DAVID SPEERS:
Josh Frydenberg, welcome to the program.
JOSH FRYDENBERG:
Nice to be with you, David.
DAVID SPEERS:
So the Prime Minister says there'll be no increase in taxes, no new taxes, If you're reelected, does that mean you're ruling out any further tax reform for the next three years?
JOSH FRYDENBERG:
Well, the tax reform that we've undertaken is actually cut taxes like abolishing a full tax bracket, the 37 cents in the dollar. See, 95 per cent of taxpayers pay a marginal rate of no more than 30 cents in the dollar between $45,000 and $200,000. Our plan was set out in the Budget on Tuesday night, it was a plan for lower taxes, it will see a $420 top up to the low and middle income tax offset which will see 10 million Australians benefit. There was also a cutting of the fuel excise in half. There was also $120 tax deduction for small businesses that invest in new technology, that in skilling their workers, and there was also an extension of the patent box which sees a concessional company tax rate of 17 cents in the dollar for new innovation in areas like agricultural technology and low emissions technology. It's a very stark contrast, David, our plans as we've delivered, as we said to the Australian people last election for lower taxes, Labor's $387 billion dollars of higher taxes, and Jim Chalmers, my opponent saying that he wants to be flexible around tax, he wants to have an election Budget after the election. Well, the Australian people deserve to know what flexibility on tax, for Labor means, not after the election, but before the election.
DAVID SPEERS:
Okay. Well, let's try and stick to your plans. What you're planning for the next three years. Are you ruling out any further tax reform?
JOSH FRYDENBERG:
Well, we've undertaken significant structural tax reform…
DAVID SPEERS:
I’m just asking about the next three years. And when the Prime Minister says no new taxes, no tax increases? Does that mean no tax reform?
JOSH FRYDENBERG:
Well, what I'm saying is our tax reforms have been lowering taxes, you must be signing up to the Labor definition of tax reform.
DAVID SPEERS:
No, I'm asking about the future, not the past.
JOSH FRYDENBERG:
Well, our future is about lower taxes. We're always looking for opportunities to cut taxes. In this Budget we've done it, both for small businesses and for households. When you look at our track record over the…
DAVID SPEERS:
What is your definition of tax reform? What's the Liberal definition of tax reform? Are you ruling out any changes in the next three years?
JOSH FRYDENBERG:
The Liberal definition of tax reform is a simpler tax system, a fairer tax system, and lower taxes. That's what we have delivered, on everything from small businesses to households and we've also helped lead the world with the work around the multinational agenda and creating a minimum global tax through the OECD.
DAVID SPEERS:
Fairer taxes could include increasing some and decreasing others?
JOSH FRYDENBERG:
Well, if you look at our big signature stage three tax reform, what that has done is it's maintained the progressive nature of our tax system. And that's always been a focus for us.
DAVID SPEERS:
So multinationals, big tech, they won't face any tax increases if you're back in?
JOSH FRYDENBERG:
Well, again, we've laid it out in the Budget. We did invest more money in the Budget around multinational tax avoidance, we have made changes…
DAVID SPEERS:
You’re collecting extra $2 billion from multinationals…
JOSH FRYDENBERG:
Correct. And base erosion, profit shifting, the work that we've done through the OECD, leading the world on a global minimum tax, has meant we get a better tax system.
DAVID SPEERS:
Alright. Let's talk about the cost of fuel. Five years ago, when you were the Minister for Energy and the Environment, you wanted Australia to catch up with the rest of the world, introduce fuel efficiency standards. You said, ‘if Australia had fuel efficiency standards in line with comparable nations, the fuel saving per passenger vehicle could be above $500 a year.’ It never happened. Are you saying you won't touch that reform for another three years as well?
JOSH FRYDENBERG:
We’re always looking for improvements around fuel efficiency standards, because when I said that, it's not just about lowering the cost of petrol, but it's also about environmental outcomes.
DAVID SPEERS:
So you might do this?
