CHRIS UHLMANN:
Josh Frydenberg, welcome.
JOSH FRYDENBERG:
Good morning.
CHRIS UHLMANN:
How will your Budget improve the lives of the people watching now?
JOSH FRYDENBERG:
Well, Chris this Budget will build a stronger economy and secure a better future for all Australians. It is going to ease the cost of living pressures, it is going to fund infrastructure that is going to bust congestion in our cities and unlock the potential of our regions and it is going to guarantee funding for the essential services of hospitals, schools, drugs on the PBS, disability support. This is the dividend, Chris, from a strong economy – a secure job and better services.
CHRIS UHLMANN:
We read this morning that you are going to be sending out cheques in the mail to people to help with their power prices. Isn’t that looking a little desperate?
JOSH FRYDENBERG:
This is an acknowledgement, Chris, that there are cost of living pressures and this support is going to go to around four million Australians, pensioners, aged pensioners and those on the disability support pension, people who are on carer payments, single parenting payments and veteran payments.
CHRIS UHLMANN:
And do you think it is good policy?
JOSH FRYDENBERG:
I think it works for these people, it’s good policy…
CHRIS UHLMANN:
Wouldn’t it be good policy to bring down their power prices?
JOSH FRYDENBERG:
Well, firstly, they are not mutually exclusive. This is money that is going to go into people’s pockets to help meet the cost of their next power bill. At the same time, we’re taking action on a number of fronts to reduce energy prices. Last year, we saw prices come down in July. On the 1st of January, we saw standing offers come down by around 15 per cent. And then from the 1st of July, we are putting in place a default price which can see families about a couple of hundred of bucks better off.
CHRIS UHLMANN:
But household prices continue to rise, so eventually, so will retail prices, won’t they?
JOSH FRYDENBERG:
Well, we’ve actually seen prices come down, as a result of the actions we’ve taken. We’re underwriting new generation, we’re building Snowy 2.0, we’ve got more gas into the market and we’ve taken on the energy networks.
CHRIS UHLMANN:
How much money will people get?
JOSH FRYDENBERG:
Under this plan, they’re going to actually get $125 if they’re a couple and $75 if they’re a single.
CHRIS UHLMANN:
And how long will that last through winter?
JOSH FRYDENBERG:
Well, it’s going to go towards their next power bill and of course we’re taking action to reduce power prices across the board.
CHRIS UHLMANN:
Is this the only time that you’ll be sending out cheques in the mail in the Budget? Are you looking at family benefits and things like that, can we expect to see a cash splash on the way in?
JOSH FRYDENBERG:
This is not a time for cash splashes, this is a time…
CHRIS UHLMANN:
Well, you’re doing it, I’m just asking how much you’re going to do.
JOSH FRYDENBERG:
…this is a time for responsible spending, targeted spending, into key areas that lifts the productive capacity of the economy. See, we’re all about creating jobs and our record shows that we have delivered on our commitment to create more than a million new jobs ahead of schedule.
CHRIS UHLMANN:
But just checking, are you going to send out any more cheques?
JOSH FRYDENBERG:
You’ll have to turn onto the Budget on 7:30 on Tuesday night, turn off MAFS, and turn on the Budget.
CHRIS UHLMANN:
That’s assume your ratings aren't going to be that great up against that, so are you going to send out more cheques in the mail?
JOSH FRYDENBERG:
You’ll have to turn onto the Budget on Tuesday night to see the detail, but what I can say is that this Budget is focused, Chris, on growing the economy, so we can secure a better future for all Australians and to repair the nation’s finances, given we were left enormous debt by Labor.
CHRIS UHLMANN:
Will you be in, are you in surplus already?
JOSH FRYDENBERG:
Look, again, in terms of 2018/19, we have faced both pre-MYEFO and post-MYEFO a number of spending challenges including in relation to the impact of the drought and the floods in Queensland, as well of course extra GST payments to the states.
CHRIS UHLMANN:
You’re very proud about getting back into surplus, but what does it mean to a household who's already in deficit?
