4 March 2019
Transcript - #2019042, 2019

Interview with Brian Carlton, Tasmania Talks, LAFM

Subjects: Polls; federal election; Indonesia-Australia Free Trade Agreement; Budget; Australian economy; retiring federal politicians; Liberal candidates; GST; fuel; Government’s investment in renewables; cutting red tape for Tasmania’s small businesses; Tasmanian economy; young people; and jobs.

BRIAN CARLTON:

Joining me in the studio, and I've been trying to organise this chat for a while now, is one of the busiest men in the country, as I indicated juggling way too many things, is the Federal Treasurer, the Honourable Josh Frydenberg. It's great to welcome you to Tasmania Talks in person, Josh. How are you? 

JOSH FRYDENBERG:

Good to see you, Brian, and what a beautiful morning it is here in Tasmania.

BRIAN CARLTON:

It is. It's like this every morning. You know that, don't you?  We never have bad or cold weather here. We've got limited time so let's get into it. The Coalition, can you win the election? 

JOSH FRYDENBERG:

Absolutely. Yes, we're behind in the polls but we've made a comeback of sorts over the Christmas break. A lot of focus was taken on Labor's $200 billion tax agenda. As you know, they miscalculated on the border protection issue in the Parliament too, Labor, and Scott Morrison's showing real leadership around the country. Obviously, here, showing a great deal of empathy with the victims of the fires and, in Queensland, with the victims of the floods and in other parts of Australia they're going through drought. So, Scott Morrison's shown very strong leadership there and I think people are relating to him and they like what they see.

BRIAN CARLTON:

It's going to be an uphill battle though. All the polling suggests that you're on track to lose somewhere between, what, 8 and 13 seats and I'm sort of being generous here. Realistically, what has to turn around? 

JOSH FRYDENBERG:

Well, the polls jump up and around. I mean, you saw an Ipsos poll the other day, which was 51‑49, you saw an Essential poll of 52‑48 and you saw a Newspoll of 53‑47. I mean, the reality is there is only one poll that counts and that's an Election Day but I think people, as we get closer to an election, will focus on the choice and the choice is very clear, the Coalition has a strong economic record and you've seen what terrific results here in Tasmania of falling unemployment and higher growth and increasing jobs. That comes with good economic management at the state level and at the federal level and we're seeing that right across the country. We also have a plan for the future and a strong economic plan for the future, which will see more trade deals as the Trade Minister today is signing one in Indonesia…

BRIAN CARLTON:

Yeah, I want to talk to you about that. I do want to talk to you about that…

JOSH FRYDENBERG:

And of course national security as well, Brian, where we have a proven track record and a commitment to doing what is right for Australia.

BRIAN CARLTON:

Let's just, seeing as though you mentioned it, the Indonesian trade deal. Lots of upside there for Tasmanian producers primarily and also our minerals sector. The issue there in signing that off when it was meant to be signed off was the proposed move of the Australian Embassy in Israel from its current location in Tel Aviv to Jerusalem. Clearly that's been massaged over and is no longer an issue and was a bit of a 24‑hour, 48‑hour jump up and down and make some noise and at the end of the day it's business as usual.

JOSH FRYDENBERG:

Well, this is an important achievement, to sign this trade deal with Indonesia. I mean, 99 per cent of the goods there will be tariff‑free and for people here in Tasmania, for example your potato farmers, there will be great benefits with this new deal and I notice that over the last year in Tasmania you've had a 14 per cent‑plus boost to your exports. It's a big part of your economy, not to mention tourism and other aspects of this growing economy here in Tasmania. So, this deal with Indonesia is just another deal that the Coalition has been able to sign. Brian, if you go back to 1991, Australia only had one Free Trade Agreement, it was with New Zealand. Today, we have 11 and the signing of Indonesia's is a 12th. It covers more than 70 per cent of our exports now and as we sit on the edge of a massive middle class in Asia, the opportunities for us to export our services, to export our resources, to export our agricultural produce is immense and the Coalition believes that free trade creates thousands of jobs across the country and I have to say it's not the same position that the Labor Party holds.

BRIAN CARLTON:

Look, again, just issues that are likely to cause you a bit of a problem, how do you think your Budget will be received? You're about to hand down your first Budget. It's a weird one because it's not usually ‑ what is it, the first Tuesday in May? 

JOSH FRYDENBERG:

Second of April.

BRIAN CARLTON:

It's the second of April this year, OK. And you will be going to the polls on which date? 

JOSH FRYDENBERG:

Well, the Prime Minister's made it pretty clear it will be in May.

