PATRICIA KARVELAS:
Josh Frydenberg joins us, welcome to the program.
JOSH FRYDENBERG:
Nice to be with you, Patricia.
PATRICIA KARVELAS:
GDP growth is at 0.2 per cent but per capita GDP growth, which is regarded as a better indicator of changes in living standards, is in negative territory for the second consecutive quarter. This is the worst result since 2006; do you take responsibility for this?
JOSH FRYDENBERG:
Actually, the way you’re reading those numbers are wrong. The calendar year, GDP growth is 2.7 per cent and actually indicates that the Australian economy is growing faster, Patricia, than any G7 nation except the United States. When it comes to the health of the Australian economy, the fundamentals are sound. We’re growing at a faster rate than we were when we took over from the Labor Party in 2013. Unemployment has come down from 5.7 per cent where it was under Labor, to 5 per cent today. And, if you want to look at a good indicator of living standards, then real net national disposable income is a better indicator, and that is up 2.1 per cent through the year. Whereas, in Labor’s last year in office, it was down 1.2 per cent. Real GDP per capita and the talk of a recession really is inaccurate because what is the best indicator of a recession is what happens to GDP growth and that has been consistently positive.
PATRICIA KARVELAS:
Treasurer, unemployment is up everywhere apart from New South Wales.
JOSH FRYDENBERG:
Unemployment actually has come down. If you look at Victoria, 4.25 to 4.5 per cent, the lowest level in many years. The New South Wales economy is the largest in the country, to see it under 4 per cent is a number they haven’t seen since the 1970’s. And, the number of women who are in the workforce is at a record high and the gender pay gap has come down to a record low. And, as you know, it was going up under Labor. And, then the young people aged 15 to 24, Patricia, the number who got a job over the last financial year has been the highest on record. So, our jobs growth record is really, really strong.
PATRICIA KARVELAS:
Treasurer, economic growth doesn’t mean much to most Australians if they don’t feel like they have more money in their pocket. What’s your strategy for lifting wages?
JOSH FRYDENBERG:
Tax cuts, investment in infrastructure, having stable workplaces where militant unionism doesn’t discourage investment and discourage economic activity. We have seen an increase in the Wages Price Index, which is a euphemism for wage growth by 2.3 per cent, which has been the biggest jump in three years. But, there is still a lot more work to be done. And, I point you to the comments of the Reserve Bank Governor, Phil Lowe, who has pointed out that he is seeing increases in wages pickup in all states, and he believes we are on the right trajectory.
PATRICIA KARVELAS:
Let me pick you up on one thing you just said, Treasurer, which was tax cuts. We know what tax cuts you’ve already offered to the business sector, or the smaller business sector now, given that you’ve now dumped your bigger tax cuts for big business. But, is there more tax cuts to come? Are there more tax cuts to come?
JOSH FRYDENBERG:
Oh, well, everything will be revealed in the Budget, Patricia. But, not only have we provided tax cuts for more than three million small and medium sized businesses, but actually, in recent months we have announced an extension of the instant asset write off and to increase it to $25,000…
PATRICIA KARVELAS:
Sure, Treasurer, but if I can interrupt you, does this show that the Government has a reason now to hand out tax cuts to households under pressure?
JOSH FRYDENBERG:
Oh, look, I’ll leave the commentary to you, Patricia…
PATRICIA KARVELAS:
It’s not commentary, it’s a question…
JOSH FRYDENBERG:
Well, no, it is commentary…
PATRICIA KARVELAS:
No, it’s not. It’s a direct question. Do you think there is now a case?
JOSH FRYDENBERG:
Well, you’ll have to turn on your ABC on the 2nd of April to see what happens in the budget…
PATRICIA KARVELAS:
Oh, I certainly will, I’ve always got it on. I would love to get your assessment. Do you think households need help more than ever now, and should it be delivered in the form of tax cuts?
JOSH FRYDENBERG:
Well, actually, if you again look at the words of the Reserve Bank Governor, he has said that our legislated tax cuts, which we’ve already put in place for 95 per cent of taxpayers. I mean, let’s not forget that we’re going to see these people pay no more than 32.5 cents in the dollar for more than 94 per cent of taxpayers. That is an incredible achievement and we’ve legislated that. Now, the Labor Party wants to wind that back and increase your taxes at the various levels of the income streams…
PATRICIA KARVELAS:
Sure, but I asked whether you think households, tax payers, deserve a further tax cut.
JOSH FRYDENBERG:
Well, we’ve already legislated significant tax cuts which will roll out of the course of a seven year plan. As for further announcements in this space, you’ll just have to wait to see what will and will not be said on Budget night.
PATRICIA KARVELAS:
I’m always waiting, you know that. Your Government has promised to reduce the migration rate, but today’s National Accounts show that without migrants fuelling our consumption, Australia’s economic growth would be going backwards. Is it time to revisit that?
