JOSH FRYDENBERG:
Welcome, it’s a real pleasure to be here with my colleague, the Assistant Minister, Senator Seselja. We’ve just come from a retiree’s tax forum that has been organised by the Alliance for a Fairer Retirement. It included representatives from National Seniors and COSBOA, and a whole series of individuals, who are going to be hit by Labor’s $55 billion retirees’ tax. And if anyone thinks that the Labor Party will change this policy, then they’re wrong, because earlier this week, the Shadow Treasurer, Chris Bowen on the 7:30 Report, said there would be no tweaks, no changes. The Labor Party’s $55 billion retiree tax will not change. And we know this came just after, he told over one million Australians, that if they didn’t like the Labor Party’s policy, they could vote against the Labor Party. This was an arrogant dismissal of the concerns of more than one million Australians. When you consider that if you’re an individual affected by this policy, you’ll be hit by an average of $2,200 a year. If you have one of the more than 200,000 self-managed super funds hit by this policy, you’ll be hit by an average of $12,000 a year. And the people who are being hit by the Labor Party and targeted by the Labor Party, have done nothing wrong, other than diligently save for their own retirement. Indeed, over 80 per cent of those hit by Labor’s retiree tax, have a taxable income under $37,000 a year. And this policy will also predominantly hit women. Over half the people affected are women, and two thirds of those are over the age of 60, and around half of those are either single or widowed. The policy will also hit pensioners. Labor said they would provide a pensioner guarantee. Well that is not even worth the paper it’s written on. It’s a lie. Because anyone who was a pensioner before the 28th March last year, and sets up a self-managed super fund after that date, will be affected by Labor’s policy. And anybody who had a self-managed super fund before the 28th of March last year and becomes a pensioner after that date will also be affected by Labor’s policy. And today, we know that around 50,000 pensioners will be affected by Labor’s policy. That’s an enormous number of people that the Labor Party have lied to. And the dramatic impact of Labor’s retiree tax will be felt across the economy. We’ve heard from charities, that their donors will no longer be able to make the contributions that they’ve made in the past. And today at the forum we heard from retirees about how it’s going to impact on their disposable income, and the amount that they can spend on living their normal way of life. And these people are frugal people. They’re not living expensive lives, they’re actually people who have diligently saved for their retirement. And this one million plus people, are not receiving, in Chris Bowen’s words welfare for the wealthy. These are hardworking people. These are your next-door neighbours. These are your former teachers and nurses. These are your grandparents. These are people who have actually done nothing wrong, except be a target for Labor’s tax grab.
And before just handing over to Zed, can I just say something about the Royal Commission. We’ve again seen another Labor stunt. Talking about hauling the banks before the Parliament. Well if they’d actually followed it closely, they would’ve known that the government did this a number of years ago. We already have systems in place for the banks to come and explain their case to the Parliament. And after more than two weeks, we’re still waiting for Labor’s comprehensive response to the Royal Commission. They’ve announced part responses to five out of the 76 recommendations. That’s around 6 per cent of the recommendations from Hayne. Now we also learned that yesterday in caucus, there were a few problems for the Labor Party on their response to the Royal Commission. There are members of the Labor Party who are not very happy, that Clare O’Neil and Chris Bowen have committed Labor to implementing every single recommendation. Which means smashing mortgage brokers, who employ around 26,000 people, 75 per cent of those 17,000 mortgage brokers that we have today are actually sole traders. They’re small businesses. And they’re involved in every aspect of our community, whether they’re regional or in the city. And Chris Bowen said, before he’d even seen the Royal Commission, that if the Royal Commissioner recommends it, it will be done. And Clare O’Neil said after the Royal Commission was handed down, that Labor would implement every single recommendation. They’re not my words, they’re her words. So the question for the Labor Party is; why are they going to smash mortgage brokers? Why are they going to hurt competition? Why are they going to give a free kick to the banks? And where are they? On once only default in super, which we know the industry funds are against. The Liberals and the Nationals, as a government, under Scott Morrison’s leadership, are on the side of consumers, we’re on the side of mortgage brokers. We’re on the side of retirees.
