LAURA JAYES:
Are we in a position Treasurer, to take advantage of these low oil prices and boost our strategic reserves?
JOSH FRYDENBERG:
Well this is absolutely an issue of focus for the Energy Minister Angus Taylor and there is an opportunity here. And as you say, both Brent and West Texas oil prices have suffered a dramatic fall, just reflecting the stop on economic activity as a result of the coronavirus pandemic. I’m sure that prices will pick up over time once the crisis passes, but certainly right now we’re seeing oil prices in uncharted territory with actually negative futures, reflecting the fact that people don’t even have enough places to store the oil let alone use it.
LAURA JAYES:
Let’s talk about the RBA Governor. He’s talking again about industrial relations reform but also tax reform. He was more broad in what he said yesterday in his speech, but do you have any specific areas when it comes to tax reform?
JOSH FRYDENBERG:
Well as you know we’ve passed through the Parliament more than $300 billion worth of tax cuts in the last couple of Budgets, very significant changes indeed, a flattening and a strengthening of our tax system. If you earn between $45,000 and $200,000, you’ll pay a marginal rate of tax no more than 30 cents in the dollar, 94 per cent of tax payers will pay no more than 30 cents in the dollar. This is a massive change to the tax system. We’ve also introduced the instant asset write-off as well as the 50 per cent accelerated depreciation which will extend into next year which was part of our response package to the coronavirus. And as you know, we’ve also passed legislation to cut company tax for small and medium sized businesses down to 25 cents in the dollar. Now our company tax rate is still very high by international standards, at the top rate it’s at 30 cents in the dollar whereas if you go to the United States it’s 21 cents in the dollar, if you go to the UK it’s 19 cents in the dollar, indeed in Singapore it’s 17 cents in the dollar. So we’re still very high with our company tax rate…
LAURA JAYES:
…Cutting company tax, would that be at the top of your list on the other side of this pandemic to help grow the economy and get investors to invest in Australia?
JOSH FRYDENBERG:
Well look I’m not going to speculate on what we’ll actually do in that regard. What we have said is that…
LAURA JAYES:
… But it’s back on the table, is that fair to say?
JOSH FRYDENBERG:
Well no, I think what’s fair to say is that we’ll look at tax reform as an area of interest, because we’re always looking for opportunities to cut taxes. And as you know Laura, there was a very clear contrast between the Parties at the last election. One side was proposing…
LAURA JAYES:
…Is anything off the table though Treasurer? Because as you’ve pointed out, as the Prime Minister’s pointed out, now Philip Lowe’s pointed out, that we’re going to need some pretty creative thinking on the other side of this to get back to where we were.
JOSH FRYDENBERG:
Well we’ll be very focused, as we have been leading into this crisis, on the productivity agenda. That means infrastructure, skills and education and training as well as obviously tax reform, industrial relations reform and deregulation. They’re areas that have been the focus for us, and will continue to be the focus going forward. I think what the message from Phil Lowe was yesterday, was that there is some challenges ahead. He painted the picture of an economy, both domestically and globally, that’s been really hit by the coronavirus, but at the same time he said the Australian economy will grow strongly in the period ahead after the coronavirus and he paid tribute to our responsible fiscal policy as giving us the flexibility to use our balance sheet to smooth out the income shock. And I think that’s very important for people to recognise, that we came into this crisis from a position of economic strength which has allowed us to put to work $320 billion to support the economy at this most very difficult time. So we’ll continue to look for reforms…
LAURA JAYES:
…But this recovery Treasurer is going to be business led, not Government led, as the Prime Minister and yourself have pointed out. So will you be looking firmly in that space, about how you can quickly, more quickly, get companies back hiring and spending?
JOSH FRYDENBERG:
We’re absolutely focused on reforms that encourage investment, innovation, new hires of employees, new investments in capital. Just yesterday Laura, I was on separate video conference calls with the Business Council of Australia and their 20 leading CEOs, with the Australian Industry Group and with the Australian Chamber of Commerce and with all their state representatives. Because it was really important to hear first-hand from them as to what is happening on the ground, but also to talk about the reforms that are needed for Australia on the way out. That’s what the Prime Minister, Mathias Cormann, myself and the rest of our colleagues are focused on.
LAURA JAYES:
Treasurer, thanks so much for your time.
JOSH FRYDENBERG:
Good to be with you.