13 February 2019
Transcript - #2018027, 2019

Interview with Graham Richardson, Richo, Sky News

SUBJECTS: Essential services; economy; Budget; trade with China and the United States; Foreign Investment Review Board; and federal election.

GRAHAM RICHARDSON: Well, I have discovered he's a pretty good bloke. So may I introduce my friend, I don't think he will object to that, Josh Frydenberg.

JOSH FRYDENBERG: Nice to be with you, Richo.

GRAHAM RICHARDSON: Good on you mate, thank you very much. So you've got the Budget coming up and it's only a couple of months. You wouldn’t want to give us a few hints, would you, about what's in it?

JOSH FRYDENBERG: Well I’ll let you in to one secret, Richo, it's going to be a surplus and it's going to be the first surplus in more than a decade and we'll continue to invest in record amounts in the essential services that people expect, need, and deserve. Particularly hospitals and schools, as well as childcare and other important areas of investment including infrastructure.

So we'll continue on the strong economic path that we've put Australia in. Let's not forget that when we came to government, economic growth was at 2.1 per cent, today it's at 2.8 per cent. Let's not forget that when we came to government, unemployment was 5.7 per cent, now it's at a seven-year low at five per cent.

We've kept our AAA credit rating, one of only 10 countries in the world with such a rating from the three leading credit rating agencies and we will deliver a budget surplus the first time in more than a decade.

GRAHAM RICHARDSON: Yeah, I think no matter who you are in politics, you can't say that you've got no record to stand on, you do. But if everything is as you say, and I'm not even disputing it, I think that you've got a reasonable economic record. Why is it that you trail so far in the polls? Why hasn't that message been accepted out there with the mob?

JOSH FRYDENBERG: Well, I think you are starting to see an improvement in our polling position. There's still a long way to go between now and the election and, as you know, watching, for example, John Howard come from behind, Paul Keating come from behind, we are very confident in our policies and we know that we have a great differentiation with the Labor Party when it comes to tax policy. We’re for lower taxes, they’re for higher taxes. And as you've seen play out in the Parliament in the last few days, we've got a very different position from them on border protection and national security. So our core equities are economic and national security. We've got the right policies in place, but more importantly than that we've got a plan for the future and you'll continue to see the Prime Minister, myself and all Ministers and Parliamentarians on our side of politics advocate for that case.

GRAHAM RICHARDSON: Yeah the difficulty though, is that, it's like a Melbourne Cup race, you've already come around the turn, there's only a furlong to go and you've got a fair bit of ground to catch up. You're still in the middle of the field.
I mean, do you think that announcing a surplus is going to give you that sort of oomph, that extra jigger under the saddle to get the horse going a bit quicker?

JOSH FRYDENBERG: Well, a surplus is not an end in itself. It's really a means to repay the debt that we inherited from the Labor Party and, as well as ensure that Australia continues to grow the economy and continues on the economic trajectory that it is. People want to see prudent economic management and what they've seen from us is record jobs growth, over 1.2 million new jobs over the last financial year. We saw a record number of young people aged 15 to 24 get a job. We've seen over 200,000 women get a job in that period and we're continuing to see youth unemployment heading in the right direction.

So from our perspective, it's in our DNA to create jobs and to lower taxes and we've done that for small business particularly, but also for 10 million income earners.

And the contrast, Richo, and I know this might be a hard, inconvenient truth for you, but the contrast with Labor is that they are taking to the public in the next election, a plan for $200 billion worth of new taxes.
Particularly their Retiree Tax is biting in the community and my opponent Chris Bowen really insulted over one million Australians by saying to them, “well if you don't like our policy, don't vote for us”, instead of listening to their concerns.

GRAHAM RICHARDSON: But why is that an insult, I've been asked about this a few times in the last few days, why is that an insult? Is that not exactly how it is every election and it doesn't matter who it is Labor or Liberal.
If I don't like your policy, I vote Labor. If I don't like theirs, I vote Liberal. What's wrong with him saying, “Listen, if you don't like it, don't vote for us”. Why is that an insult?

JOSH FRYDENBERG: Because he’s dismissed their concerns. He hasn't listened to their concerns about how the Labor Party has gone against two decades of bipartisanship on tax policy. How back in 2000, when the policy was introduced, Simon Crean said that this would help retired Australians on low incomes.

I mean, this has been a tenet for the Labor Party to support this policy, but in a desperate cash grab, they're whacking retirees. People have saved for their own retirement, people have taken personal responsibility, people who have done nothing wrong. They're whacking them with this increased tax burden.

