JOSH FRYDENBERG:
Good morning, Chris, nice to be with you.
CHRIS UHLMANN:
Now just over your shoulder people can see the cabinet room where many of the decisions about your budget have been made. How will the decisions that you made in there make Australian's lives better on Tuesday night?
JOSH FRYDENBERG:
Well this is a budget for the times. Australian families will see cost of living relief now in a practical and responsible way. They'll see a long‑term economic plan to create more jobs with more investment in infrastructure and skills, in energy, in small business. They'll see the essential services that they rely on guaranteed, hospitals, schools, the NDIS, aged care, and of course they’ll see more investment in national security and defence because we do face very uncertain international times.
CHRIS UHLMANN:
And because of those uncertain times petrol's now over $2 a litre for most people. Will you cut petrol excise? That's 44 cents in the dollar that the Government takes at the moment.
JOSH FRYDENBERG:
Well, Chris, we do understand that the number one topic around the kitchen tables of Australian families right now is cost of living and one of the highest costs is fuel prices. So what we will do on Tuesday night is provide relief for those families, recognising that fuel costs are very high right now and that's putting pressure on families.
CHRIS UHLMANN:
So you will cut excise?
JOSH FRYDENBERG:
I'm not going to get into, on the sticky paper with you this morning about the individual measures other than to say we recognise that fuel prices are very high.
CHRIS UHLMANN:
So you won't just pause indexation, which is almost nothing to people?
JOSH FRYDENBERG:
Well you could ask me lots of different ways as to the same question but what I can say is that fuel prices of course are high. That's a result of the international tensions. The barrel of oil is up by 50 per cent since the start of the year, that's flowing through to the bowser here at home. We recognise that pressure. We will be providing relief for cost of living on Tuesday night.
CHRIS UHLMANN:
There's one thing that parents tell me more often than not is they fear that their children will never own their own home. The median price of houses in capital cities in Australia is now over a million dollars.
JOSH FRYDENBERG:
Yes.
CHRIS UHLMANN:
What if anything can you do about that?
JOSH FRYDENBERG:
Well we'll have some initiatives in the housing space on Tuesday night but we’ve already announced the home builder program, we've announced the first home super saver scheme which allows people to build up a deposit in their superannuation. We've also provided in previous budgets other initiatives to allow people to get into a house with a deposit as low as 2 or 5 per cent. If they're a single parent, it's 2 per cent, if they're not it's 5 per cent. These measures have helped see, across Australia more than 160,000 first home buyers over the last year. Now the five-year average is 100,000. So we've seen more first home buyers getting into the market. That's a good thing. Our measures have played a role in that.
CHRIS UHLMANN:
What about people with rent, because of course high house prices drive high rents?
JOSH FRYDENBERG:
Well rental prices are going up and that's reflected ‑‑
CHRIS UHLMANN:
Will you help them?
JOSH FRYDENBERG:
Again, we do already provide $5 billion a year through what is called Commonwealth rental assistance.
CHRIS UHLMANN:
And will that be more?
JOSH FRYDENBERG:
That supports one and a half million Australians.
CHRIS UHLMANN:
Will there be more for the renters?
JOSH FRYDENBERG:
Again, we continue to provide that support.
CHRIS UHLMANN:
So will you provide cash hand outs to people on low incomes?
JOSH FRYDENBERG:
Well again, there's been a lot of speculation about what's in or what's not in the budget, but we recognise cost of living pressures are affecting all Australians right now and we will want to and we will provide relief in the budget.
CHRIS UHLMANN:
You've extended the low-income tax offset twice now.
JOSH FRYDENBERG:
We have.
CHRIS UHLMANN:
Do you intend to extend it again?
JOSH FRYDENBERG:
Well that was always a temporary measure. That was designed as a fiscal stimulus when the economy had been hit by the pandemic. The economy is recovering very strongly.
CHRIS UHLMANN:
So no?
JOSH FRYDENBERG:
Again, I will announce the particular measures on Tuesday night in the budget, but you can be rest assured taxes will always be lower under the Coalition. The low- and middle-income tax offset that you referred to can be claimed by Australians from 1 July. That can see someone get up to a $1,080 refund on their tax and that will put more money into their pockets.
CHRIS UHLMANN:
You'll have this budget, and you'll go to an election. Why shouldn't people think that with cuts to excise, with cash hand outs, with all the things you've just discussed, that this is just a fist-full-of-dollars budget to try and buy votes at the next election?
JOSH FRYDENBERG:
Well the measures to provide cost of living relief will be targeted, they'll be temporary, they'll proportionate to the challenges Australian families face. But overall this budget is very responsible. There's a material improvement to the budget bottom line, a very significant one. That's the fiscal dividend, that's the dividend that we're getting to the bottom line from having a strong economy. We have unemployment today at its equal lowest in 48 years. That's a remarkable achievement when you consider that, for example, in the United States there are fewer people in work than at the start of the pandemic, in Australia there are more.
