PETER STEFANOVIC:
Joining us live is the Treasurer Josh Frydenberg. Treasurer, good to see you, thanks for your time this morning. How’s isolation going?
JOSH FRYDENBERG:
Well, it has its pluses and its minuses. Obviously away from family and out of the office is not really that great. But at the same time I’ve got plenty of good company – a hundred thousand fellow Victorians are reportedly in isolation right now. So it’s a difficult time for everyone as those vaccination rates get very close to our 70 to 80 per cent targets.
PETER STEFANOVIC:
Okay, let’s talk about APRA increasing the serviceability buffer by half a per cent. That’s only going to affect 5 per cent of buyers. So what’s the next shot that you’ve got in mind to address housing affordability?
JOSH FRYDENBERG:
Well, it will actually affect probably around two in 10 buyers, and what it will do is have an impact of preventing emerging risks in the economy. So we welcome what the prudential regulator has announced. We see it as a targeted, prudent action. Our housing market – our $10 trillion housing market – has seen strong growth, Pete, over the last year off the back of historically low interest rates. And Australia is not unique in that regard; other countries have also seen strong growth in the housing markets. But what APRA have sought to do here is to try to prevent people getting over stretched when it comes to their borrowings. And so they are putting in new changes that will see loans assessed at a higher interest rate than what people would otherwise pay, and that will create a bigger buffer with those loans. So if people’s circumstances change there are a few protections that are in place.
PETER STEFANOVIC:
Okay. A couple of state issues at the moment I’d like you to address, Treasurer, starting with Victoria. Should Daniel Andrews stand aside while being the focus of an anti‑corruption probe?
JOSH FRYDENBERG:
Look, I’ll let Daniel Andrews explain himself with respect to that. And I’m not going to run a commentary on any investigation. I have a good constructive working relationship with my counterpart in Victoria when he’s not making gratuitous comments or having cheap shots at us. But the reality is those are matters for the state Premier to answer, and I’ll leave that to him.
PETER STEFANOVIC:
Right. Matthew Guy thinks he should.
JOSH FRYDENBERG:
Well, he’s the state opposition and I’m the federal Treasurer, so we’ve got different remits.
PETER STEFANOVIC:
Okay. Let’s go to Queensland now. It’s moving towards a trial to have stranded citizens home quarantine. It’s only a trial at this stage, affecting about a thousand people. Bearing in mind there’s some 3,000 Queenslanders who want to get home at the moment. Should it be larger?
JOSH FRYDENBERG:
Well, we’d obviously welcome a larger trial. We’d welcome an acceleration of the vaccination rates in Queensland and opening up of the borders in accordance with the national plan that Queensland agreed to. I mean, I note that Queensland’s own websites talk about a $28 billion domestic tourism industry with nearly one in 10 Queenslanders who are employed in the tourism industry and more than 230,000 Queenslanders employed in tourism. And it’s exactly those tourism jobs which are being damaged, which are being harmed by the closed borders and also the slow vaccination rates. So let’s get vaxxed in Queensland. Let’s see the rates hit 70 to 80 per cent as quickly as possible, and let’s see Queensland stick to the national plan.
PETER STEFANOVIC:
Is Premier Palaszczuk going to get more money for hospitals?
JOSH FRYDENBERG:
Well, she’s already getting more money. I don’t know what she’s complaining about. I mean, the reality is we have increased hospital funding by over 100 per cent since coming to government for Queensland. Yet at the same time the Queensland government has increased hospital funding by a fraction of that – about half. And so we’ve got on with the job of providing more funding for Queensland hospitals. We’d welcome the Queensland government spending a bit more on their own hospitals.
PETER STEFANOVIC:
The former New South Wales Treasurer is now the Premier. Have you spoken to him since he’s been promoted?
JOSH FRYDENBERG:
Yes, I have. I have a good relationship with Dom Perrottet and I wish him well. I also, you know, express my thanks and gratitude to Gladys Berejiklian for her outstanding work as Premier of New South Wales. It’s a difficult time for the country and I’m sure Dom will do a very good job.
PETER STEFANOVIC:
Well, Premier Perrottet, you know, he likes to fight over GST. He wants GST reform. Will you budge on that?
JOSH FRYDENBERG:
Well, you know, I note that the states themselves can’t even agree on GST reform, bearing in mind that we effectively raise the tax and every dollar goes to the states. I mean, sometimes, Pete, I feel like a referee in a wrestling match between, you know, Mark McGowan in the red corner and Dom Perrottet in the blue corner.
PETER STEFANOVIC:
Okay, who’s going to win?
JOSH FRYDENBERG:
Well, the reality is they’re both winning. That’s the point. Because we’ve actually seen an increase in the GST take over the last year, and that’s money all of which goes to the states. And New South Wales alone has seen a four and a half billion dollars increase over the last year compared to the year prior for the GST take. We’ve put in arrangements that will see no state worse off, and also it’s important for the people of Western Australia to know that they’re not getting short‑changed with 30 cents in the dollar coming back on GST. So we put a floor in there as well. So what we’ve sought to do with those reforms, which were initiated by then Treasurer Scott Morrison and I continued that when I took over the role, I think is creating a fairer system overall and all the states are better off.
PETER STEFANOVIC:
Just finally, are you and the Prime Minister looking forward to having a bottle of burgundy with the French ambassador when he returns?
JOSH FRYDENBERG:
Yeah, a glass of wine would obviously be one way to get the relationship back. But, look, you know, we both have important interests in the region. We have a longstanding relationship. We welcome the announcement that the French ambassador is coming back to Australia. They’ve put out their statement, we’ve put out ours. We’ve got to go ahead together and advance our mutual interests.
PETER STEFANOVIC:
Treasurer Josh Frydenberg, thanks for your time.
JOSH FRYDENBERG:
My pleasure.