towards its recovery. Picture: Gary Ramage

While the government is pulling back broad-based economic support programs like JobKeeper, the upcoming budget will continue to provide for targeted support while undergirding job creation and providing essential services.

He also said that despite the setbacks in the vaccine program, which according to Deloitte Access Economics means borders may not fully open until 2024, he was still confident in his numbers.

“I’m very focused on getting the private sector to drive the economy and that means encouraging and enabling businesses to invest and grow,” no matter the border situation.

Recalling the pictures of thousands of suddenly unemployed Australians streaming out of Centrelink offices as the economy all but ground to a halt in March, 2020, Mr Frydenberg noted that there was “huge fear in the community” as “we saw those very confronting ­images.”

“We had to do what needed to be done,” the Treasurer said.

“As (former prime minister) John Howard once said, ‘at times of national crisis there are no ideological constraints’.”

And the big lesson the Treasurer takes from the early days of the crisis is a simple one: “You never know what’s around the ­corner.

While steadfastly refusing to be drawn on specifics about what will be handed down when he addresses parliament on May 11, the Treasurer was clear that there would be major themes — jobs, services, and making the changes that have occurred in the economy work for the nation over the long term.

Mr Frydenberg said the government would be “capitalising on the opportunities” Australia has created by managing the health and economic sides of the pandemic so well, relative to other nations.

“I’m very proud of what more than 25 million Australians have achieved over the past year,” he said.

“We’re not out of it yet, but we can see the light at the end of the tunnel.”

Originally published as Treasurer Josh Frydenberg on Australia’s economic future