DAVID KOCH:
Joining us now, not really a fashion guru but a financial guru, Treasurer, Josh Frydenberg. Treasurer, big tick from the OECD which is a really prestigious international group. For what you’ve done in the past, they point out we’ve got to be flexible in the future, what are your plans for the future for the economy?
JOSH FRYDENBERG:
Well obviously my immediate focus is to get us through the depths of this pandemic and, obviously, sticking to the national plan, getting people vaccinated - that 70-80 per cent rate - so we can open up, is really going to be important for the momentum coming back in the economy. For all those small business owners watching your program this morning, there is light at the end of the tunnel. Of course, we continue with the economic reform program. Tax reform that’s seen us legislate, Kochie, significant tax changes for income earners, so we are abolishing the whole $0.37 in the dollar tax bracket, so that 95 per cent of taxpayers pay a marginal rate of no more than $0.30 in the dollar. We are trying to put incentives in place for businesses to invest more. We are doing innovative things, one is called the patent box. If you are developing in Australia new biotechnology or medical technology, you pay a lower company tax rate and that encourages the research and development here in Australia, and the patents here in Australia, rather than being commercialised abroad. We have a busy agenda around skills, infrastructure, tax reform that we will continue with.
NATALIE BARR:
We were doing well when we came out of the first round, and then we were pummelled; Sydney and Melbourne pummelled, more than probably you guys thought. What happens if COVID throws us another curveball?
JOSH FRYDENBERG:
Nat, I expect it will. I think that’s what we’re living through right now. I don’t think you can eliminate the virus and, unfortunately, there will be new variants into the future. That’s why vaccinations are so important. That’s why booster shots that the Government has secured will be so important going into next year and beyond. But we do need to learn to live with the virus, because we can’t live in lockdown forever. That’s why the national plan is so important. But I want people watching your show today to know, as Kochie indicated at the start of the program, that the fundamentals of the Australian economy are sound. The OECD has praised the swift, well-coordinated economic response of the Government, and we will be opening up, particularly in NSW and Victoria I hope relatively soon.
DAVID KOCH:
Couple of things. Housing boom. Massive increase in housing wealth. Booming markets. Are you scared of that? Is this housing bubble going to damage the economy when it eventually bursts – it has got to burst.
JOSH FRYDENBERG:
It’s a really important topic and I am focused on the issue of housing affordability. I do point out though, Kochie, that every country around the world because they’re experiencing these historically low interest rates, are seeing housing prices appreciate - some more than others. In Australia, it has been quite significant over the course of the last year. Also, programs like HomeBuilder have boosted demand. We’ve also seen a relatively strong labour market despite the recession we’ve gone through. That being said, the key going forward is going to be more supply. That’s planning, that’s zoning, that’s land release to get more supply into the market because we know demand is there. We also know because of these historically low interest rates, actually the amount of people’s disposable income they spend on their interest repayments, are actually back at the levels they were in the early 2000s. Because people’s main asset is actually their house, this does give them confidence, this does give them wealth, and this wealth has appreciated…
DAVID KOCH:
So you’re not worried?
JOSH FRYDENBERG:
I am focused on it is what I would say.
DAVID KOCH:
Treasurer, appreciate your time. Thank you.
JOSH FRYDENBERG:
My pleasure. Thank you, Kochie and Nat.