17 December 2020

SUBJECT: Mid-Year Economic Update.
DANICA DE GIORGIO, HOST: Today's MYEFO update is expected to show Australia's economic position has improved in the ten weeks since the Federal Budget was handed down. Joining me live is Shadow Assistant Treasurer Stephen Jones. Stephen, is it fair to say that the economy is bouncing back quicker than expected?
STEPHEN JONES, SHADOW ASSISTANT TREASURER: Look I certainly hope it is. We've always said that the economic outcome is going to be closely tied to the health outcome. And with the health situation improving in every state and territory around the country, that bodes well for the economy. I've got to say though, this afternoon the last thing Australians want to see is Scott Morrison or Josh Frydenberg patting themselves on the back saying, job done. Because we know that unemployment is going to go up. We know that more than a million Australians will still be looking for work. They’ll be losing their jobs, that's going to go up. We know that businesses are going to be closing their doors in record numbers. So this is no time for the Government to be patting themselves on the back. It is a time for the Government to be saying this is what we intend to do to support those Australians who are looking for a job, those businesses that are closing their doors. And a particular group of Australians who are out of work that I want to shout out to and that is those older workers. Before we went into this recession one in five workers between the age of 55 and 65 were already unemployed. That's 20 percent, more than double the national rate. Workers over the age of 55, they’re going to find it even harder to get back into the workforce. So we'll be looking very closely what the Government's got not just to boost the economy nationally, but how we're going to be helping those workers that are doing it even harder this Christmas. 
DI GIORGIO: The unemployment forecast is also due today. But according to new data released by seek today, the jobs market is actually in a far better condition, Stephen Jones, than initially thought.
JONES: Look, the forecast was very, very dire going back a few months. But even if it comes into the low end of the range, unemployment is still going up. And we know that there are a lot of workers who aren't showing up on those unemployment figures because they’ve either withdrawn from the labour market or the being supported by wage subsidies, which will cut out in March. So we know those numbers are going to go up. I hope that we get some good figures this afternoon from the Treasurer. I hope the economy is coming back and there is some early signs. But I just want to repeat, this is no time for the Government to be patting themselves on the back and say job done, when unemployment is going up and over 20 percent of workers over the age of 55 were out of work before the recession and are going to find it even harder to find a job after the after this Christmas. So let's double down and get the job going of getting those people back into work. Let's not be patting ourselves on the back and prematurely celebrating when there are so many Australians who are still out of work.
DI GIORGIO: In terms of Australia's economic recovery, how big of a role has iron all played in it?
JONES: Yeah, the Government's got very lucky here. Certainly taken a whack with the trade bans from China on coal and agricultural products. But we've been lucky with iron ore because our biggest competitor is not producing iron ore at anywhere near its historic levels, and I'm talking about Brazil here. That will change. That will change over the next two years. But at the moment we're in a lucky spot. And it means the Government's revenue is going to be higher than it anticipated, than anyone anticipated. But with the fragility of the relationship with China, with no sign that that's going to improve in the near term, and with competition about to come back online from Brazil when they ramp up their production, this is no time for complacency. Welcome the fact that iron ore is doing well. That's great news. But we're not going to be in this sweet spot forever. And that's why we need a long-term plan about how we diversify our trade and how we ensure that we are not just a quarry, but we're ensuring that we've got a lot of downstream manufacturing capacity. We should be adding value to the mineral resources that we dig up and ship out. We've got a lot of capacity in that area that is untapped at the moment.
DI GIORGIO: How long, though, do you think it will take to diversify our markets into new areas?
JONES: It’s going to take a long while. A lot of that'll involve trade agreements with other countries. Nobody is going to be able to replace overnight the size of the Chinese market. Just to put that in context, about 80 percent of the world's iron ore that is on a ship at any point in time is going from either Australia or Brazil to China. So they are a massive market. They produce over 50 percent of the world's steel. So that's a massive market. It's not like there's another country out there that is going to fill that slack overnight. We've got to diversify our economic base away from being just a quarry and ensuring that we've got more markets, more businesses more industries making stuff in Australia again. And if I'm critical of the Government on anything, this is a big one. They chased manufacturing out of the country, they chased the car industry out of the country. Now, we find ourselves vulnerable not only with our export markets but with our supply lines. I think it's a time for us to be rediscovering the capacity of Australia as a country which makes stuff. We’ve got the skills. It's only the will that’s lacking and a big shift from Government is needed in this area.