JOSH FRYDENBERG:
Well, if you’re no longer borrowing on the nation’s credit card, it means you don’t have to pay the interest bill and therefore you’ve got more money to spend on the essential services of schools, hospitals and roads.
CHRIS UHLMANN:
But ordinary people don’t have more money to spend, in fact in the last year, household expenses, by way of tax, went up eight per cent. That’s your taxation bills to them went up eight per cent, while their income went up 3.5 per cent, so they’re going backwards under you, aren't they?
JOSH FRYDENBERG:
No, not at all, in fact we’re the party of lower taxes.
CHRIS UHLMANN:
The Reserve Bank said that.
JOSH FRYDENBERG:
No, well actually the Reserve Bank has said that they’re seeing wages lift faster than they were a year ago in all states and nearly all industries.
CHRIS UHLMANN:
And the Reserve Bank said a week ago, that tax bill has gone up eight per cent, you've seen that haven't you? It’s gone up eight per cent in the last year…
JOSH FRYDENBERG:
Well, actually…
CHRIS UHLMANN:
…because you’re compliance costs are going up.
JOSH FRYDENBERG:
Well, Chris, in terms of taxes they’ll always be lower under the Coalition and what we delivered in last year’s Budget was $144 billion of tax cuts which will see 95 per cent of taxpayers better off and Bill Shorten wants to reverse those legislated tax cuts. And it doesn’t matter if you’re going to run a business or go to work or put extra money in super or buy a property or buy a share, you’ll pay higher taxes under Labor.
CHRIS UHLMANN:
Are you bringing forward your next round of tax cuts?
JOSH FRYDENBERG:
Well, again, you will have to turn on Tuesday night to see what we do in relation to…
CHRIS UHLMANN:
But we already know the shape of them, they’re actually aimed at higher income levels this time around and if you do deliver them under the form you’ve talked about them, the average income earner between $50,000 and $90,000 will get an extra 20 cents a week in a tax cut. You can’t get excited about that.
JOSH FRYDENBERG:
Well, our $144 billion worth of tax cuts that we have already legislated will actually see 95 per cent of tax payers better off. They’re the tax cuts that Labor is promising to reverse, because they don’t believe in lower taxes, they believe in higher taxes.
CHRIS UHLMANN:
Should you be giving out all of this money at the time when the economy is softening?
JOSH FRYDENBERG:
Well, in terms of the threats to the economy or challenges to the economy, they’re real. What we have actually seen is the impact of global trade tensions and Brexit and we’ve seen slower growth in other global economies. Here at home, we have seen the impacts of the drought, farm GDP came down by around six per cent over the last year and we are also seeing a slow-down in the housing market. This is exactly the worse time for Labor’s new housing taxes, because if you push down house prices as the Labor Party is promising to do…
CHRIS UHLMANN:
It’s not a house tax, they are getting rid of a tax deduction, as you have been doing as we have seen from the tax office.
JOSH FRYDENBERG:
Actually, they’re increasing the capital gains tax by 50 per cent…
CHRIS UHLMANN:
Yeah, but the other thing too, with what they are doing with negative gearing. One in ten people actually benefit from that, why shouldn’t the other nine and ten benefit from that?
JOSH FRYDENBERG:
Well, actually Wayne Swan said, it would be economically disastrous to get rid of negative gearing – and he was right.
CHRIS UHLMANN:
Yeah, and we saw Joe Hockey say it was time to go back to negative gearing and have a look at it and make sure we didn’t reward people for speculation. So who should we believe?
JOSH FRYDENBERG:
Well, we should believe…
CHRIS UHLMANN:
Joe Hockey?
JOSH FRYDENBERG:
No, we should believe what the Master Builders Association have said, when they say this Labor Policy will cost 32,000 jobs, see 42,000 fewer homes being built. We should listen to the Property Council, we should listen to the independent economists who say as a result of Labor’s policy, rents could go up and house prices will go down.
CHRIS UHLMANN:
We are talking about a tax deduction. Why should those people enjoy a tax deduction when nine in ten don’t get it? Why don’t we just take that money and redistribute to them?
