LISA MILLAR:
But first, Treasurer Josh Frydenberg is travelling though drought stricken areas of Queensland and northern New South Wales at the moment, and he joins us now from the town of Inverell. Josh Frydenberg, good morning. The Prime Minister was very keen for you to head out on this trip, for you to see firsthand what is going on. What have people been saying to you?
JOSH FRYDENBERG:
Well, this is the worst drought in living memory, and ninety five per cent of New South Wales and two thirds of Queensland are impacted by drought, and when you speak to the farmers, they've sold their stock, and when you speak to the shop owners, they're closing down, and when you speak to the families, they've really been impacted and devastated by what is happening around them and in their families indeed too.
LISA MILLAR:
You can't make it rain out there.
JOSH FRYDENBERG:
So this is a really challenging time.
LISA MILLAR:
You can't make it rain out there.
JOSH FRYDENBERG:
You can't.
LISA MILLAR:
So what more can you do?
JOSH FRYDENBERG:
Well, firstly, we're listening to the stories, but also talking about what further action the Government can continue to provide. And we do already provide income support through the Farm Household Allowance, that's up to twelve thousand dollars. We've been providing money to Local Government, and I was meeting with local Mayors last night, and they were telling me about how that money is employing people in the town. Fixing up showgrounds, putting up fences around properties, and also just ensuring that people have a job in these communities and therefore can stay in the community. We're also providing increased numbers of regional financial counselling, as well as mental health support, because that's a real challenge too.
LISA MILLAR:
Treasurer, are you confident that the $7 billion in drought funding that the Government currently offers is being assigned efficiently and correctly?
JOSH FRYDENBERG:
Well, certainly the message from the communities that I met with yesterday here in Inverell is that they are getting that money. Now, they always want the Government to continue to do more and that's why we're talking to them and working out what are our other options. But the Prime Minister just last Friday announced an additional $100 million in support, and it's the support that we're providing both in the immediate term to help them, you know, get through this challenging period, but also investing in the long term infrastructure that we need to make these areas more drought resilient.
LISA MILLAR:
The Labor opposition wants to see the Auditor-General have a closer look at this. You didn't get off to a good start with the Moyne Shire being given a million dollars that they said they didn't need. So it does raise questions, doesn't it? What is happening with that $7 billion?
JOSH FRYDENBERG:
Well, I'm travelling with David Littleproud who is the Water Minister, and he is obviously working hard to ensure that that money is going to the right areas, and to ensure that the practices are the best possible ones. So we'll continue to work with the relevant Departments to ensure that the money is getting to the communities in the fastest and most efficient way possible.
LISA MILLAR:
Treasurer, can I turn to the decision by the banks to ignore the pleas from both you and the Prime Minister to pass that rate cut on in full? When does it start to get embarrassing? That they're ignoring you?
JOSH FRYDENBERG:
Well, this has been a pattern of behaviour for the banks regardless of who is in political power. If you remember when Labor was last in office, there were fourteen separate rate cuts and only five of those were passed on in full, and what we've seen through the Royal Commission is the banks' behaviour being highlighted as being inappropriate and in many cases, wrong and in breach of the law. So, the authorities are taking the necessary action there. But what we do expect the banks to do is to provide their customers with the best possible deal, and it's very disappointing that they haven't done that in this case.
LISA MILLAR:
You must be really cranky.
JOSH FRYDENBERG:
We're very disappointed. The only way the banks will get the message is though the voices of their customers who can vote with their feet. And I know that some of the smaller lenders like Athena have passed on the full twenty five basis point rate cut in full and are offering a standard variable rate under three per cent. So people need to shop around and get the best possible deal.
LISA MILLAR:
Hey, some have suggested that the Government should vote with its feet as well, and maybe start turning down donations from the banks?
JOSH FRYDENBERG:
Well, it's up to the banks to disclose their donations, and I know they make them to not just one political party, but to all political parties. And of course that's a very transparent process.
LISA MILLAR:
Yeah, but if you're cranky enough, you could say no to them.
JOSH FRYDENBERG:
Well, it's not illegal to be a bank, and it's not illegal to make a donation as long as the proper rules are adhered to, and I know that is always the case.
LISA MILLAR:
Yeah, I get that, but when does it just start being, forgive me, slightly lame that the Prime Minister and the Treasurer keep saying you're disappointed in the banks. You're telling people to vote with their feet. Well, you could make a real statement too.
JOSH FRYDENBERG:
Well, like I said, this is not a new development, this is one that goes back since rate cuts were passed down by the RBA under previous governments. The banks have decided to put their profits, here, before their customers, and that's not a good outcome for their customers, and that is not a good outcome for the economy. And therefore, people should shop around and get the best possible deal.
LISA MILLAR:
Treasurer, there's been more turbulent global headwinds overnight, things are not looking good. The RBA, Phillip Lowe, has said that clearly he wants some fiscal movement here, whether it's tax cuts, or more spending on infrastructure. How long can you hang on to this idea of keeping your surplus, when all the signals are suggesting the Government needs to do something, and do something fast?
JOSH FRYDENBERG:
Well, let me put the results in context in terms of the Australian economy. We've just completed our twenty eighth consecutive year of economic growth. That hasn't been matched by any other country, and when you talk about the most recent National Account figures, the June Quarter, Australia continued to grow.
Whereas Germany, the UK, Sweden, Singapore and other economies actually experienced negative economic growth. And in the statement from the RBA just a couple of days ago, they did point to the benefits the economy of the tax cuts, of the infrastructure spending, of the rate cuts, of the rebound in mining investment, as well as the stabilisation in the housing market. And more than $18 billion, Lisa, has made its way out of the ATO into the pockets of hardworking Australians as a result of tax refunds for the 18-19 Year, and the tax cuts that we passed against the Labor Party's wishes.
LISA MILLAR:
Okay.
JOSH FRYDENBERG:
So, we'll continue to monitor domestic and international events very closely, but the Australian economy continues to grow. We have a AAA credit rating and people are getting the benefits of the Government's policies.
LISA MILLAR:
Okay. We get the message. Treasurer, I just want to quickly ask you about a review that's being released today, it was commissioned by the Federal Government after the Banking Royal Commission, which says that the big four banks need to be putting at least $20 million each financial year into financial counselling services. Are you going to support that recommendation?
JOSH FRYDENBERG:
Well, we certainly support increased money in to financial counselling services, and indeed here in these regional communities hit by drought we've supported that strongly. And we've seen the number of regional financial counsellors go from just over five hundred to now over seven hundred. So we'll continue to provide that support, and we do expect the financial services companies like the banks to be investing in these important services for communities.
LISA MILLAR:
Josh Frydenberg, thanks for your time.
JOSH FRYDENBERG:
Good to be with you.