BRIAN CARLTON:

Okay. Budgets rarely give a massive bounce in the polls to governments, especially governments that are struggling in other areas. Why do you expect that there will be some sort of instant fillip from the Budget, no matter how good it is? 

JOSH FRYDENBERG:

Well, the Budget will, again, refocus people's attention on the economic choice at the next election and our economic plan, which has worked to date and which will continue to work into the future. We'll continue to invest the dividend of a strong economy in essential services, health and education. I mean, here in Tasmania you've had a 43 per cent boost to hospital funding since we, the Coalition, came to Government, a significant boost in school funding as well. We've listed some 2,000 new drugs on the Pharmaceutical Benefits Scheme, costing the taxpayer more than $10 billion, they're life‑saving drugs that you can only list if you've got a strong economy, not to mention all the infrastructure spending that's going on around the country. So, this is the dividend of having a strong economy. Obviously, one of the features out of this Budget coming up will be the surplus. It will be the first surplus, Brian, in more than a decade. Again, that's not an achievement that happens overnight or through luck. It's the product of more than five years of hard work, diligent decision‑making and hard decision‑making because we've had to cut spending or restrain spending in certain areas so that we can bring the Budget back into surplus and get Australia paying back Labor's debt.

BRIAN CARLTON:

That message, the 1.4 million jobs message particularly, it's hard to imagine as a person who's been around and commenting on politics for more than a few decades, it's hard to imagine that a government with that sort of economic record could possibly, A, find themselves in the position you are in the polls now and, B, lose the upcoming election. The noise in and around the party is mostly self‑generated. For example, just over the weekend we've got off the back of the resignation of, or impending retirement, sorry, of senior Minister Christopher Pyne, Steve Ciobo announced he's going too, Bronwyn ‑ sorry, not Bronwyn, the other one , Julie Bishop a week ago. How many of these people will actually be missed? Julie Bishop, for example, and Christopher Pyne, will they be missed from the Party? 

JOSH FRYDENBERG:

Absolutely. These are people who've made a significant contribution over a long period of time in high‑profile portfolios, whether it's Julie Bishop as Australia's first female Foreign Minister and the Deputy Leader of the party for 11 years or…

BRIAN CARLTON:

But just coming out over the weekend saying, "Hey, look, if I'd won the internal fight in the Party I would beat Bill Shorten in the upcoming election”.

JOSH FRYDENBERG:

Well, I believe Scott Morrison will beat Bill Shorten and if you want to point to retirements, look at the other side of politics. You've had Jenny Macklin announce her retirement, young Tim Hammond in Western Australia, Kate Ellis in South Australia, Wayne Swan, the former Treasurer. I mean, you have retirements on both sides of politics and for different reasons. The travel is, you know, it takes its toll after a while, Brian, and people want to spend more time with their families or when they get to a later stage in their career they want to go and start a new career and I don't begrudge that and I think we have to be understanding of that. So, I don't think it's a reflection on anyway on the Labor Party or the Liberal Party that people have decided to change direction in their careers. I do think it's an opportunity for the next generation of young people and the fact that Linda Reynolds is coming in to the Cabinet, somebody who's been a brigadier in the Australian Defence Force and has shown real strength in responding to the Queensland floods with her leadership up there, I think she'll be a great addition and it is worth your listeners knowing that we now have seven women in the Australian Cabinet, which is the highest number of women since Federation.

BRIAN CARLTON:

There is a sense though, as we get close to the election, that the jump off the boat before you end up in opposition, your pay drops, your privileges drop, all that sort of thing, it's not quite the same gig in opposition as you well know. There's just a perception, an optic out there, that these people are the rats escaping the sinking ship.

JOSH FRYDENBERG:

Well, they're not. They're not. Take, for example, my neighbour and colleague in Victoria, Kelly O'Dwyer. She's got a young family and for very personal reasons that she was public about, she wanted to go and spend more time with her family, so I wouldn't begrudge that at all.

BRIAN CARLTON:

No, I don't begrudge anybody going off and having a career, it's just the optics at the moment, timing as much as anything else.

JOSH FRYDENBERG:

Well, it's creating new opportunities, you know, Brian.

BRIAN CARLTON:

By refreshing the party. Renewal and all of that.

JOSH FRYDENBERG:

Take that seat, for example, a lady called Katie Allen has been endorsed as our candidate and she is a fellow of the Australian Academy of Health and Medical Sciences, she's a Professor of Paediatrics at the Royal Children's and Melbourne University and she's world renowned in her field. I think it's great endorsement of the Liberal Party that someone of that calibre, who hasn't spent her whole life in the Party, has decided to put her hand up and has won the endorsement of her local membership. I mean, today I'll be out with some of your candidates here. I mean, Senator Wendy Askew, soon to be hopefully Senator…

BRIAN CARLTON:

Not quite sworn in yet. Senator‑elect.