JOSH FRYDENBERG:
Well, in terms of immigration, as you know and I have said this repeatedly, it’s a very important part of the Australian story. You and I are products of immigration to this country and proud to be so. We will continue to have a very strong, robust, generous immigration program…
PATRICIA KARVELAS:
But, your policy, Treasurer, but your policy on the record is to cut back migration and if you look at the figures, you won’t disagree with me on this, immigration, migration, is the story behind the continued growth. So, if it’s the story behind it, aren’t you taking a risk by changing that policy?
JOSH FRYDENBERG:
Well, actually, there’s lots of stories behind this…
PATRICIA KARVELAS:
That’s one of the stories, isn’t it?
JOSH FRYDENBERG:
Well, certainly population contributes to economic growth by simply having greater demand. But, if you look at the non-mining investment numbers in these National Accounts, they are positive which shows that companies are feeling confident to continue to invest and to grow. We’re seeing strong exports, and as you know, this week we inked the Australia-Indonesia Free Trade Agreement, which will be very important in strengthening business opportunities for Australian businesses to export into that growing market. Just as we have done with Japan, China and Korea and other Free Trade Agreements. So, there are lots of reasons why we’re continuing to see robust growth in the Australian economy and the Government can claim some of the credit for that…
PATRICIA KARVELAS:
And, Treasurer…
JOSH FRYDENBERG:
With the Free Trade Agreements and the other policies we have put in place…
PATRICIA KARVELAS:
And, Treasurer, what is your message, now, to bosses to employers; should they be giving their workers an immediate wage rise?
JOSH FRYDENBERG:
Well, obviously people who run businesses want to attract the best possible employees and they will pay to do so. Those decisions will be taken within, you know, within the companies themselves and of course, they’ve got to decide how do they expand their business? Do they open up into new markets? Do they invest in new equipment? Do they open another shopfront? These are decisions…
PATRICIA KARVELAS:
Would you like to see them increase the wages of their workers though, given that Bill Shorten says that the next election is a referendum on wages?
JOSH FRYDENBERG:
Well, I can tell you one thing that wages will not increase with $200 billion of new taxes that Labor is proposing…
PATRICIA KARVELAS:
But I’m asking, Treasurer, with respect, for your strategy. I know you’re telling me what’s wrong with Labor’s strategy but I don’t hear what yours is.
JOSH FRYDENBERG:
Well, with the greatest respect I told you earlier, we’re about reducing taxes and we’ve already legislated significant taxes. We’re focused on delivering new Free Trade Agreements with one in five Australian jobs coming from trade. We’re focused on getting effective workplaces, not pitting employer vs employee, and giving militant unions the keys to the business, as Bill Shorten is promising to do, because we know how that ends up. You see, we have a very different approach, we’re in favour of lower taxes, you see, Labor’s in favour of higher taxes. We’re in favour of more jobs, more investment in infrastructure and more Free Trade Agreements. That is actually what has produced over 1.2 million new jobs, that is what is seeing Australia have a rate of economic growth which is faster than other G7 nations except the United States.
PATRICIA KARVELAS:
Treasurer, the Prime Minister has danced around the idea that a Labor Government could precipitate a recession, but all of these economic indicators have started trending downwards on your watch. If there is a recession this year, won’t it be your responsibility?
JOSH FRYDENBERG:
Well you’re overlooking a key statistic, which is unemployment, which continues to come down, and the fact that more women and more young people are getting jobs than ever before, and the fact that we saw over 65,000 full time…
PATRICIA KARVELAS:
so you don’t accept, you don’t accept that there will be a recession?
JOSH FRYDENBERG:
Well certainly there won’t be a recession while we’re in government…
PATRICIA KARVELAS:
But why will there suddenly be a recession if Labor is in government, are you saying there will be a recession if Labor is in government?
JOSH FRYDENBERG:
Well Labor is a real risk to the economy…
PATRICIA KARVELAS:
But are you saying there will be a recession if Labor is elected?
JOSH FRYDENBERG:
I’ll leave others to make those judgements…
PATRICIA KARVELAS:
Why will you leaving others to make those judgements? You’re the Treasurer I’m asking you.
JOSH FRYDENBERG:
Because what I’m saying is based on the setting that we as a government have in place, we will continue to see strong economic growth and more jobs being created, in contrast…
PATRICIA KARVELAS:
But you can’t say, can you, that you think there will be a recession under Labor?
JOSH FRYDENBERG:
Well in contrast, if you whack the economy with $200 billion of new taxes, not an insignificant amount, Patricia, if you’re going to take $55 billion from the pockets of retirees, if you’re going to increase superannuation taxes, if you…
PATRICIA KARVELAS:
What will happen? What’s your prediction then? What will happen?
