ANNA HENDERSON:
Thank you, Treasurer. Thank you so much for joining SBS World News.
JOSH FRYDENBERG:
Good morning. Nice to be with you.
ANNA HENDERSON:
Firstly, can one budget win an election?
JOSH FRYDENBERG:
This is about delivering cost of living relief for Australian families now in a responsible and a practical way. This is about putting in place a long term economic plan to create more jobs with further investments in skills, in infrastructure, in energy, in the digital transition and transformation of our economy. This is about guaranteeing the essential services that Australians rely on with aged care and hospitals and schools and the NDIS. And this is about investing more in the national security and the defence of our nation at a very uncertain time. That's what this budget is about, delivering for Australians.
ANNA HENDERSON:
And as many Australians fill up for their weekly fuel docket this morning, what are you going to do to change that price for them? Are you going to freeze or reduce the excise?
JOSH FRYDENBERG:
Well, I recognise that cost of living is the number one topic around the kitchen tables of Australians right now. And foremost in their mind is what's happening to petrol prices. More than $2 a litre, that’s really stretching household budgets. So we will have cost of living relief in Tuesday night's budget. It will be temporary, it will be targeted, it will be proportionate, and it will help deal with some of those pressures that Australian families face right now.
ANNA HENDERSON:
So a temporary reduction in excise is on the table for you.
JOSH FRYDENBERG:
Well, I'm not going to get it on the sticky paper with you this morning about individual measures other than to say we recognise petrol prices are higher. This has been driven by international events, a barrel of oil is 50 per cent up on what it was at the start of the year. This is flowing through to the bowsers here in Australia and therefore putting pressure on household budgets.
ANNA HENDERSON:
Okay, so you're not going to, by that rule I imagine, tell me whether you're going to roll over the lower middle income tax offset, but why would there be any argument to keep it given that the stage one and two tax cuts are now in place?
JOSH FRYDENBERG:
Well, you're right about the stage one and two tax cuts and how we brought forward stage two and we've got stage three, which has been legislated, yet to roll out. And that's real structural form that's abolishing the 37 cents in the dollar tax bracket, that's seeing 95 per cent of Australian taxpayers pay a marginal rate of no more than 30 cents in the dollar. Under a Coalition, you will see lower taxes, and that's what Australians have seen since we've come to government. The lower middle income tax offset was designed as a fiscal stimulus at a time when the economy had been hit by the greatest economic shock since the Great Depression. It was always meant to be temporary, was never meant to be a permanent feature of the tax system.
ANNA HENDERSON:
One of the biggest issues for your economy is making sure as many people are working as many hours as they can be. So, in that context, why hasn't your government moved to make parental leave more equal so that both the primary carer and the secondary carer can take more leave and be paid for it?
JOSH FRYDENBERG:
Well, again, we do have a significant paid parental leave scheme in place.
ANNA HENDERSON:
But if I can just take you to the detail there, so 18 weeks for the primary carer, two for the secondary carer. There are countries elsewhere that give equal to both, so that one, usually the female member of the family, is not essentially financially punished.
JOSH FRYDENBERG:
Well, again, we have a paid parental leave scheme which is designed to enable families to spend more time with their newborn. And then, of course, we've got a series of female workforce participation measures, which we've been rolling out in previous budgets, we'll continue to roll out more on Tuesday night. What that is designed to do is to boost the ability of women to participate in the workforce and our paid parental leave scheme, which, as you say, does now provide 18 plus two weeks, is a significant form of assistance to families in need.
ANNA HENDERSON:
And why don't women, while they're on parental leave, deserve to get super?
JOSH FRYDENBERG:
Well, again, we do not have super right now in Australia on paid parental leave, but we have made changes to our super system previously, which is helping a lot of Australians get super when they previously didn't, including abolishing what's called the $450 rule, which now means a lot of low income earners who are working part time jobs who previously weren't getting super now do as a result of measures that we've announced in very recent budgets.
ANNA HENDERSON:
You do have a windfall on the commodity side and in terms of taxpayers in work, why not use a small portion of that money to give women super while they're on parental leave, or whichever parent is on leave so that they have more super at the other end of their life, which is another area that's testing you.
JOSH FRYDENBERG:
Well, firstly, we're banking the dividend of a stronger economy. You're absolutely right that we have seen elevated commodity prices, although I've put to you that we've been very conservative in our assumptions. We haven't banked in to the budget bottom line higher commodity prices for longer. We've been very responsible and conservative in that regard. But we've also seen more people in work with an unemployment rate today at an equal lowest in 48 years. And we've also seen, therefore, less people on welfare. That is improving the budget bottom line. But what we have sought to do in this budget is to provide relief to Australian families now with a series of cost living measures.
