Treasurer insists his budget is for the future, not the election

Ross Greenwood speaks to The Treasurer, Josh Frydenberg,
who is refusing to be drawn on whether his first budget, just weeks out from the election, is enough to save the government after he
announced there will be a $7-billion surplus next year but didn’t deliver any big surprises.

Ross Greenwood:  Josh Frydenberg, who is just waiting just wandering in through the door. The treasurer’s here. He’s delivered his first budget only a little over– He finished half an hour ago. Treasurer, welcome to the program, Going Right Around the Country. In terms of giving your first budget today, you would have felt the weight of the government on your shoulders I would’ve imagined, given the fact that the election is only five or six weeks away. Is this a budget that can deliver government for the Coalition in that time?

Interview with: Josh Frydenberg, Treasurer

Josh Frydenberg:  We’ve always been focused on delivering for the Australian people. Ross, I think this budget delivers a stronger economy and secures a better future for all Australians. The surplus we have announced tonight is very substantial, $7.1 billion. It’s the first surplus in 12 years and it will ensure that we can start paying back Labor’s debt that we inherited.

Ross Greenwood:  Okay, and then rising, of course, over a period of time, but then there’s the big moment, 2024, when really you flatten out the tax rate. Between $40,000–

Josh Frydenberg:  45.

Ross Greenwood:  $45,000 to $200,000. You’ve got a flat rate of tax of 30 cents in the dollar. How does that change the way in which Australia operates going beyond that date if it’s legislated?

Josh Frydenberg:  Well, it will mean that people will not be subject to bracket creep so that they work a bit extra and not be hit with a higher marginal rate. That’s really important, and that’s the vast bulk of workers within that $45,000 to $200,000. The Labor Party has been opposing and didn’t support when we legislated abolishing the 37 cents in the dollar tax bracket. It will be interesting to see what they do tonight.

Our key message to your listeners is that we have provided significant tax relief in the immediate term to a couple listening to your show, a tradie, and a teacher, who are earning $60,000 each, they will get $2,160 in their pocket in 13 weeks’ time when they put in their next tax return, and the structural change will come in in the years ahead.

Ross Greenwood:  Where did the money come from?

Josh Frydenberg:  Well, we’ve grown the economy. More people in job means less people on welfare. We’ve actually got the lowest number of people of working age on welfare in 30 years. We’ve also reduced the rate of spending growth to the lowest of any government in 50 years and we’ve created 1.2 million new jobs. A record number of women, a record number of seniors, a record number of Australians are in work.

That’s a good thing, and that’s creating a stronger economy to allow us to guarantee the essential services, but also to provide these tax cuts. Essentially as Liberals and Nationals, what we believe in is that people should earn more and people should keep more of what they earn.

Ross Greenwood:  Given the fact that you get half of the taxes from the PAYE workers, the fact there’s a bracket creep has actually played in your favor. This is one of the reasons you’ve been able to get back into surplus because fundamentally, the people have had more tax coming out of their pay packet as a proportion.

Josh Frydenberg:  Well, fundamentally, it’s actually more people getting into work, but what we are focused on is removing that bracket creep, and then the things that we’ve already legislated combined with what we’ve announced tonight I think is very significant.

Ross Greenwood:  In terms of small businesses, you’ve given more incentives to small businesses, instant asset write-offs, these type of things. A small business is a big winner out of this.

Josh Frydenberg:  And medium-sized businesses because we’ve extended the turnover, Ross, for eligible companies from $10 million to up to $50 million, so an additional 22,000 businesses that employ 1.7 million Australians. They might be a food manufacturing business, be a large catering business. These businesses will now be able to purchase items up to $30,000, a new van or a new grill, and write them off immediately.

Ross Greenwood:  What about some of the biggest businesses, the biggest employers in Australia, because they really are now saying to me that their energy bills are the biggest in the world, that their wages bills are some of the highest in the world. The really bigger new investments, it’s almost attractive for them to go overseas rather than to stay here in Australia.

What do you say to those big businesses and people who work for those businesses?

Josh Frydenberg:  Well, I’d say to them that this budget actually creates more economic activity and that’s good for them. I’d say that the Free Trade Agreements that we’ve entered into have created new opportunities for Australian companies, the most recent is with Indonesia. The Trans-Pacific Partnership with a number of countries. The fact that we’ve got Free Trade Agreements under this Government with China, with Japan, with Korea, has been really important for many of our industries.

I’d also say to them that we have ensured that industrial disputation has come down with sensible workplace relations policies. The alternative is Bill Shorten who doesn’t believe in Free Trade Agreements and who wants to put the unions in charge of the shop floor and that’s going to create lots of problems for lots of businesses.

Ross Greenwood:  In terms of putting this budget together, and you’ve got priorities. The national seniors tell us they’re disappointed, there’s not more for Home Care Packages, for example.

Josh Frydenberg:  There were 10,000 new Home Care Packages funded in this budget.

Ross Greenwood:  Already announced?

Josh Frydenberg:  That brings to 40,000, the number we’ve done in the last 18-months. This is a huge number.

Ross Greenwood:  The next aim is another 160,000 that are probably needed over a period of time.

Josh Frydenberg:  We’ve also put additional money into residential care and of course, we’re not raiding the hard-earned retiree savings of seniors.

Ross Greenwood:  In infrastructure, $100 billion over the decade, you say, but of course, a lot of that is, well, should I say, scoping studies. Which is okay putting scoping studies in place.

Josh Frydenberg:  Not really. The money, the $100 billion is actually real money for real projects. We’ve put down on the table $2 billion for a fast rail between Geelong and Melbourne which will halve those travel times, unlock the potential of our regions and bust the congestion in our cities. We’ve lifted the Congestion Fund from $1 billion to $4 billion in this budget, that’s very significant.

We’re investing in our regions because we want our regions to have proper freight access and proper roads and the bridges and the rail and the ports. We’re investing substantially there. This is a record spend on infrastructure because if Australia has the right infrastructure its productivity capacity is boosted, and that means more jobs and more money in people’s pockets. [crosstalk]

Ross Greenwood:  Can you win the election off this budget?

Josh Frydenberg:  Like I said, this is a budget to deliver a stronger economy and secure a better future for all Australians. The surplus tonight is no accident, it’s the product of sensible decisions and an economic plan that is working.

Ross Greenwood:  You won’t get the tax cuts unless you vote for the Government?

Josh Frydenberg:  Well, the tax cuts are the next stage in our tax plan.

Ross Greenwood:  If you vote for the Government?

Josh Frydenberg:  Which we need the public to see very clearly-

Ross Greenwood:  If you vote for the Government?

Josh Frydenberg:  -that if they vote for us, they get these tax cuts. Whereas with Labor, they’re going to get $200 billon of higher taxes.

Ross Greenwood:  And now claim that they’ll also give bigger tax cuts to certain parts of our community.

Josh Frydenberg:  They haven’t supported our previous tax cuts and we know that they’re going to raid retiree savings, increase superannuation tax, hit the housing market with a new housing tax. There’s no end to their taxes.

Ross Greenwood:  The Treasurer, Josh Frydenberg, great with his time here on the program. He’s got a busy evening, there’s no doubt. Josh, many thanks for your time.

Josh Frydenberg:  Great to see you, Ross.