BROOKE CORTE
Joining us live is the Federal Treasurer, Josh Frydenberg. Josh Frydenberg welcome to the show.
JOSH FRYDENBERG
Nice to be with you, Brooke.
BROOKE CORTE
Treasurer, we’ve got a cash bonus for 10 million Australians, cheaper fuel for everyone, top‑up payments for pensioners. Have you spent enough to buy a fourth term in office?
JOSH FRYDENBERG
We’ve actually banked a more than $100 billion improvement to the budget bottom line, Brooke, which is the dividend from a stronger economy, particularly having more people in work and fewer people on welfare. But, as you and your listeners are well aware, cost of living is the number one topic of discussion around Australian kitchen tables right now. And with fuel prices more than $2 a litre, it’s putting real pressure on household budgets, and so we’ve provided relief not just for fuel prices, but also more money into people’s pockets as well as making medicines cheaper.
BROOKE CORTE
Your budget papers show that household savings have increased by 11 per cent during the pandemic. We’ve spent a long time in previous months talking about this massive war chest of savings that was going to be unleashed on the economy. I’m just wondering if a big boost in cash payments is actually really needed right now?
JOSH FRYDENBERG
Well, inflation is running at 3.5 per cent and the number that we are forecasting for this year is for it to rise 4¼ per cent, so that is a significant increase. Now, it’s less than half of what it’s been in other countries around the world, like in the United States, where it’s been running at 7.9 per cent. But this is putting pressure on families, and so while we are providing lower electricity prices, increased support for childcare and tax relief, with what we’ve already previously announced, we needed to go further, because families needed that support. But we’ve done so in a temporary, in a targeted way, in a responsible way and, as I say, the improvement to the budget bottom line is worth more than $100 billion and our deficits as a share of our economy are more than half over the forward estimates, and that’s the fastest consolidation that people have seen in over 70 years.
BROOKE CORTE
Could you name one tough decision you had to make in this budget to reduce debt and deficit, though? We’re still looking at debt blowing out to $1.1 trillion within three years?
JOSH FRYDENBERG
Well, if you remember when I ended JobKeeper, and it was a very successful program, it saved more than 700,000 jobs, I was heavily criticised particularly by our political opponents. Anthony Albanese said the economic roof would come crashing down. When we ended the COVID disaster payments that were available in New South Wales and Victoria after the Delta outbreak, again, Labor was quick to criticise. But we took those decisions because they were the responsible ones to do. They weren’t easy decisions. We tapered that support, but there were plenty of people, you will remember Brooke, you were probably interviewing me about it at the time, who said keep JobKeeper going, and we ended it. So, we have taken decisions, not easy ones, to end those emergency support payments with a view to getting the economy back to its normalised settings.
BROOKE CORTE
On the petrol excise cut, you’ve halved the tax. That should lower fuel prices by 22 cents a litre. But listeners who are texting in, already emailing this radio network, are very doubtful that they’ll see those 22 cents in their own pocket. You cannot guarantee that people will get that 22 cents, can you? The oil giants, there’s no mechanism, no guarantee that they’ll pass that full 22 cents on.
JOSH FRYDENBERG
Well, the ACCC have already put out a statement tonight where they’ve made it very clear that if companies do not pass on the reduction in the fuel excise, and engage in misleading and deceptive conduct, they can face penalties of up to $10 million per contravention.
BROOKE CORTE
That’s existing penalties, same as they’ve always had, same powers?
JOSH FRYDENBERG
They’ve got powers, and they’ve also got a fuel taskforce, and I spoke earlier today with the head of the ACCC. So they are very conscious of their responsibility that this is passed on. And I believe that the consumers will see a fall in the prices. Now, oil is obviously very volatile and the main driver of the higher oil price has been events in Ukraine and overseas. And neither of us have a crystal ball as to how that will play out, Brooke, but what I can tell you absolutely is that but for our announcement tonight, fuel prices would have been more than 22 cents higher.
BROOKE CORTE
Businesses did want higher levels of migration and skilled migration in this budget. There are chronic work shortages, it is crippling a lot of business and it is a handbrake on so many. Why didn’t they get that? A lot of business groups have said tonight that you haven’t gone far enough, because that’s one of the critical issues we face right now.
JOSH FRYDENBERG
Firstly, the borders are open, so skilled workers are coming, and it’s in the budget papers, about tens of thousands of them coming since the early part of November when the borders started becoming open. So, they are coming now. But we’re also skilling up Australians. So, we’ve announced more job trainer places for the care workforce, which is high in need. I announced that we’re seeking a partnership for real skills reform, structural reform with the states, which can create 800,000 new places. We announced tonight substantial changes to the way apprentices are paid for, and with incentives to employers of up to $15,000, and incentives to the apprentices of up to $5,000. That has worked, Brooke, because right now in Australia we have more than 220,000 people in a trade apprenticeship, which is the highest number since records began in 1963. So, we are working to try to meet the needs of business with respect to workforce shortages but you’re right, they’re there, they’re real and there are very high numbers of job ads available.
BROOKE CORTE
Certainly, I think records of job ads available, in fact, 100,000 more than we had pre‑pandemic. Treasurer, the…
JOSH FRYDENBERG
That’s a sign of a strong economy by the way, Brooke, and you don’t want to gloss over that. The reason why businesses are looking for workers is because they have got customers coming through the door. And if it wasn’t for programs like JobKeeper, if it wasn’t for programs like the cash flow boost, if it wasn’t for what we did across the economy, we wouldn’t see Australia now leading the world with an unemployment rate at 4 per cent, and tonight we’ve printed in the Treasury Papers an expected unemployment rate of 3.75 per cent. That’s the lowest in 50 years with female unemployment at its lowest level already since 1974.
BROOKE CORTE
Finally, Treasurer, the timeline for a budget surplus, we can now say is measured in decades, not years. What do you reckon we’ll see first? Do you reckon we’ll see delivery of AUKUS nuclear submarines or a budget surplus?
JOSH FRYDENBERG
Well, we delivered the first balanced budget in 11 years and that was one of the reasons why Australia had the fiscal firepower to respond as we needed through COVID. But COVID was the biggest economic shock since the Great Depression. We saw our GDP shrink by nearly 7 per cent in the June quarter of 2020. The previous highest shrinkage in GDP for a quarter was just 2 per cent. And so people have to understand the scale of the shock and what we needed to do. Now, our economy is recovering and what you’ve seen tonight is that the deficits as a percentage of the overall economy have more than halved – the debt has peaked earlier and lower than as initially forecast, so we have turned the corner. I can see real momentum now in the economy. I’m very confident about the future. Tonight’s budget was not just a plan to ease cost of living pressures now, but also to lock‑in future economic growth and jobs with a long‑term plan with more investment in skills, infrastructure, our regions, manufacturing, the digital transformation.
BROOKE CORTE
Treasurer, we thank you very much for your time.
JOSH FRYDENBERG
Always a pleasure. Thanks Brooke.