KIERAN GILBERT:
Joining us now the Treasurer, Josh Frydenberg.
And the National Accounts, disappointing yesterday. Are you worried it will hit the expected retail boost for Christmas?
JOSH FRYDENBERG:
The Australian economy is performing well, Kieran. At 2.8 per cent, we are growing faster than any G7 nation, except the United States…
KIERAN GILBERT:
Savings down to a decades low. This has got to be a bit of worry, doesn’t it?
JOSH FRYDENBERG:
No, because actually the savings number at 2.4 per cent, the household savings ratio reflects two things. Firstly, it reflects the historical low interest rate, so if people would put money in the bank, they wouldn’t be getting that huge return. But, at the same time, it reflects their confidence in the economy that they feel that they can spend. The times when the savings ratio has been very high, was just around the time of the GFC, when people didn’t have the jobs security that they have now.
See the Australian economy is in its twenty seventh year of consecutive economic growth, we’ve got unemployment down to its lowest level since 2012, we have created more than one million new job, our AAA credit rating has been reaffirmed and next year we are going to deliver a budget surplus.
So, the Australian economy is very healthy by international standards and also by our own record here in Australia over many decades.
LAURA JAYES:
The breaks have been pushed on spending though. Savings are at a low, wages growth has been low for quite some time. Does this make a good case for accelerated income tax cuts?
JOSH FRYDENBERG:
Well, as you know, we have actually legislated, Laura, tax cuts. And that’s pretty significant. The Labor Party wants to wind those tax cuts back. We’ve also legislated tax cuts for small and medium-sized enterprises, more than three million of them, employing around seven million people. So, we are actually got the benefits of tax cuts flowing through to the economy and you can see that in those numbers. But when you talk about wages growth, I have to point out that the Wages Price Index, which is an indicator for wages growth, had its biggest jump in three years just a couple of weeks ago. And the Reserve Bank Governor of Australia has said that wages will continue to rise as the economy continues to grow and the labour market continues to tighten.
KIERAN GILBERT:
But will there be more tax cuts as Laura questioned?
JOSH FRYDENBERG:
Oh look, I am not going to speculate on tax cuts…
KIERAN GILBERT:
Why not? We are almost in, you know, election season, why not speculate? People would like it.
JOSH FRYDENBERG:
Because you are a journalist and I am a treasurer. And my responsibility is to proceed very carefully in a deliberate way, go through proper processes, which we do. But, what I can assure you and your viewers is that we will continue to shepherd the Australian economy through some challenging times. You know that the international trade tensions have been a real focus and Australia would stand out to lose if those trade tensions between the US and China would were to accelerate. So, we are really focused on being the responsible Government, with an economic plan that is working.
LAURA JAYES:
Treasurer, you say challenging economic times. We now have some economists predicting that the RBA might have a rate cut on the radar. So, going into a budget into an election year, have these growth figures and other indicators in the economy, is that causing you pause for thought on the direction that the Government is going in? Is there a time to rein in spending or accelerate spending, anything change because of these figures?
JOSH FRYDENBERG:
No, we know that we are actually on the right path and our economic plan is working. And when you talk about Government spending, we have brought the growth in Government spending down to its lowest level in fifty years. That doesn’t happen by accident, that’s disciplined decision making and the Prime Minister can take a lot of credit for that, as the Treasurer before his current role, as well as the Finance Minister Mathias Cormann. I inherited a pretty good set of numbers from them and the previous Prime Minister and we will continue to deliver good economic growth and more importantly than that jobs security and more jobs for millions of Australians.
KIERAN GILBERT:
But, your forced divestment of energy companies, well it has got through the first hurdle. But, those companies have said and have indicated pretty clearly, they are going to challenge this in the High Court. They are not going to take it lying down, if it is eventually passed through the Senate in 2019?
