8 February 2019
Transcript - #2019024, 2019

Doorstop interview, Parliament House

Subjects: Population; Designated Area Migration Agreement; immigration; cyber security; Australian economy; Tim Wilson; and Labor’s retiree tax.

JOSH FRYDENBERG:

Good afternoon. It’s a great pleasure to be here with my good friends and colleagues, Alan Tudge and David Coleman. The three of us have just been with state Treasurers at an important meeting to discuss how Australia can better manage the changes that are occurring in population. Australia’s population is growing faster than it was in the 1980s and 90s; in fact we have the strongest rate of population growth for some time and the fifth fastest rate in the OECD. This is putting pressure on our cities because over two thirds of immigrants are  now going to the major cities, in particular Melbourne and Sydney and south-east Queensland. And, every decision a treasurer takes, whether it’s regarding road infrastructure, on a state level, public transport, and whether it’s on health, education or other, vital essential services, it’s impacted upon forecasts as to population. Population, demographics are destiny, and they have a major impact on how treasures and governments manage the economy. Out of today’s very constructive discussion, we agreed to set up two working groups to begin work immediately, those working groups will look at data sharing, as well as regional aspects of the population debate. When it comes to data sharing it’s about infrastructure, it’s about skills, it’s about population trends and getting greater cooperation and coordination between state and federal governments. When talking about regional analysis, we need to know where are the jobs open and where workers are needed, but also about education, particularly international students, encouraging them also to be educated in some of our regional universities which are, of course, of very high quality. So, today was a very constructive discussion that followed a meeting of the leaders late last year, where they agreed to set up a framework that would be endorsed by COAG and around managing population change. Alan.

ALAN TUDGE:

Thanks very much, Treasurer and David. We had a great discussion today and we pointed out the fact that Australia is growing very rapidly, at about 1.6 per cent per annum which is fast in historical terms and also quite rapid compared to most other countries. Almost three times the pace of the OECD average right now. But, the particular issue is that nearly all the growth is into Melbourne, Sydney and south east Queensland, while we have quite slow growth elsewhere in the country. And, that’s then causing enormous pressures on those three big capitals while there are other areas, such as Adelaide, Tasmania and the Northern Territory who actually want more people. Indeed, even in regional Australia there’s an estimated 47,000 jobs which are vacant today, and so we need to be thinking about that as well and how can we encourage more people to take the jobs which are there and available today. The other point that I’ll make is that one of the key problems with our federation is that we control the primary population growth lever, being the migration settings, while the states and territories are largely responsible for the infrastructure and the service delivery. And what today’s about and what a new framework is about is trying to marry those two things more closely together so that the population, so that the infrastructure and the service delivery will keep up with the population growth, and the population doesn’t run ahead of infrastructure built. So we had a very good discussion, we talked about some of the principles which should underpin the development of this framework. As the Treasurer said, we will be doing further work on this to take to the COAG leaders meeting in the middle of the year.

DAVID COLEMAN:

Thanks Treasurer, thanks Alan. Australia’s immigration program has been a fundamental backbone of this country for generations. We are the most successful migration nation in the world, as the PM says. One in three small businesses in Australia were started by migrants which is an interesting statistic, it really shows how important immigration is to our economy. But we can do a better job of matching our immigration program and the distribution of people in our immigration program to the regional needs, because the needs for immigration in Sydney and Melbourne are very different to what they are in Tasmania, or in outback Queensland or wherever the case may be around the nation.

To that end, today we’ve announced three specific initiatives to help to promote regional migration in Australia with an investment of some $19 million over the forward estimates. The first is further investment in resources for Designated Area Migration Agreements (DAMAs). These enable particular regions within Australia to negotiate conditions for immigration that suit their area. The Northern Territory has had one for five years, we’ve recently renewed that and we’ll be closing one very shortly on the Great South Coast in Victoria as well. These are really important these DAMAs and we’re talking at the moment to Orana in Western NSW, to the Cairns region and a number of other places, and I’ve directed the Department to send officers out to those locations to help to negotiate those important regional agreements. We’re also putting more resources into the processing of regional visas, so what that means is – if you apply for a regional visa, the time it takes to process that will be reduced, which is a good thing that encourages people to migrate to regional areas. And finally we’ve launched an online regional migration hub which is a website that brings together all the different elements of regional migration programs, it’s good for employers to understand what the opportunities are and for people who are looking to migrate to regional Australia. So, that’s a part of what we’re doing overall to help to address this important question of population and the way we distribute our immigration numbers around the nation, and it was a really good and constructive discussion with the states today.

