CHRIS SMITH:
Good morning to you, Treasurer.
JOSH FRYDENBERG:
Good morning, Chris. Nice to be with you and your listeners.
CHRIS SMITH:
Yeah, the economic recovery is still a long way to go. I know we’re in debt and deficit. We’ve got unemployment problems, etcetera, but that saving record is quite extraordinary.
JOSH FRYDENBERG:
Well, as you say, there is more than $200 billion additional money that is now on household and business balance sheets that was not there this time last year. Now, that’s a function of the record economic support from the Morrison Government. The higher savings ratio as people become a bit more cautious during the pandemic, but also the health restrictions that were in place last year meant that people couldn’t go about their normal daily lives and spend money at the café, at the restaurants or on taking a local holiday as they otherwise would. So, some of that money went in the bank. But history does show us that as the confidence comes back and as the restrictions are eased, money does get spent across the economy and this will help underpin our economic recovery and help get people back to work as well.
CHRIS SMITH:
The early signs from the latter part of last year indicate that we’ve been doing that, spending online, we’ve been spending at retail venues as well, but you’d be hoping that the entire $200 billion could be spent, spent, spent?
JOSH FRYDENBERG:
Well, people make their own decisions, Chris, about their economic priorities but again, history does show us that people do spend that money that they have saved after a downturn or after a crisis. You’re right, at the end of last year we saw very strong consumption numbers. We also saw strong retail numbers at the end of last year. While we all want these border restrictions to be eased, obviously, when it’s COVID-safe to do so, we do know that once people are able to move more freely they will spend. But there is good news across the economy. I want your listeners to understand that 85 per cent of the 1.3 million Australians who either lost their jobs or saw their working hours reduced to zero at the start of the crisis are now back at work. We have seen consumer and business confidence come back to its pre-pandemic levels. We have seen capital city house prices and regional house prices both lift in recent times and, as I said, retail numbers have been strong too.
CHRIS SMITH:
You blocked Beijing’s $300 million takeover bid for that construction company ProBuild over national security concerns. We know that our relationship with China is on the rocks at the moment - that would have been a tough decision for you to make.
JOSH FRYDENBERG:
Well we make decisions based on Australia’s national interest. We make no apologies for that. Indeed, as a Government we’re elected to defend the national interest and that means taking into account all relevant considerations. So, I don’t go into the detail about specific cases other than to say…
CHRIS SMITH:
But why not? You know we discuss this forward and backwards on the open line but people don’t have the information to understand why something like that goes on and, of course, the Chinese don’t either. Wouldn’t it be better for an open understanding of these things? Why you’ve made the decision and on what basis?
JOSH FRYDENBERG:
Well, we have a Foreign Investment Review Board that looks at cases as they come forward and then the Treasurer has the final decision. That has been the process since this legislation was put in place. Now, when it comes to some of these matters, they are very sensitive. We take advice from the key agencies and that can be the tax office in relation to tax considerations. That can be the competition regulator in relation to competition issues or that can be the national security agencies in relation to national security issues. So, there are some sensitivities around various cases but what your listeners can be confident about is that the Australian Government will always act in the national interest; we make no apologies for that. We put in place at the end of last year and successfully passed the legislation through the parliament, new laws to tighten up foreign investment. As you may remember last year during the pandemic, I reduced the threshold down to zero dollars, so that every acquisition that came across effectively my desk, so I could get a good look at it so there wasn’t an opportunity for people to take advantage of the crisis to scoop up assets that were not in the national interest to be sold.
CHRIS SMITH:
Meanwhile, eight million tonnes of our coal is floating on seventy three ships off the coast of China. The Australian reports they’ve been told to bugger off and find new buyers.
JOSH FRYDENBERG:
Well, as you say, there’s some challenging issues in the bilateral relationship right now but our coal is high quality coal and certainly there are restrictions being put in place on imports, then that has an effect on price. Certainly, buyers then don’t get access to high quality Australian coal. So, we have made representations in the past and as the Prime Minister has previously said it’s a lose-lose situation; people don’t get the Australian product because it is such high quality.
CHRIS SMITH:
I want to talk about superannuation. A former Treasury official says workers should be given the choice between locking in a higher superannuation rate or taking home more pay. Are you going to give workers the choice to choose between one box and the other?
JOSH FRYDENBERG:
Well, the increase in the superannuation guarantee is legislated. But what I have said is that we will make a decision on that before that legislated increase takes effect which is mid this year. We had Mike Callaghan, a very experienced and distinguished former Treasury official, conduct a comprehensive review. What his panel and his report found is that there is a trade-off between wages and the superannuation guarantee, that’s not rocket science because the Reserve Bank has said that and the Grattan Institute. Now, anyone who denies that there is a trade-off is effectively a flat-earther because it obviously is coming out of people’s wages. So we’ll continue to assess that superannuation guarantee legislated increase. I’ll have more to say about that as the year progresses. My focus, the Government’s focus, when it comes to superannuation is to try to get fees down, to increase competition, to increase accountability and transparency. In the Budget at the end of last year we announced measures that will have a $17.9 billion payoff for consumers and that is where our focus is, on preventing these multiple accounts, allowing people to be able to better compare the performance of funds and also holding funds to account for their underperformance. So, that’s where my focus is, lowering fees, increasing transparency.
CHRIS SMITH:
Now, one last very important question, we’ve been watching you on television do a few interviews this week and I just wonder whether you’ve been running marathons or at the gym because you’ve shed some weight!
JOSH FRYDENBERG:
Well, I’ve just been eating a bit more responsibly Chris…
CHRIS SMITH:
Have you? Intentionally?
JOSH FRYDENBERG:
Intentionally. My wife has been in my ear through the year and she thought, and I agree, that having chocolate for breakfast wasn’t a really great idea anymore, or lollies for lunch, or chips for dinner. So I had a pretty bad diet last year as you can imagine, not much sleep, not enough exercise, but plenty of work. So I’ve used this opportunity with the family down at the beach in Lorne, a beautiful spot in Victoria, to just be a bit more responsible when it comes to my eating habits and to get out and do a bit of exercise so that’s been fun.
CHRIS SMITH:
I thought so. Our female listeners are waiting for you to shed all on a male calendar somewhere in the next few months. All the very best.
JOSH FRYDENBERG:
Great to speak to you Chris, look forward to joining you on TV and on radio many times this year.
CHRIS SMITH:
I’ll get back to you on that one. Thank you very much. Federal Treasurer, Josh Frydenberg.