ANNA HENDERSON:
In that tight environment, how many other Andrew Gee type situations have you been dealing with, Ministers trying to get more for their portfolio?
JOSH FRYDENBERG:
Well, Ministers always do, and they're very passionate about their portfolios, as they should be. We also have an expenditure review committee process, and that's a rigorous one. There have been many proposals that have come forward that have received a no and some of them that have received a tick, and the ones that have received a tick you'll see on budget night.
ANNA HENDERSON:
What's the message here, though, that if you're unhappy, you can go public, threaten to resign, and then you get the money?
JOSH FRYDENBERG:
Well, again, what Andrew was talking about was getting more people within his department to process claims. We have done that in recent budgets. Hundreds of more people into the Veterans Affairs Department, we've invested significantly in technology upgrades as well across the public service. We recognise what Andrew said is important, and there is a down payment in this budget with extra money that has been provisioned for extra resources to deal with those claims issues.
ANNA HENDERSON:
Can I take you to that commodities question? So we recently have heard that the Chinese ambassador wanted to meet with the Prime Minister in this economic climate. With the reliance we now have on Beijing, would you have preferred that there was that kind of high level engagement? And how worried are you about what could unfold in terms of our budget position over the coming years?
JOSH FRYDENBERG:
Well, the Prime Minister is absolutely right when he says the leaders of China don't meet with our ambassador. And so therefore, it is appropriate that the ambassador here engage with the Foreign Minister, indeed other Ministers as they see fit. But we have been on the receiving end of economic coercion from China. It is an important trading relationship. Our economies in many ways are complementary. The resources that we have helped provide to China have fuelled their economic transformation, and we welcome that. Likewise, Chinese students, Chinese tourists, Chinese products have been supporting our economy, and we welcome that as well. So we want the relationship to continue, but recognise it's been under stress recently.
ANNA HENDERSON:
How much are we spending on the war in Ukraine at this time?
JOSH FRYDENBERG:
Well, we've already made announcements, over $100 million in respect to both military assistance and humanitarian support. It's a tragedy what's happening in Ukraine. Russian aggression against civilian targets, indiscriminately killing children, women, the elderly is shocking, and it's the harsh reality of the world in which we're in now. It's going to change. It's going to change things, I think, globally for some time to come. What we're seeing now is a battle between autocracies and democracies and Ukraine that more than 40 million people has been a democracy. They pose no threat to Russia. Yet Russian tanks rolled over the border.
ANNA HENDERSON:
Are we open to essentially providing whatever Volodymyr Zelenskyy asks for from our government?
JOSH FRYDENBERG:
Well, again, we'll continue to provide support as necessary. We continue to join with our international partners in turning the screws on Putin and his cronies. We've seen more than 400 individuals and entities be subject to sanctions. We called for Russia to be excluded from the SWIFT money exchange settlements system. I've been speaking to my counterparts around the rest of the world as well. It is very important.
ANNA HENDERSON:
And finally this morning the US President Joe Biden said Vladimir Putin cannot remain in power. Do you agree and what do you think is the alternative? How can this situation be remedied?
JOSH FRYDENBERG:
I don't believe he should be remaining power. Obviously he's a totalitarian leader and he runs that country with an iron fist and this aggression against Ukraine is backfiring against him. It's bringing countries around the world together to stand strongly against this form of violence and this aggression from Russia. I think it does set back significantly the globalisation effort. Here in Australia we are reassessing our supply chains for example ensuring that they are more resilient and the world is moving from a just in time approach to a just in case approach where they're diversifying their suppliers and we're working with partners to do so. We're also going to invest more in defence and you've seen recent announcements for example by the German government that they're going to do that as well and across Europe and so it's been a wake up call to many of those nations across the EU that their neighbourhood is not as serene and as stable as they initially thought.
ANNA HENDERSON:
One of the vox pops, the people in the community that we spoke to ahead of this interview said in their view and this is a widely held view amongst people we spoke to "the rich are getting richer in Australia and the poor are getting poorer."
JOSH FRYDENBERG:
Well, what we have sought to do with our changes to the tax system for example is to ensure that it remains progressive in the same way and we've done that with our tax system. We've boosted the job seeker payments and of course during the COVID crisis at its peak we effectively doubled the safety net with the Coronavirus supplement. We've had a series of measures which have been designed to focus on low and middle income earners including the low and middle income tax offset which has done exactly that. So we'll continue to invest where people in low and middle income earners and ensure that we have a progressive economy and one that provides for all Australians.
ANNA HENDERSON:
Treasurer, thank you very much for your time.
JOSH FRYDENBERG:
Thank you.