QUESTION:

Mr Coleman, who will have responsibility for the DAMAs, will it be local councils and if so, how will they have powers to restrict the population from moving to another area, for example?

DAVID COLEMAN:

With the Northern Territory DAMA for instance, it’s negotiated between the Northern Territory and the Federal Government and the visa applies for work in that area. So you can’t just go and work somewhere else, it’s actually linked to that specific area. So that’s how…

QUESTION:

So, if they were to move to another area for another job they would have their visa cancelled.

DAVID COLEMAN:

They would have to seek another visa and they wouldn’t have that visa and it would be unlikely  to be frank that they would obtain it, and they wouldn’t be able to obtain permanent residency if they did that. So it’s about encouraging people into those areas that have had persistent problems in attracting people. In the Warrnambool region for instance, there is a persistent issue in the meat processing industry, and this is an issue that occurs in other parts of Australia too, and that’s what DAMAs are all about.

QUESTION:

Treasurer, the RBA today downgraded economic forecasts, the biggest downgrade since the GFC. Does that put your surpluses at risk and does it highlight the difficulties in lowering population growth?

JOSH FRYDENBERG:

Well, in terms of where the economy it is today is in a good, healthy position and it is growing. The September National Accounts showed that GDP growth is at 2.8 per cent and we’re going to continue to see strong growth over the coming years. What the Governor did refer to in his speech at the Press Club just a few days ago was some challenging global headwinds, which is exactly what the Prime Minister and I have been saying for some time, as well. Namely the trade tensions, particularly between the US and China, the global instability, these are issues that can have an impact, here at home. The Governor of the Reserve Bank has made it very, very clear that the Australian labour market is strong and he is expecting wage growth to continue. He has pointed to our unemployment rate, that it has come down to 5 per cent, the lowest level in seven years, and will come down further. The fundamentals of the Australian economy is strong. So, there is no complacency. We are going to deliver a budget surplus, the first in more than a decade when we release the budget on 2 April. We cannot be complacent about the Australian economy.

QUESTION:

Treasurer, if the migrant intake is cut, does that then have a negative impact on economic growth and what does that mean for growth over the future if that’s actually the plan, to cut that permanent intake by 30,000 places?

JOSH FRYDENBERG:

Well, our plan is to continue to grow the economy and to continue to have a very strong, robust and welcoming immigration system. Immigration has underpinned the success and the diversity of the Australian community and our nation for more than a century. The fact that so many people have a parent born oversees or are indeed, also themselves born overseas, and the benefits of migration for many, in particular, is the fact that the average age of a migrant is well below the average age of the resident population. So, immigration is actually helping us mitigate some of the challenges from an ageing population. So, immigration is critical and we will continue to be strong here in Australia. And as the Prime Minister has pointed to, the permanent migration number of 190,000 is a cap and the numbers have been running, for a couple of years, below that at around 160,000. David, do you want to add to that?

DAVID COLEMAN: 

As the Treasurer said, immigration is so fundamental to our economic growth. Seventy per cent of migrants who come via our permanent immigration program are skilled migrants. These people add a lot of value to businesses, they are often the sort of people who start businesses, they bring skills that can help grow Australia businesses and employ more Australians. So it’s a really fundamental point that our program is based overwhelmingly on skilled immigration – bringing those skills to Australia to help Australian businesses grow so Australian businesses can help to employ more Australians. And that will continue to be the case, we have a number of initiatives focused on growing the skilled components of the program, and as the Treasurer said economically immigrants who are highly skilled and younger tend to be very, very valuable because they enter into the economy, they work for a lengthy period of time and they add a lot of value to our nation.

ALAN TUDGE:

I just want to make one point too about the growth rate. We’re growing at 1.6 per cent per annum, if there was an even distribution of that growth, we wouldn’t have some of the challenges that we do in our big capital cities at the moment. And so, what we were discussing today and indeed, what some of the smaller states and the regions are crying out for is more of the growth to go to the smaller cities and some of the regions. And David has already announced some of the initiatives today but we’re also working on other initiatives to try to encourage that further growth. It might be looking at the international student market, it could be other incentives for migrants to go to those smaller cities in regional areas, some are other economic development opportunities. So, these are all of the things that we are looking at. The centre point is that immigration has been very good for our economy, both on a GDP basis but also a GDP per capita basis. About 20 per cent of our GDP per capita over the last three decades has been driven by migration, so it’s very important.

QUESTION:

Does the Government want to reduce that 1.6 per cent? And can you, or the Treasurer, offer some clarity about whether this 160,000 intake will be maintained or will it rise or fall?

