VIRGINIA TRIOLI:
Treasurer, good morning.
JOSH FRYDENBERG:
Good morning, Virginia, nice to be with you and your listeners.
VIRGINIA TRIOLI:
It is a heck of a cash splash. So, will it work? Will it buy you the election?
JOSH FRYDENBERG:
Well firstly, at $8.6 billion, the cost‑of‑living package is less than half a percentage of GDP. Treasury have factored in these measures to their inflation forecasts, and while inflation rises this year as a result of developments overseas, particularly the Ukraine, it then starts to moderate when we see wages strengthen. But the measures that we’ve put in our cost‑of‑living package are practical, they’re temporary, they’re targeted and they’re responsible, including halving the fuel excise, just like New Zealand, just like Ireland, just like France and other countries have cut their fuel excises. The $250, that goes to six million people on income support, including job‑seekers, pensioners, veterans, carers and concession card holders. The $420 boost to the low and middle‑income tax offset will see a person who earns 50, 60, 70, 80 or $90,000 get $1,500 on the time when they put their tax return in after 1 July, which provides relief. And then we’re also providing more accessible and affordable medicines for Australians by changes to the thresholds there.
VIRGINIA TRIOLI:
That’s a long laundry list you’ve just run through there Treasurer, but I’ll repeat my question will it work for you? It’s a pre‑election cash splash. Will it buy you the election?
JOSH FRYDENBERG:
Well, take for example the low and middle‑income tax offsets, that doesn’t actually get delivered until after the election. So, that’s from 1 July. I know some people like yourself may be pointing to the pre‑election boost but what this budget is really focused on is delivering for families, for small businesses and for seniors. There’s a really strong story, Virginia, to tell about how Australia is on the cusp of its lowest unemployment rate in 50 years and how we’ve led the world with our economic recovery from COVID.
VIRGINIA TRIOLI:
Ok well given that you’re clearly not going to answer that direct question, let me stay with that and what doesn’t kick in until after the election. You’ve admitted to continue the low and middle‑income tax offset in the coming financial year, and that’s one way of avoiding saying that about 10 million‑plus taxpayers earning up to that $126,000 a year threshold are going to have their income tax increased by up to about $1,000 a year from July 1. They won’t feel it for at least a further 12 months, but that, ultimately, is going to be a tax increase, which is pretty counter to the Coalition narrative, isn’t it?
JOSH FRYDENBERG:
Well I would disagree with that characterisation because when we…
VIRGINIA TRIOLI:
If you don’t continue it, then, you know, you don’t get it and, therefore, you are paying higher tax.
JOSH FRYDENBERG:
Well, remember when, you know, Kevin Rudd announced his $900 cheques and…
VIRGINIA TRIOLI:
No no let’s just stick with you.
JOSH FRYDENBERG:
But I’m just making the analogy for you. When you make temporary fiscal stimulus measures, which is what the low and middle‑income tax offset was, which is what previous governments did with $900 cheques, it doesn’t mean they stay in the system indefinitely. What we laid out to the Australian people ahead of the last election was a three stage plan to reduce taxes significantly. Stages 1 and 2 have now been implemented. Stage 3 has been legislated. It comes in in 2024, and what that actually does is it abolishes a whole tax bracket, sees 95 per cent of taxpayers paying a marginal rate of no more than 30¢ in the dollar and it’s a simpler, fairer tax system. So taxes are lower under us. We’ve delivered $40 billion of relief since the start of the pandemic. But the particular low and middle‑income tax offset was always a temporary measure designed as a fiscal stimulus during the heat of the pandemic. Now that the economy is normalising, we’ve taken that measure off.
VIRGINIA TRIOLI:
On your estimates, average pay packets are poised to grow by about 3.25 per cent in the coming financial year. Is that based on anything more than us having to go to our boss and ask for a pay rise?
JOSH FRYDENBERG:
Well, it’s actually based on a tighter labour market and economic analysis by the Treasury Department…
VIRGINIA TRIOLI:
Sorry, to jump in there. So, then, if we have people coming back in from overseas and all those visa workers we’re relying upon, then we won’t have that tighter labour market and we can’t anticipate that wage increase.
JOSH FRYDENBERG:
Well, we’ll still have that tighter labour market because, again, what Treasury has factored into their forecasts about unemployment is the open borders, more workers coming in, the skilled workers coming in, and what we now see right now across the country is significant numbers of job vacancies. In fact, the participation rate in the Australian economy now, Virginia, is at a record high. That’s a good thing. We’ve seen female unemployment at its lowest level since 1974. The forecast from Treasury, even with the open borders and the more skilled workers coming in, is that the unemployment rate will be sustained at that low level for a number of years.
VIRGINIA TRIOLI:
The budget figures tip the cost of living though will rise by 3 per cent in the next financial year ahead, so even if we can persuade our bosses for that pay rise, we’re only going to be 0.25 per cent ahead of the inflation game. It’s not much of a sell.
JOSH FRYDENBERG:
Well, when you combine that with the tax relief that we’re providing…
VIRGINIA TRIOLI:
For some.
JOSH FRYDENBERG:
Well, people who are earning up to $126,000 can see up to $1,080 in their pockets and the ones this year, based on the LMITO, will be actually getting up to $1,500 with this bonus. That’s more than 10 million Australian workers. For those who are not working, for the people on income support, we’ve got that payment last night, the $250. But we’re also seeing significant indexation. So, for example, on the pension, it’s more than $20 a fortnight that it lifted from March, which will see an additional $260 over the next six months.
VIRGINIA TRIOLI:
I have to turn to another topic, Concetta Fierravanti‑Wells, the Senator, has called the Prime Minister a bully with no moral compass who’s not fit to be Prime Minister. The PM has been calling Anthony Albanese gutless for not calling an inquiry into allegations the late Kimberley Kitching was bullied. So what do we call Scott Morrison if he doesn’t call an inquiry on this?
JOSH FRYDENBERG:
Well, Scott Morrison has said, firstly, if Connie Fierravanti‑Wells is wanting to make complaints through the Liberal Party then she should do that. But the fact is that on the weekend, 500 members of the Liberal Party gathered to choose their Senate candidates. We respect those decisions. But obviously, I have a very different characterisation of Scott Morrison than…
VIRGINIA TRIOLI:
My question goes to what action should flow from this, or maybe the Prime Minister should stop saying that about Anthony Albanese. It’s mutually assured destruction now. You’ve got bully allegations on both sides.
JOSH FRYDENBERG:
Well I know you would like to see some moral equivalents here, but I’m not going to play that game. What I will tell you…
VIRGINIA TRIOLI:
Explain the difference
JOSH FRYDENBERG:
Well, firstly, I don’t want to talk about the tragedy of Kimberley Kitching because she was a friend, but the reality is that with the pre‑selections in New South Wales, they took place on the weekend, and we respect that.
VIRGINIA TRIOLI:
Okay. I appreciate you wrapping up before the news as well, Treasurer. I really do. Thanks so much. We’ll talk again soon. Thank you.
JOSH FRYDENBERG:
Thank you.