JIM WILSON:
Treasurer, welcome to Drive. Welcome back to the program.
JOSH FRYDENBERG:
Good afternoon, Jim. Nice to be with you and your listeners.
JIM WILSON:
Thank you for your time, as always. Now, there's always winners and losers in budgets. In many ways the priority of this budget is to buy votes ahead of the election. Will this budget achieve that and turn the polls around for you, Treasurer?
JOSH FRYDENBERG:
Well, the priority, the focus, the meaning of this budget is to deliver a stronger economy and a stronger future for all Australians. And we've done that in a number of ways, Jim. Firstly, we've responded to the needs of many Australians who are under real pressure with cost of living, and particularly the fuel prices and the food prices. So the cut to the fuel excise is significant. We're also providing $250 payments to 6 million pensioners, veterans, carers, concession card holders including self-funded retirees. We're providing $420 as a boost to the low and middle-income tax offset. So if you are a low or middle-income earner up to $126,000 a year, you'll see a benefit come when you put your tax return in from the 1st of July. And then we're cutting the cost of medicines for people who use multiple scripts on a regular basis.
JIM WILSON:
Just as far as the tax breaks for low and middle-income earners, I mean, it's a welcome move, but surely it's a clear sign, Treasurer, that you're trying to win over their support ahead of the election?
JOSH FRYDENBERG:
Well, to be very honest with you, that benefit, that $420, does not arrive before the election. So it actually goes against those who seek to make that argument because it arrives once people put in their tax return, which you can only do after the end of the financial year.
JIM WILSON:
But it's a sweetener come July 1, though, isn't it?
JOSH FRYDENBERG:
Well, it's a response to the need to provide cost of living relief to more than 10 million Australians. We've already put in place the low and middle-income tax offset, Jim, which will see someone receive up to $1,080, and we've boosted that to $1,500.
JIM WILSON:
I'm happy to see the petrol excise that's been halved, which is good relief for motorists. But it's only temporary. If you win the election, would that be extended beyond September?
JOSH FRYDENBERG:
We're only doing it for six months, and that's reflecting the high energy prices, petrol prices, that we're seeing today. Treasury's forecast, which was included in last night's budget, is that the barrel of oil price will come down to about $100 in September, and that's when the six-month period is over for the halving of the fuel excise. And, Jim, I point out to you that in New Zealand, in France, in Ireland and a host of other countries they've also cut the fuel excise in response to the high prices that we're seeing, which are, again, driven by international factors, particularly the conflict in Ukraine.
JIM WILSON:
There are some skeptics who aren't convinced fuel companies will pass on the savings at the bowser. I know you and the ACCC have put these companies on notice that it must happen. Are you certain we will see those savings and see them soon?
JOSH FRYDENBERG:
I'm confident that the savings will be passed on to consumers. The ACCC has put out a public statement. They already have a petrol price monitoring group, that they will come down hard on businesses, retailers, that engage in misleading and deceptive conduct, and if they do so, the ACCC has at their disposal the ability to impose contraventions of up to $10 million in fines. So pretty significant.
JIM WILSON:
Okay. Treasurer, I know one thing a lot of my listeners have been asking about is what happened to the beer tax cut? Are you disappointed not to be announcing that?
JOSH FRYDENBERG:
Well, again, we can't do everything. What we did do is put in place cost of living relief with those measures I talked about, and there's four significant ones. We've also banked a material improvement to the budget bottom line as a result of having a stronger economy and more people in work. So when more people are in work, they're paying tax and fewer people on welfare requiring less expenditure from the government. So that's a significant outcome from the budget. We've provided small business relief for businesses that buy digital equipment, whether it's hardware or software, as well as skilling up their staff. So there's a bit in it for small businesses. There's a bit in it for households. There's a bit in it for the regions. There's obviously a bit in it for all Australians with the lowering of the fuel excise. But we can't undertake every measure in this particular budget.
JIM WILSON:
As a government you've done a very good job with the economy in a very challenging environment. With unemployment where it is, should now be the time for you to do more to write down the crippling debt?
