NEIL BREEN:
Treasurer Josh Frydenberg joins me now. He's got a busy day. Good morning, Treasurer.
JOSH FRYDENBERG:
Good morning, Neil. Nice to be with you and your listeners.
NEIL BREEN:
Now, I've read through all the previews of the speech you're giving to this Australian Chamber of Commerce and Industry event today. It seems as though you're cashed up. You're not a cashed‑up bogan; you're a cashed‑up Treasurer. You've got a lot of money from iron ore receipts and also the fact there's a lot of employment you've got extra tax receipts, but you're not going to blow it all on largesse in this Budget ahead of the election; you're going to try and bank it and pay off the debt we accrued from COVID. How's my summation?
JOSH FRYDENBERG:
Well, about being a bogan? Well, I don't have a mullet anymore.
NEIL BREEN:
You used to have one.
JOSH FRYDENBERG:
In fact, I don't trouble the hairdresser very much these days. But what you'll see in the Budget in just over a week's time, Neil, is an improvement to the bottom line. That's a result of a stronger economic recovery than initially thought. And you're absolutely right – unemployment has been coming down. It's now 4 per cent, the lowest in 14 years. Female unemployment is the lowest since 1974. And this sees more people paying tax because they're in work and less people on welfare. We've also seen higher commodity prices than expected – iron ore is around $130 a tonne, thermal and metallurgical coal are also at record highs. But we're careful not to bake in those higher commodity prices for the longer term into the Budget. We'll continue to have a conservative set of commodity price assumptions. When Wayne Swan was the Treasurer and Labor was in power, they baked in very high commodity prices for a number of years and then made structural spending commitments off the back of that. We won't make that mistake. We're being a lot more conservative. But the good news is in the Budget is that you will see an improvement as a result of a strong economy and our economic plan working.
NEIL BREEN:
One of the temptations would be with a federal election looming six to eight weeks away would be to dish out a bit of that money, especially with the cost of living pressures. So you're being pulled in that direction. Will there be some largesse in this Budget?
JOSH FRYDENBERG:
Well, cost of living pressures are real, and whether you're in Brisbane –
NEIL BREEN:
They are real.
JOSH FRYDENBERG:
Whether you're in Melbourne, Sydney, Perth or wherever in the country, this is the number one topic around the kitchen table. Higher petrol prices but, as you know, that's a function of what's happening globally with the oil price having gone up by more than a third as a result of the crisis in Ukraine. But also during COVID and with the Ukrainian tensions you've seen supply chains being constrained. That's flowed through to higher freight costs which mean higher food prices as well as higher prices for motor vehicles and other goods that may be imported. We will make some announcements in the Budget which will seek to alleviate those cost of living pressures. And, of course, we're trying to get the balance right here by improving our Budget bottom line, capitalising on the strong economy but also responding to people's needs.
NEIL BREEN:
Okay. I want to explore a couple of those things. The fuel excise – 44.2 cents a litre – big discussion point over the last 10 days or so. Will it be cut?
JOSH FRYDENBERG:
Well, you won't get me on the sticky paper one way or another just a week out from the Budget, Neil, as you could understand. I'm not going to get into the rule in, rule out game. But I do acknowledge that these cost of living pressures are putting pressures on families. And that's why we've cut taxes to put more money into people's pockets. That's why we're seeking to cut electricity prices further. And that's why we've invested in child care, all of which are other cost of living pressures for families, not just fuel.
NEIL BREEN:
And all those things are happening, we know. So I'll tuck the excise over into the maybe column. Can I put this one into the yes column: the cost of living pressures and the things you'll do in the Budget, will they be targeted, I mean at lower income‑type people? Could I at least push that over into a positive column?
JOSH FRYDENBERG:
Well, certainly our focus in the past and again in this Budget will be on low and middle‑income earners.
NEIL BREEN:
Okay.
JOSH FRYDENBERG:
Who have been under pressure, so you will see a focus on that cohort of people. But these measures in the Budget that will address cost of living are designed to be very targeted. The time for economy‑wide large economic stimulus is over. We've drawn some clear lines in the sand. You remember that Queenslander Jim Chalmers said the biggest single test of the Morrison government's management of the pandemic will be what happens to jobs and unemployment? Well, that test, that evidence is now in. Labor had unemployment at 5.7. Unemployment under us is at 4 per cent. We brought JobKeeper to an end at the right time. We brought the COVID disaster payments to an end at the right time. We said no to further requests for support from the states because the recovery was well underway. We're very conscious that the next election will see a clear choice for the Australian people between our strong economic management, which has helped Australia through this pandemic, and a Labor Party that don't know how to stop spending once they turn the taps on.
NEIL BREEN:
Well, the numbers are in, because unemployment, 4.2 to 4 nationally, Queensland, best position in 13 years – 4.3. Females, as you said earlier, 3.8, best since 1974. Another issue that will cause pressure for Australians is what's happened in the United States. The federal reserve took interest rates up a quarter of a per centage point yesterday. They think they're heading back to 2 per cent. We know they went down to near zero because of the pandemic. Inflation's at 7.9 in the United States. Interest rates will rise here. That will further cause problems for Australians as we head towards the back end of the year, Treasurer.
JOSH FRYDENBERG:
Well, that is another reason why our economic support needs to be very targeted. We don't want to put additional pressure on inflation, which then drives up interest rates. Labor has committed $80 billion of additional spending through COVID over and above what we announced. They wanted JobKeeper to keep going. As you know, they wanted a $6 billion payment for people to get the jab even though they had the jab. And then, of course, they had other economic promises. That would have all put upward pressure on interest rates and put upward pressure on inflation. Obviously the Reserve Bank here has been very cautious about where they stand on interest rates. They want to see wages lift and they also want to see inflation steadily be within that target band that they've set. But the market has priced in future interest rate rises. But I'll leave that up to the independent Reserve Bank board.
NEIL BREEN:
Treasurer, I read in the newspaper today that you'll be attending the funeral of the late Labor senator Kimberley Kitching on Monday, I think it is. It's a very sad thing. But post her death has been played out in the Labor Party that she'd put in complaints of bullying. The Labor Party was pretty tough on you guys through the women's issues, if you like, over the past 18 months. It seems as though when the shoe is on the other foot they don't handle them well, because they won't talk about it.
JOSH FRYDENBERG:
Well, the reports of this intimidation and bullying is very concerning. That can't be dismissed. It will be up to Anthony Albanese and the Labor Party as to how they respond. But Kimberley Kitching was a friend of mine; indeed, she was a friend of many on both sides of the political divide, and she was somebody who was a patriot. She was a very effective parliamentarian. She generated real change in protecting human rights, the Magnitsky laws being a good example of that. And, of course, you know, everyone is deeply concerned about these reports. But I'm not going to add to it. That would be up to the Labor Party to respond to. I just want to remember fondly Kimberley Kitching and what she achieved.
NEIL BREEN:
Did she ever talk to you about it?
JOSH FRYDENBERG:
She didn't. But she did, you know, obviously share that with other people, which has been reported.
NEIL BREEN:
Okay. Treasurer Josh Frydenberg, thanks for your generous time today.
JOSH FRYDENBERG:
All the best.