LEON BYNER:
I have on the line the federal Treasurer Josh Frydenberg. Josh, there’s a bit of money out there for us?
JOSH FRYDENBERG:
Yeah, worth more than over $650 million, Leon. This is part of a broader tax package that we’ve passed through the parliament that has seen in the three months to September more than 11 million Australians get more than $10 billion in what is the biggest tax cuts in more than 20 years. It’s part of a broader plan that will see us eventually abolish the full ‑ the 37 cents in the dollar tax bracket. Ninety‑five per cent of Australian taxpayers will pay no more than 30 cents in the dollar as a marginal rate. And that’s a really big change. It will create a fairer and a stronger tax system. And obviously with more people keeping more of their hard‑earned money, that’s encouraging effort and it’s rewarding aspiration as well.
LEON BYNER:
According to your numbers, I just want to give people some perspective on this, this basically means, Josh, that the average benefit per person is about $879, is that right?
JOSH FRYDENBERG:
That’s in the three‑month period.
LEON BYNER:
Yeah.
JOSH FRYDENBERG:
But if you’re a listener on your program this morning who’s a teacher or a nurse on $60,000 a year, this financial year they’re paying $2,160 less tax, so a really significant and substantial change. That money that they’re no longer paying in tax and that they’re keeping themselves can be spent across the economy, whether it’s improvement in the home, at the local retail stores, taking a holiday either within South Australia or going interstate. And that’s going to help drive jobs with Treasury estimating that our tax cuts will create at least 60,000 jobs.
LEON BYNER:
So basically Treasury’s taking a hit in the hope and expectation or aspiration that people are going to re‑invest that and do the spending so that generates more work in the economy?
JOSH FRYDENBERG:
Well, that’s absolutely right. But also having a tax rate that is encouraging effort and aspiration is really important. Because you want people to take those job opportunities when they come.
LEON BYNER:
Yeah.
JOSH FRYDENBERG:
And they’re more likely to do so if they’re keeping more of their hard‑earned money. Now, with tax it’s always a balancing act because you do need to raise sufficient taxes to meet your obvious expenses, whether it’s health, on education, welfare and also defence.
LEON BYNER:
Yeah.
JOSH FRYDENBERG:
But what we have found is that the improvement to the budget bottom line comes from getting people off welfare and into work, because when they’re in work, they’re paying tax. When they’re off welfare, they’re needing less support from the government. That’s how you improve your budget bottom line, and the tax cuts does create more jobs.
LEON BYNER:
I’d love to get your reflections on this, because there are many employers who can’t find staff. You obviously know about this. What’s the solution here?
JOSH FRYDENBERG:
Well, it’s two‑fold, Leon. Firstly it’s about training people up, and we’ve heavily invested in apprenticeships, as you know, in recent budgets. And they’re across everything from hospitality to the trades. We’ve also heavily invested in other shorter term job training programs and we’re partnering with the universities and with other vocational training institutions to do that. The other part of it is we import skilled labour as well as some agricultural workers and more manual labourers from the regions. Because of COVID those borders have been closed and one of the results has been that a lot of fruit has sat on the vine and rotted without being picked and put on the kitchen table. We’ve made provisions for cohorts of workers to come in from abroad to work in our agricultural sector. And the sooner we can open our borders in a safe way, the more skilled labourers we can have to come into our country as well as international students as well as tourists, all of which help contribute to a stronger economy.
LEON BYNER:
Is it the numbers such as 27,000, are those figures pretty accurate as to what we need?
JOSH FRYDENBERG:
Well, I think we need a range of people in a range of areas. I mean, it’s not just hospitality, Leon.
LEON BYNER:
Sure.
JOSH FRYDENBERG:
It’s also aspects of construction, aspects of the mining sector. You speak to people in IT and some of those telecommunications skills that people and businesses need, they’re heavily in demand as well. And that’s leading to an upward pressure on wages as well in some of those particular sectors. But to put it in perspective for you, before the pandemic, you know, more than 200,000 people were coming to Australia in terms of net overseas migration. That has now gone negative for the first time in decades, meaning that more people have been leaving the country than coming to it. And our population growth has been the lowest in over a century as closed borders have combined with the sort of structural decline in our fertility rate to actually see that population growth at a very low level. I think that can be changed and, indeed, reversed in the period ahead, but that will require us to open our borders and obviously to welcome back tourists, students, skilled workers and the like.
LEON BYNER:
Are you hoping that all the Premiers, including ours, will come to the party on this? No doubt you are.
JOSH FRYDENBERG:
Well, absolutely it’s critical that we have a unified approach to many of these issues. And with respect to the borders, I’m pleased that Steven Marshall now has that road map for opening your borders up, just as New South Wales and Victoria have announced theirs and Queensland theirs and hopefully Western Australia in the coming days as well. Because vaccinations are our greatest defence, and with the vaccination rates rising rapidly across the country, Leon, that gives businesses and the medical experts confidence that we can live with the virus. Because we can’t eliminate it; we must live with it. But the good news for your listeners is that they can look forward to a bright summer.
LEON BYNER:
That’s the Treasurer Josh Frydenberg. Always good to have him on the show. He speaks pretty clearly and straight from the hip.