After the first recession in nearly thirty years, the Australian economy is roaring back. Bigger, stronger, and leading the world.
Today, unemployment fell for the seventh consecutive month to 5.1 per cent, smashing market expectations.
Participation was up. Underemployment was down. 115,000 new jobs were created, of which around 85 per cent were full-time jobs.
And of those 115,000 new jobs, around 60 per cent went to women. Today, there are more women in work than ever before.
We have seen 987,000 jobs created since May of last year. And since the end of JobKeeper, at the end of March, 84,000 new jobs have been created. You will remember our political opponents said the sky would fall in with the end of JobKeeper.
Well, 84,000 new jobs have been created since the end of JobKeeper. These job numbers follow other positive economic data that we've seen in recent weeks and recent months.
We saw Standard & Poor’s reaffirm Australia's AAA credit rating and Australia is now one of only nine countries in the world to have a AAA credit rating from the three leading credit rating agencies. We saw in the national account numbers for the March quarter, economic growth of 1.8 per cent, again beating market expectations.
What was particularly pleasing about those numbers was the strong private sector led recovery. With dwelling investment up, machinery and equipment up, farm GDP and output up. Indeed, after that March quarter national account numbers, we saw Australia ahead of any advanced economy in the world, see its economy bigger than it was going into the pandemic.
Australians know we are still in the middle of a once in a century pandemic. There is a long way to go. But the Australian economy is recovering strongly, indeed, the Reserve Bank Governor said today it is a ‘v’ shaped recovery.
What these numbers should do is give Australians confidence that there is light at the end of the tunnel. These numbers should give Australians confidence that the Morrison Government's economic plan is working; a plan that’s been laid out in successive budgets - lower taxes, investment incentives for business, skills programs and record spending on infrastructure. It is this economic plan that is delivering more jobs across Australia.
Thanks Treasurer. It's a pleasing set of numbers that we're seeing today but of course there's more to be done.
Still 1.1 million Australians on a primary payment. However, those numbers are coming down rapidly. Unemployment at 5.1 per cent, participation at 66.2, slightly off the high we saw in March, as well as underemployment dropping by 0.4 per cent, and we're seeing participation rising across the states, and of course extraordinary pleasing numbers with female employment currently participation and 61.7 per cent, well over 130,000 more Australians in work now then pre-pandemic and the pleasing thing is, there's still a lot of capacity in the economy, job advertisements are at a 12 year high, so there is still enormous opportunity for Australians to find work.
The Budget has doubled down on this of course, to $2.4 billion in terms of boosting apprenticeship commencements, and we've seen to date since that was announced, 143,000 new apprentices pleasingly across 58,000 organisations, which means small businesses are employing apprentices in their ones and twos, as they continue to grow. Good numbers Treasurer, still more to do, but the plan is working.
The RBA Governor has said the economy is moving from recovery to expansion and, with that comes concerns there will be workforce shortages in the regions particularly. What’s your Government going to be doing to address those workforce concerns in the regions, particularly when we don't have borders so migrants aren’t coming in?
A couple of things. The first thing to say is when we talk about the expansion in the Australian economy, ahead of any advanced economy, we now have more people in work than before this pandemic and our economy is bigger today than it was going into this pandemic.
That is very significant and that’s why the Reserve Bank Governor has talked about a ‘v’ shaped recovery.
As you know, in the budget we doubled down on skills programs. As Stuart has talked about, the apprenticeship programs have been very important.
We initially started with programs to keep existing apprentices in a job and we expanded that to provide up to a 50 per cent wage subsidy to generate new apprenticeships and that is working, helping to get people into work.
We've also put in place an additional 163,000 JobTrainer places in this Budget and those JobTrainer programs and places are often shorter in length, they’re right across the sectors, they can help get people into the hospitality sector where there is a need, they can help get them into other sectors where there is a need.
We’ve also reintroduced mutual obligations so that those people out of work have an obligation to go out there and seek those jobs. We are working with employers, we’re obviously putting in place those additional obligations for those who are out of work, as well as new training places.
Your question goes to this point, the fact of the matter is we are still in a pandemic and international borders are closed. The Budget had an assumption, not a policy decision, an assumption that those international borders would gradually reopen from the middle of next year.
While we’re going to start taking in cohorts of international students who meet a certain criteria, brought forward by state governments, ticked off by state Chief Medical Officers, bringing in skilled migrants is a harder proposition as long as those international borders are closed.
We are just going to have to skill up our people as best as we can and encourage them to take up those job opportunities where they are. But as Stuart said, we've seen very strong growth in job ads, more than 200,000 job ads across the country, so the jobs are there for people to take.
We’ve got unemployment back to pre-pandemic levels. As you say, job vacancies are at record levels. The RBA governor has said today there is this cost-cutting mindset amongst businesses. Do you think it is about time employers bit the bullet and started paying workers more wages to attract them and to start getting a bit more growth and more wages growth that the economy really needs to get into the next level of growth?
