FRAN KELLY:
Treasurer, welcome back to breakfast.
JOSH FRYDENBERG:
Nice to be with you, Fran.
FRAN KELLY:
Julie Bishop was the first woman to become Deputy Leader of the Liberal Party, a position you now hold, is her departure a significant loss for the Coalition, as you face an election? Given her popularity with the public for one thing, and her fundraising ability?
JOSH FRYDENBERG:
Well, she’s certainly a loss for the party, and Julie has served with great distinction and dignity in two decades in Parliament. And as you say, as the Deputy Leader of the Liberal Party for 11 years, she leaves with a very, very proud record of achievement. Particularly her time spent as Foreign Minister. Australia’s first female Foreign Minister. When she looked after the victims, families, from MH17 and sought justice through the United Nations. She’s also established the new Colombo Plan, which is based on a Menzies Government initiative, which at that time brought people from Asia into Australia, and she’s sending young people into Asia. So, she leaves with a very significant legacy.
FRAN KELLY:
Treasurer, isn’t this just another transactional cost of the decision last year from your party to dump Malcolm Turnbull as leader? I mean if you’d said he would still be Prime Minister, Julie Bishop would still be Deputy wouldn’t she? She wouldn’t be bowing out.
JOSH FRYDENBERG:
Well, no, people make their decisions for a whole host of reasons…
FRAN KELLY:
Like not being elected to be leader by your colleagues?
JOSH FRYDENBERG:
Well, as Julie said, she went through the leadership race, and obviously Scott Morrison was successful there and I think he’s doing an outstanding job as Prime Minister. But Julie Bishop made it very clear in her statement to the Parliament, that the government should win the next election. That it’s doing everything right with respect to the economy and to national security and that there will be a clear choice at the election.
FRAN KELLY:
Ok there’s a serious, before we get to any election issues, there is a serious economic and trade issue emerging this morning. A major Chinese port, that controls five harbours, has banned, as we understand it, banned imports of Australian coal. Now, last night the Trade Minister, Simon Birmingham, was seeking urgent clarification from our Ambassador in Beijing. Can you bring us up to date?
JOSH FRYDENBERG:
Well, I wouldn’t jump to conclusions. I mean, the Australia-China trading relationship is exceptionally strong…
FRAN KELLY:
Well, have they banned our imports? Do we know that?
JOSH FRYDENBERG:
No, they haven’t, and if you…
FRAN KELLY:
So, what’s going on there?
JOSH FRYDENBERG:
Well, look they’ve, in the past, put in testing systems in place, and as Simon Birmingham has said, that our Ambassador will be making enquiries. But the two-way trading relationship works strongly in Australia’s favour. The coal industry, in terms of its exports is worth over $60 billion to Australia, creates over 50,000 jobs. And if you look at both the value and the volume of our coal exports to China in the last quarter of 2018, that was greater than the same period in 2017. So I wouldn’t jump to those conclusions…
FRAN KELLY:
But isn’t that why the reason this is serious? If they’re not banning it, they may be capping it or certainly going slow on it, and that would have an economic impact, as you’ve just indicated. Is this likely, are we seeing some sort of retribution here for Australia’s decision to ban Huawei?
JOSH FRYDENBERG:
No we’re not, we have a very strong relationship with China, and it’s based on mutual respect and mutual interest and the relationship both at a people to people links, as well as a trade and economic side, is very important to both countries.
FRAN KELLY:
So, you’re not concerned at the reports that indicate that, at the moment, Australian coal is not being unloaded at these ports?
JOSH FRYDENBERG:
Well, I think that the relationship is strong, that our exports to China will continue to be strong, as they have been in the past.
FRAN KELLY:
Minister, Labor is vowing to dramatically expand its compensation scheme for people who are the victims of banking misconduct. The plan, which we’ve now seen outlined this morning, we will be talking to Bill Shorten about it in a moment, offers 4 times more compo than you are, to individuals, and gives people a second chance and businesses a second chance to argue their cases if they think they got a raw deal from the Ombudsman or the courts in the years past. Will you match this plan?
JOSH FRYDENBERG:
Well, actually, imitation is the best form of flattery, Labor’s actually followed our lead here…
FRAN KELLY:
Well, they’re offering $2 million cap, you’re offering $500,000. Theirs is bigger and better isn’t it?
JOSH FRYDENBERG:
Well, actually let me explain something to you, Fran. Eighteen days ago the Coalition responded quickly and comprehensively to the Hayne Royal Commission, we said that AFCA, the Australian Financial Complaints Authority, which we established, would have its remit extended from six to ten years, and that people could put their case. This is a body that the Coalition has set up. Now we put in place the amounts for compensation, based on the recommendation of the independent Ramsay Review, which included professors of law, representatives of consumer organisations, and former members of the Productivity Commission. You’ve got to get the balance right, because there are 35,000 small businesses that are effectively affected by ACFA, and you want to ensure that the levies that are imposed on them, to meet the compensation schemes, are right and don’t put them out of business, don’t make it more difficult for them to get indemnity insurance and the like. So, we listened to the experts, Labor’s only involved in stunts, and now they’re playing follow the leader.