JOSH FRYDENBERG:
…What will happen is you’ll see less jobs, lower growth and less, lower wages as well…
PATRICIA KARVELAS:
But you can’t say there will be a recession can you?
JOSH FRYDENBERG:
Well I would like others to offer comment on that, and some of them have…
PATRICIA KARVELAS:
But why won’t you, because it seems to me like you’re kind of dancing around it, you want someone else to say it, you’re implying it heavily, but you won’t say it.
JOSH FRYDENBERG:
You don’t seem to be listening Patricia…
PATRICIA KARVELAS:
I’m listening very intensely!
JOSH FRYDENBERG:
With the greatest respect, what you don’t want to hear, is the dangers that are posed to the Australian economy by $200 billion of new taxes, now if you’re a retiree…
PATRICIA KARVELAS:
I’m asking you to quantify the danger.
JOSH FRYDENBERG:
Well I’m telling you, it’s $200 billion of additional taxes, and its lower wages, and that’s from the Centre for International Economics, who just looked at Labor’s capital gains tax policy, it’s from National Seniors, who have looked at Labor’s retiree’s tax policy, and the list goes on.
PATRICIA KARVELAS:
Treasury told you to stop saying Labor’s negative gearing policy would bring down house prices, because that’s not their view, why are you misrepresenting Treasury advice?
JOSH FRYDENBERG:
Well we’re not…
PATRICIA KARVELAS:
But you are, because we’ve read the emails and that’s what they say.
JOSH FRYDENBERG:
Well actually let me tell you what Treasury said. They said that Labor’s policy could put downward pressure on housing prices, and also that it could create real problems in a cyclical downturn in the housing market. Now, when Labor came up with this policy, and a few years ago when this advice, this comment was provided, we were in a different housing market. We’ve seen housing prices come down around 10 per cent in the key markets in Sydney, in Melbourne, over the last year or so. The Labor Party’s policy is designed in the words of Chris Bowen himself ‘to put downward pressure on prices’.
PATRICIA KARVELAS:
Ok but I’m asking you about the Treasury emails.
JOSH FRYDENBERG:
And I’m telling you about the Treasury emails.
PATRICIA KARVELAS:
But I’ve seen, but I’ve read them, and they’re in black and white, on the ABC news site right now. So you can’t contest facts.
JOSH FRYDENBERG:
I’m telling you what they say, and you can open up your article and in fact…
PATRICIA KARVELAS:
But you have been exaggerating it haven’t you?
JOSH FRYDENBERG:
No, let me take you through it. Five days ago, this story appeared in the Financial Review, so unfortunately you’re coming to it a bit late. Secondly, Treasury made it very clear that the Labor Party’s policies could put downward pressure on prices, Chris Bowen says that is what it is designed to do. Treasury makes it very clear that it will compound the problem in a cyclical downturn in the housing market which is what we’re seeing today. The Master Builders Association have said that if Labor’s policy is in place you’ll see 32,000 fewer jobs and 42,000 fewer homes being built. The Property Council of Australia…
PATRICIA KARVELAS:
Ok, but I asked about Treasury advice, with respect, it wasn’t about all of the other players. I’ve asked about the Treasury advice, that was my question. But I just want to move on, because we are running out of time, to just two things very briefly, Treasurer, and one is, are you really pumping a million dollars into your campaign?
JOSH FRYDENBERG:
Well everybody who runs in a seat no doubt invests in their campaign…
PATRICIA KARVELAS:
A million dollars? Because it’s safe Liberal seat apparently?
JOSH FRYDENBERG:
Well I’m not putting a number on it, but if you want to quote the Australian…
PATRICIA KARVELAS:
I am quoting the Australian, I’m trying to get… it wasn’t my story, in fact a former colleague of mine who I trust wrote the story. So I’m asking you, is that how much you’re pumping into a safe Liberal seat?
JOSH FRYDENBERG:
I don’t know what the final number will be, but certainly we will continue to work hard in the seat of Kooyong, and I will work hard to win the trust of my community just as I have done at the previous elections. I don’t take anything for granted, I work hard in my community, and I look forward to the contest, at the election when it comes.
PATRICIA KARVELAS:
Finally, Treasurer, your government has blocked right wing provocateur Milo Yiannopoulos from entering Australia, he held a speaking tour here in 2017, what’s changed?
JOSH FRYDENBERG:
Well look I don’t comment on individual cases, that’s a decision that’s come through the Immigration Department, I’ll leave it at that…
PATRICIA KARVELAS:
But do you back that decision? Do you think it’s wise?
JOSH FRYDENBERG:
Well those decisions of the Department and the Minister stand.
PATRICIA KARVELAS:
Alright Treasurer, tried there but you weren’t going to go there, thanks very much for your time.
JOSH FRYDENBERG:
Good to be with you.