CHRIS UHLMANN:
And you said that when Australia got below 6 per cent that you'd start to repair the budget. You're not doing that yet. It's going to go understand 4 per cent. So when will you repair the budget? You've got a trillion dollars in debt and the highest deficits ever posted in Australia's history, so when do you start repairing this?
JOSH FRYDENBERG:
We're already seeing improvements to the bottom line. So in the final budget outcome for the 2021 year it was $80 billion, Chris, better off than what I had forecast in the budget the previous year.
CHRIS UHLMANN:
Which was disastrous so ‑‑
JOSH FRYDENBERG:
The reason ‑‑
CHRIS UHLMANN:
-- forecast than the disastrous one you had.
JOSH FRYDENBERG:
The reason why it was better was because more people were in work therefore paying tax and fewer people were on welfare therefore less government expenditure. I put it to you that less than two years ago 1.4 million Australians either lost their jobs or saw their working hours reduced to zero. We saw images of hundreds of thousands of our fellow Australians lining up outside Centrelink which were for many reminiscent of the scenes of the Great Depression. We responded with JobKeeper which saved 700,000 jobs.
CHRIS UHLMANN:
Sure.
JOSH FRYDENBERG:
With around a thousand separate measures which now sees Australia in one of the strongest recoveries anywhere in the world.
CHRIS UHLMANN:
I put to you though, you never cut the Labor Party any of that slack during the global financial crisis. You cried debt and deficit disaster when the debt was at $300 billion and the deficit was at $54 billion. You posted a $160 billion deficit last year and a trillion dollars worth of debt is on the horizon. Why shouldn't we say debt and deficit disaster and not listen to any excuses?
JOSH FRYDENBERG:
Well, Chris, we were rightly critical of Labor's cash for clunkers, their pink batts fiasco, their $900 cheques to dead people. We don't resile from that. But what we did do in this crisis is put any ideological constraints aside and responded to the needs of Australians. Now we're seeing an unemployment rate at its equal lowest in 48 years. Female unemployment is at its lowest since 1974. This is a result of an economic plan that is working.
CHRIS UHLMANN:
And with you throwing stimulus into the economy at a time when unemployment is that low you are inviting the Reserve Bank to lift interest rates, aren't you?
JOSH FRYDENBERG:
Well what we're doing is getting that balance right. You raise a very important point here. The measures that we have in the budget are designed to not put unnecessary upward pressure on inflation, which is already high right now. But they're also responding to people's needs. The issues we talked about at the start of this interview, higher fuel price, higher food prices, higher transport costs, that are playing right out across our supermarket shelves. This is the number one topic around the kitchen tables of Australians, we're getting the balance right in this budget.
CHRIS UHLMANN:
Sure, but doesn't it follow logically that if you pour more cash into an economy that's running hot, you'll have to push up interest rates? The Reserve Bank will have no other choice and people then will really feel the pinch because a lot of Australians are massively over-leveraged.
JOSH FRYDENBERG:
Well again we've got the balance right. We've worked through these issues with Treasury. We're providing cost of living relief now but we're also providing a long‑term economic plan. I mean this is always a contrast going into an election. Labor promised more than $80 billion of additional spending. That would have put more upward pressure on interest rates and inflation. We're doing it in a more ‑ we're spending in a responsible and balanced way.
CHRIS UHLMANN:
You're in no position now to talk about the Labor Party's record, are you? People will look at you and see the spending that's come, and you will make your excuses about the global financial crisis, as Labor did ‑ about the COVID‑19 as Labor did about the global financial crisis. Don't both parties respond in exactly the same way when there's a crisis? There is no difference.
JOSH FRYDENBERG:
Well again, we've responded in a very responsible and targeted way to the point that Australia has seen a stronger and faster economic recovery than the United States, than the United Kingdom, than Canada, than France, than Germany, than Italy. This is the result of an economic plan that is working and there is more to do. There have been setbacks along the way, but Australians now go into this year understanding that the unemployment rate is low, that their vaccination rates are among the highest in the world, that the mortality rate's among the lowest in the world.
CHRIS UHLMANN:
Treasurer, do you project any surplus anywhere in the next ten years?
JOSH FRYDENBERG:
What I do project in Tuesday's night budget is a material improvement to the bottom line which we're banking. We're banking that dividend.
CHRIS UHLMANN:
But you taunt Wayne Swan on the fact that he would never deliver a surplus. When will the next Treasurer, Labor or Liberal, be able to deliver a surplus? Is it in the next decade?
JOSH FRYDENBERG:
Again, what you'll see in the budget is the trajectory of our debt peaking earlier and lower than what was initially forecast. What you will see is a strong set of numbers where we're banking the fiscal dividend. And what you did see was that the Coalition delivered the first balanced budget in 11 years going into this crisis which gave us the fiscal firepower to respond as necessary.
CHRIS UHLMANN:
Very quickly, Treasurer, this might be your last budget. Have you reflected on that?
JOSH FRYDENBERG:
Well again I'm looking forward to the election campaign ahead. We've got a very strong record to campaign on, but more importantly we've got the plans for the future. The future which will see a strong economy and a stronger future for all Australians.