DAVID COLEMAN:

The PM has already said publicly that you would expect the 190,000 figure which is currently the cap to come down, he’s stated that publicly. We typically announced migration plan numbers each year in the budget and we’ll have more to say at that time. As the Treasurer said although the cap this year, or the year just past is 190,000, the actual intake is actually 162,000, it’s actually running about 30,000 below the cap and that has been in an environment of strong economic growth. So the PM has made it clear that the number will be coming down somewhat, the cap. We’ve also made clear that we’re also very focused on the issue of regional distribution, because we know that in Sydney and Melbourne and South East Queensland, those congestion issues are very real, they’re very real. And we also know that in so many parts of Australia, local and state governments are literally crying out for more people. So the distribution can be better aligned and that’s what it’s all about.

JOSH FRYDENBERG:

The bottom line, Ben, is that immigration is a vitally important part of our national story, economically and culturally. At the same time, we need to as a country, plan better for the future. In 2002, the Intergenerational Report said that Australia would reach 25 million by 2040. We met that number last year. And the impact of getting that number wrong plays out in so many other ways. So, we need the right infrastructure, we need the right skill sets, we need the right services in place to ensure that Australians get the right outcomes.

QUESTION:

What do you make of the Productivity Commission’s past suggestion that Australia should even increase and are more focused on skilled immigrants, because they are the ones delivering to the economy, and focus less on family reunions and such because they are a bigger burden on the economy. Is there a merit in that approach having more skilled you can have less people.

DAVID COLEMAN:

We already have about 70 per cent of our program as skilled; it’s one of the highest rates of skilled migration anywhere in the world. If you look around, that is the case. We have an important obligation to enable Australian families to stay together, to enable spouses from overseas to join Australians, and we certainly
won’t be walking away from that. It’s a significant percentage already at 70 per cent, obviously we’re not here today to announce the migration plan numbers, and we’ll be having more to say on that in the future.

QUESTION:

What do you say about the cyber security breach?

JOSH FRYDENBERG:

You’re talking about the statement that was put out by the President of the Senate and the Speaker of the House of Representatives. The statement says that there is no data breach, but obviously, I will leave it to them to have anything further to say.

QUESTION:

Did it affect today’s meeting at all? Surely, what is your view on this considering that it is sophisticated and the last time this happened China was involved.

JOSH FRYDENBERG:

We didn’t notice any changes in today’s meeting.

ALAN TUDGE:

There are no devices in the Cabinet Room.

JOSH FRYDENBERG:

But, in terms of cyber security, this is an absolutely vital area of which the Government is investing unprecedented amounts of resources and is absolutely focused on doing everything possible to ensure that not only is the Government’s information is protected but also that the community has access to the best possible cyber awareness and protections.

QUESTION:

Treasurer, just on an issue that impacts a lot of Australians. Cadbury has reduced the size of their chocolate box by 10 per cent, but only dropped the price by 4 per cent. Are you upset by this?

JOSH FRYDENBERG:

Shame on them.

ALAN TUDGE:

That sounds un-Australian.

QUESTION:

Treasurer, Tim Wilson has investments in the company before an inquiry. He has co-ordinated protests with that company before the inquiry. Today, we have revealed he is uses part of the Liberal fundraising platform  and he has misused the Parliament’s coat of arms as part of Liberal Party advertising. Does he still have your support and will you refer him to the Parliamentary privileges committee just to absolve the appearance of any conflict of interest?

JOSH FRYDENBERG:

Yes and no. He has my support, I won’t be referring him and the point is that Tim Wilson has done one thing; he has got under the nose of Chris Bowen. This is, again, the Labor Party bringing up a distraction to take away the attention from what is the main issue. And the main issue is their policy around franking credits, their new retirees tax which will hit 900,000 individuals and 200,000 self-managed superannuation funds. These are people who have saved for their retirement and done nothing wrong except taken personal responsibility for their own retirement. And, the Labor Party is coming after them and they will deeply regret that decision. Chris Bowen  has said those million plus retirees out there, if you don’t like our policy, vote against us. And, I can tell you, they will.

QUESTION:

Why doesn’t Tim Wilson have a conflict of interest?

JOSH FRYDENBERG:

Well, Tim Wilson has done everything in accordance with the rules. He doesn’t have a pecuniary interest in the issue and he has disclosed what needs to be disclosed in accordance with the rules. But, what Tim Wilson has done, has effectively provided a voice and an opportunity for people to heard on this issue of Labor’s retirees tax. Chris Bowen, arrogantly dismissing over a million retirees. I haven’t heard another Labor member echo his words, because they know it was a mistake and the Labor Party has dismissed the deep concerns of over one million Australians who are going to have their retirement savings smashed by this Labor tax grab.