KARL STEFANOVIC:
Good morning Treasurer.
JOSH FRYDENBERG:
Good morning Karl.
KARL STEFANOVIC:
Gee whiz, it is going to cost you a lot to buy WA at the next election.
JOSH FRYDENBERG:
Well it is not about just WA, it is about the fairness of the GST system going forward and it is clearly unsustainable to have one state only getting 30 cents in the GST dollar. So what we are going to do is to legislate a floor of 75 cents in the dollar for any state or territory. We are going to provide an additional $9 billion and as a result every state and territory will be better off as a result of our reforms.
KARL STEFANOVIC:
C’mon we all know it’s to buy WA though.
JOSH FRYDENBERG:
Look, the system is unsustainable in WA. If you are sitting there, you might feel happy about the West Coast Eagles win, but you don’t feel happy about getting 30 cents in the GST dollar. We need to ensure that the system is fair going forward and only then does everyone get a better deal and now it is up to the Labor Party to follow our lead, to support our legislation and to see all Australians in every state and territory better off.
KARL STEFANOVIC:
You might still have some dramas getting it through though?
JOSH FRYDENBERG:
I’m not so sure about that. Bill Shorten, just a few weeks ago, was in WA saying he wants to support us in legislating it. So let’s just now see if he walks the talk.
KARL STEFANOVIC:
There are deep concerns this morning - moving on - about spiralling household debt. I know you are keeping your eye on it, but you don’t seem that concerned.
JOSH FRYDENBERG:
Look, we are focussed on household debt but the assets households have is five times their debt levels and because interest rates are relatively low, the servicing of that debt is at the long run average. So we do watch it closely, but we have seen the housing market come back to more sustainable levels.
We have seen some price drops in the key states of NSW and Victoria. But I can tell you one thing, Bill Shorten’s desire to hit everyone with a new property tax with his attack on negative gearing will see house prices fall even further and that means that people’s biggest asset, their value in their home, will fall and that is not a good thing for Australian families.
KARL STEFANOVIC:
There are also serious concerns this morning, there will be more random rate rises. You would think the banks would have learnt their lesson.
JOSH FRYDENBERG:
Well the banks often have to borrow their money often off-shore, so they have to take into account what the cost of credit is. But the banks shouldn’t be increasing their interest rates because what we do know is that Australians are doing it tough in parts of the country and what we do know is that they have recently, all but NAB, recently increased their interest rates. So, while we understand the cost of credit sometimes puts upward pressure, we don’t expect them to be putting it up anytime soon.
KARL STEFANOVIC:
Labor is saying the Commission needs more time to hear from other victims, do you agree? Does it need to be extended, the banking Commission?
JOSH FRYDENBERG:
Well, we have said if the Royal Commissioner asks for more time then we will give it, there’s no doubt about that. But he has received some 9000 submissions, he has read them all and he has said that he wants to get on with the job very promptly. Anybody who has read this 1000 page report can see how rigorous and comprehensive the work of the Royal Commissioner is and when you read the report it is a frank and scathing assessment of the culture and the compliance in our banking system. The banks have to be better.
KARL STEFANOVIC:
And to think you weren’t going to have one.
JOSH FRYDENBERG:
What’s that?
KARL STEFANOVIC:
And to think you weren’t going to have one.
JOSH FRYDENBERG:
No, we absolutely initiated, support this Royal Commission, but I think everyone has been shocked by some of the revelations including fees to dead people, fees for no service, unacceptable conduct which the regulator ASIC needs to stamp out.
KARL STEFANOVIC:
Ok, another significant pressure this morning is petrol. The ACCC is saying we are paying on average about 4 cents a litre more then we should be. They say it’s quote “unexplained”. Anything you can do to help there?
JOSH FRYDENBERG:
Well the ACCC needs to be the cop on the beat there and if they make any recommendations to government then of course we will favourably consider those. But what we understand about our petrol market is it is driven by some extent by what happens overseas with the Australian dollar, but with also global oil prices. But, if companies here are ripping off consumers - than we will take action.
KARL STEFANOVIC:
Ok, finally, Chris Uhlmann has an exclusive after 7 o’clock this morning. I haven’t heard this but apparently Prime Minister Malcolm Turnbull has had plenty to say in a recording in New York about the government. He’s been by the looks of it, pretty brutal, by the sounds of it. Don’t you think it is time the former Prime Minister packed up his wickets and went home?
JOSH FRYDENBERG:
It is a pretty challenging situation to be Prime Minister one day and not the next. But what we have seen through the strong economic numbers, that the Government has released Karl, he can take a lot of credit for that.
KARL STEFANOVIC:
And he must be still scratching his head as to why he is not there anymore.
JOSH FRYDENBERG:
Well look the party room spoke and as you know I stuck with Malcolm Turnbull to the end, but the Party Room spoke, we are getting on with it and Scott Morrison has made a fantastically strong start.
KARL STEFANOVIC:
Treasurer, thanks for your time this morning, appreciate it.
JOSH FRYDENBERG:
Good to be with you Karl.