PETER STEFANOVIC:
Let’s go live to Canberra now and joining us is the Treasurer Josh Frydenberg. Treasurer good morning to you.
JOSH FRYDENBERG:
Good morning Pete.
PETER STEFANOVIC:
I suppose the sticking point in all of this is that two-way value exchange isn’t it? Because two companies believe that their worth is more.
JOSH FRYDENBERG:
Well this is a fair and balanced way to assess the value that is generated by these digital platforms and by these traditional news media businesses. But the money can only flow one way. The money can only flow from Facebook and Google to the traditional news media businesses under this model. But it is only fair that we also consider, in an arbitration process, the benefit to the traditional news media businesses of having more eyeballs on their product by having them placed on Google search or Facebook news feed. This is a world first. The legislation being introduced into the Parliament today Pete, is the culmination of three years of hard work by the Government and by the ACCC. Many other nations will be watching what is occurring here in Australia because they are seeing similar challenges with the rise and the dominance of these giants, these Googles and Facebooks, who are really taking over the online advertising market. Indeed, for every $100 spent on online advertising, $53 is going to Google and $28 is going to Facebook and we’re seeing traditional news media businesses, be they print, be they television, be they radio, not being paid when their original journalistic content is being used.
PETER STEFANOVIC:
Can they still walk away?
JOSH FRYDENBERG:
Well Google and Facebook have an obligation if they are going to use this journalistic content from the traditional news media businesses to reach an agreement with the traditional news media businesses. Now we are obviously encouraging and enabling commercial agreements to be struck outside the mandatory bargaining code. And the word is that good progress is being made on that front between a number of media businesses and the digital giants. But if an agreement can’t be struck outside the code, then the code can be triggered and that has a final offer arbitration process where an independent panel of arbitrators will consider the two offers from the parties and take one of them.
PETER STEFANOVIC:
That will take time though.
JOSH FRYDENBERG:
There’s a set timetable in the legislation. That’s only a 45-day program once it goes to arbitration and that obviously will ensure we can move quite quickly through this process. But there will be a lot of work that’s done in preparation by the parties.
PETER STEFANOVIC:
Treasurer, you’re introducing credit legislation that includes rolling back responsible lending obligations for banks. The Senate has already made it clear that it’s opposed to scrapping the responsible lending obligations. So, is the legislation dead before it hits the Senate?
JOSH FRYDENBERG:
Well no. Our responsible lending has become the restrictive lending laws, and these were put in by the Labor Party in the wake of the GFC and they started off as a principles-based framework which has become overly prescriptive. You’ve nearly got 100 pages of ASIC guidance and the process has meant under these laws that households, people who are going to get a home loan, people who are going to get an extension on their overdraft, a new credit card, are being asked for a level of detail in their own finances which is unnecessary in order for that transaction to take place. This is delaying and, in some cases, prohibiting proper access to finance which should otherwise occur. We’re leaving in place the consumer protections Pete. What we are saying is APRA as the prudential regulator have a lending standard and that will continue to apply. But what we are seeking to do here is cut red tape, make it easier for people to access finance and to move from a model which is based on lender-beware to borrower having personal responsibility for the loans that they are seeking. Of course, these lenders will need to continue to seek to verify the income of those people who they are making loans to, but the consumer protections will remain in place so much so, that we saw the Council of Financial Regulators which is made up of the heads of the Reserve Bank and ASIC and the Australian Prudential Regulator (APRA) and Treasury, and they all said that the responsible lending changes that the Government were seeking to implement can help boost access to finance.
PETER STEFANOVIC:
But Australians are already up to their necks in debt so how will more debt help them?
JOSH FRYDENBERG:
Well again, it depends on individual circumstances. People seeking a home loan and people seeking a credit card, there are examples where people with hundreds of thousands of dollars in the bank were unable to get a basic credit card because they were unable to show a weekly or a monthly income statement. Now there are a lot of perverse consequences of what have become overly prescriptive regulations and laws that, in today’s world, are unnecessary, and I also want to point out how important it is to Australia’s economic recovery that we have the free flow of access. So this is not only cutting red tape, but this is going to boost consumer outcomes in their favour.
PETER STEFANOVIC:
Are you looking to bring forward stage three tax cuts as part of the next Budget?
JOSH FRYDENBERG:
We’ve just had a big Budget. A Budget that’s probably bigger than any other, Pete, which had very substantial tax cuts. We saw stage two being brought forward two years early. The money is starting to flow into the pockets of 11.5 million Australians. So they were very substantial tax changes that we introduced on the personal income side. But we’ve also made substantial changes also in terms of company tax where for smaller sized companies they are getting a lower tax rate. We introduced a loss-carry back measure, as well as an immediate expensing in what is otherwise known as an expansion to the instant asset write off.
PETER STEFANOVIC:
But the next one, you’re going to get this question a lot. In the lead up to the next part, you’re going to get this question, so are you looking to bring forward stage three tax cuts?
JOSH FRYDENBERG:
I’ll leave the commentary to commentators like yourself. What I’m focused on is Australia’s economic recovery and what I can tell you is that our nation’s economy is recovering nearly quicker and stronger than any other nation across the world. We saw a 3.3 percent boost in the September quarter to GDP growth, we have seen 178,000 jobs being created last month, we saw earlier this week just yesterday consumer confidence up for 13 out of the last 14 weeks. We saw business confidence up yesterday by 9 percentage points. Across the board we are seeing positive economic data showing that the recovery is underway as Australia has successfully managed the virus. This is something that all Australians can be very proud of as they have made many sacrifices this year.
PETER STEFANOVIC:
Treasurer Josh Frydenberg appreciate your time, thanks for joining us
JOSH FRYDENBERG:
Always a pleasure.