CHRIS KENNY:
Thanks for joining us Josh.
JOSH FRYDENBERG:
Nice to be with you Chris.
CHRIS KENNY:
Tell me with the deficit for last year cut to a mere $10 billion – I can’t believe we talk in those terms now, a mere $10 billion – there must be a very, very high chance that in this current year, you could end up with a balanced budget.
JOSH FRYDENBERG:
Look, we’re still on track to reach a balanced budget by 2019-2020. As you know, we’ll reconcile the new spending and savings measures in our Mid-Year Economic Fiscal Outlook, which comes out around December after the final National Accounts.
But the key message to your listeners is that the Australian economy is strong, it has good momentum. In recent weeks we’ve seen our GDP growth numbers being the fastest since the height of the mining boom in 2012 and greater than any G7 country.
We’ve seen Standard and Poor’s, one of the world’s leading rating agencies, reaffirm our AAA credit rating and today, the Finance Minister and I have, as you say, released the Final Budget Outcome, which is $19.3 billion less than when the Budget was delivered in May 2017.
CHRIS KENNY:
Yeah, now you mentioned MYEFO, that’ll come out in late December and then of course there will be another fiscal update on the eve of the election, whenever that’s called. So there’s a couple of big financial audits, if you like, to come before the election.
I know you’re going to play coy here but all the economists tell me that what we’re seeing from last year and what we’ve seen so far this year is that you just might be able to pull out a rabbit from the hat pre-election and say this year you are actually going to balance the Budget?
JOSH FRYDENBERG:
Well look, lots of commentators like yourself, Chris will speculate as to what will or will not be in those budget numbers and updated forecasts.
But the reality is we are seeing more people in jobs than ever before and we’ve created over 350,000 jobs over the ‘17-18 year. More women are in the workforce, more seniors are in the workforce, more young people are in the workforce.
And when more people come into the workforce they’re obviously paying more tax on the income side but they’re also increasing their consumption and that is making companies more profitable.
So we’ve seen improvements both on the receipts side of the ledger but we’ve also made savings on the spending side because less people have needed welfare support because more people are in jobs.
CHRIS KENNY:
Well the point being though, of course, whether you balance the Budget this year, or as predicted, the following year - that’s only the start of the process isn’t it? Because you’ve taken a lot longer to get back to that position than was promised before you came to government.
We’ve seen our net debt blow out substantially and then, only once you’ve got that balanced budget can you start to play out that long arduous process of trying to actually repay some debt.
JOSH FRYDENBERG:
Well let’s not forget what we inherited. The Labor Party left us with spending growth, which was around double what it is today and now we’ve got our spending growth down to the lowest level in 50 years.
We’ve also got the number of people on welfare, who are of working age, down to the lowest level in 25 years, which is very significant and we are on track to come back to balance, as I said, in ‘19-20.
So we have had to do a big budget repair job that involved a lot of tough fiscal decisions, but that’s why people rate the Coalition – the Liberal and National Parties – as much better economic managers than our political opponent because Bill Shorten just wants to tax and spend when it comes to his budget management and that’s a recipe for less jobs and less growth.
CHRIS KENNY:
Of course John Howard, at the end of his time as Prime Minister, with Peter Costello as Treasurer, left the place with no net debt, he actually [inaudible] now given the amount of debt that’s racked up now and the can you envisage in your lifetime in politics ever getting back to that zero net debt position? It’s just not- it’s just not foreseeable is it?
JOSH FRYDENBERG:
No, I would disagree with that. I think we’ve got good fiscal discipline and a growing economy which is by the way the answer to reducing debt. It’s about ensuring that more people are in jobs, that businesses are more productive and that the economy is growing to meet the needs of the community, particularly around essential services.
I think we can, over time, reduce our debt position and we’re starting to do that. And we have legislated $50 billion worth of savings. At the same time, we’ve also legislated lower tax rates for both personal household income as well as for small and medium sized enterprises.
So we are driving more jobs and we’ve seen that come through in the figures and that’s helped produce the better Budget Outcome we announced today.
CHRIS KENNY:
I’m speaking with the Federal Treasurer, Josh Frydenberg. And Josh another announcement in your portfolio area today was the publication of the review by ASIC looking at how banks and other financial institutions have actually been laggards when it comes to picking up breaches and making recompense with consumers who might’ve been dudded.
It’s been taking them five years between any breaches being picked up and any resolution being delivered for consumers. You’ve spoken about this before. What can you do to make sure these financial institutions, particularly the big banks, actually act on these things much more quickly?
JOSH FRYDENBERG:
Well obviously that is something that now ASIC, as the regulator in this space is absolutely focused on because the time it took for the major banks to lodge a report with ASIC was too long. It was around 150 days and as you say for other financial institutions it was much longer and there was too much discretion on the part of these institutions as to what they lodged with ASIC and when they did so.
And we’re talking about these breaches that were very significant and they caused financial losses to consumers of around $500 million and there is more remediation that is going to need to be provided. So, obviously ASIC needs to work hard at this.
I know the new Head of ASIC, James Shipton is very focused on it and he’s been out there today saying that more will be done.
CHRIS KENNY:
Just finally, on a day like today when you’re out there trying to talk about good strong economic news, this is the main game for the Government of course. It’s got to be your number one, two and three priority to talk about the economy.
You must’ve been pretty disappointed that your own Prime Minister Scott Morrison has been out there dominating the headlines with this distraction about Australia Day?
JOSH FRYDENBERG:
Not at all. I think he was making a very important point Chris, which is that those councils that do not allow citizenship ceremonies to occur, as they should, on Australia Day, will be stripped of that right. That was the major point he was making.
CHRIS KENNY:
Well the point of course that’s created all the consternation is his suggestion that we should have a separate national day for Indigenous Australians. Surely you don’t support that divisive idea?
JOSH FRYDENBERG:
I strongly support Australia Day staying where it is.
CHRIS KENNY:
And it’s supposed to be for everybody. Not a separate day for Indigenous Australians.
JOSH FRYDENBERG:
Well I think it is an important point to make, which is that our first Australians, our Indigenous Australians, have achieved an enormous amount over time and we need to celebrate that. But I don’t support changing Australia Day because some people call it invasion day.
Rather, I say that celebrating our Indigenous Australians, our first Australians and celebrating modern Australia are not mutually exclusive goals and objectives and we should all be celebrating those two objectives in a way that contributes to the community’s harmony and prosperity.
CHRIS KENNY:
Well thanks for joining us Josh Frydenberg. I know you’ve got a busy schedule, you need to be somewhere. You don’t have to worry about the Grand Final this year though of course – being a Carlton supporter – I presume you’ll be barracking for anyone but Collingwood?
JOSH FRYDENBERG:
Well actually, wrong on that count Chris. I’m, as you know, a proud Victorian and while you know I grew up being taught at home that Collingwood was the arch enemies of my beloved Carlton, I am prepared to put that history aside in favour of a Victorian team.
CHRIS KENNY:
This is what politics does to football supporters. Thanks very much for joining us.
JOSH FRYDENBERG:
Good to be with you.
CHRIS KENNY:
Josh Frydenberg, the Federal Treasurer.