LAURA JAYES:
Treasurer, thank you for your time. Is it likely that the government will extend the coronavirus travel ban?
JOSH FRYDENBERG:
Look, we're going to take the best advice from our medical experts. As you know, the restrictions have been put in place for some time and it's had a significant economic impact but we're doing these protectionist measures to ensure that we protect the Australian people. These are precautionary initiatives that we’ve taken.
LAURA JAYES:
Treasurer, you are indeed in Brisbane. This is costing Queenslanders dearly. As the Premier pointed out yesterday, she has put in place a $27 million stimulus package for business there. She has asked you and the Federal Government to match that. Will you?
JOSH FRYDENBERG:
We've announced a $76 million package to support the tourism industry, including those tourism operators here in Queensland. That's not only to encourage Australians to have a holiday at home but also to project Australia's image in the best possible way abroad. So we've already announced a $76 million tourism package and we'll continue to monitor very closely what are the significant economic impacts of the coronavirus.
LAURA JAYES:
But this was specifically for business. Would you consider that?
JOSH FRYDENBERG:
We will maintain a watching brief across the economy more generally because it's not just the tourism operators, it's also the international student market. We are also starting to see some of our export orders going down as a result of the slow down in the Chinese economy and you are also seeing disruptions in end to end supply chains as well because so many of the Chinese factories are closed. But we'll get through this just as we got through previous incidences of SARS and MERS and we'll continue to maintain a watching brief across the Australian economy.
LAURA JAYES:
It seems like you, as Treasurer, is almost facing this perfect economic storm. Is this a time for more government stimulus or is this a time to get the Budget back into surplus?
JOSH FRYDENBERG:
Well, you're certainly right, Laura. We've faced one after another economic events which have been outside of our control which has adversely affected the Budget bottom line. Obviously the trade tensions between China and the US are still ongoing and there for some time. We've got the ongoing drought which has hit farm GDP and devastated those communities. We've had the fires and the floods and now the coronavirus. So I'm wondering what's coming next. But I do know that the Australian economy is remarkably resilient. We saw unemployment fall in the December period down to 5.1 per cent and we have announced a number of spending initiatives; a $2 billion National Bushfire Recovery Fund, more than an extra billion dollars for the drought support since the election as well as bringing forward $4.2 billion of infrastructure spending and another half a billion dollars-plus for the aged care sector. All of these have been done without new taxes or new levies and we know that when we went to the election we promised lower taxes and Labor promised higher taxes.
LAURA JAYES:
What do you think about this idea from Labor’s Jim Chalmers of a wellbeing Budget. Is that something you would consider?
JOSH FRYDENBERG:
Look, it's laughable. I mean, Labor hasn't delivered a surplus since 1989 so it should surprise no one that they are going to look around for some other way to measure economic output. They will be looking for any alternative than proper accounting that has seen the Australian Government, the Coalition Government, deliver the first balance Budget in 11 years. This is another thought bubble from Labor. This is Labor double speak for higher taxes and more debt.
LAURA JAYES:
A few quick other things. Superannuation guarantee, can you rule out changing what's already legislated?
JOSH FRYDENBERG:
Well both the Prime Minister and I have made it very clear, we have no plans to change that legislated increase but I have to say whenever the Labor Party talks about superannuation, it borders on the hysterical. I mean, they can't brook any criticism from any quarter about anything to do with superannuation. That makes them blind to the reforms that we need in superannuation, reforms that we have passed through the Parliament with them objecting in many cases. I'm talking about opt-in insurance for young people with superannuation, I'm talking about a cap on fees for low balance accounts and I'm talking about proactively consolidating through the Australian Tax Office inactive low balance accounts. That's what we have done, which is helping Australians, ensuring that their super is not eaten away by unnecessary fees and it seems the Labor Party are stuck in the ideological conflicts of the past.
LAURA JAYES:
Well, the luxury car tax, another one that has come up this week. How can you now justify maintaining it? Other than reaching a, well, being good for the Budget?
JOSH FRYDENBERG:
Well, Laura, the luxury car tax when it came in in 2000 was not a protectionist measure. It came in when the GST replaced a 45 per cent wholesale sales tax. What we have from the luxury car tax is just under $3 billion of revenue coming in over the forward estimates. But we, as a Government, are committed to lower taxes. So I would never say never about removing the luxury car tax, but I've always got to balance, you know, maintaining the strength of the national balance sheet and ensuring that we are committed to lower taxes. And we did, after the election, legislate significant tax reform which will see now people who earn between $45,000 and $200,000 pay a marginal rate of tax of no more than 30 cents in the dollar. So we have been absolutely committed to lower taxes. We've looked for every opportunity. But can I also just point out when it comes to the luxury car tax, we did make some tweaks in the Budget last year. What we enabled farmers and tourism operators to do was to get a refund of up to $10,000 on the luxury car tax paid. That's an increase from what it was, which was $3,000 ,so we have made some tweaks about the luxury car tax to make it particularly easier for farmers and tourism operators.
LAURA JAYES:
Perhaps some more tweaks are coming as well. I expect this to come up when you start negotiating those Free Trade Agreements with the UK and the EU in coming months. Is that something that you are willing to trade on?
JOSH FRYDENBERG:
Well, we'll go into those free trade negotiations with the United Kingdom as we've done successfully with a whole series of other countries. Most recently Indonesia but, of course, on our watch, Japan, Korea, China and the Trans Pacific Partnership. It's been one of the great successes of the Coalition government that we have entered into these Free Trade Agreements. We've opened the doors for Australian businesses to two billion new customers across the world and particularly in our region. So we'll have those discussions with the United Kingdom about what is best for both economies but what I've got to focus on is doing my best to ensure that we've got the money available for the essential services that people need and deserve and the focus on aged care, delivering more drugs on the PBS, ensuring that the NDIS is rolled out in full, and we need a healthy balance sheet to do that. We are obviously achieving that with the first balanced Budget in 11 years and with the lower taxes that we've legislated through the Parliament, in stark contrast to Anthony Albanese and Jim Chalmers and the Labor Party.
LAURA JAYES:
So the Bushfire Royal Commission, the parameters of that, the terms of reference, I understand, will be announced today. The focus rightly will be on hazard reduction but to what level will climate change feature?
JOSH FRYDENBERG:
Well, the Prime Minister has said very openly that we're living through hotter, drier, longer summer periods and we need to ensure that there's the right adaptation and resilience measures in place so that we can protect lives, protect property and deal with these bushfires and floods and indeed cyclones and everything else that comes with these weather patterns. So the terms of reference, as you say, will be released in due course and I'm sure that this will be a very important step forward in ensuring that we can manage what are, you know, disastrous and devastating events for the whole country.
LAURA JAYES:
Treasurer, thank you.
JOSH FRYDENBERG:
Thank you.