Our policies are designed to boost employment and to boost wages and one of the ways we are doing that is by seeing the unemployment rate come down so we get more competition for labour. As you know, I made a speech on our fiscal strategy ahead of the this year’s Budget, where I talked about NAIRU being between 4.5-5 per cent.
By driving that unemployment rate below 5 per cent which the Budget expected to be at the end of next year, and obviously these numbers are ahead of our Budget expectations, is that we will start to see more competition for labour. We're seeing that in some sectors.
For example, in Western Australia there is a very hot construction centre. Across the housing market, it is very hot and programs like HomeBuilder and State Government incentives have led to great demand for tradies on the tools.
That is adding to some of the wage pressures in those areas. As for the mindset of business, we want them to be confident and the best way for them to remain confident is for us to successfully suppress the virus. That is why blunt instruments like statewide lockdowns can really dent investment, dent confidence and cost jobs. That is why we are working with the State Governments.
And as you know, we announced our income support contingent on a Commonwealth hotspot because we want these approaches to be not only based on the best medical advice, but to be done in a way that can allow business, where possible, to keep operating in a COVID-safe way.
Another dent to public confidence is of course the vaccine. Some potentially devastating news today with ATAGI recommending restrictions of AstraZeneca for under 60s. What threat does that have on economic recovery, and indeed, the opening of borders next year?
Well Andrew, obviously the Health Minister, once he is in possession of that advice from ATAGI will stand up and address your comments and others and other questions in more detail. As you know, the vaccine rollout is continuing to gain pace, more than six million people have received the jab and more doses are being delivered.
And we have seen a focus on the vulnerable cohorts, like the over 70s, where more than 60 per cent of people have received the jab. Like the over 50s, where more than 40 per cent have received the jab. Like the aged care residents and the aged care workers. So that is what Greg Hunt is working on, but as for that specific advice and issue that you raise, he will have more to say later when he is in possession of that advice.
Treasurer, how does changing vaccine advice impact the economy, essentially is what Andrew is asking?
How does vaccine advice affect the economy?
Obviously our success as an economy to keep the momentum going will depend on our ability to suppress the virus. And that means following the health restrictions, but it also means rolling out the vaccine and that is what we are seeking to do as more supply becomes available. And I was pleased in Victoria to see less vaccine hesitancy, more people willing to take the jab, I would like to see that replicated more across the country. But as you know, the numbers have been increasing quite significantly with the vaccine rollout.
The two biggest shots to the vaccine rollout have been advised by ATAGI. Isn't it time for cabinet ministers like yourself to say there are other things that you need to take into account beyond whether there are zero cases in Australia. We are in the middle of a global pandemic, lockdowns are destroying lives, shouldn't that come into the equation when you have got one workhorse vaccine?
We have got more than one vaccine, as you know. We’ve got the Pfizer vaccine, we’ve got the AstraZeneca vaccine. We are seeking access to other supplies. I will let Greg talk to that in more detail later today.
The RBA is seeing a bit of a hesitancy in some businesses, that perhaps they’re waiting until the border opens to see if they can get cheaper migrant workers back in rather than employing more expensive Australians. Would you like to see them not wait, would like to see them employ Australians even if that means paying them more?
My message to business is very clear, employ Australians, employ the workers today that you need, be confident about your future, invest, grow, hire, innovate because that is what you have done so well in the past.
What we did see in the March quarter was machinery and equipment investment up by more than 10 per cent and that was obviously off the back of the immediate expensing provisions and loss carry back provisions that we have announced but also businesses having more confidence in their future as those restrictions have eased.
Normally you see a capital strike during crises such as this. We haven't seen that, we have actually seen business investment go up and government incentives have played a role there. But I have been meeting regularly with business groups and my message to them is there is good reason to be confident about your future here in Australia.
Can I add Treasurer? Migrant workers are not more expensive. When anyone works in Australia they are covered by the same industrial framework and the same pay and conditions and award structures, if indeed they are following the award.
So it is a misnomer to think that business would be waiting for cheaper migrant labour, because it's not. The labour is ostensibly priced in exactly the same way in exactly the same [inaudible] and the Treasurer is spot on. We want Australians now to join the Team Australian effort and employ an Australian. 58,000 businesses are taking the shot to get 140,000 apprentices, up to this point, we're doubling down on 170,000 apprentices in the Budget.
We will pay for 50 per cent of their first year salary, the federal government will stump up with all Australian businesses to help them, not just with boosting Australian apprenticeships through the boosting apprenticeship commencements program, but also through JobTrainer, so my advice, my strong call to all businesses is to employ an Australian, there's never been a better time than now to employ an Australian, when the federal government will partner with you in terms of training.
Treasurer, you’ve raised concerns about the blunt instrument of a statewide lockdown but what we had from the New South Wales Premier, Gladys Berejiklian this morning saying that anyone in Eastern Sydney should basically avoid going anywhere they don't have to, is almost a lockdown via stealth, yet these businesses are never going to have access to the kind of support they might have got if there was an official lockdown.