JOSH FRYDENBERG:
Well, again, we saw a $100 billion improvement, Jim, to the bottom line. That's the fastest and largest improvement that Australia has seen in over 70 years to the budget deficit. I mean, it's come down as a share of the economy by more than half over what are called the forward estimates – the next few years – and then it halves, more than halves, again at the end of the medium term. So the trajectory is a positive development given what we had announced last year, and certainly what we had feared in the early stages of the pandemic when Treasury were talking about the unemployment rate being as high as 15 per cent. Now it's 4 per cent, which is the equal lowest in 48 years.
JIM WILSON:
So you're comfortable? You think that this budget you've delivered is fiscally responsible?
JOSH FRYDENBERG:
Absolutely. And I make no apologies for the fact we put in JobKeeper and helped save 700,000 jobs, that we gave the cash flow boost to millions of small businesses, that we provided a doubling of the safety net with the coronavirus supplement at the peak of the pandemic which helped people who were on income support. We took over a thousand individual decisions, Jim, and now we've got to the point where the Australian economic recovery is stronger and faster than the United States, than the United Kingdom than Japan, Italy, Germany and France. And that's something that belongs to all 26 million Australians. I'm not underplaying the risks that are out there whether it's another Covid outbreak or whether it's the conflict in Ukraine spreading beyond those borders. They're out there. But what we have always sought to have done is take responsible, principled, temporary and targeted decisions to get Australians through this pandemic.
JIM WILSON:
How about wage growth? You say they will more than keep up with the cost of living pressures. But are you being optimistic on that front? When will wages rise?
JOSH FRYDENBERG:
Well, what the budget does show is that wages will steadily rise, and that is a function of having a tighter labour market where employers are competing hard for employees. And you can see that now with, you know, more than 200,000 job vacancies. And you hear from businesses, Jim, that one of their biggest issues is actually workforce shortages. So that is something that will help drive up wages. That's Treasury's view, and that's reflected in the numbers that we print.
JIM WILSON:
Okay. As you were handing down the budget last night, Treasurer, next door Liberal senator Concetta Fierravanti-Wells unleashed on the Prime Minister labelling him a bully and accusing the PM of having "no moral compass and he's not fit to be Prime Minister." I mean, it was a stinging attack by the outgoing Liberal senator. How damaging is that to Scott Morrison? And is there any truth to the claims?
JOSH FRYDENBERG:
Well, it won't surprise you that I have a very different view to the Senator and her comments. You know, my experience working very closely with Scott Morrison both as the Deputy Leader of the Liberal Party but also the Treasurer through the toughest of times with the pandemic, has been that he has provided outstanding leadership to the country. And he and I have a very, very positive, constructive working relationship. And that's been a great partnership during this difficult time. So there was a preselection in New South Wales. Around 500 party members gathered on the weekend. They made their decision. That decision is now to be upheld.
JIM WILSON:
Obviously the Coalition's been very vocal about Anthony Albanese's inaction when it comes to very serious bullying allegations in his own ranks. So how will your government handle these claims by Senator Fierravanti-Wells?
JOSH FRYDENBERG:
Well, again, the Prime Minister has been very clear that if there's allegations of that kind, they can be made through the party system given it's related to party matters, and that's where it should be.
JIM WILSON:
Before I let you go, you're a proud Victorian. Tonight here at the MCG legendry cricketer Shane Warne will be honoured at a state memorial service. Treasurer, I think it's going to be a very fitting tribute to a man who achieved so much.
JOSH FRYDENBERG:
Yeah, I mean, I was one of the fortunate people in the country to know Shane Warne. And, you know, I always had really pleasant dealings with him. I found him someone of, you know, amazing charisma and not just an amazing player on the field, of course, but, you know, off the field he was pretty passionate about a lot of things. And I enjoyed my discussions with him. And it's a terrible loss for Australia and most of all for his family. And I extend my thoughts and my prayers to them at this difficult time.
JIM WILSON:
Treasurer, thank you for your time this afternoon.
JOSH FRYDENBERG:
Thank you.