JOSH FRYDENBERG:
Well, again, this is work that you know, Angus Taylor, is the Minister responsible has been undertaken, but what we've done…
DAVID SPEERS:
Five years ago, but what we're going to do…
JOSH FRYDENBERG:
But what we've done in the Budget is we've halved the fuel excise by more than 22 cents a litre…
DAVID SPEERS:
Yeah…
JOSH FRYDENBERG:
We’ve done it for six months.
DAVID SPEERS:
You've said that, it’s very important. Just be clear, are you saying you could still do fuel efficiency standards after the election?
JOSH FRYDENBERG:
We've always been committed to getting fuel efficiency standards in place but obviously working through some of those details with the stakeholders is important.
DAVID SPEERS:
Right so it's still alive?
JOSH FRYDENBERG:
That issue has always…
DAVID SPEERS:
…option?
JOSH FRYDENBERG:
That issue has been a focus for us.
DAVID SPEERS:
Okay, you did instead cut the fuel excise…
JOSH FRYDENBERG:
We did.
DAVID SPEERS:
…for six months. Will definitely go back up in September no matter what?
JOSH FRYDENBERG:
That's what the legislation said, the legislation sunsets, that's our plan. What we have done is, as you say, done for six months, we've cut it by more than 22 cents a litre. In New Zealand they cut it for just three months, but they did 25 cents a litre. In France, they did it for four months. In Ireland, they did it for five months. In the Netherlands, for six months. Australia hasn't been alone in cutting fuel excise but if you're a family with two cars and you fill up once a week, you're $30 a week better off, up to, and $700 over the six months.
DAVID SPEERS:
So if you’re Treasurer or even Opposition Leader in six months’ time, you won't argue we need to keep this fuel excise cut, right?
JOSH FRYDENBERG:
I'm certainly not arguing that. And the other thing to point to you, David, is that Treasury’s, forecasts for the price of a barrel of oil is down to $100 by the September quarter, now it's around $115, $120. So we actually think the barrel of oil price will come down.
DAVID SPEERS:
Okay. There was the fuel excise cut, there is the cash payments as well…
JOSH FRYDENBERG:
Yes.
DAVID SPEERS:
…to deal with cost of living as well. The Assistant Treasurer, Michael Sukkar, also announced a $10 cut in the price of medicines. Here he was.
[Plays excerpt.]
DAVID SPEERS:
A $10 cut in the price of medicines. Why wasn't that in your Budget speech?
JOSH FRYDENBERG:
Well, what we've done in my Budget speech is I announced that with respect to the thresholds, we would change that when you need multiple scripts. That's available to 2.4 million people…
DAVID SPEERS:
That is a different to what Michael Sukkar…
JOSH FRYDENBERG:
There’s a different point but…
DAVID SPEERS:
So is that in the Budget or not?
JOSH FRYDENBERG:
Well, what Michael was talking about, actually was the 2.4 million people that will benefit with reduction in the, in getting multiple scripts.
DAVID SPEERS:
No he wasn’t, he said that the price, the current amount will go from $42.50 to $32.50 from the first of May, is he right?
JOSH FRYDENBERG:
Well, again, what we've been talking about in the Budget was taken for 2.4 million Australians to get a reduction in the amount that they pay for their…
DAVID SPEERS:
Was this $10 price cut taken out of the Budget, was it?
JOSH FRYDENBERG:
No, what I'm talking about is there were 2.4 million people benefiting from reducing…
DAVID SPEERS:
The safety net, I know that.
JOSH FRYDENBERG:
The safety net.
DAVID SPEERS:
He specifically said, I can play it again if you’d like, there'll be a $10 cut in the price of medicine. Is that happening?
JOSH FRYDENBERG:
Well, again, our focus has been on 2.4 million people getting over…
DAVID SPEERS:
I know your focus is there. Is that $10 cut…
JOSH FRYDENBERG:
Again, what Michael has done when he was introducing the legislation was talking about the thresholds that have been reduced and…
DAVID SPEERS:
Was he right about the $10 cut?
JOSH FRYDENBERG:
Well again, our focus has been on 2.4 million…
DAVID SPEERS:
I know your focus is there.
