KARL STEFANOVIC:
Treasurer, good morning. Thanks for your time this morning.
JOSH FRYDENBERG:
Good morning, Karl.
KARL STEFANOVIC:
Look, it was a big night last night. Are you Treasurer of the decade after tripling debt over 10 years?
JOSH FRYDENBERG:
Well, what we are delivering is one of the strongest economic recoveries anywhere in the world, Karl – faster and stronger than the United States, than the United Kingdom, Canada, France, Germany, Italy, and Japan. We're on the cusp of a 50‑year low for the unemployment rate. That's not just numbers on the page; that's actually people being able to find work and, indeed, the biggest issue now for businesses is to get more workers and the job shortages that they're finding. So, there is a very strong story to tell with wages strengthening, with unemployment lower, with growth higher and, of course, we've also banked the dividend of that stronger economy with the bottom line improving by more than $100 billion.
KARL STEFANOVIC:
Clearly, though, inflation hangs heavily over the country. How is anything in the Budget actually going to quantifiably decrease inflation?
JOSH FRYDENBERG:
Well, the cut to the fuel excise Treasury says will actually decrease inflation by a quarter of a percentage point. And as you know, the number one topic around the kitchen tables of Australia right now is cost of living. And fuel prices being at over $2 a litre is one of those top pressures. And so that's why we've taken the decision – just like Ireland, just like New Zealand, just like France, just like Germany and other countries have done – to actually cut those petrol taxes so that the cost of living relief can be provided to Australians at a time when they need it most. So we've heard their concerns. We've responded and acted in the Budget. But we've done so in a temporary and a targeted and a responsible way. And we've also laid out our plan for future jobs and growth across the economy – more investment in our regions, more investment in skills. We've been backing small business with two very significant tax measures. And, of course, we continue to guarantee the essential services. And we had some very powerful stories last night about more investment in women's safety, listing more drugs on the PBS, for example, to deal with breast cancer as well as a whole lot of other measures.
KARL STEFANOVIC:
I think that's all incredibly positive. You're saying that cutting the fuel excise will actually reduce inflation. But you can't guarantee those savings will actually get passed on. You don't have any control over international supply and costs. How can you guarantee families will even notice this difference?
JOSH FRYDENBERG:
Because fuel excise will be cut by more than 22 cents a litre. That will be passed on to motorists. The cop on the beat is the ACCC. They've made a very clear statement last night that if retailers in the fuel space are engaging in misleading and deceptive conduct then they can face contraventions of up to $10 million. And we know, that, you know, fuel excise is a big part of the cost of petrol. You're also right, though, that international factors are at play here. It's a volatile situation. But this cut to the fuel excise will reduce petrol prices by more than 22 cents.
KARL STEFANOVIC:
Treasurer, you're also giving workers this $1,500 tax cut this year and abolishing it, those, next year. Doesn't that mean you're actually increasing tax for 10 million Australians?
JOSH FRYDENBERG:
No, we're not. We're actually cutting taxes, and that's what a Coalition Government is elected to do. And some $40 billion of tax relief has been provided, Karl, since the start of the pandemic. The low and middle‑income tax offset was originally designed to be temporary, it was a fiscal stimulus measure. So we announced it in last year's Budget and it was available to people from the 1st of July this year. We've added to that an extra $420 recognising the cost of living pressures. So if you are earning 50, 60, 70, 80, or $90,000 you will get $1,500 in your pocket from the 1st of July or when you put in your tax return. If you're a couple who earns two incomes, you'll get $3,000. That's a very significant boost at a time when families do need that extra support.
KARL STEFANOVIC:
Okay. You've had years to actually work on structural reform to tax and make big decisions like the Howard Government did with the GST. There's nothing in this Budget. You've squibbed it – not just six months but beyond. Not just election but beyond. Why haven't you done that?
JOSH FRYDENBERG:
Well, to take issue with you there, Karl, we've actually legislated the abolition of a whole tax bracket – 37 cents in the dollar. So 95 per cent of Australian taxpayers will be paying no more than 30 cents in the dollar. That's real structural reform. It was stage 3 of a plan that we articulated, that we took to the Australian people, that they voted on at the last election, and now we have legislated. And Labor was fighting us every step of the way. So that is, to answer your question, real, significant structural reform to our tax system. It becomes fairer, it becomes simpler. It will reward aspiration, reward hard work, and it delivers more money into people's pockets because that is what a Liberal and National coalition does.
KARL STEFANOVIC:
Okay. What happens in six months beyond where this Budget is planned, even post‑election? You say wages will naturally go up. Are you saying this morning, that under a Coalition Government you're guaranteeing, wages will go up?
JOSH FRYDENBERG:
Well, what Treasury printed last night in the Budget papers was that elevated inflation rate this year driven by those international factors – higher food, higher fuel prices, obviously accelerated by what's happening in the Ukraine – but then inflation would start to moderate and wages as that tight labour market saw employers competing for employees would start to see a lift in wages growth. That is a good sign. In fact, in last year's –
KARL STEFANOVIC:
But you can't guarantee it?
JOSH FRYDENBERG:
Well, what I can tell you is that we're doing everything to put upward pressure on wages. And we're also putting in place a long‑term economic plan to create more jobs with further investments in our regions, further investments in infrastructure, further investments in small business. I mean, last night, Karl, you know, more than 3 million small businesses will now get further tax incentives to train their workers and to invest in digital technology, whether it's new computers or hardware and software. So that's a really good announcement that will help strengthen the economy.
KARL STEFANOVIC:
I'm just not sure that there was any relief in terms of inflationary pressures on small businesses that we saw last night. You really did have a swagger about you last night, Treasurer. The country in the numbers is going well. Some of that you have an absolute right to swagger about. But will the swagger, will it be enough to get you re‑elected do you think?
JOSH FRYDENBERG:
Well, what it is, is an underlying confidence in the resilience of the Australian economy. I mean, the last two years, Karl, we have thrown the kitchen sink at ensuring that we see a strong recovery. Let's not forget – your viewers certainly won't forget – images of hundreds of thousands of our fellow Australians lining up outside Centrelink in March and April 2020, which for many were scenes reminiscent of the Great Depression. There was huge fear across the community. Small businesses closed their doors and thought they would never open them again. We responded with programs like JobKeeper, which helped save the economy. And now we've seen one of the strongest economic recoveries in the world. And with more people in work that means people can provide for their families, and that's real confidence for the future.
KARL STEFANOVIC:
Gee, the PM's got a big team behind him. I didn't realise he had that many people. It looked like a small business behind the Prime Minister. We'll let you go. Thanks for your time. Appreciate it, Treasurer.
JOSH FRYDENBERG:
Thanks, Karl.