MICHAEL ROWLAND:
Treasurer, good morning to you.
JOSH FRYDENBERG:
Good morning, Michael.
MICHAEL ROWLAND:
A Labor Government would, under that plan, allow compensation of up to $2 million for individuals ripped off by the major banks. Will the Coalition follow that?
JOSH FRYDENBERG:
Well, imitation is the best form of flattery. The Labor Party's following the Coalition. Over two weeks ago, Michael, we announced our comprehensive and full response to the Hayne Royal Commission. We're still waiting for Labor's response. With respect to compensation, we announced that we would extend the remit of the Australian Financial Complaints Authority back a decade, which Labor has copied, and that the compensation that would be offered would be based on the independent Ramsay Review, which included representatives of consumer organisations, the Productivity Commission, former members, professors of law. We think we've got the balance right and the Labor Party, over two weeks later, has still not provided a full response to the Hayne Royal Commission and the biggest story today will be their humiliating backflip on mortgage brokers after saying that all commissions from mortgage brokers should go.
MICHAEL ROWLAND:
Will you go up to that $2 million level that the Labor Party is now promising?
JOSH FRYDENBERG:
We actually think we've got the balance right and, like I said, it was based on the independent advice from the Ramsay Review, which saw the Coalition establish the Australian Financial Complaints Authority. So, we think we've got the balance right. Now, look, Bill Shorten will continue to talk about the banks but it's not just the banks who will pay this levy for the scheme, it's actually 35,000 small businesses that are members of the Australian Financial Complaints Authority across the country. Now if the balance is not struck right, then they could have trouble getting indemnity insurance and it could actually put them out of business. So, you need to be sensible here, not engage in political stunts. The Labor Party, for two weeks, has been engaged in political stunts on the Royal Commission and you've got to look at what they do as opposed to what they say.
MICHAEL ROWLAND:
You mentioned mortgage brokers, why shouldn't both sides of politics stick to the Hayne recommendation that the lender, sorry, the borrower pay that upfront fee, not the bank, to remove any suggestion of a conflict of interest?
JOSH FRYDENBERG:
Because what we've been concerned about is competition in the sector and giving a free kick to the banks because they have an extended branch presence, which the smaller lenders don't. Now, mortgage brokers employ around 26,000 people across the country. They're responsible for writing over 50% of the mortgage business in the residential housing market and 75% of them are actually sole traders. So, they're in every regional community, every urban and city community, and they play an important role and should be valued. But the Productivity Commission underlined the fact that if you took away their current fee model, then it would inhibit competition and be a free kick to the banks. That's why we quickly announced our position standing side by side with mortgage brokers, which was endorsed by the Reserve Bank Governor. And the Labor Party said, Clare O'Neil said on ABC radio, with respect to commissions for mortgage brokers, that they should go. Chris Bowen said if the Royal Commissioner recommends something it shall be done. They're his words. So, today their position is really untenable because they've been humiliated, rolled by their own caucus, rolled by their own Cabinet and rolled by their own leader.
MICHAEL ROWLAND:
What's going on with Australian coal exports to China?
JOSH FRYDENBERG:
Well, we've asked our Ambassador to follow this issue up, but I wouldn't jump to conclusions, Michael. The two way trading relationship between Australia and China is very strong, very important and it's certainly in Australia's long-term national interest. If you look at the volume and the value of our coal exports to China in the last quarter of 2018 it was higher than the same period last year and those coal exports underpin more than 50,000 jobs, more than $60 billion of exports so they will continue to be strong and robust.
MICHAEL ROWLAND:
Does it strike you as odd, though, that our exports have been halted at the same time the Chinese are still accepting shipments of coal from Russia and from Indonesia and therefore is this not payback against some of the policies we've seen here, shutting out Huawei and espionage laws targeted to China as well?
JOSH FRYDENBERG:
Look, the Chinese have actually done these sorts of tests before and, like I said, the resources that we supply to them are vitally important for their industrialisation, for their urban growth, and for us it creates huge numbers of jobs and export income here in Australia. So, it's a two way trading relationship which is vitally important. It's based on mutual respect and mutual national interest.
MICHAEL ROWLAND:
Okay. What legacy does Julie Bishop leave to Australian politics in the wake of her shock resignation yesterday?
JOSH FRYDENBERG:
A wonderful legacy and she should be congratulated on her two decades in public life, not just as the Deputy Leader of the Liberal Party for 11 years and as a wonderful member for Curtin, but as one of Australia's greatest Foreign Ministers and Australia's first female Foreign Minister. I'd look particularly to her response to the MH17 disaster where she showed enormous empathy to the victims' families and she worked through the UN Security Council to get justice for the victims, but also her work in establishing the New Colombo Plan, which was based on a Menzies Government initiative where thousands of people from Asia came to Australia for work experience and education and now we are sending thousands of Australian young people to the region for similar experiences and I think that will be a lasting legacy where it will continue to strengthen the engagement between Australia and our region.
MICHAEL ROWLAND:
It was, from all accounts, a very classy speech by Julie Bishop yesterday but, Josh Frydenberg, does it strike you as odd that she left the chamber straight after the speech and didn't wait around to hear the Prime Minister's response and does that speak to continued divisions within the Liberal Party in the wake of the leadership spill?
JOSH FRYDENBERG:
I think you're reading something into that, which is not present. In fact, the Prime Minister and Julie Bishop have worked closely together. Yes, they were opponents in the ballot for the leadership but that's been done and I know that they are in close contact with each other. The fact is, Julie Bishop leaves a lasting legacy and there's a new generation of Liberal women. For example, Linda Reynolds has done an outstanding job recently in dealing with the floods in Queensland. Sarah Henderson in Corangamite is doing outstanding work. Whether it's Melissa Price as the Environment Minister or Karen Andrews as our Industry Minister, we are doing really wonderful things on our side of politics and with women helping lead the way.
MICHAEL ROWLAND:
I want to finish with the Helloworld controversy. We have differing interpretations of what was said, what wasn't said in terms of Joe Hockey, owing me, this is Andrew Burnes, what was alleged Andrew Burnes, the head of Helloworld, Federal Liberal Treasurer, told one of his executives. But isn't the main question here, Josh Frydenberg, is why a company run by the Federal Treasurer of the Liberal Party, a very generous donor to the Liberal Party, why this company gets exclusive access to offering parliamentary travel?
JOSH FRYDENBERG:
Well, Michael, let's put some facts on the table. Back in 2012 when Labor was in government, they gave a significant contract to a company associated with Andrew Burnes. In 2014, we, when we were in government, gave a travel contract to a company, which was the competitor of Andrew Burnes. In both cases, they were independent tender processes. With respect to Joe Hockey, the Secretary of DFAT has made clear that the Ambassador fulfilled his declaration of interest responsibilities…
MICHAEL ROWLAND:
Actually, no, I’ll correct you there. She said in subsequent testimony to an estimates hearing that she wasn't in a position to say whether Joe Hockey had met the required standard on that.
JOSH FRYDENBERG:
No, in terms of declaring his interests he did and it is, you know, a common occurrence that Ambassadors and their officials meet with Australian companies or US companies. I mean, let's put the facts on the table and let's also point out that the Labor Party used this as a big distraction this week, because they were on the back foot on tax and borders.
MICHAEL ROWLAND:
Josh Frydenberg, Federal Treasurer, thank you so much for joining us on news breakfast.
JOSH FRYDENBERG:
Nice to be with you.