ZED SESELJA:
Thank you Treasurer. Look it was really important today to be hearing some of the real stories about how Labor’s retiree tax would hurt real Australians. And far from the way that the Labor Party has tried to characterize this, this isn’t, in fact, just about the 900,000 or so Australians who would be directly affected by the retiree tax, and not just about their families. But fundamentally all Australians should be concerned about the attack on fairness. We heard from a retired female teacher, 65 years old, worked for 40 years, saved on a modest income, stands to lose thousands of dollars a year in franking credits. We heard from an elderly gentleman who was able to, last year, buy the replacement fridge that he and his wife desperately needed, because of the small amount on income they were getting from franking credits, which would be taken away under the Labor Party. These are the real stories of men and women, who are going to be affected, who would be, in many cases, severely affected, and have their lifestyles impinged upon in a way that I don’t think most Australians would see as fair. So, it was great to hear from those. This retiree tax is one that we will fight all the way to the election. It is one that we will fight, not just on behalf of those 900,000 Australians directly affected and their families, but in fact, to fight for a fair tax system, which doesn’t rip off those who have worked so hard to save for their retirement.
QUESTION:
Treasurer, does your criticism of Labor on mortgage brokers equally apply to Ken Hayne because it’s his recommendation?
JOSH FRYDENBERG:
Well what we’ve said…
QUESTION:
But does Ken Hayne not like consumers?
JOSH FRYDENBERG:
What we’ve said is we’re on the side of the mortgage broker. We recognise, Phil, that they play a critical role in competition. That’s what the Productivity Commission had found in their report. We supported the Commissioner’s recommendations in relation to the best interest duty, and in relation to volume-based bonuses and trailing commissions. But what we have said, very clearly, is that when it comes to changing the fee for service model, as recommended by Commissioner Hayne, you have to be cautious. And that is in fact what the Reserve Bank Governor has said, but in contrast, Phil, the Labor Party has said that they will implement every single recommendation. Chris Bowen said before the report was even handed down, if the Commissioner recommends it, it will be done. They’re his words. So either there’s going to be a humiliating massive backflip, in which case, the people of Australia and the mortgage brokers of Australia still won’t trust the Labor Party. Or, they’re going to continue, as promised, and smash the mortgage brokers.
QUESTION:
Andrew Thorburn’s going to walk out of the NAB building with a $1 million payout. How do you think that’s going to sit with customers and the people who are still looking for compensation?
JOSH FRYDENBERG:
Well clearly, the issues of remuneration are ones for boards, and for shareholders. And they will make those decisions.
QUESTION:
ANZ is handing down its response to the Royal Commission today and they say that they’re going to implement all of the recommendations. What about when banks are acting but you guys haven’t implemented all the recommendations?
JOSH FRYDENBERG:
Well, actually we have been taking action. And we’ve already passed through the Senate legislation that will implement two of the recommendations. Namely in expanding the civil penalties to trustees of super funds, and ensuring that super funds are not providing inducements to employers to become the preferred default fund. We have been working with the states to set up a review of financial counsellors. We have been working to set up a national debt mediation scheme. I met yesterday with the head of the Australian Financial Complaints Authority, because we’re expanding their remit from six to ten years, and setting up a compensation scheme of last resort, so that people can be heard. I mean, we are taking action on all fronts, but as the Law Council of Australia has pointed out, you’ve got to get this right. And as Commissioner Hayne pointed out, that one of the real problems in this area of law is its complexity. So, the Labor Party in its traditional style is all focused on [inaudible], it’s not focused on the substance. The substance is, where is their response? Please, as journalists, hold them to account. Say that they said before the Royal Commission was handed down, they were going to implement all of its findings, they said after it was handed down that they were going to implement all its findings, they were desperate to be part of the lock up so that they could give their response. Where is it? Where is their detailed response? Where is their position on mortgage brokers? Where is their position on once only default?