JOSH FRYDENBERG:
Well, actually, the vast majority of the people who are investing in property have a taxable income under $80,000 and over 70 per cent of those people only have one property. Now, Wayne Swan said, it would be economically disastrous to touch negative gearing and he was right.
CHRIS UHLMANN:
But do you agree that all those people who enjoy that now, will continue to enjoy it under Labor because it is grandfathered. We are only talking about happens from next year on?
JOSH FRYDENBERG:
Well, actually, what is not true about Labor’s policy is that it will lead to those people having an investment that is still worth what it is today. Because as a result of their policy, they are taking new buyers out of the market, therefore prices will come down. But importantly for your viewers, rents will go up because investors in the housing market have an expectation of an after tax capital gain and so therefore they charge lower rents than would otherwise be the case.
CHRIS UHLMANN:
Would you have a surplus at all if the National Disability Insurance Scheme wasn’t vastly under spending, if it wasn’t totally mismanaged?
JOSH FRYDENBERG:
Well, in terms of the National Disability Insurance Scheme, let me be absolutely clear. The Commonwealth will meet every cent of its commitment to the National Disability Insurance Scheme and it will be fully funded in this Budget.
CHRIS UHLMANN:
But it hasn’t met what it is budgeted this year, has it?
JOSH FRYDENBERG:
Well, we have actually met every commitment. It is a demand driven program and as of the end of last year, there were 250,000 people who were in the NDIS, 78,000 of whom hadn’t received disability support before and it is going to 460,000. We have fully funded the NDIS.
CHRIS UHLMANN:
But, just to get clear on this. It’s under spent, hasn’t it? By somewhere between $2.5 billion and $5 billion and that money is going onto your Budget bottom line, isn’t it? That’s something to give you a surplus.
JOSH FRYDENBERG:
Well, firstly they’re your numbers…
CHRIS UHLMANN:
Is that true?
JOSH FRYDENBERG:
Well, what I…
CHRIS UHLMANN:
Give me your numbers.
JOSH FRYDENBERG:
Well, you’ll have to again to wait for the Budget on Tuesday night.
CHRIS UHLMANN:
Is that in the ball park? Has it underspent?
JOSH FRYDENBERG:
It’s a program that is in transition and a program that has currently 250,000 and will move up to having 460,000. But Chris this is the key point, everybody who is in the NDIS is fully funded through this Government and through this Budget. We will meet every cent of our commitment to the NDIS.
CHRIS UHLMANN:
Just so people can understand what you mean by screwing down on this program to save money on individual plans, which is what has happened…
JOSH FRYDENBERG:
That is not what happened actually…
CHRIS UHLMANN:
So, a man call Laurie cannot get a second cochlear ear implant, because they won’t fund him for that, but they will fund him $10,000 for community visits. A boy called Lachlan can’t get calipers for his leg, because they won’t fund for that, but they will fund for community visits. Isn’t this system entirely mismanaged? Aren’t people missing out on the services that they deserve? And the bottom line for the Government is, it’s actually saving money.
JOSH FRYDENBERG:
Chris, this is a vitally important scheme, there is bipartisan support. We have fully funded the NDIS and when fully rolled out it will affect and support 460,000 Australians. Already, Chris, there is 250,000 people in the NDIS, 78,000 of whom have not received support before…
CHRIS UHLMANN:
Is six ministers in six years good government for the NDIS?
JOSH FRYDENBERG:
Well, what is important for the NDIS is that the scheme is fully rolled out and we get the support to people who need it. We are absolutely committed to this program, it’s a demand driven program and we’ve fully funded it in this year’s Budget.
CHRIS UHLMANN:
We’re heading to an election campaign and this is clearly an election Budget. Would you say you’ve been a good Government?
JOSH FRYDENBERG:
Absolutely.
CHRIS UHLMANN:
So, why have you had three Prime Ministers?
JOSH FRYDENBERG:
Well, we’re a very good Government that’s delivered 1.2 million new jobs, that has delivered record spending for schools and hospitals, that has put 2,000 new drugs on the PBS, that has fixed up Labor’s mess when it came to the defence spending and now brought spending up to two per cent of GDP…
CHRIS UHLMANN:
Can I just take you to one small number, three. Why do you need three Prime Ministers, if you’re a good Government?
