PETER VAN ONSELEN:
Treasurer, thanks for your company. Is this budget going to save the government’s bacon? You’re down by 10 points in the polls.
JOSH FRYDENBERG:
Well we start the election as the underdog, but this budget is all about delivering for Australian families, small businesses, for seniors and creating a stronger economic future. In this budget you see a significant material improvement to the bottom line as we bank the dividend of a stronger economy with the unemployment rate falling to historic lows.
PETER VAN ONSELEN:
You say a better bottom line, but it’s still a deficit of $78 billion, deficits right across the forward estimates. When does serious hard budget repair start?
JOSH FRYDENBERG:
Well, the deficits actually more than halve over the forward estimates as a share of the economy and then halve again over the medium term. And what we have seen with the increased revenue is it’s a result of a stronger economy. More people in work, fewer people on welfare. We haven’t baked in long-term high priced commodities, as the Labor Party did. So we are actually…
PETER VAN ONSELEN:
I’m an admirer of you guys not doing that with the commodity prices, because it means that you overdeliver rather than overpromise. But if they win the election, they’re going to look like they’re repairing the budget more quickly if commodity prices stay high because of your lower forecasts.
JOSH FRYDENBERG:
Well, we’ve made decisions that are important for the here and now; easing cost-of-living pressures, putting in place the long-term economic plan to create more jobs and more investments in our regions, and infrastructure and skills in the digital economy, guaranteeing the essential services that Australians rely on and investing more in national security and defence. That’s been our record and that’s our plan.
PETER VAN ONSELEN:
I want to get into the cost-of-living measures, but can you win the election with this budget? Like, what’s the contrast with Labor?
JOSH FRYDENBERG:
We absolutely can win the election. Labor has committed to more than $80 billion of additional spending through this crisis. Remember when we ended JobKeeper, Anthony Albanese actually said the economic roof would come crashing down. They were his words, and, in fact, in the three months after, 120,000 more people found employment. So, we actually ended, PVO, those emergency economic support measures when we could safely do so. Whereas, the Labor Party just wanted to keep the taps of spending on.
PETER VAN ONSELEN:
You’re halving the fuel excise, that’s a pretty massive cut. It’s only for six months – understandable – but is there any chance that it can be extended depending on what happens with international events?
JOSH FRYDENBERG:
The legislation will be very clear that it is only for six months and that it ends.
PETER VAN ONSELEN:
But what if it needs to go for longer, surely then you can extend it?
JOSH FRYDENBERG:
We are only doing it for six months. We’ve made it very clear. It’s temporary, it’s targeted. It does come at a significant cost to the budget of $3 billion, but Treasury also say that it will put downward pressure on inflation by a quarter of a per cent.
PETER VAN ONSELEN:
Tell us about some of the things we didn’t know before you stood up? There’s always budget leaks, but there weren’t leaks about the tradies’ package, there weren’t leaks about the domestic violence spending.
JOSH FRYDENBERG:
There were a number of important announcements in the budget that weren’t made public beforehand; two of them for small business, which is the 120 per cent tax deduction if a small business, and there are 3.6 million of them employing some 8 million Australians, invest more in the skills of their employees, their workers, as well as purchasing digital commitment or software, invoicing software, cybersecurity software. So we’re encouraging that transformation across the economy. You’re right about the women’s budget statement. More than $2 billion of new funding, more than half of which was for women’s safety. Important investments in protecting our women and our children in the community, and I think that’s been a legacy item for our government.
PETER VAN ONSELEN:
Again, in the time that we’ve got left, let’s talk about cost of living. How do you help people who need that help with cost-of-living pressures without spiking inflation, which can lead to higher interest rates, which has got all sort of ramifications for home loans and all the rest of it?
JOSH FRYDENBERG:
Well, it’s a very important question, because it goes to the heart of the balance that needs to be struck. So, our measures are temporary. They’re targeted. They’re responsible. In fact, the fuel excise cut actually delivers downward pressure by a quarter of a percentage point on inflation. When you look at the cost of living measures that we’ve taken, combined they’re less than half a percentage of GDP. So you’ve got to keep it in the context of the size of the economy, PVO. The economy is very large – a $2 trillion economy – so when we made these measures, they were very targeted, they were very temporary, and they were, of course, responding to the need of Australians.
PETER VAN ONSELEN:
Treasurer, appreciate your time. Thanks for joining us.
JOSH FRYDENBERG:
Always a pleasure.