QUESTION:
Can I ask you about Christmas Island? The local councillors have expressed their concern about these refugees being sent there for treatment. Why should they have these asylum seekers thrust back upon them?
JOSH FRYDENBERG:
Well, because the Labor Party is creating a situation where people will need to go back to Christmas Island. That’s why we have taken the decision to reopen it, that’s why it’s going to hit the budget by $1.4 billion. These are decisions that Bill Shorten has taken and I see that the Labor Party is at odds over Christmas Island. You’ve got Tanya Plibersek saying she’s got concerns with it, and Bill Shorten is saying it is fine. I mean, let’s go back to actually what happened here. The Labor Party supported legislation in the Senate without having the requisite briefings. Then, in the House, they were forced to backtrack and they supported a policy that will dilute the strength of our border protection policies. The Australian people know they can’t trust the Labor Party because the last time they were in office, despite all of the promises that Kevin Rudd made on the eve of the 2007 election, despite all those promises, 50,000 unauthorised arrivals turned up, 8,000 kids went into detention, more than 1,000 people lost their lives at sea. The Labor Party had to open seventeen new detention centres and there was a $16 billion blowout. In contrast, we’ve got on with the job, we’ve taken all children out of detention, we’ve closed detention centres and we’ve prevented the tragic loss of lives at sea.
QUESTION:
Why don’t you consult them, Treasurer? Why couldn’t you consult them here?
JOSH FRYDENBERG:
The Labor Party don’t even consult the intelligence…
QUESTION:
But you’re not the Labor Party…
JOSH FRYDENBERG:
But we’re the government. And we have delivered a policy that works. A policy that other countries are looking at to see how they can implement, the successful positions that we have taken, which have stopped the boats. The Labor Party have a case to answer here. They say one thing to the Australian people, but now they’ve delivered weaker borders.
QUESTION:
Speaking of a case to answer, can I take you to Joe Hockey. Isn’t it improper for an Ambassador to be using his position in this way?
JOSH FRYDENBERG:
Well as DFAT have said, Joe Hockey complied with the declaration of interests and had no say in the tender.
QUESTION:
Will you be investigating whether there were any other inappropriate interactions with Helloworld [inaudible].
JOSH FRYDENBERG:
Look, in relation to Joe Hockey, what I just said, and let me say on Mathias Cormann, he has said that this was a genuine mistake, and he had no say in the tender. I mean, this is Labor’s mud-raking. This is the Labor Party, as the Prime Minister said in the Parliament yesterday, digging very deep, digging very deep in the bucket to try to distract from their inability to come up with a comprehensive response to the Royal Commission. Their inability to listen to the concerns of retirees, and their inability to protect our borders.
QUESTION:
Do you thinks that passes muster with the average Australian that you wouldn’t notice $2,700 worth of flights hadn’t been charged to your card?
JOSH FRYDENBERG:
Well as Mathias Cormann made very clear he provided the details of his Visa and he expected that he would’ve been charged for it.
QUESTION:
If the anger is as strong as you say it is against Labor’s policy change announced last year, shouldn’t you have a thumping lead in the polls at this point, if the anger is that deep and wide-reaching?
JOSH FRYDENBERG:
Polls move up and down, but what I’m interested in is not polls but policy. And this is bad policy. This is policy that goes against two decades of bipartisanship, with respect to the treatment of cash refunds for franking credits. Let’s go back to 1998, and as you may have seen today, it’s been revealed that the Labor Party took a policy to that election. They took a policy to that election which actually called for this very policy. Because they said it would deliver benefits to low-income Australians who are preparing for retirement, or who are in retirement. We heard from Simon Crean in 2000, the Labor Party’s position on this. This is just a desperate tax grab and I think the Labor Party, you know, haven’t even comprehended the hurt that they will deliver with this policy, to over one million Australians. They’re starting to hear the anger, but in their traditional style, they’re dismissing it with arrogance.
