MARK RILEY:
Treasurer, thanks for joining us on Weekend Sunrise.
JOSH FRYDENBERG:
Good morning. Nice to be with you, Mark.
MARK RILEY:
This budget will be about the cost of living. It has to be. Australians are doing it tough at the moment. What’s in it for families?
JOSH FRYDENBERG:
Well, there’s a lot in it for families. There will be cost‑of‑living relief right now that is as a result of practical and responsible measures in this budget. We recognise, Mark, that this is the number one topic around the kitchen tables of Australians right now – higher petrol prices, higher food prices, higher supply chain costs that are obviously making their way onto the supermarket shelves as well.
MARK RILEY:
So, a surplus is out of the question, but we’ve got some working capital there, and you’re going to direct about $250, if you believe what we read in the papers, and we always believe what we read in the papers, to people. That’s going to go pretty quickly. Are you expecting these cost‑of‑living pressures to ease off quickly?
JOSH FRYDENBERG:
No, I think that the inflation rate will be higher going forward than it is today, and we’ll actually upgrade some of our numbers in the Budget on Tuesday. This is largely driven by international factors where we’ve seen the oil price spike by 50 per cent since the start of this year. We’ve seen wheat prices up by 40 per cent. We’ve seen supply chain pressures and, as a result, freight costs are five times what they were going into the pandemic. All of that is impacting on the cost of living so what, Mark, we will be doing is provide cost‑of‑living relief now, but we’ve also been providing tax relief, which has put more money into the pockets of Australians as well.
MARK RILEY:
So, will pensioners get this bonus?
JOSH FRYDENBERG:
Again, there’s been a lot of speculation about who will get the support from us on Tuesday night, but pensioners will, of course, be supported by our Government.
MARK RILEY:
It will be tough if they missed out on this, wouldn’t it?
JOSH FRYDENBERG:
Again, I’m not going to go to the individual measures, but you’ll see cost‑of‑living relief right now and, of course, pensioners will benefit.
MARK RILEY:
Okay. Inflation is going up, as you said. It’s predicted to go to about five per cent this year. Wages are nowhere near that. What will you do directly to increase wages?
JOSH FRYDENBERG:
Well, the way you get higher wages is you get a tighter labour market. You get employers competing for workers and –
MARK RILEY:
You’ve got that now.
JOSH FRYDENBERG:
And what we’ve seen is wages in our latest update be upgraded, so we’ve actually forecast that wages will be rising. We also recognise that inflation is higher than expected. That’s why we’ve been providing tax relief with very significant money going into people’s pockets.
MARK RILEY:
But still inflation is outstripping wages, so that’s a real wage cut for most people.
JOSH FRYDENBERG:
Well, what you’ll see is an upgrade, an update, in our numbers on Tuesday night –
MARK RILEY:
Will wages go up?
JOSH FRYDENBERG:
The expectation is that wages will go up and that is the result of a tighter labour market, but again you’ll see the numbers on Tuesday night.
MARK RILEY:
By how much?
JOSH FRYDENBERG:
Again, you’ll tune in on Tuesday night, and I’m sure in the subsequent interviews you will be asking me about those details.
MARK RILEY:
It’s an interesting dance this one, isn’t it? Fuel excise – there’s been lots of talk about cutting the fuel excise, a pause, whatever. What about fuel vouchers? The states have been very successful in giving vouchers to restaurants and to tourism, you know, hotels and accommodation so forth. They’re pretty effective.
JOSH FRYDENBERG:
We welcome that. When the states did provide those vouchers, that was a big boost to hospitality, tourism, cafes and restaurants, cinemas – you name it. They benefited out of those initiatives but –
MARK RILEY:
Will the Federal Government do that?
JOSH FRYDENBERG:
Again, that is something that the States did. When it comes to fuel, you’re absolutely right that this is putting real pressure on household budgets. We’ve seen fuel prices above $2 a litre and that really does put pressure on families.
MARK RILEY:
So, could there be fuel vouchers?
JOSH FRYDENBERG:
Well, again, I’m not going to go into individual measures other than to underline for you very clearly that we recognise the rising cost of fuel has put real pressure on household prices.