JOSH FRYDENBERG:

Senator‑elect. Bridget Archer who, you know, comes to her candidacy with a deep background in the farming community and in Local Government. These people bring a great deal of expertise and diversity to the Parliament and hopefully the electors of Bass and will see that at the upcoming election.

BRIAN CARLTON:

One of the contentious issues that you've had to deal with over the past 12 months or so is the GST carve‑up. Now, no State will be worse off under the, under the…

JOSH FRYDENBERG:

In fact, they'll be better off.

BRIAN CARLTON:

…under the redistributed GST. Yeah, well, ok, well, that's an expense to your Budget, isn't it? The number…

JOSH FRYDENBERG:

9 billion. 

BRIAN CARLTON:

So, it's 9 billion over, what, Forwards? 

JOSH FRYDENBERG:

A bit further than that but, yes.

BRIAN CARLTON:

So, 9 billion extra has to be found to give to Western Australia to…

JOSH FRYDENBERG:

Well, all States are going to be better off.

BRIAN CARLTON:

…make good on the promise.

JOSH FRYDENBERG:

Tasmania's actually going to more money.

BRIAN CARLTON:

I understand that, but doesn't this put the GST, well, the GST system itself, on a form of welfare?  It's on top‑up welfare. The GST was sold to us as the tax that would end all taxes. It was going to be the thing that solved the economic woes of the country; each state would know exactly how much revenue it was going to get etc etc. Hasn't quite worked out that way and now, because of politics, we're dipping in to what is effectively Commonwealth money to hand over to the states because they can't agree on how it should be carved up.

JOSH FRYDENBERG:

Well, two points, Brian. The first is that all the money raised from the GST goes to the states.

BRIAN CARLTON:

My point exactly.

JOSH FRYDENBERG:

It's really important. So, this is funding hospitals, schools, infrastructure here in Tasmania.

BRIAN CARLTON:

But there's not enough of it, is there? 

JOSH FRYDENBERG:

But, and it's growing and the amount of the GST that is distributed is growing and has been quite significantly, however, the distribution of the GST got to an unsustainable position. To think that a state like Western Australia saw their relative distribution come down to 30 cents in the dollar is something which is not sustainable or indeed fair in the long‑term. So, we did the hard work with the states, working it through Treasury, talking to the relevant experts, and we came up with a model which will leave no state worse off. And I did work closely with Peter Gutwein and Will Hodgman during that period and Tasmanians can be rest assured that they'll be better off under this redistribution of the GST.

BRIAN CARLTON:

It just strikes me as a system that's still a little bit more broken than it absolutely needs to be. Look, one of the key issues you're going to find as you travel around the place today and no doubt on subsequent visits to all over regional Australia in the lead up to the election is the cost of fuel. It's one of those things where we here in the northern part of the state, particularly those who buy in Launceston, are paying stupid amounts above what would be considered the national average and every time we get some sort of investigation, some sort of inquiry, the ACCC has a look at it, all the various motoring bodies…

JOSH FRYDENBERG:

A couple of years ago down here in Launceston.

BRIAN CARLTON

: We, indeed, okay, the message that came back from the ACCC was we just lack competition and if there was more competition then the fuel price would naturally drop. Now, that competition has not emerged and we're still paying stupid prices for fuel and people are fed up with it. What can you, as the Federal Treasurer, do? 

JOSH FRYDENBERG:

Well, the other thing that that report found from its look at the Launceston market was higher operating costs, so higher transport costs and the like.

BRIAN CARLTON

: What, than outback Western Australia? 

JOSH FRYDENBERG:

Well, than other parts of the country. It is important that we keep a sense of perspective on the fuel issue because 80 per cent of the fuel that we use is imported, Brian, and there are two factors here, which the Government has limited control over. One is the international fuel price.

BRIAN CARLTON:

I understand.

JOSH FRYDENBERG:

And the other is the Australian Dollar, which does move around and will obviously make a difference to the cost of fuel at the bowser, but we are working with the ACCC. I answered a question from Andrew Wilkie in the Parliament about this matter. I did speak to Rod Sims and we are continuing to watch very closely what happens in the Tasmanian market.

