LAURA JAYES:
Josh Frydenberg, once again, thanks for your time. Let’s start with the easy one, it seems that all state and territory counterparts are on board with removing the GST from tampons. Is today just a formality and when will we see that GST removed?
JOSH FRYDENBERG:
Well, we are very hopeful to get agreement from the state and territory treasurers at today’s meeting in Melbourne to removing the GST on those feminine hygiene products. It was the Coalition Government that put this issue on the agenda.
My colleagues have been championing it, like Sarah Henderson and others, for some time and now we look like we are on the verge of getting a breakthrough. In terms of when it would come off, what the treasurers and I have been discussing is from the 1st of January next year.
LAURA JAYES:
Okay, so the 1st of January, mark it in your diaries. Now you’re meeting with your state and territory counterparts today, as I mentioned. The west seems to be pretty happy with you, but not so much the eastern states. There’s modelling by the Victorian Government today that shows that in this new GST world, the new GST peace-deal that you’ve put forward, some of the other states could be short-changed by $3 billion.
JOSH FRYDENBERG:
Well the distribution of the GST had become a national problem and the Morrison Government is now providing a national solution. We’re taking the leadership that the Australian people expect us to do and what we have seen in the past is that in Western Australia, following their mining boom, Western Australia has only got 30 cents in the dollar.
And you’ve got a ridiculous situation, Laura, where the Northern Territory with one tenth of the population of Western Australia and Tasmania with one fifth of the population of Western Australia was getting more GST revenue than Western Australia itself.
LAURA JAYES:
So other states will be worse off?
JOSH FRYDENBERG:
No. All states and territories will be better off as a result of this. We’ve used the data produced by the Productivity Commission; we’re putting in an additional $9 billion to support the states and territories; there’ll be an additional billion dollars in perpetuity going to the states and territories from the GST and we are putting in a floor at 75 cents, so that no state falls below that proportion of their GST share. These are important developments…
LAURA JAYES:
So what’s with this Victorian Government modelling then? Is it wrong?
JOSH FRYDENBERG:
Well, the Victorian Government is grandstanding here. They know that they will be better off by hundreds of millions of dollars as a result of this GST reform.
And let me make it very clear, when it comes to the distribution of the GST, the Commonwealth can take action because that is our responsibility. When it comes to changing the rate and the base, you need the states and the territories for that agreement.
This is about the distribution of the GST, this follows extensive work by the Productivity Commission, this is using data put forward by the states and this will be a long term solution to what was a problem that threatened the viability and the integrity of our GST system.
LAURA JAYES:
Well, Labor’s not quite on board yet, Josh Frydenberg. There’s been a letter sent, I believe, between the Prime Minister’s office and the Opposition Leader’s office and so far, what Labor’s seen they are not that satisfied with.
They don’t look at this legislation yet and see that there are guarantees that no state would be worse off. Will you put a provision, in legislation, to guarantee that?
JOSH FRYDENBERG:
We’re not running dual systems. We’re not running the old system and the new system at the same time. We’re running a new system of distribution, based on the work of the Productivity Commission, which will see every state and territory better off.
And I’ve made it very clear that the additional $9 billion we’re putting in is not coming at the expense of other grants and payments to the states…
LAURA JAYES:
Right, so are you confident that you’ll be able to satisfy those concerns from Labor to get them on board?
JOSH FRYDENBERG:
Well, this is a real test for Bill Shorten. Because, just a few weeks ago, Laura, he was standing in Western Australia with the Premier, a Labor Premier of Western Australia, saying that he was on a unity ticket with the Coalition, that he would follow Scott Morrison’s lead, that he will support the legislation of this reform.
Now, if he tries to walk both sides of the street, as we’ve seen him on other issues, saying one thing in Victoria and another thing in Western Australia, then that goes to the heart of his credibility and we’ve seen already that a Labor Premier in Western Australia, Mark McGowan, has said he’s been surprised by the to-ing and fro-ing that’s coming from Bill Shorten.
So, Labor needs to act to support us in delivering a better deal for every state and territory. It really is a test of Bill Shorten’s credibility. He can’t walk both sides of the street. We’ve been decisive, we’ve shown leadership and Scott Morrison deserves credit for that.
LAURA JAYES:
Why have you been so critical of Labor’s announcement yesterday of a listening tour? Labor wants to listen to those people that haven’t been able to air their grievances in the Royal Commission. What’s wrong with that?
JOSH FRYDENBERG:
Well, firstly, we’ve had 9,000+ submissions and the Commissioner has said they’ve all been read and he’s asked for further submissions. And if you had read through the 1,000 page report or anyone had read through the 1,000 page report from the Commissioner they’d be left in no doubt that this is a very rigorous, professional, considered, forensic process that he’s going through.
Now, Bill Shorten first thought that he knew better than the Royal Commissioner saying there must be an extension of time, when the Royal Commissioner has yet to ask for it. Now he thinks he’s the Royal Commissioner by conducting his own hearings and running a parallel process around the country.
I mean, you cannot be serious. He is threatening the independence, the authority of our Royal Commission. Now, that is the process that they had called for and that we have implemented. And now we have a very considered interim report, which is scathing in its assessment of the culture, compliance in the banking sector and we will be taking the necessary action to restore the public’s confidence and trust in our financial system so that they get the products and services they deserve.
LAURA JAYES:
Well Treasurer, just finally, I know you are open to extending the Royal Commission beyond the February 1 deadline, but you haven’t been requested- that hasn’t been requested yet by the Commissioner. But are you concerned that this could run too long and therefore damage the economy? Would you consider putting a cap on the timeline? Yes, you’re happy to extend it but should it run past a year and a half, two years? Could it start doing more harm than good?
JOSH FRYDENBERG:
Our position is very clear. If the Royal Commissioner asks for more time, he’s got it. Now, in his report, he did point out that the existence of the Royal Commission does shake the confidence in the financial system and that is why he wants to execute his role promptly. And he is doing a very good job.
LAURA JAYES:
But if it takes two or three years, so be it?
JOSH FRYDENBERG:
But look, let’s not speculate about that. Let’s just deal in the reality of today, which is the Royal Commissioner has said that his report will be down by February. We look forward to receiving it and acting on his recommendations. But if he asks for more time, he has got it. But in the meantime, Bill Shorten – first thought that he knew better than a Royal Commissioner, now he thinks he is the Royal Commissioner himself.
LAURA JAYES:
Josh Frydenberg, thanks for your time.