MARK RILEY:
Okay. I get the message. There’s a balance though, isn’t there, and particularly for you? You need to give people relief, but if you pour too much money into the economy, inflation breaks out and the cost of living gets worse. So, how do you strike that balance?
JOSH FRYDENBERG:
Well, Mark, that’s exactly the big question is to ensure that we strike that right balance, which we think we have done, with cost‑of‑living relief now for Australian families, but also ensuring that what we do provide is done in a responsible and practical way that doesn’t put unnecessary pressure, upward pressure, on inflation, which has already been rising.
MARK RILEY:
Good news this morning for apprentices. Some more money there.
JOSH FRYDENBERG:
Well, we have a great story to tell about apprentices. We now have 220,000 trade apprentices in work. That’s the highest since records began back in 1963. Today we’re extending the apprentice wage subsidy, and that will see 35,000 more apprentices being hired. This is great story because these are your plumbers, these are your carpenters, these are your hairdressers, these are your chefs.
MARK RILEY:
What about immigration? What are you forecasting for immigration? When will we see immigrants coming back to Australia in large numbers?
JOSH FRYDENBERG:
Well, we are seeing an upgrade to the number of people who are coming as a result, of course, of our borders being opened. That’s everyone from international students to working holiday makers and backpackers and, of course, tourists are starting to come back now. So we’ll upgrade those numbers in the budget on Tuesday night.
MARK RILEY:
Your last pre‑election budget contained a bit over $200 million on commuter car parks that were never built, including in your electorate and on sporting grants that the Auditor General found to be out‑and‑out rorts. What rorts have you got in this budget for this election?
JOSH FRYDENBERG:
This budget is about Australian families. This is about easing the cost‑of‑living pressures now. This is about putting in place a long‑term economic plan to create jobs. This is about –
MARK RILEY:
No pork‑barrelling?
JOSH FRYDENBERG:
This is about guaranteeing the essential services. This is about investing more in national defence and our national security at a very important time.
MARK RILEY:
With respect, you smashed out those talking points, but no pork‑barrelling in this budget? Can you make that commitment hand on heart you’re not going to use this to pork‑barrel?
JOSH FRYDENBERG:
That’s your characterisation on what we considered to be important measures in previous budgets. What we’re doing in this budget is responding to the needs of Australian families.
MARK RILEY:
The last pre‑election budget was Back in Black. What song is this one? Living on a Prayer?
JOSH FRYDENBERG:
Well, what you’ll see is a material improvement to the budget bottom line. We did balance the budget for the first time in 11 years going into this crisis. That gave us the fiscal firepower to respond as we needed. But, Mark, I don’t need to remind you or indeed your viewers this morning about the images that they saw just two years ago when 1.4 million Australians either lost their jobs or saw their working hours reduced to zero. There were hundreds of thousands of people lining up outside Centrelink in scenes which were reminiscent, for many, of the Great Depression. There was great fear across the community. Small businesses were closed. People thought they were going to lose their life savings. We responded with programs like JobKeeper, which saved 700,000 jobs; HomeBuilder, which kept the tradies on the tools and saw 100,000 people get into their home; tax relief which put more money into people’s pockets. We took some 1,000 decisions individual decisions right across the economy which today sees our economic recovery amongst the strongest and fastest in the world. Faster than the United States, faster than United Kingdom, faster than Canada, faster than Japan, Italy, France and Germany. That’s something which 26 million Australians can be proud of.
MARK RILEY:
Just quickly, they say that miracles, like lightning, don’t strike twice. Is this enough for another miracle election victory?
JOSH FRYDENBERG:
Well, the budget in 2019 did shift the dial and it did bring into stark focus the contrast between the two political parties, Labor with their $387 billion of higher taxes and our commitment figures figure to lower taxes and responsible management –
MARK RILEY:
This one shift the dial?
JOSH FRYDENBERG:
This budget responds to the here and now, to the needs of Australian families while also putting in place a long‑term economic plan. Our record is there for every Australian to see: an unemployment rate of four per cent. Under Labor it was 5.7 per cent. A material improvement to the budget bottom line and those essential services being guaranteed.
MARK RILEY:
Treasurer, thanks for your time.
JOSH FRYDENBERG:
My pleasure.