JOSH FRYDENBERG:
And…
DAVID SPEERS:
Just to be clear, one more time, is the price of medicine coming down $10?
JOSH FRYDENBERG:
The price of medicine is coming down for 2.4 million people, either concession cardholders or non concession card holders. Previously, you needed 48 scripts. Now you need 36 scripts, if you are a concession card holder, and…
DAVID SPEERS:
That’s a different thing to what he said…
JOSH FRYDENBERG:
That’s what we've been talking about and…
DAVID SPEERS:
So $10 cuts is not happening?
JOSH FRYDENBERG:
Well again, what we've done is both for concessional card holders and for non concessional card holders, you get a substantial reduction in the cost of your medicines as a result.
DAVID SPEERS:
You did also pump a lot of money into the regions.
JOSH FRYDENBERG:
We did.
DAVID SPEERS:
Various pots of money…
JOSH FRYDENBERG:
$21 billion...
DAVID SPEERS:
For infrastructure. You've called this unprecedented, just happens to follow the deal that was difficult with Barnaby Joyce and the Nationals over net zero by 2050. Some of the projects you're funding including the Hells Gate dam in North Queensland don't have a…
JOSH FRYDENBERG:
…business case.
DAVID SPEERS:
…a business case. Why are you committing $5.4 billion of taxpayers money, to something that you don't know whether it will stack up?
JOSH FRYDENBERG:
Well, again, we've made a number of announcements. $21 billion worth of support for our region's right across water infrastructure, transport infrastructure, telecommunications infrastructure, and health in order to get more GPs and MRIs. Hells Gate dam has been on the drawing board for a number of years, it would obviously be a priority for Queensland. We've committed $5.4 billion, we'd like a contribution from the Queensland Government. We need…
DAVID SPEERS:
Wouldn’t you like a business case, though to make sure that you're not wasting the money?
JOSH FRYDENBERG:
And we are going to be doing business cases, that's absolutely…
DAVID SPEERS:
Shouldn’t you do that and then commit the money?
JOSH FRYDENBERG:
Because if you look at, for example, the Melbourne Airport Rail Link, David, we announced $5 billion for that, matched by the Victorian Government with $5 billion before the business case was undertaken. We will be doing business cases but what the businesses cases will be telling us is not whether we will be building these dams or these infrastructure projects, it’s how we will be doing it, because the key about business cases is you bring in the surveyors, you bring in the architects, you bring in the engineers, they look at how to do it at maximum value and at minimum cost.
DAVID SPEERS:
The Fair Work Commission…
JOSH FRYDENBERG:
Yes.
DAVID SPEERS:
…will make a decision later this year on aged care workers pay. The Prime Minister says the Government will “absorb any decision.” It’s a little unclear what that means. Labor's committed to fund 100 per cent of whatever the umpire decides…
JOSH FRYDENBERG:
Whatever that means.
DAVID SPEERS:
Yeah, well, they'll pay 100 per cent of whatever the Fair Work Commission decides.
JOSH FRYDENBERG:
But again, you've got Government residential aged care providers and also you've got those in the private sector and where Anthony Albanese has been all at sea, is the costings of his open ended promises.
DAVID SPEERS:
Well, what about the Coalition? How much would you fund as an increase?
JOSH FRYDENBERG:
So firstly, we've taken aged care funding from $13 billion to $30 billion, a massive increase. We commissioned the Royal Commission, and it was 148 recommendations and a five year plan and I announced $17.7 billion dollars in last year's Budget across home care, across residential care…
DAVID SPEERS:
The question is about how you’ll pay for the pay rise?
JOSH FRYDENBERG:
What we've said is we respect the independent umpire. The independent umpire is the Fair Work Commission and then with respect to the private sector, David, what we have now is an independent pricing authority that takes into account the input costs, and then makes the subsidies increase accordingly. So we will respect the decision of the Fair Work Commission. But when…
DAVID SPEERS:
But what does this mean? I mean, whatever they recommend, will you pay for the lot? Or will you ask the provider…
JOSH FRYDENBERG:
Well obviously, when it comes to Government, when it comes to Government provision in residential care, then we take responsibility for that, when it comes to…
DAVID SPEERS:
100 per cent of that?