What impact are you concerned that these kinds of measures will have on the confidence of the timid recovery that is obviously still very prone to shocks like these semi-lockdowns?
Clare, Gladys Berejiklian and New South Wales has been the gold standard when it comes to responding to the virus. They have avoided the state wide lockdowns we have seen, for example, in Victoria where there have been new cases and indeed in the Northern Beaches there was a significant outbreak there with more cases than we saw in parts of Victoria. Yet they didn't go through a statewide lockdown.
So I have confidence in the New South Wales Government to get the balance right. I know that they want to avoid broader lockdowns where possible. I know that they are working to address the issues in the areas where the challenges are but I have a lot of confidence they will get it right. But when you point to lockdowns more broadly, yes they do dent confidence. It is a reminder too that we are in the middle of a pandemic and when we are in the middle of a pandemic, the challenge to our health also poses a challenge to the economy.
Treasurer, just in light of these strong employment figures and Doctor Lowe’s comments essentially encouraging businesses to give bigger pay rises, do you think the minimum wage rise we saw yesterday is affordable and sustainable for businesses?
We welcome the increase of the minimum wage of 2.5 per cent. As you know the role of the Federal Government was not to put forward a particular quantum for that minimum wage increase. It was to provide an insight into the economic recovery, the Fair Work Commission made it very clear, John, in their statement that the economy was recovering more quickly than was expected.
I note, you saw the AIG Group put in a submission for a 1.1 per cent increase but yet you saw the ACTU for a 3.5 per cent increase and that number of 2.5 per cent was in the middle. We welcome the increase, it means a real wage increase for more than two million Australian workers, bearing in mind that you have got just over 20 per cent of workers that have been on the award across the broader economy.
But we welcome that increase and obviously it comes on top of the tax cuts we have provided which have helped boost household disposable income through this crisis.
I imagine you'd have a role in the development of agricultural visa, where do you see with that and how long do you think it will be before you have it up and running?
It'll be a number of weeks. The Prime Minister announced it as part of the Free Trade Agreement announcement in London with Boris that we would have an agricultural visa, and there will be more on that in coming weeks and months as we look through that and work through them. So I suspect you will see an announcement from government as a whole in the coming weeks and months.
As you are aware, this morning Senator Hanson moved an amendment that appeared on the surface to perhaps enrich herself more than the general public. She claims that was a misdraft, was the Government ever considering supporting that amendment and are you concerned about senators using amendments to enrich themselves?
Well firstly I think it was a Labor slur, I thought it was outrageous, their attacks on Pauline Hanson and they should have a good look at themselves. The fact is, the Labor Party have fought these reforms to super tooth and nail. Now these reforms as I understand have passed the Senate, they’re going to come back to the House.
But if they successfully pass the House, which is the Government's intention, these reforms which I announced in last year's Budget will see savings to consumers of more than $17 billion. Let's not forget that Australians pay more than $30 billion in superannuation fees and charges every year.
That is more than the household electricity bills yet many Australians don't know the amount that they have in super or indeed it is their money to access, as we gave them access during the COVID crisis.
And these reforms are really significant, these reforms are about preventing duplicate accounts, that was one of the recommendations out of the Productivity Commission. As you know, when you move professions or move roles, particularly if you’re a young worker just entering the workforce, you may be somewhere for only a couple of years and then move somewhere else, you end up with multiple superannuation accounts, often low balance accounts and the fees from the super funds eat away at your balances.
So this is a welcome reform, it’s a recommendation by the Productivity Commission, no surprise the Labor Party, you know, wasn’t there to support it.
Other important reforms include holding super funds to account for their performance, or indeed for their underperformance and penalties to apply there and that’s going to bring more transparency and to give every Australian the opportunity to compare the performance of their super fund, both in terms of fees but also returns against other super funds.
Many Australians would ask the question, why has it taken this long? Well the reality is it’s pretty hard to get some of these reforms through the Parliament, as we’ve seen in the Senate, because there are so many vested interests that are fighting hard against more transparency, more accountability and lower fees.
And these aren't the first, or indeed the last reforms that we’re making to superannuation, we’ve banned exit fees, we’ve capped fees on low balance accounts, we’ve consolidated inactive accounts, we’ve ensured that for under 25s, insurance is opt in as well as the reforms before Parliament today.
So these are really significant reforms, they have been opposed tooth and nail by a Labor Party that doesn't want to reduce people’s superannuation fees, we’ve looked at each of the amendments that Senator Hanson has moved and supported those that we think should be supported.
We do that with regard to the cross bench, we don’t have the numbers in the cross bench, we continue to negotiate with them as we’ve done constructively, in this case, with One Nation and with Centre Alliance, for one reason, that the outcome of this legislation, if it passes the House of Representatives today will be of significant benefit to Australian consumers with superannuation. Thank you.