CHRIS UHLMANN:
Josh Frydenberg, when will people see the cost of fuel fall?
JOSH FRYDENBERG:
Chris, we're delivering cost of living relief now with a cut of 50 per cent to the excise rate and worth more than 22 cents a litre. That will start to flow through over the next couple of weeks. It's a substantial relief for Australian families who are paying high fuel prices.
CHRIS UHLMANN:
How can you be sure that retailers won't just pocket the difference?
JOSH FRYDENBERG:
Well the ACCC have put out a statement. They made very clear that they will be the cop on the beat and that they will be coming down hard on any retailers that engage in misleading and deceptive conduct with contraventions being up to $10 million in fines.
CHRIS UHLMANN:
What happens if the price of fuel just bounces up, and we've seen it bounce up by ten cents, by 20 cents and it just eats up what you've given away?
JOSH FRYDENBERG:
Well it would be more than 22 cents a litre higher but for the decision that we've taken, so we have actually taken a concrete step to reduce fuel prices for millions of Australian motorists.
CHRIS UHLMANN:
When will pensioners get their $250 cash payments?
JOSH FRYDENBERG:
That will happen in a matter of weeks. It will be automatically done through the social services system. Around six million Australians, pensioners, veterans, carers, others on income support like concession card holders, will get this $250 bonus payment. It comes on top of the indexation arrangements that have already taken place as a result of the higher inflation that we see.
CHRIS UHLMANN:
And if I'm on less than $126,000 a year there's a tax offset that you're giving. That comes at tax time.
JOSH FRYDENBERG:
That's $420 and it builds on what we announced in last year's budget. If you're earning up to $126,000 you could see up to $1,500 in your wallet, in your bank account when you put your tax return in from 1 July onwards.
CHRIS UHLMANN:
And you're also trying to encourage businesses to hire more people, to train more people.
JOSH FRYDENBERG:
There's a good package of measures in tonight's budget for small businesses. Two in particular of note. The first is we're providing an extra deduction for the taxes for small businesses when they hire people that they want to train more with upgrading their skilling, as well as when they purchase new technology. So if they want to buy invoicing software, cyber security software, web design or new computers, they can get a bonus 20 per cent tax deduction.
CHRIS UHLMANN:
Now you got about $30 billion of a windfall this year in more tax receipts but you're spending $17 billion of it. What do you say to people who say you are simply trying to buy votes?
JOSH FRYDENBERG:
Well actually we're banking the dividend of this stronger economy. So of the ‑‑
CHRIS UHLMANN:
You're banking part of it.
JOSH FRYDENBERG:
Well, banking the vast majority of that actually over the forward estimates, over the four‑year period, and what we've seen is around three quarters of the improvement through receipts and revenue is a result of a stronger labour market. So more people in work and therefore fewer people in welfare. We've had to take decisions to increase funding for the COVID response. That's of course required. This cost‑of‑living relief will come at a very important time for Australian families, and then we're investing in this budget in our long‑term economic plan to create more jobs with further investments in infrastructure, in skills, in the digital economy.
CHRIS UHLMANN:
But just on those cost‑of‑living measures, you're pouring essentially $8.5 billion into the economy by the middle of the year. It's already running hot. Won't that drive up inflation?
JOSH FRYDENBERG:
So $3 billion of that is for the cut in the fuel excise and Treasury actually say that that would put downward pressure on inflation, so that will reduce inflation by about a quarter of a per centage point. But when you consider the size of the Australian economy, putting all these measures together is less than half a per centage of GDP and the good news for the economy is that more people are finding work, the unemployment rate's coming down and we're actually leading the world with our economic recovery.
CHRIS UHLMANN:
Inflation running though at 4.5 per cent, costs are on the rise. You're not concerned that you're walking too fine a line here?
JOSH FRYDENBERG:
It's always a balancing act when it comes to budgets, providing that cost‑of‑living relief to Australian families, hearing their concerns and acting on it. That's what we've done, but at the same time putting in place a long‑term economic plan for the future to create more jobs while also seeing material improvements in the budget bottom line. We're actually seeing the deficits more than halve over the next few years and we're seeing debt peak earlier and lower than what was originally forecast. That's a good sign for the economy.