JOSH FRYDENBERG:
Well, we are a good Government that is creating jobs and under Scott Morrison we will continue to deliver.
CHRIS UHLMANN:
Surely, the thing that people are going to measure you on when they come to the election is how you’ve performed and in votes on your own performance, your party has voted against two prime ministers. How does that make you a good Government?
JOSH FRYDENBERG:
Well, what this Budget will do is actually make very clear the contrast, Chris, at the next election. We’re creating more jobs, delivering better services without increasing taxes. Bill Shorten is promising $200 billion of new taxes, your job will be less secure.
CHRIS UHLMANN:
See, this is the point, Treasurer. I’m not asking you about Bill Shorten, I’m asking you to score your own Government on the one measure that everyone knows, three prime ministers. And, why would a Treasurer be facing a threat in his own safe seat if you had been such a good Government?
JOSH FRYDENBERG:
Well, we don’t take any seat for granted when it comes to the next election and that is obviously what every side of politics should do as well. But, when it comes to our achievements, it’s our jobs record, it’s the fact that in this Budget we will be delivering the first surplus in over a decade. That is a very significant achievement. We’re paying back Labor’s debt for the first time since Peter Costello paid back Labor’s debt too.
CHRIS UHLMANN:
And, again, if you are so good, if the economy is so good, why aren’t people feeling it, why aren’t they rewarding you?
JOSH FRYDENBERG:
Well, in terms of new jobs, they’re seeing that being created…
CHRIS UHLMANN:
They’re seeing their wages flat…
JOSH FRYDENBERG:
Well, actually, when it comes to wages, we all want wages to be higher, but the Reserve Bank of Australia has said that wages has picked up…
CHRIS UHLMANN:
And they said household income is going down.
JOSH FRYDENBERG:
…and the Wage Price Index is actually up 2.1 per cent. But, Chris, the fundamental point is that we are delivering a strong economy and that the economy now faces some headwinds and the Australian people can trust us to secure them a better future with more jobs and better services and repairing the nation’s finances…
CHRIS UHLMANN:
But, if I watch this conversation from beginning to end, why don’t we go back to where we started. And, if people are doing so well, why do you need to send them money in the mail?
JOSH FRYDENBERG:
Well, we have a series of measures in this Budget which will actually ease cost of living pressures and the money that is going today to those four million Australians, to pensioners, to people on veterans payments, to people on carers payments, to single parenting payments, these are people who face real cost of living pressures and we stand by them as well as by every Australian.
CHRIS UHLMANN:
And, if we see more cash payments to people in your Budget, won’t it be the sign that the people that face the most pressure at the moment are the people in this Government?
JOSH FRYDENBERG:
What you will see in this Budget is the next stage of our economic plan for a stronger economy and a more secure future. That is what the Morrison Government has delivered and that is what the Morrison Government will continue to deliver.
CHRIS UHLMANN:
Just finally, can I take you back to six years ago when you came into this Government under Tony Abbott. Did things turn out the way that you imagined they would?
JOSH FRYDENBERG:
Well, of course, I’m in a different position than I was then…
CHRIS UHLMANN:
So is everybody else, it seems to be a bit of a problem with this Government.
JOSH FRYDENBERG:
Well, there is always changes in portfolios. I’m really excited about these opportunities as Treasurer and I’m really looking forward to the Budget on Tuesday night.
CHRIS UHLMANN:
And, can I take you back to six years ago and if we’d been having this conversation, one of the measures you would have used for the Labor Party were the number of prime ministers that they had and that was the reason they deserved to lose, wasn’t it?
JOSH FRYDENBERG:
The measure that I and our Government will stand by is the number of jobs we’ve created, the better services we’ve delivered, the fact that, today, the Australian economy is stronger than the economy we inherited, economic growth is higher, unemployment is lower, business investment is stronger and more Australians are in a job.
CHRIS UHLMANN:
Josh Frydenberg, we will leave it there. Thank you.
JOSH FRYDENBERG:
Good to be with you.