LUKE GRANT:
Treasurer, I trust you are well?
JOSH FRYDENBERG:
Thanks, Luke. I am and all the very best to your listeners.
LUKE GRANT:
Thank you so much. Economic growth, it's 0.5 per cent during the final three months of 2019 but I think an annual growth is 1.4. Where does that leave the economy in your mind, given that, you know, the headwinds around planet earth, it's probably not too bad, is it?
JOSH FRYDENBERG:
These numbers actually show the remarkable resilience of the Australian economy. As you say, it's a repudiation to all those critics who have sought to talk down the Australian economy. Let's not forget that Germany, the United Kingdom, Singapore, Sweden, and other countries all experienced negative growth over the June quarter. Yet Australia's economy continues to grow in the face of those challenging economic headwinds. Globally, and it is a bit outside our control, China and the US have been going head to head on the trade front and that's had a negative impact on the global economic outlook and you've seen a reduction in capital flows, you've seen the deferral investment decisions and you've seen a slowdown in the growth in the volume of trade and that does affect Australia. At the same time domestically, we're going through the most severe drought in many, many years as well as those devastating floods in Queensland and the combination of that has seen our farm GDP down by more than 8 per cent through the year. So despite those challenges we are continuing to grow. We've maintained our AAA credit rating, we've got very strong employment growth and there is a sign of the remarkable resilience of the economy.
LUKE GRANT:
Your harshest critics obviously are the federal Opposition. I notice that Jim Chalmers has not missed the opportunity of saying that the Government has no plan but I think his plan was to hit us with nearly $400 billion worth of tax, wasn't it?
JOSH FRYDENBERG:
Could you imagine what would happen if the Labor Party had got in and during these challenging economic times they sought to hit retirees, hit renters, hit homeowners, hit family businesses, hit people with superannuation. That was their policy that they took to the election, which remained their policy today. And the Labor Party simply can't add up because on the one hand they're saying they're committed to surpluses, on the other hand they want more stimulus of the economy. On the one hand they say they want lower taxes but on the other hand they've still got $387 billion of higher taxes on their books. And on the one hand they say that debt's too high but on the other they want to defer the payment of debt and that's where Labor has no credibility on the economy and in the minds of Australian voters, that was very clear at the election.
LUKE GRANT:
Yes, indeed. In relation to China, Treasurer, given that we, you know, do rely on them to buy much of our goods, what's plan B? If things go awry there how do we ensure there's no major impact felt here in Australia?
JOSH FRYDENBERG:
The first thing to say is the Australian and Chinese economies have grown together and we do provide one-third of our exports to China. In fact, the two-way trade between our two countries last year was over $200 billion and the China economy has grown, people have been lifted out of poverty and as we entered into that free-trade agreement with them back in 2015, our two-way trade has increased by more than 40 per cent. That's been good news for our economy and for China's economy. So we'll continue to see, I think, that relationship be very important for Australia. At the same time we've got free-trade agreements that we've entered into with Indonesia, the eleven nation Transpacific partnership, Japan, Korea, the United States is our biggest investment partner. So we do have a diversified set of trading relationships and one in five Australian jobs, Luke, are connected to trade so it's in our interests to have these trade tensions reduce and have the parties come to the table and negotiate their differences.
LUKE GRANT:
And that's a difficult road to hoe, isn't it, Treasurer, because you've got on one hand, as you say, the leading foreign investor, America, who are our long-time ally, and we've got this huge customer in China and they're not exactly on the same page at the moment. Difficult for government to navigate their way through that, I imagine?
JOSH FRYDENBERG:
Well, our messaging is the same publicly as it is privately. We understand some of the American concerns that they have when it comes to trade, for example, the intellectual property issues, the forced transfer of technology and also some of the subsidies at an industrial scale that we've seen. So they're all legitimate issues the Americans have raised but at the same time we believe the World Trade Organisation is the appropriate body to resolve some of these differences. But we continue to have a very strong economic partnership with the United States and with China, and while the world has changed a lot since 2003, you may remember back then when John Howard was the Prime Minister, we had both the American President and the Chinese President address the Australian Parliament in successive days back in October 2003. That was George W Bush and then Hu Jintao. So it's showed what Australia has tried to do in managing the relationships with both key countries.
LUKE GRANT:
And of course they talk about India being the next big potential trading partner. Where are we with India doing a deal there? Is it way too early to be talking about one or is there work being done now?
JOSH FRYDENBERG:
Well, there has been a lot of work that's been done over recent years and Andrew Robb, when he was the trade minister, was trying to secure a deal there. It's a big economy and we have seen an expansion in our trading relationships but it also has a big bureaucracy. But there are some benefits. Not only do we share a love of cricket and the common law and the English language and a link back to Britain, all those things are in common between India and Australia but getting a free-trade agreement over time would be a good thing. But we also want to make sure that any agreements that we do are in our national interest.
LUKE GRANT:
Fair enough. Just away from the economy at the moment, let's go to Biloela in Queensland and the ongoing debate about this family who the mum and dad arrived quite separately, illegally by boat, they were in Australia on a bridging visa, they've had a couple of kids and of course now the debate is they're an active part of the Biloela community, they seem to want them to stay and there's plenty of people saying that this is the opportunity for Peter Dutton to intervene and use his ministerial discretion. But I can't get past the point, Josh, and I listen very carefully to what the Prime Minister's had to say and he's told me, as you've told me over the years, you've actually got to believe in this stuff. You can't just wave in and out in your commitment to a policy. It is very clear that if they are left in Australia, it does prove that if you float here, having given a people smuggler $10,000 or $15,000, and you're prepared to wait it out, you get to stay here. Surely that's not the message we want to send?