GRAHAM RICHARDSON: I might say, I do agree that we have to stop, and that includes Chris Bowen and anybody else, fiddling with retirement incomes because you can't sit there and say “righto, I'm retired, I'm 65, I'm going to live another 20 years, here's how I'm going to make sure that I've still got money, he's how I’m going to eke out that living over the 20 years” and then turn in and say “no, I'm going to take a bunch of that money off you”. I mean, I obviously think that that's going to be very, very difficult to sell.

JOSH FRYDENBERG: Well it certainly is and you've seen from those parliamentary hearings around the country, people are turning up in their droves to make their concerns heard and felt and you've heard groups like the National Seniors come out strongly against the Labor Party's policy.

But it's not just with retirees who are going to be hit by Labor's new taxes. It's also homeowners and people who rent who are going to pay as a result of the changes to capital gains tax and negative gearing. It's also superannuants who are going to pay higher taxes, and you've even heard Paul Keating criticise the Labor Party's plan to increase income tax for those at the top end. I mean, these policies are targeting aspiration, they're ideologically opposed to the things that we believe in, namely that if you have a go, you get a go, that you should keep more of your hard-earned money, that you should be rewarded for effort. They're the values that the Liberal Party believes in, but unfortunately the Labor Party just wants to get more and more money in the government coffers and in the process will hurt the economy and cost jobs.

GRAHAM RICHARDSON: Well, can I move on to the way the economy is working now. We've enjoyed a very, very good period where you had coal and iron ore prices up there. They are remaining up there.
Do you worry about riding on the miner’s back when it used to be riding on the sheep's back? Are you worried about riding on the miner’s back? Does, one day, this all stop and we get into strife?

JOSH FRYDENBERG: Well it's not always appreciated, Richo, that Australia has a very diverse economy. In fact more than 70 per cent of our economy is now services, so for example, in my state of Victoria one of the biggest exports we have, if not the biggest, is education and tourism. And obviously agriculture is booming particularly through the free trade agreements that the Coalition has entered into with China, with Japan, with Korea, and now the Trans-Pacific Partnership.

This has opened up a whole range of new trading opportunities beyond iron ore and coal. We are obviously very blessed to have a strong resources sector and we can't target that success. What we need to do is capitalise on that success.

When it comes to budget management, we have been very prudent and conservative when it comes to what the estimates of the iron ore and coal prices would be. We've obviously been, we have been surprised more often than not, on the upside when the prices have been higher than what we budgeted for.

So we'll continue to watch the Chinese economy very closely. It's still got six per cent plus growth but obviously we are very blessed with our resources sector and we need to continue to promote it, to preserve it and to ensure that we are capitalising on that massive growth in our region, on our doorstep in Asia.

GRAHAM RICHARDSON: Yeah there's obviously wonderful opportunities in Asia, but can I ask you about Trump’s America. I mean how are we doing there? He seems very, very reluctant to make concessions on trade. I know it looks like he's going into some sort of trade war with China. Is it going to be the case that that will affect us as well?

JOSH FRYDENBERG: Well certainly we are affected by trade tensions particularly if it involves two of our biggest trading partners, the United States and China. Indeed China is our number one trading partner but the United States is our number one investor. So we obviously will continue to promote a rules-based trading system and one where disputes are worked out amicably between the parties and we encourage it to be done through the WTO, the World Trade Organization.

But so far, that tit-for-tat between China and the US has been contained. It hasn't extended much more broadly across the economy but we do, again, watch it very, very closely. When it comes to advocating on behalf of Australian workers, it was through the good work of Malcolm Turnbull, Prime Minister at the time, who ensured that Australia wasn't hit by those particular tariffs that Trump put on the steel industry and that helped preserve jobs at BlueScope Steel and other manufacturers across Australia.

GRAHAM RICHARDSON: Well if that's the case, where does the Chinese company Huawei, where do they stand today? What's their position in Australia? What can they do and what can they not do?

JOSH FRYDENBERG: Well look, you've heard Peter Dutton and the Prime Minister and others make clear our policy around the telecommunications sector and 5G and the like, but I'll leave that to them. We have very close relationships with our Chinese companies and counterparts and, again, it's a very strong, important trading relationship for us.

But of course when it comes to any Foreign Investment Review Board decision, they are made in the national interest and that will continue to be thus, regardless of which side of politics is in power at the time.