CHRIS UHLMANN:
But it does peak at a trillion dollars and when I look at your deficits you've got a ten‑year forecast which doesn't see you hitting surplus at any time in that time. So that's not great, is it?
JOSH FRYDENBERG:
Well, Chris, actually we do see a material improvement to the bottom line on what was forecast just months ago. But no one is hiding from the fact that COVID was the biggest economic shock since the Great Depression. Your viewers will remember the images of millions of Australians having either lost their jobs, seeing their working hours reduced to zero, lining up outside Centrelink with fear right across the economy. We responded with programs like JobKeeper, cash flow boost which saved the economy. And now we're at the point where the unemployment rate is going to reach a 50‑year low.
CHRIS UHLMANN:
Is there not a concern though about what happens in the future? Some Treasurer at some stage has two choices: they either cut services or they raise taxes. That's inevitable, isn't it?
JOSH FRYDENBERG:
Well what we're focusing on is growing the economy and we're banking that dividend which has seen more people in work, fewer people on welfare, therefore less expenditure on welfare payments, more receipts coming in through the tax system. That's how we improve our budget bottom line.
CHRIS UHLMANN:
You once said you'd improve the budget bottom line when unemployment got under 6 per cent, we're now crashing through 4 per cent. At what point is a good point to fix the Budget? After the election obviously.
JOSH FRYDENBERG:
I'll say it again. What you see in the Budget tonight is a material improvement to the budget bottom line. We've banked the vast majority of those revenue upgrades but of course we've been required to spend in the areas of health responding to COVID, while also putting in place infrastructure spending, skill spending, supporting small businesses, helping businesses adapt to the digital economy, all of which are important for our economic growth.
CHRIS UHLMANN:
And clearly when you look at the Budget papers given where we came from you've got a good story to tell. Why is it the Government can't tell it? Why is it you are lagging in the polls when the economy has bounced back, we have one of the most highly vaccinated populations on earth, and more people have been employed than ever before? What's wrong with the government?
JOSH FRYDENBERG:
Well, Chris, you've been around a long time, and you know there's only one poll that counts and that's on election day. There were plenty of people who wrote us off last time ahead of the 2019 election. What I do know is tonight's budget details a long‑term economic plan to create more jobs across the economy, to guarantee the essential services that people rely on, to invest more in defence and national security, and to provide that cost‑of‑living relief now.
CHRIS UHLMANN:
And it is undoubtedly aimed at trying to win votes at the next election, clearly, the cash splash.
JOSH FRYDENBERG:
It's aimed at delivering for Australian families, small businesses, seniors and creating a stronger economy and a stronger future.
CHRIS UHLMANN:
One of the problems for the Government it seems to be is personality based. It's Scott Morrison. Would perhaps you have a better chance if you were leading the Coalition to the next election?
JOSH FRYDENBERG:
You are very cheeky indeed this late in the evening. Scott Morrison has done an outstanding job leading this country through a very difficult time. The single largest economic shock since the Great Depression. My focus, Chris, has been on delivering the Budget. Tonight the Australian people will see that.
CHRIS UHLMANN:
Okay. But you have children and you once talked about the compact between generations.
JOSH FRYDENBERG:
Yes.
CHRIS UHLMANN:
Are you happy with the legacy that you're leaving them?
JOSH FRYDENBERG:
Well certainly I'm not about to leave them or finish my job here. I've got a lot of work still to do. But I tell you what I'm proudest of over the course of the last two years: is that Australia has avoided the experience of the 1980s and 1990s when we had recessions and unemployment was elevated for a long period of time. The biggest issue now for employers is actually finding more staff. So Australians are in work and there is dignity in work. And for Australia to help lead the world with our economic recovery is something I'm very proud of.
CHRIS UHLMANN:
Josh Frydenberg, thank you.
JOSH FRYDENBERG:
Thank you.