QUESTION:
But Treasurer, with regards to that, haven’t the Baby Boomers had it good for long enough? Isn’t this really shifting the burden onto the youth, and what about, you know, what about the youth of Australia? You know, they’ve had enough.
JOSH FRYDENBERG:
Well we’re saying to the youth of Australia; we’re providing you with tax cuts,we’re investing in the infrastructure, we’ve helped create 1.2 million new jobs. Let me say something about the young people of Australia, those aged 15-24. Over the last financial year, more than 100,000 got a job. That was the highest number on record. You don’t create jobs with higher taxes. You create jobs with an economic plan. An economic plan, that Scott Morrison has delivered to the Australian people. An economic plan which is working. Record investment in infrastructure, record investment in schools, record investment in hospitals, a defence industry plan that is creating jobs right around the country. That’s what matters to young people, how can we create a job for them into the future.
QUESTION:
Just on mortgage brokers again. You’re very definitive in your defence of mortgage brokers. Why then are you leaving it open and having a review in 2020 on the payment of upfront commissions? Why don’t you just say now we’re not going to change ever?
JOSH FRYDENBERG:
Well Phil what is very clear is that the best interest duty will have an impact, and that what we’ve supported which is [inaudible] Hayne Royal Commission, also the recommendation under trailing commissions. We actually want to see how that plays out over the next 3 years. We’re being cautious, and the Reserve Bank Governor has actually said that is the right way to go. We’ve listened to the Productivity Commission, but we won’t smash the business model of mortgage brokers as the Labor Party is promising to do. Thank you very much.
QUESTION:
The two case studies you’ve referred to, what is the value of those two people assets?
ZED SESELJA:
Well look I obviously don’t know, I don’t know all of…
QUESTION:
Well that would be a huge part of the angst and agony in this argument wouldn’t it? Many people using franking credits actually have huge assets; some of them actually have $1.5 million homes or $2million dollar homes [inaudible].
ZED SESELJA:
There’s a whole range, but the argument that’s being put by Labor, and it’s implicit in that question, that somehow people who use franking credits are all wealthy is simply not facts.
QUESTION:
Asset wealthy…
ZED SESELIJA:
It’s simply not the case. There are many low-income Australians doing it tough. I mean, the retired teacher I was talking about, there are not many wealthy teachers and there are not many wealthy retired teachers, I would put it to you. And it’s not uncommon that we see teachers, people who are on modest incomes in small business, people who are working in all sorts of jobs, who scrimped and saved for their retirement, who will lose a pretty fair chunk of that. These people are not wealthy, I don’t accept the premise of that question. I simply don’t accept the premise of the question, that what we’re talking about is a whole group of wealthy Australians, that’s not the case.
JOSH FRYDENBERG:
And I would direct you to my Hansard yesterday, where I read out one of the-many of the stories from the Parliamentary Committees, including one about a couple in Queensland, who’ve lived in the same home for three decades and they said it was valued at around $300,000. That’s not a lot of money.
QUESTION:
While there’s some people like that who aren’t particularly wealthy, there are actually a number people benefitting from this who have enormous assets, they might have a million-dollar house or a two-million-dollar house, which they might have bought 20 years ago, but they’re now, in inner city suburbs, they’re worth a lot. They’re not selling and using those assets to retire upon; they’re actually making money out of these dividends. It’s not to say they broke the rules, but they actually have a lot of money stored away that they’re not using.
JOSH FRYDENBERG:
Well this is all about the class warfare of the Labor Party. Because these people are either in self-managed super funds, or individuals, and they’re not in industry funds, they’re not going to let them claim the benefits from these excess franking credits. But the Labor Party will say, if you are one of these retirees who is in an industry fund, and a union associated industry fund, it is ok. You keep the franking credits. It’s that hypocrisy that is at the heart of their policy, their pensioner guarantee is not worth the paper it’s written on. Over 80 per cent of these people who were affected had a taxable income under $37,000. These are not wealthy people. These are hardworking people. These are your neighbours. These are your grandparents. These are the former teachers and the nurses. These are the people that the Coalition stands with. Thank you very much.