JOSH FRYDENBERG:
Well, you have to ask yourself the question, why are they so opposed to this legislation. And the truth is, because it’s going to shine a very bright spotlight on misconduct in the sector. It focuses on the retail market, where energy retailers don’t pass onto their consumers sustained and substantial reductions in the costs that they have. It focuses on the wholesale market, where companies may withhold supply in order to drive up prices and manipulate prices. And it also focuses on the contract market, where there is a lack of liquidity, which is a barrier to entry to new retailers coming into the market. So, these are problems that the ACCC has identified and in the words of the ACCC, it’s unsustainable, unacceptable and so that is why the Government is acting. It’s a real test for Labor, I have to say to you, I mean the Labor Party has a very anti-business tax policy, very anti-business IR policy, they are looking for a cloak of decency by trying to join with the energy companies on this one but I tell you what, it’s not going to work with the Australian people.
LAURA JAYES:
If a publicly owned company is forced to divest an asset, your legislation says it can be sold to another Government entity. Is it also possible that that asset could be privatised?
JOSH FRYDENBERG:
No. Absolutely not. And again, this is a Labor scare campaign, a la ‘Mediscare’. I mean we saw last night, them putting out little photos and claiming that there’s going to be a privatisation of assets here. It’s absolute rubbish. And this is the Labor Party way, to manipulate, to lie, to run scare campaigns. They should be ashamed of themselves.
KIERAN GILBERT:
So if a government entity, just to clarify this, is forced to divest an asset, it can only go to another Government?
JOSH FRYDENBGERG:
Correct.
KIERAN GILBERT:
It’s not a secret privatisation plan?
JOSH FRYDENBERG:
Of course not. And as you know in Queensland, Kieran, they have already set up another Government entity, the Palaszczuk Government with a set of a renewable energy generation assets. What we won’t do, is we won’t allow the Labor Party to get away with another scare campaign, just like they did in the lead up to the 2016 election.
LAURA JAYES:
This doesn’t seem a very popular, both the Queensland Opposition and Government don’t like this divestment plan. But, I mean, but are you confident that you have the support of the crossbench today? Is that going to get across the line before Parliament rises for the year?
JOSH FRYDENBERG:
Well obviously we’ve had good discussions with the crossbench, they understand the importance of this issue and getting the legislation passed before the next election. They also know that energy consumers, small businesses and families have done it tough and this is only calling out misconduct. I mean there’s a very high…
LAURA JAYES:
But you said “passed before the next election”. Does that mean it’s going to pass by the end of the week or not?
JOSH FRYDENBERG:
Well, it’s got to go through the House, Laura, as you know and then it goes to the Senate, the other chamber in the Parliament. And as it works with the other Chamber, these things tend to get referred to committees and the like, so I’m sure the Labor Party will engage in a set of stalling tactics in the Senate, but what we want to do is get the legislation through, so that Australian families and businesses get a better deal because we’re on their side.
KIERAN GILBERT:
When, just finally, you talk about the deal, we’ve been talking about working with the crossbench, not much prospect for that when it comes to kids on Nauru, they’re going to be bringing on a vote likely today. If the Government loses that vote, what does it say about your ability to manage, what is a pivotal issue and that is border security and offshore processing specifically.
JOSH FRYDENBERG:
Well, as you know, this is a very difficult issue. It’s been around for many, many years. But it actually took a Liberal and National Government to actually get the results that we’ve seen, which is to stop the boats and to stop the tragic drownings at sea…
KIERAN GILBERT:
If you can’t implement your policy…
JOSH FRYDENBERG:
…and to remove the children out of detention.
KIERAN GILBERT:
…what does it say about this government?
JOSH FRYDENBERG:
This is not about us.
KIERAN GILBERT:
Well, it actually is, and your hold on the Parliament.
JOSH FRYDENBERG:
Kieran, Kieran, actually it’s not. What it’s about is what the Labor Party is doing is ripping up their commitment to a strong border protection policy, because if this was to go through, it would make the offshore processing that has been such a successful component of the Government’s policy, much more unlikely to be effective. And we need to keep the focus on the Labor Party and ask why would they be siding up with the Greens? It’s ‘a la’ Kevin Rudd in 2007. He said to the people of Australia when he was up against John Howard, he’ll just continue on the successful policies of John Howard, and he didn’t do that. This is again Bill Shorten being very, very tricky.
KIERAN GILBERT:
Treasurer, we are out of time, thanks so much. Appreciate it.
JOSH FRYDENBERG:
Good to be with you both.