JOSH FRYDENBERG:
Well, as you know, this is one of the most challenging and difficult issues because Australia has a wonderful record of being a multicultural nation of inviting people, welcoming people from around the world and that has made us a stronger country as a result. At the same time, after John Howard had done so much to bring stability and integrity to our border system, Kevin Rudd came to power promising nothing would change and we saw what the result was, more than 50,000 unauthorised boat arrivals, new detention centres opening up around the country, multibillion dollar blowout in the budget costs but also, most tragically, the life loss of life at sea. So there are no easy answers to this challenging problem. So it is a bit of hypocrisy of the Labor Party to take this position in relation to this family because when they were in government they removed more than 2,500 people from Sri Lanka back to that country after their cases were rejected and we now know that there are another 6,000 who are in a similar predicament to this particular family. So we have maintained our consistent line and, as you say, consistency is important, particularly on an issue like this where we know that people smugglers are waiting to see any sign of weakness or change in the Australian position which they will seek to manipulate and at the same time manipulate the vulnerable circumstances of people who want a better life in Australia.
LUKE GRANT:
Yeah, couldn't agree with you more. You and the Prime Minister seem to have a very good working relationship. I made the comment to you last time, Treasurer, that there's just no noise. You just seem to be both, for the whole government, getting on with business. A great contrast to maybe the previous ten years, it might be that long. You obviously find it easy to work together, the two of you, and others in the government?
JOSH FRYDENBERG:
Well, we certainly do and there's a great deal of mutual respect and as you know, we were not seeking a change in the leadership of the Liberal Party more than a year ago but when it came, both of us have taken our responsibilities very seriously and the Prime Minister has performed remarkably well in the role and shown great leadership during the election campaign and while some people might have expected us to win I thought it was possible but not necessarily probable and as you know, we put down the budget a month earlier than normal in April and the Prime Minister, and the former Treasurer, understood some of those challenges and we worked very closely in relation to that document and that helped set us up for the economic contests in the election and particularly the contrasts between our lower tax agenda and Labor's higher tax agenda. Now that the election is over, we're getting on with the job. We got through our major tax cuts, the most significant in more than twenty years, through the Parliament. Now more than $14 billion, Luke, has made its way into more than 5.5 million Australian household pockets. 5.5 million Australians have actually now got the benefit of those tax cuts and we'll continue to take the other necessary action to ensure the economy grows and Australia's national security is protected. So I really enjoy working with the Prime Minister and the jobs are ahead of us. We know that these are challenging times on so many fronts but I can tell you what, the country dodged a bullet because we know Bill Shorten and the Labor Party would have taken us backwards as a country.
LUKE GRANT:
Yeah, I think there's people that are realising that now every single day, I have to say. Just a couple of quick ones. Anything changed, you talked about the budget that was handed down prior to the poll, has anything changed to make you think that the tax cuts that were a little way down the track are in any jeopardy? Are they still very much within the plan? Is there anything within that budget that looks like it might be altered in some way?
JOSH FRYDENBERG:
Well, the good news for the Australian taxpayers is we have legislated those tax cuts and what we will see in Australia is one big tax bracket between $45,000 and $200,000 where Australians pay a marginal rate of no more than 30 cents in the dollar. That's a very big change as well as what we are now seeing with over $14 billion making its way to Australians. Let's not forget, Luke, that the Labor Party opposed us every step of the way. They're now trying to claim that we should bring forward tax cuts that they opposed.
LUKE GRANT:
That's right.
JOSH FRYDENBERG:
And Jim Chalmers was there saying that these tax cuts were offensive, they were irresponsible, they were a con job and now the bloke is trying to keep a straight face and say we should bring them forward. I mean that's why they have no credibility. And, you know, the other thing about these national account numbers, Luke, is that the Labor Party were actually hoping for them to be worse. They were talking down the Australian economy every day.
LUKE GRANT:
Yeah, you're right.
JOSH FRYDENBERG:
And Jim Chalmers should take a leaf out of his old boss's book, Wayne Swan, who said the Opposition shouldn't be talking down the Australian economy, it's too serious a business.
LUKE GRANT:
Yeah, of course.
JOSH FRYDENBERG:
We've seen Anthony Albanese and Jim Chalmers talk down the Australian economy at every opportunity and we know that Jim Chalmers learnt everything at the feet of Wayne Swan. Well, remember those four surpluses -
LUKE GRANT:
Oh, yes.
JOSH FRYDENBERG:
That he announced that were never delivered? Well, I can tell you that we'll be delivering a surplus, as promised, and that will be the first surplus for more than a decade. We've got $100 billion of infrastructure spending and the Prime Minister's written to the premiers about what potential projects we could bring forward and we've got the 80,000 new apprenticeships. We're spending record amounts on hospitals and schools and the economy continues to grow. Your listeners should know that Australia has now completed 28 consecutive years of economic growth which is a record that is not matched by any other developed nations. We cannot take it for granted but if we're steady, if we're steady and we stay the course, and we stick to our plan, then the Australian economy will continue to grow and more jobs will be created.
LUKE GRANT:
Great stuff, you're doing a great job. I've told you that. I'll tell you again. I'll keep telling it to you and I appreciate your time always, Treasurer. Thank you so much.
JOSH FRYDENBERG:
Good to be with you.