JOSH FRYDENBERG:
We take responsibility, obviously, we’d pick up the bill today…
DAVID SPEERS:
Okay, but the private operators, you’re saying, they’ll have to pay for part of it?
JOSH FRYDENBERG:
So there’s an independent pricing authority that determines based on all the input costs, what that increase in subsidy will be. Where that is different to the Labor Party, is when Anthony Albanese laid out his so called five point plan, he then went on Leigh Sales and said the total cost of that was $2.5 billion, only then to be contradicted the next day by Katy Gallagher, his own shadow finance person who said no, that was only for the non wage cost... So
DAVID SPEERS:
Yeah…
JOSH FRYDENBERG:
So he's talking about real wages, he's talking about real wage increases, right. And so what does that actually mean he will fund? Which part of it for the private sector will he fund?
DAVID SPEERS:
We don't know, we don't know.
JOSH FRYDENBERG:
Well I’ve just told you what our plan is.
DAVID SPEERS:
Well with respect, we don't know what level of this increase, whatever it turns out to be, providers will be required to pick up…
JOSH FRYDENBERG:
That’s the independent pricing authority.
DAVID SPEERS:
You’ve got a lot of providers, 60 per cent of aged care facilities on an estimate that's going to be coming out this week, are running at a loss. That's even after the increase you announced in last year's Budget, 60 per cent running at a loss, 65 per cent in rural and remote areas. If you're asking them to pay more for staff, some of them will shut their doors, won’t they?
JOSH FRYDENBERG:
Well, again, what we did in as you pointed out in last year's Budget, is we paid an extra $10 a day per resident. We put in place new bonus…
DAVID SPEERS:
It’s not enough…
JOSH FRYDENBERG:
…retention bonuses for nurses, new other respite services for carers, obviously, a better approach around the workforce, around quality and safety, a new funding model and the like. This was comprehensive, transformational reform.
DAVID SPEERS:
But the point is 60 per cent of them are running at a loss right now even after all that, you're going to ask them to pay more for their staff, can they really afford…
JOSH FRYDENBERG:
That's why you have an independent pricing authority, because that takes into account all the different other input costs that these particular providers are encountering and then it tries to work that out.
DAVID SPEERS:
And ultimately, though, this could cost billions and billions, far more than the two and a half billion that Labor announced for other measures?
JOSH FRYDENBERG:
Well, that's I mean..
DAVID SPEERS:
Where will that money come from?
JOSH FRYDENBERG:
Again, Labor's so called costings are very fluffy, rubbery.
DAVID SPEERS:
What about you though? I'm just asking you as Treasurer. Where will that money come from?
JOSH FRYDENBERG:
Well it depends, it depends on actually what the Fair Work Commission decides, as you know there’s…
DAVID SPEERS:
They’ll decide on an increase on some level, where will the money come from?
JOSH FRYDENBERG:
Well, again, you've got to wait to see what actually that decision is and therefore, how much that will cost. There are different estimates, as you know, you know, whether it's Uniting Care or others, they've made different estimates. We're going to wait.
DAVID SPEERS:
Okay.
JOSH FRYDENBERG:
But what we've made very clear, is that we respect the decision of the Fair Work Commission.
DAVID SPEERS:
In the event of a hung parliament Zali Steggall says she would be open to supporting a Coalition Government as long as Scott Morrison is not the Leader. Would you be prepared to step up?
JOSH FRYDENBERG:
Well, obviously we're hoping to win the election and striving to win the election in our own right. With respect to the independents, firstly, they are fake independents, these independents are…
DAVID SPEERS:
Zali Steggall?
JOSH FRYDENBERG:
They're all having their strings pulled elsewhere. They're acting as a political party…
DAVID SPEERS:
Who’s organising Zali Steggall’s?
