PETER STEFANOVIC:
Let’s go to Canberra. Josh Frydenberg the Treasurer is joining us live. Treasurer is here. Where is he? Have we got him up? Hey, there he is! Treasurer Josh Frydenberg, thank you for your time as always. We got you finally.
JOSH FRYDENBERG:
Good morning Pete.
PETER STEFANOVIC:
We spoke to our viewers about the super reforms that passed yesterday. Was there a deal struck with Pauline Hanson?
JOSH FRYDENBERG:
Well, our only deal is with the Australian people and that’s a deal to deliver lower fees for them in super and better performing funds, and that’s what we did. We negotiate with all the crossbenchers as the Labor Party did when they were last in Government. Pity for the Labor Party though, their strenuous efforts to defeat this Bill, which was in the best interests of consumers, failed. And what we’ve seen now is legislation pass the Parliament which will help save consumers more than $17 billion. It will provide more choice. It will hold the underperforming funds to account, and it will also ensure that we prevent the creation of unnecessary, unwanted, unneeded duplicate accounts that are now more than 10 million in number, and often people have low balances in those accounts that get eaten away by superannuation fees and charges. It may surprise your viewers to know, Pete, that Australians pay more than $30 billion a year in superannuation fees and charges. That’s more than they pay on their household, electricity and gas bills.
PETER STEFANOVIC:
Now, the onus is on the employee here, isn’t it, to make sure that they aren’t attached to a dodgy fund?
JOSH FRYDENBERG:
Well, when you go and take a job and you’re often getting a super fund when you start a job, and then you may move to a different profession or industry and then you tend to get another super fund. What we’re saying now is that initial fund will move with you, unless of course you want to choose another fund or unless of course you want to have more than one fund. You still have that choice, but this is all about giving people the opportunity to build their balances without having those balances eaten away by unnecessary fees and charges.
PETER STEFANOVIC:
So a point being that if someone starts stacking shelves at Woolworths and they’ll start collecting super there, if they go on to become, say, you know, a police officer, the life insurance attached to that super fund is going to be very, very different, so what I mean is the onus is on that employee to make sure that the super fund catches up to the work that they’re doing.
JOSH FRYDENBERG:
Well, they have that option. They have that choice. No one is taking that away from an employee to work out, which is the super fund that works best for them. And the other thing that we’re doing in these reforms, Pete, is that we’re actually putting online the performance of the funds both in terms of fees and returns, so people actually get to see how well their fund is doing. And where a fund underperforms a benchmark, then that fund has to notify its members about its underperformance and if it keeps doing that, then it can be stopped from taking on new members. So, we’re effectively holding them to account and we’re also specifying in the legislation that the funds have to meet a best financial interest test for the investments that they make, and that’s really important too. I mean, people work so hard to put away money for their retirement. It’s only fair that that money works for them and that the funds act in their best interests.
PETER STEFANOVIC:
Sure. Why not weed out the bad funds though before the stapling commences?
JOSH FRYDENBERG:
Well, bad funds will be weeded out.
PETER STEFANOVIC:
But it takes two years, right? There have to be two negative annual reviews?
JOSH FRYDENBERG:
We actually do an average over an eight-year period and if they perform under the benchmark, then they have to notify them, and if they perform again under the benchmark, then they can be prevented from taking on new funds. But people will know when they join a fund whether that fund is underperforming because they’ll receive that letter from the fund. That’s one of the really important changes in these reforms. Let’s not forget that we were opposed every step of the way by the Labor Party, by the Greens, by the unions and indeed by the industry funds, even though these funds are going to deliver better outcomes for consumers.
PETER STEFANOVIC:
Extraordinary unemployment numbers yesterday, Treasurer. As the man pulling the strings, how does this change your thinking and your expectations?
JOSH FRYDENBERG:
Well, these unemployment numbers were far better than either what Treasury or the Reserve Bank or indeed the market was expecting. Unemployment fell from 5.5 to 5.1 per cent, 115,000 new jobs were created, 85 per cent of those jobs were full time and 60 per cent of those jobs went to women. And I remember you and I discussing, Pete, the claims of our political opponents that the sky would fall in and that the world would end as we knew it with the end of JobKeeper. Well, that didn’t happen. In fact, 84,000 new jobs have been created since the end of JobKeeper. So, I think a few people are going to be eating humble pie over in the opposition benches, but the fact of the matter is this is much better than what the market was expecting and it’s a sign of the strength of Australia’s economic recovery, and that is very good news.
PETER STEFANOVIC:
Yeah, unemployment is getting lower. That is good news no doubt, but wage growth is also still very low, so when can people expect pay rises? When would you like to see that happen?
JOSH FRYDENBERG:
Well you saw just earlier in the week the Fair Work Commission make a decision on a 2.5 per cent pay rise for -
PETER STEFANOVIC:
That’s 20 bucks a week. There’s not much in that.
JOSH FRYDENBERG:
Well, Australia has the highest minimum wage in the world and I don’t think you should gloss over that fact. That is very significant and we know that the Australian Industry Group and other industry bodies were saying that the wage rise should be 1.1 per cent. Well, it was 2.5 per cent. So, it is a significant increase. At the same time, as we get more competition for labour and we get a tighter labour market, then that’s when we’ll start to see an increase in wages. But the key focus for the Government has been to deliver jobs growth because when you get more people into work, that’s when you start to get start to get upwards pressure on wages. And the fact that nearly one million jobs have been created since last May is a real sign that our economic plan is working; the lower taxes, the more skills programs, the infrastructure projects that we’re rolling out, the business investment incentives. And this is not the only piece of economic data, Pete, that has been very positive. We recently had the National Accounts numbers which were again beating expectations with the private sector level of recovery. We had Standard and Poor’s reaffirm Australia’s AAA credit rating and now we have the job figures. So, it is very positive.
PETER STEFANOVIC:
Just to wrap Treasurer, you must be concerned about vaccine hesitancy at the moment. We’ve got the change now from AstraZeneca. More and more people are going to have to be taking Pfizer. How concerned are you about vaccine hesitancy? There’s even reports in the paper this morning about people who have had one AstraZeneca shot have now cancelled their appointments to have that second shot?
JOSH FRYDENBERG:
Well, vaccine hesitancy is a real issue and we encourage people who are eligible to get the vaccine, whether it’s the Pfizer vaccine if you’re under 60 or the AstraZeneca vaccine if you’re over 60, to take that opportunity because the more people who get vaccinated the better for our country. We have again followed the medical advice to us as we’ve done right throughout this pandemic and that has served us very well. I note that the advice from ATAGI is cautious and it’s conservative when you look at what’s happened in some other countries. For example, in the United Kingdom, the AstraZeneca vaccine is available to those aged 40 and over, and in Korea it’s aged 30 and over. In Germany it’s available to those aged 18 and over. But we have followed the advice of ATAGI as we have done right throughout this pandemic and Australia has been remarkably successful and effective in suppressing the virus and long may that continue.
PETER STEFANOVIC:
Okay. Treasurer Josh Frydenberg, thanks as always for your time. Talk to you soon.
JOSH FRYDENBERG:
My pleasure.