PETER STEFANOVIC:
Treasurer, good to see you. I’m waiting for you. Why are you not here?
JOSH FRYDENBERG:
Well, as you just said, Pete, there were some security issues. I’m with the Prime Minister in his courtyard right now. I’d rather be with you in person, but what I say and what you say will be the same no matter where we are.
PETER STEFANOVIC:
Okay, let’s go to the Budget. Did you ever think that you would be delivering a Labor‑like budget?
JOSH FRYDENBERG:
Well, this is a Liberal budget. This is a budget that delivers for families with lower taxes, with increased support through childcare, a budget that delivers for small businesses to back them doing what they do best, to innovate, to hire and to grow with tax incentives. This is a budget that leads to stronger regions with significant support around infrastructure, transport and water infrastructure and better telecommunications connectivity. This is a budget that delivers for retirees. This is a budget that delivers for those who want to get into the housing market. These are fundamental values of Coalition philosophy, Liberal and National Party values. And, of course, this Budget delivers more jobs. It’s the Morrison Government’s economic plan to create 250,000 new jobs and to drive that unemployment rate lower from the 5.6 per cent it is today.
PETER STEFANOVIC:
Is all that spending masking cuts to come, though, Treasurer?
JOSH FRYDENBERG:
Well, the increased spending that you’ve seen, some of it is temporary, like the lower and middle income tax offset, like the incentives for business, like some of the infrastructure programs. There’s additional new spending, though, that is longer term around aged care, around disability support and mental health. They’re key priorities for the Australian community. They’re key priorities for the Morrison Government. And that’s why you’ve seen us respond so strongly to the royal commission into aged care, to the Productivity Commission into Mental Health, and, of course, we’re fully committed to a fully funded National Disability Insurance Scheme.
PETER STEFANOVIC:
Yeah, but all that structural spending, that’s going to have long‑term effects. So who’s going to pay for that?
JOSH FRYDENBERG:
Well, what you see in last night’s budget is that net debt as a proportion of the size of the economy of GDP compared to what we forecast in last year’s budget, last October comes down each and every year and that the deficits actually come down by two‑thirds over the forward estimates over the next four years. And so we have actually seen our economic position improve since last year’s budget in October. And that’s particularly off the back of a stronger labour market with more people in work, because when more people are in work you see higher tax receipts from their income tax and you see lower welfare payments. And let’s not forget, Pete, that going into this pandemic we balanced the Budget for the first time in 11 years, and we did that by getting welfare dependency down to a 30‑year low. We’re going to need to do that again, but we have gone through the biggest economic shock since the Great Depression, and that’s why we responded with such unprecedented support.
PETER STEFANOVIC:
Will you rule out tax cuts though, beyond the next election, if you win?
JOSH FRYDENBERG:
Well, we’ve already legislated significant tax cuts. There’s stage 3 that come in from 2024‑25, and that’s a real reform because what we’re doing is abolishing the 37 cents in the dollar tax bracket. And if you earn between $45,000 and $200,000, you’ll pay a marginal rate of tax of no more than 30 cents in the dollar. That’s 95 per cent of Australian taxpayers. So, we have legislated those tax cuts. We’re committed to them. It’s up to Anthony Albanese to walk the talk when it comes to those tax cuts. He says he supports them, but I’m not so sure.
PETER STEFANOVIC:
The Budget shows a $104 billion improvement, Treasurer, but $96 billion in new spending. Is that fiscally responsible?
JOSH FRYDENBERG:
Well, around half of that spending is actually temporary directly related to the COVID response. And we have to remember we’re in the middle of a pandemic. We’re seeing more than 800,000 new COVID cases a day. We have seen Europe go into the double‑dip recession. We saw recently Western Australia go into a statewide lockdown. The pandemic is still with us. The virus is still with us. It’s deadly, it’s stubborn, and we need to remain vigilant. So, we’ve extended some of those health measures like the telehealth programs, like the support for GPs, like the procurement of vaccines, that’s important. As well as the stimulus measures like the additional year of that lower and middle income tax offset. That’s really important to help create growth and to keep driving this recovery. We don’t want to lose the gains, Pete, that we’ve already made. We’ve got to continue to lock them in.
PETER STEFANOVIC:
Are you going to have to allow for more funding though, for the tourism sector now that it doesn’t really have any certainty, bearing in mind that the international borders will remain closed until the middle of next year?
JOSH FRYDENBERG:
Well, we’ve already provided substantial support for both the aviation and the tourism sector, and when it comes to the major airlines we’ve done –
PETER STEFANOVIC:
Yeah, but will you have to provide more?
JOSH FRYDENBERG:
Well, again, the substantial support that we’ve provided is actually doing what it was expected to do, which is to drive jobs and to help the recovery. 800,000 half price air fares have gone off like hot cakes, Pete, and people are travelling now more freely across the country. It’s really important, and when we have future outbreaks, and we will, because we can’t eliminate this virus, but we can successfully suppress it, is that when we do have those outbreaks that state premiers ensure a proportionate response, and if they do so then we can continue to see people move freely between states, travel around our great country and create jobs in the process.
PETER STEFANOVIC:
Migration, though, just finally here, Treasurer, migration is at zero now until the middle of next year as well because of those borders being closed. Does this mean that you would be looking to explore quarantine facilities to be able to speed that up to get some skilled migrants in, to get international students in as well?
JOSH FRYDENBERG:
Well, we say in the Budget that we expect small numbers of international students to start coming in from the end of the year but that there is an assumption that the international border will remain closed and then gradually open from mid next year. Again, these are assumptions. These are not policy decisions. They do depend on the medical advice. The situation is very uncertain. But we will open the borders when it is safe to do so. And, of course, it’s not just the vaccine rollout which is a factor, but it’s also how the virus is changing internationally. Because we’ve seen new variants of the virus and we’ve seen images from right across the world, the developing world and the developed world, about how it has continued to wreak havoc. Our first priority always will be here protecting Australians. We’ve done that from the start of this crisis by following the medical advice and we’ll do it till the end of this crisis.
PETER STEFANOVIC:
Okay. Treasurer Josh Frydenberg, as always, thanks for your time. We’ll talk to you again soon.
JOSH FRYDENBERG:
My pleasure, Pete.