FRAN KELLY:
Well, Labor’s stunt, as you call it, would nevertheless offer people four times more compensation for banking misconduct than you will. Will you match that?
JOSH FRYDENBERG:
Well actually that’s not right, because what we have done, is we’ve announced not only that the government would pick up the tab for $30 million for compensation schemes that were not paid in the past…
FRAN KELLY:
Yeah that’s a global figure, I’m talking individual figures.
JOSH FRYDENBERG:
Well, what I’m saying is we’ve got the balance right, following the Australian Financial Complaints Authority’s establishment, and the recommendations of the Ramsay Review. Now the Labor Party, have had 18 days to respond to the 76 recommendations, we’ve only seen 6 responses. They’ve been part responses; they’ve had to backflip all week. Today we’re hearing that they’re going to backflip on mortgage brokers, which means that they can’t be trusted. Because before the commission was even handed down, Chris Bowen said that if Hayne recommended something, then it will be done. And the Labor Party has said, including by Clare O’Neil that they think that the commissions for mortgage brokers should be brought to an end. So you can’t actually trust the Labor Party because their position is changing from day to day.
FRAN KELLY:
Just on mortgage brokers, the government’s looking at this, if you support upfront commissions for mortgage brokers, will they increase under you? Because if not how will brokers make up for lost income from the abolition of trailing commissions?
JOSH FRYDENBERG:
Well, they absolutely could increase, that could be a function of what happens in the market. But, the point is, we stand by mortgage brokers. The Labor Party said that mortgage brokers’ commission should go, those are the words of Clare O’Neil, on ABC Radio. So, we actually think that mortgage brokers should continue to play an important part where they write more than 50% of the loans in the residential housing market, and that 75% of them are small businesses.
FRAN KELLY:
Treasurer, it’s been a tough week for Mathias Cormann, for the Coalition really, and Matthias Cormann and now Joe Hockey, in strife over his ties to a travel company run by a Liberal donor. We had Michaelia Cash being put through the Senate estimates ringer for her failure to provide a witness statement to police. Not to mention losing control of the legislative agenda in the lower house. Why should voters give you another chance, come the May election?
JOSH FRYDENBERG:
Well, you conveniently left out there that the Labor Party’s been humiliated on border protection, weakening their position…
FRAN KELLY:
I’m going to the issues that plagued you; I mean you did lose control of your legislative agenda this week.
JOSH FRYDENBERG:
You actually talked about the week that was. I’m about to tell you that there were features of the week, which were very detrimental to the Labor Party namely on border protection and their exposure on the retirees tax…
FRAN KELLY:
And I’ll be coming to those with Bill Shorten. Let’s go with you directly to the Helloworld scandal that overwhelmed the week, because there are fresh allegations about the role played by Australia’s ambassador to the United States, Joe Hockey, in arranging a meeting for the travel company, HelloWorld, run by Andrew Burns, who’s the Federal Treasurer of the Liberal Party. In a statement to the committee, a former company executive said he was surprised at how quickly he was able to arrange a meeting with Mr Hockey; he says Andrew Burns told him “Hockey owes me”. Now Andrew Burns has since said he never said those words, but do you accept at the very least this looks very cosy?
JOSH FRYDENBERG:
Look, let’s put some facts on the table here. The Labor Party gave a contract in 2012 when they were in government, to a company associated with Andrew Burns. Then in 2014, when we came to government, we gave a travel contract to a company that was a competitor of Andrew Burns. The reality is in both tender processes, the Ministers haven’t been involved. Now, with Joe Hockey, he put all his declarations in the appropriate way, and that has actually been confirmed by the secretary of DFAT, he’s had no role in the independent tender process, and the Labor Party will continue to use these types of issues to distract from their weakness on the floor of the Parliament on borders and tax.
FRAN KELLY:
But, meanwhile, people are looking on, and they see that Ministers are booking their travel directly with the CEO of a major company, an Ambassador is holding meetings and calling meetings for companies that he has a million dollar investment in. It doesn’t look great, what’s your message to people out there?
JOSH FRYDENBERG:
Well, my message to the people is we’re getting on with creating 1.2 million new jobs, and you know what happened yesterday? Was that the new job numbers came out and there were 65,000 full time jobs for the month, female work force participation is at a record high level in Australia, the gender pay gap has come down to its lowest level ever, and we’ve created the jobs that we promised and the growth that we created. So, we can be trusted to deliver a strong economy, in the next term of government if we’re lucky enough to get elected, that’s what we’re focusing on, because we have the track record and the plan for the future.
FRAN KELLY:
Josh Frydenberg, thank you very much for joining us.
JOSH FRYDENBERG:
Thank you.