LEON BYNER:
I have on the line the Federal Treasurer Josh Frydenberg. Morning, Josh.
JOSH FRYDENBERG:
Nice to be with you, Leon.
LEON BYNER:
Now, unlike money for health, education, infrastructure, GST revenues are untied grants. They can be used for any purpose the state government sees fit. That is still the case, is it not?
JOSH FRYDENBERG:
It is, and there’s a boost to consumption across the economy, and consumption is the main generator of GST, and there’s an increase in expected GST receipts as a result.
LEON BYNER:
So, what does that mean for SA?
JOSH FRYDENBERG:
Well, again, they’re decisions that your state government will take. But what we have seen in this Budget is strong support for families with tax cuts to over 10 million Australians that will be flowing into South Australia, strong support for small businesses with the expansion of the immediate expensing provisions and the loss carry back, which will be good news for small businesses in South Australia, strong support our regions, biosecurity, water infrastructure, transport infrastructure, all of which will be good news for South Australia. Support for retirees, support for homeowners with a series of programs including enabling 10,000 single parents to get into the housing market with a deposit as low as 2 per cent, and a series of other measures that are designed to create more jobs across the economy and help drive that unemployment rate below 5.6 per cent where it is today.
LEON BYNER:
What does the Budget do for aged care?
JOSH FRYDENBERG:
There’s a $17.7 billion funding commitment to aged care, but it’s more than just increased funding, it’s also about reform. Reform to the number of minutes that are required each day to be spent with a resident by a carer and by a registered nurse, reform to the governance structure so there’s more accountability, reform to the workforce with increased training places for those who are providing aged care. 80,000 new home care packages, mainly level three and level four packages, to those people who want to remain in their home as they age. Right across the board there’s substantial changes in aged care, which is responding to the Royal Commission and reflects the fact that our senior Australians need to be able to age with dignity and respect.
LEON BYNER:
All right. What does your Budget do for the rules on super?
JOSH FRYDENBERG:
With respect to the rules on super, if you are wanting to save a deposit through your super for your home, you can now do so up to $50,000. That’s a very significant change. We announced in last year’s budget how we’re going to improve the accountability and the transparency with respect to the performance of superannuation funds where people will be able to compare the fees charged and the performance of various super funds. We’re also removing unwanted, duplicate accounts that eat away at people’s fees and balances. They’re the sort of things that we’ve also introduced. Now we’re also enabling people to get paid super on their earnings from day one as opposed to when they’re earning above a certain threshold.
LEON BYNER:
What about increasing the Medicare levy for low-income thresholds?
JOSH FRYDENBERG:
Well, we haven’t increased the levy in this Budget. What we have sought to do is reduce taxes. We’ve done that with an additional year of what’s called the low and middle income tax offset. So, if you’re listening to your program today and you’re a truckie or a tradie or a nurse or a teacher and you’re earning anywhere between $48,000 and $90,000, you’ll be $1080 better off at the end of next financial year, and that is a result of the tax cuts that we’ve introduced.
LEON BYNER:
Tell me, how does this impact the amount of debt that we’re going to ask our children and grandchildren to pay off? Are you sitting comfortably with that?
JOSH FRYDENBERG:
Well, actually, the net debt to GDP, which is the amount of our debt to the size of our economy, has come down each and every year from what was forecast at last year’s budget just over six months ago in October. So our bottom line improved from more people being in work than we expected, so higher income tax receipts and lower welfare spending, as well as the fact that the iron ore price has been higher than we had forecast, and that had helped company tax receipts as well. So there have been some improvements to the bottom line, but at the same time, Leon, the Australian economy has been hit by an economic meteor. It’s been hit by the biggest economic shock since the Great Depression, the net result of which has been a significant hole in the economy. 1.3 million Australians either lost their jobs or saw their working hours reduced to zero, and we’ve been seeking to repair the Budget by repairing the economy first.
LEON BYNER:
Have we been somewhat fortunate in that our ore prices for exports have gone up to the extent where your coffers are somewhat fuller than otherwise might have been expected?
JOSH FRYDENBERG:
Well, they’ve certainly had a significant boost to the bottom line. Around $25 billion in increased company tax receipts over the next few years. But there’s been a $44 billion increase in the income tax receipts. So you’ve actually had a bigger boost from more people being in work as opposed to the higher iron ore price. But it is always good to see the iron ore price higher than what we forecast because that is more money to the Budget bottom line.
LEON BYNER:
In your opinion as federal Treasurer, what is South Australia’s greatest benefit to the Budget that you announced last night?
JOSH FRYDENBERG:
Well, I’d speak in general terms to say the South Australian economy, South Australian families, South Australian businesses will benefit from the overall settings that we announced in last night’s economic plan to create jobs. The skills program, the infrastructure spending and, of course, there are specific measures in South Australia. The focus on tax relief, the focus on the digital economy, childcare spending to boost workforce participation, they will all help create jobs and help keep people in a job, and that’s what our focus has been. We have worked very hard, Leon, to see Australia avoid a situation where a whole generation of Australians go into long-term unemployment. We’ve had a recession, the first recession in Australia in some 30 years. After the 1990s recession it took 10 years to get the unemployment rate back to where it was before the recession hit. We’re on track to get back to where we were with respect to unemployment in around two years after the COVID recession. That’s five times faster than Australia’s experience in the 1990s, and I think that’s a real credit to the hard work of more than 25 million Australians.
LEON BYNER:
From where you sit as Federal Treasurer what do you think South Australia’s biggest economic challenge is?
JOSH FRYDENBERG:
Well, just continue to keep people in work. Obviously you’ve got great natural resources, great natural assets, a strong resources sector, a strong agriculture sector, a wonderful tourism sector and, of course, strong services and professional sectors as well. You would have seen lots of measures in this budget, even little ones, relatively little ones, like the tax breaks for distillers and also smaller beer brewers. That will all benefit the tourism industry in regional areas across South Australia as our tax rebates for the wine industry do. There’s a lot of things, I think, that South Australia have going for it, but we’re still in the middle of a pandemic, so the biggest challenge for South Australia is also the biggest challenge for Australia as a whole, is how do we get to the other side of this pandemic in a stronger position than when we entered it?
LEON BYNER:
That’s Treasurer Josh Frydenberg.