JOSH FRYDENBERG:
Well, they're acting as a political party. They get their funding from Climate 200. They’re former Labor Party members in many cases, including in my own seat…
DAVID SPEERS:
Well let’s stick to Zali Steggall, I don’t think she’s a former Labor Party member...
JOSH FRYDENBERG:
Well, in many cases they are and that's the point. And they're running with the implicit support of the Labor Party. They're only targeting Coalition members…
DAVID SPEERS:
Okay.
JOSH FRYDENBERG:
And they’re running on a Labor Party platform.
DAVID SPEERS:
Would you would you rather be in opposition than take the Prime Ministership in those circumstances?
JOSH FRYDENBERG:
Well, David, we're seeking to win the election in our own right.
DAVID SPEERS:
Your own seat of Kooyong is always a challenge to hold, Will you campaign with the Prime Minister in your seat?
JOSH FRYDENBERG:
Well, if he would like to come down, he would be very welcome and I'll be campaigning with him around the rest of the country as I'll be campaigning around the rest of the country, off to Western Australia later today.
DAVID SPEERS:
Can you understand, can you believe the mess in the New South Wales Liberal Party Division wasn't sorted out much sooner?
JOSH FRYDENBERG:
Well, it's less than ideal to say the least. And obviously, I'm glad that it's been sorted out now. But don't think that we're the only side of politics that has had issues in our own divisions.
DAVID SPEERS:
Sure.
JOSH FRYDENBERG:
The Labor Party, as recently as last week…
DAVID SPEERS:
[inaudible].
JOSH FRYDENBERG:
In the High Court, there was a challenge in the High Court last week to the Federal Labor Party's division taking over the Victorian division. So don't think it's just…
DAVID SPEERS:
Okay…
JOSH FRYDENBERG:
… a pox on one house.
DAVID SPEERS:
What about these claims that Scott Morrison racially vilified a competitor in a preselection context, which he denies…
JOSH FRYDENBERG:
He's categorically denied it. And Jamal Rifi, who is one of Australia's leaders of the Australian Muslim Lebanese community, has said about Scott Morrison that he doesn't have a racist bone in his body. That's what he has said.
DAVID SPEERS:
So you have never had anyone come to you with concerns about him using language like this…
JOSH FRYDENBERG:
No.
DAVID SPEERS:
…or his behaviour?
JOSH FRYDENBERG:
No.
DAVID SPEERS:
Okay. Finally, we're about to head into the campaign. This is the end of a pretty extraordinary three years for you as Treasurer of floods, fires, pandemic, and so on…
JOSH FRYDENBERG:
Global conflict.
DAVID SPEERS:
Indeed, global recession. If I can invite you not to be overly partisan at this moment, just give us a reflection of what's been the most difficult moment, any regrets about your own decisions?
JOSH FRYDENBERG:
Well, obviously, the most difficult is having been a Victorian and living through, in Melbourne, the longest lockdown of any city in the world, and that impacted every family in Melbourne. So at a personal level, that was obviously very difficult for so many. As the Federal Treasurer, those early days in March and in April, were the most difficult because 1.4 million people either lost their jobs or saw their working hours reduced to zero and Treasury feared that unemployment could reach as high as 15 per cent, now it's the equal lowest in 48 years at four per cent. So for me, that's been the most rewarding part of the last two years is helping to steer an economy to have one of the fastest and strongest economic recoveries in the world and one of the lowest unemployment rates. We've seen…
DAVID SPEERS:
Any regrets over your decisions?
JOSH FRYDENBERG:
Well the thing I regret, and I felt really helpless at the time over, was the kids being out of school for so long in Melbourne to be honest, you could be Federal Treasurer, Deputy Leader of the Liberal Party, and you had no say over how we could get the kids back into the classroom earlier. I think that's had a long term, detrimental impact on both education and social development outcomes and you know, I feel very sad about that.
DAVID SPEERS:
Treasurer Josh Frydenberg, we will have to leave it there. But thanks for joining us.
JOSH FRYDENBERG:
My pleasure.