GRAHAM RICHARDSON: No I understand that, but I also understand that irrespective of independent bodies making decisions, the Chinese can get themselves upset about those decisions and in their case, they don’t care who makes it, it's Australia who makes it and if they turn against you on anything, they can really hurt us pretty easily because as you say, they’re our number one export market.

JOSH FRYDENBERG: Well they are, and we have more than $150 billion of two-way trade with China and it's firmly, I have to say, in Australia's favour, with Australians exporting over a $100 billion to China every year and we’re importing just over $50 billion. So it's a strong two-way trading relationship that has been in Australia's interest and will continue to be so for the years and decades ahead.

GRAHAM RICHARDSON: What about Asia and how we're doing there? Is it the case that we're taking real opportunities in India because it seems to me we've missed the boat just a bit there?

JOSH FRYDENBERG: Well, historically we should have had a much closer trading relationship with India. I mean we share a common English language, we share a love of cricket, we are two countries that have had close ties to the United Kingdom over the years and so there is a lot that we have in common, we’re both Commonwealth countries.
So the relationship should have been stronger over the time, over the years.

I remember Alexander Downer describing India and Australia as like two ships in the night that bypassed each other, but I think in recent years that relationship has become closer and the leader of India, Prime Minister Modi, and Prime Ministers here in Australia have developed a close relationship. And the free trade agreement between our two countries is obviously something that would, I think, be beneficial to both countries. But obviously, working out those details will take time. The systems are quite different between our two countries and of course any trading relationship that we enter into in a formalised way like that needs to be strongly in Australia's interest.

GRAHAM RICHARDSON: The trade unions claim virtually every time we sign a free trade agreement with another nation that it's not in Australian workers’ interests. What do you say to that?

JOSH FRYDENBERG: Well that's just simply wrong. I mean, Australia is a country of 25 million people, China is over a billion people, India is over a billion people, Indonesia's over 200 million people, and you've got the dynamic economies in Korea and Japan and, of course, closer to home, for example, Singapore and Thailand. It's in Australia's interest to have good economic relationships with these countries where we can sell our services and our produce.

And as I said earlier, it goes well beyond agriculture and mining. Some of our most exciting sectors are in financial services and in tourism and in education and the things that we've been doing in that area, for example, in financial services, creating a special passport that allows our fund managers to operate in the region, has been really beneficial for that sector and that sector is indeed the largest single sector in the Australian economy at around 10 per cent of GDP and employing over 400,000 people. That's why we've got to get our banking system right that's why we've responded quickly to the Royal Commission, whereas Labor has yet to respond.

Because if we have a strong financial system here, it's not only good for Australians at home, but it creates opportunities overseas to export our services too.

GRAHAM RICHARDSON: It does. Last question, on a somewhat different tack. In the recent Victorian election, the Liberal Party in Victoria really was smashed. I don’t think anyone can even use a better word. How do you feel about your seat? Do you start to worry that seats like yours can be a problem?

JOSH FRYDENBERG: Well I've never been complacent about my seat but indeed I've been very fortunate to have won the support of my constituents in Kooyong over the three elections that I've contested, 2010, 2013 and 2016.
In each of those campaigns, I've worked hard to deliver for the people of Kooyong, that's better services, more investment in local projects and community organisations, and despite the demands on my time in Canberra and in other parts of the country, I enjoy my constituent work the most. Just yesterday, I welcomed one of the more than 50 schools in my electorate to Canberra, an opportunity to speak to young people about how Parliament works and the goings-on here in Canberra.

I've got more than 30,000 school students in my electorate, tens of thousands of small businesses, and they're the beneficiaries, those small businesses, of the policies that we’ve put in place to cut taxes, to cut red tape, to ensure that government and other companies are paying small businesses on time and, like the most recent announcement and legislation I introduced in the Parliament today, to create a new $2 billion securitisation fund for small business, which will increase access to finance so that this goes beyond the big banks.

They're the things that matter to the local people in Kooyong. So I'm not complacent. I'm going to work hard, but it's the area in which I grew up in, it's the area which I live in, it's the area which I went to school in and of course the people of Kooyong deserve the best possible representation and that is what I'm giving them.

GRAHAM RICHARDSON: Good on you Josh thank you very much for your time. You always make yourself available. I just want you to know I do appreciate it. If ever you're in Sydney, happy to shout you lunch.

JOSH FRYDENBERG: That would be good and look forward to discussing the Royal Commission too with you and what we're doing to support mortgage brokers, because I know you're focused on them too.

GRAHAM RICHARDSON: I haven't quite got time to do that tonight but we'll get a chance I promise you. Josh Frydenberg, thanks very much mate.