PETER STEFANOVIC:
Treasurer, good to see you as always, thanks so much for joining us.
JOSH FRYDENBERG:
Good to be with you.
PETER STEFANOVIC:
So first of all, we’ve got tax cuts that come into place today for small and medium sized businesses, up to $50 million. Drops by about 1.5 per cent, what sort of savings can businesses get?
JOSH FRYDENBERG:
Well if you’re a pub or you’re a supermarket you’ll save around $7,000 this year and next year when the tax rates come down again, you could save around $12,000. That’s if you’re a pub or a supermarket with a $500,000 profit. These tax cuts are being brought forward by five years, they’ll be available to some 3.5 million small and medium sized businesses across the economy with a turnover of less than $50 million. And as you say, the tax rate has progressively come down for these companies from 30 cents in the dollar now to 26 cents in the dollar and next year to 25 cents in the dollar. So that’s a good thing for them because that gives them more money in their pockets to spend on their business, to grow, to innovate and to hire more people.
PETER STEFANOVIC:
Treasurer, just on a report in the Australian this morning that suggests offshore crime syndicates have been targeting JobKeeper, JobSeeker super schemes, what’s your reaction to that?
JOSH FRYDENBERG:
Well organised crime is a problem, both for the public and the private sectors, that’s nothing new and particularly when you’ve got a program of this scale and size. I mean, JobKeeper is the single largest one-off Government program in Australia’s history. But we take these challenges very seriously, we’ve established a Serious Financial Crimes Taskforce that brings together the Federal Police, the ATO, the Department of Home Affairs and others. And we’ve also put in a number of integrity measures to ensure that payments are not going to compromised accounts and ensuring that there are risk-based random audits across the board. We’re working to ensure that where there is fraud it’s uncovered and those people face the full force of the law.
PETER STEFANOVIC:
Okay. Onto GST, plenty of talk about it this week, it is 20 years since it came into play. There are growing calls for changes, you are no doubt aware of that, largely driven by the New South Wales Treasurer, will there be a rise?
JOSH FRYDENBERG:
Look, our focus is on getting people back to work, our focus is on ensuring that the economy opens up. That’s why we’re doing the review of the JobKeeper program right now Pete, that’s why we’ve put to work $260 billion of economic support packages and that is our focus. Now the Thodey report is welcomed, it’s not the first and it’s not the last report into our tax system and Dominic Perrottet, Tim Pallas and my state treasury counterparts, we’re all working together through the Council on Federal Financial Relations tasked by National Cabinet to focus on tax reform. But right now, my focus is on ensuring that the economy opens up.
PETER STEFANOVIC:
Treasurer, you didn’t deny that, so is it in play?
JOSH FRYDENBERG:
No, look, we have no plans to increase the GST, and we’ve been pretty consistent on that. Our focus is on lower taxes and today, the company tax cut is one that we’re talking about.
PETER STEFANOVIC:
Okay, well the review of financial relations recommended increasing the GST, or broadening the base to include fresh food, education and health, does any of that interest you?
JOSH FRYDENBERG:
Again, we’ve got no plans to increase the GST. Our focus is on getting people back into work, our focus is on ensuring that the economy opens up in accordance with that three stage process set out by the National Cabinet. We have a track record though when it comes to tax reform of reducing taxes, and you’ve seen that both on the income tax side as well as on the company tax side. Let’s not forget in the last two Budgets Pete, more than $300 billion worth of tax cuts have been legislated and passed through the Parliament. We’re creating one big income tax bracket between $45,000 and $200,000 where people pay a marginal rate of no more than 30 cents in the dollar. That is our focus, cutting income tax, cutting company tax, getting people back into work.
PETER STEFANOVIC:
No plans now, but there could be plans down the track?
JOSH FRYDENBERG:
Look, I’ve…
PETER STEFANOVIC:
Go on!
JOSH FRYDENBERG:
I’ve said it a couple of times, our focus is on lower taxes, a simpler, stronger, fairer tax system and when it comes to what we’ve delivered, it’s been on the income tax side and it’s been on the company tax side. And Pete, it was only a year ago that the Australian people faced a pretty clear contrast at the election about our plans for lower taxes and Labor’s plans for $387 billion of higher taxes, taxes which are still on their books.
PETER STEFANOVIC:
Just finally, we’ve got about 30 seconds Treasurer, these localised lockdowns that are taking place in Melbourne at the moment, there’s probably going to be more of them down the track, it could be anywhere, do you support them?
JOSH FRYDENBERG:
Well I support these stronger measures, absolutely, because we need to ensure that where there are these outbreaks, where there are these hotspots, that we can contain them with tracing and with testing and with effective quarantine. You see the three stage process for easing those restrictions will see about 850,000 people get back to work and around $9.4 billion a month added to the economy. Victoria is about a quarter of those gains. Now, we’ve got to keep it in perspective too what’s happened in Victoria, we’re talking about ten postcodes being locked down, just over 300,000 people out of a state of 6.4 million people. So this is serious and we’ll see more new cases over time, but our ability to get people back into work and keep businesses in business and to maintain the gains towards our economic recovery, we need to effectively deal with these outbreaks when they occur and that’s why these drastic actions are supported.
PETER STEFANOVIC:
Okay, Treasurer Josh Frydenberg, appreciate your time, thanks for joining us.
JOSH FRYDENBERG:
Good to be with you.