LAURA JAYES:
From Washington – Treasurer, thanks so much for your time. You’ve met with your US counterpart, as I’ve just mentioned, did he give you or did you seek any reassurances?
JOSH FRYDENBERG:
Look, we talked broadly about the importance of the productivity agenda and the strength of our respective economies, but also about free trade. And from Australia’s perspective, we strongly support a rules based trading system. We also would like to see the tensions between the United States and China being ameliorated. That’s our hope, because right now, those tensions are weighing on the global economic outlook. We’ve seen trade volumes be down, we’ve seen investment deferred, and it was certainly the issue at the top of the agenda for most countries at the G20 Finance Ministers meeting.
LAURA JAYES:
Well, the G20 will happen next week. The Prime Minister will be there as well. Did you walk away from this meeting today any more positive or less positive about that trade war and that trade deal being done at the G20, or is it going to take longer?
JOSH FRYDENBERG:
Well look, we’ve said the United States has legitimate issues that they’ve raised in relation to trade, but from Australia’s perspective we just would like cool heads to prevail here. We’d like to see the strengthening of the rules based trading system, and obviously all eyes will be turning to Osaka where President Trump and President Xi will attend together with Prime Minister Morrison.
LAURA JAYES:
So, any reassurances from Steve Mnuchin, or does this all come down to Donald Trump and how he does this personally on the day?
JOSH FRYDENBERG:
Well look, I can’t provide a running commentary on our private discussions, but what I can say is that Australia strongly puts the case for free trade. One in five Australian jobs, Laura, are related to trade, and one of the great successes of the Coalition Government has been the Free Trade Agreements we’ve struck with China, Japan, Korea, the Trans Pacific Partnership, and most recently the Agreement that we’ve signed with Indonesia. We’ve recognised the benefits that flow to countries like Australia from free trade and we will continue to make that case publically and privately.
LAURA JAYES:
Whilst you’ve been in Washington, has anyone raised the US Australia refugee swap deal with you?
JOSH FRYDENBERG:
No, they haven’t. This has been a discussion and a set of meetings here that has focused on the economy. What they have said to Australia is that our economic outlook is widely admired. The fact is that we’re in our 28th consecutive year of economic growth. At 1.8 per cent GDP growth, we’re growing second only to the United States among the advanced economies and we’re also maintaining our AAA credit rating with the three leading credit rating agencies and bringing the Budget back to surplus. And we have net debt to GDP which is about a quarter of the average across other G20 nations. So, the outlook for the Australian economy continues to be positive. We do face challenges and we’ve been talking about those challenges here in Washington, as well as in Europe and in Japan.
LAURA JAYES:
It comes down to the state of the relationship with the United States as well, and I don’t want to linger on this refugee swap deal, so I’ll just ask you one more question about it. The US has resettled more than 500 refugees from Manus Island and Nauru. There was a deal at play here. In exchange, Australia has resettled a total of two. Does that threaten the future of that deal? Does that threaten further resettlements in the United States? Perhaps it’s a little ominous that it hasn’t been raised with you?
JOSH FRYDENBERG:
Well, no, you’d only expect those issues to be discussed between the relevant Minister, who’s Peter Dutton. I saw that he had comments on the weekend about it, and I’ll leave the commentary on that to him, other than to say – we continue to maintain our strong border protection policies. People know that those policies have saved lives. They’ve also enabled the closing down of detention centres in Australia, and with the United States, as you pointed out, a number of people have been resettled there.
LAURA JAYES:
Okay. I want to talk to you about the tax cut package. Now, the AFR have done their own analysis today showing that the tax cuts for higher income earners will do little more than keep bracket creep at bay. Is that your analysis of the package too?
JOSH FRYDENBERG:
Well, as you know, it is a package of measures - $158 billion in total. It was central to our election campaign and our election policies were endorsed by the Australian people. So quite clearly, the Labor Party don’t want the Australian people to get the tax cuts that they voted for and Anthony Albanese is ignoring the will of the Australian people.
But when it comes to our tax relief, it was both short term as well as long term structural reform, and we’re creating a much simpler and stronger tax system by seeing people who earn between $45,000 and $200,000 a year pay a marginal rate of 30 cents in the dollar.
So we will be avoiding the situation of bracket creep and we will be rewarding effort for those in the work force, enabling them to earn more and to keep more of what they earn.
LAURA JAYES:
Okay. Will you provide the extra information that Jim Chalmers is asking for? I.e – who will benefit? Will it mostly be men? Can you answer those questions? And will you introduce this package on the first sitting day of Parliament?
JOSH FRYDENBERG:
We will be introducing this package in the first week of Parliament that it’s back and this is our priority piece of legislation. As I said, it was central to our election campaign.
Now, Jim Chalmers went into the election campaign talking about a mandate for their tax policies. Well, here we are on the other side of an election, an election which they lost, and they seem to be denying us the same mandate that they were seeking from the Australian people with their high tax agenda.
Now, the Australian people voted very clearly in favour of aspiration and lower taxes, and very clearly against Labor’s higher taxes and against their redistribution agenda. Now Jim Chalmers, just as Chris Bowen before him, knew that what we have provided to the Australian people is the level of information about the tax cuts that they did when they were in government and they were making changes to the tax system.
It’s $158 billion of tax relief, its $95 billion to reduce the rate of tax from 32.5 cents down to 30 cents for those who earn between $45,000 and $200,000, and we’re not changing the rate of tax for those on the highest income. We’re simply focused on low and middle income earners.
LAURA JAYES:
Okay. Just quickly, very quickly as I know you have to go. Craig Emerson writes this morning that a top marginal tax rate of 49, even 47, is too high. Do you agree with him?
JOSH FRYDENBERG:
These people are always brave after the event. Where was Craig Emerson before the election?
LAURA JAYES:
Do you agree with him or not?
JOSH FRYDENBERG:
Well I believe that we should always, as we have done, support lower taxes. But we are not changing the rate of tax for the higher income earners. What we are doing is providing significant structural reform to simplify and strengthen the tax system for lower and middle income earners.
LAURA JAYES:
Okay. Treasurer, thanks for your time. Live there from Washington.
JOSH FRYDENBERG:
Thank you.