DAVID KOCH:
Treasurer Josh Frydenberg joins us now. Treasurer, good morning to you.
JOSH FRYDENBERG:
Good morning, Kochie.
DAVID KOCH:
And, look, one of the big criticisms of the Budget is that it's not long term. It doesn't focus on the long term. It's about the short term, it's about buying votes. What's your response to that?
JOSH FRYDENBERG:
Well, a big part of the Budget is laying out a long‑term plan to create more jobs and a more resilient economy. There's significant investments in our regions. We've identified four priority areas in the Pilbara, in the Hunter, across north Queensland and central Queensland as being a key area for us. And, of course, these are going to be areas where we can further invest in economic growth, we can capitalise on the growing middle classes in the regions. We've got more investments in infrastructure, telecommunications, water infrastructure. We've got more investments in small business. We want them to adapt to the digital economy so we're providing tax incentives for them. There's a lot of extra money for manufacturing in Australia because whether it's an mRNA vaccine, which we'll now make in Victoria, or whether it's other aspects of our supply chains like critical minerals, which are going to be so important into the future. So there is a long‑term economic plan here, Kochie – investing in our regions, investing in infrastructure, investing in skills and investing in small businesses.
DAVID KOCH:
Okay. Things like halving the fuel excise for six months to shave 22 cents off a litre, a one‑off payment – $250 – to 6 million people, that's to meet increasing costs now while wage growth catches up, is it?
JOSH FRYDENBERG:
Well, it's also reflecting the higher oil price at the moment, which is, as you know, well above $100 a barrel. It's up by 50 per cent since the start of this year. And this is putting real pressure on households budget with the price of a litre of petrol more than $2. So what Treasury have forecast is that the price of a barrel of oil will come down. But until that time, we're putting in place for six months this temporary and targeted measure. And I point out to you and your viewers, Kochie, that New Zealand, that Ireland, that France and a whole host of other countries have taken similar steps to cut the fuel excise.
DAVID KOCH:
Okay. All right. But then 10 million Australians will get an extra $420, but that's a tax offset. We take it off at tax time, don't we? We don't get it in our bank account. Do you think people will just forget about that, that it won't have an impact?
JOSH FRYDENBERG:
Well, not if you're earning, 50, 60, 70, 80 or $90,000. When you get through three $1,500, or if you're a two‑income family you get $3,000 in your bank account from the 1st of July when you put in your tax return, you won't forget about that very quickly. That's real money. That's lower taxes and that's delivering on our commitment to the Australian people. So this is very significant. More than 10 million Australians, Kochie, will get that tax offset. On top of that, you've got the $250 payment which goes to 6 million – pensioners, veterans, carers and including self‑funded retirees who are concession card holders – all of which will help. And then, of course, we're making medicines cheaper and more affordable and accessible, particularly for people who use medicines on a very frequent basis.
DAVID KOCH:
Yep. A lot of handouts in it. Is there a fear it will feed into inflation and then feed into pressure for even higher interest rates to come?
JOSH FRYDENBERG:
Well, what Treasury have done is put these measures into their forecasts. And they see inflation rising this year off the back of international factors, particularly what's happening in Ukraine, but then inflation starting to moderate and then we see wages strengthening as well. We're on the cusp of a historical low unemployment rate with a 3 in front of it for the first time in 50 years. That sees employers competing for workers and, therefore, driving up wages as well. But we have a great story to tell, Kochie. We've faced the biggest economic shock since the Great Depression. Your viewers will remember the images just two years ago with hundreds of thousands of our fellow Australians lining up outside Centrelink having lost their jobs.
DAVID KOCH:
Yeah.
JOSH FRYDENBERG:
We have recovered really strongly. We've got to maintain that momentum. We've got to stick to our plan – a plan that is clearly working.
DAVID KOCH:
Treasurer, appreciate your time. Thanks for joining us.
JOSH FRYDENBERG:
Always a pleasure.