BRIAN CARLTON:

The ACCC was effectively defanged by a previous Coalition Government in the early noughties. It removed the capacity for the ACCC to prosecute anybody working in the fuel supply chain. Is there any possibility you can restore that power to the ACCC?  Because it seems the ACCC's out doing all are sort of good things at the moment, finally, in industry sectors that badly needed some attention. The fuels sector is sacrosanct from this sort of exposure.

JOSH FRYDENBERG:

Well, actually, Scott Morrison, when he was Treasurer, commissioned the ACCC , which is a commission that's still in existence, to monitor the prices and the profits and the conduct of the operators in the fuel sector…

BRIAN CARLTON:

But that's all they can do, they can only monitor and advise. They've got no power of prosecution. You know that.

JOSH FRYDENBERG:

But, if they identify misconduct or a problem then action will be taken.

BRIAN CARLTON:

But what action though? Seriously, what action has been taken against a fuel company in the last 15 years? 

JOSH FRYDENBERG:

Well, actually the margins have actually come down apparently to the lowest level…

BRIAN CARLTON:

Not here.

JOSH FRYDENBERG:

The lowest level in a decade, in through the work of the ACCC. But the ACCC is effectively a cop on the beat and it is watching closely what happens here in the Tasmanian market and I have raised it with them as recently as just a week or so ago.

BRIAN CARLTON:

OK, but the cop on the beat unfortunately doesn't have the capacity to make an arrest and put the individual before a prosecutor to determine whether there's any wrongdoing there.

JOSH FRYDENBERG:

Well, there is rules, there is rules around misconduct, misleading and deceptive conduct. They apply in the fuel sector as they apply anywhere else.

BRIAN CARLTON:

OK. One of the other issues that's big here in Tasmania, as you know, is the so‑called Battery of the Nation program. The noises running round over the weekend about the so‑called agnostic approach that the Coalition's taking to new generators coming into the market with a bit of incentive, there was some bizarre noises around that the Federal Government's about to underwrite the construction of up to 10 coal‑fired power stations. Now, I put it to you, if that is true, and I very much doubt it, but if it is true then the Battery of the Nation program and our second interconnector, the proposed Marinus cable, 1.2 to 2 gigawatts, is not likely to go ahead, is it? 

JOSH FRYDENBERG:

Well, if will go ahead and the Commonwealth is investing significantly in a second interconnector process and project as well as the Battery of the Nation. And you know that I've been down here in my previous guise as Minister For Environment and Energy and saw first‑hand the incredible renewable resource you have here in Tasmania, the hydro capacity, and, you know, the Roaring Forties, you have that wind, which can be harnessed and utilised with new wind farms to couple with the hydro resource and if you can build a second interconnector then you can get an extra 1,200 megawatts of power into Victoria where it's needed as we've seen, you know, in recent weeks with some shortages there. So, I think this will be economically viable. I think it's good news for the emissions profile of the country, because you assert such a renewable resource here in Tasmania. And it's good news for prices and prices is critical because you've got 400 megawatts of additional power here in Tasmania you can't get across to the mainland and that is power that would reduce prices because more supply means lower prices and I think the Prime Minister is showing a real focus on these particular issues and the Battery of the Nation in Tasmania is not mutually exclusive, Brian, from Snowy 2.0, which is a sort of 2,000‑megawatt project, which will power 500,000 homes, create thousands of new jobs and which the Government has announced an additional contribution of more than a billion dollars into. So, we're very focussed on meeting our Paris commitments, reducing emissions and at the same time lowering power prices.

BRIAN CARLTON:

OK. I wonder whether, if the coal button is pushed, the coal‑fire button, even clean coal etc is pushed, whether the necessity will be there from a market perspective to do the hydro work you're talking about. Let's park that for the moment, this is an issue that’s going to take years to roll out. You're announcing today a cutting of some red tape for Tassie's small businesses. This is more giving them access and better information and better ways of communicating with various Government departments. Is that correct? 

JOSH FRYDENBERG:

Well, that is right. We have a $300 million Small Business Regulatory Reform Agenda and today I'm announcing $6.4 million worth of initiatives to reduce red tape here in Tasmania and working closely with the Tasmanian Government. For example, if you're a hospitality and tourism business, you currently have to lodge separate environmental, heritage and food‑safety applications when you're putting in your building application. Now there, we'll use this existing building portal and you'll be able to apply online for all three at once. In terms of bushfire risks, we're going to enable businesses to get access to online mapping of bushfire risks...

BRIAN CARLTON:

OK.

JOSH FRYDENBERG:

…which will help them. There's work in relation to contractors' building licences, again, using online portals and when it comes to the water and sewage data, we're going to give small businesses access to a whole series of new data that they previously couldn't. So, this reduces red tape, eases the cost of doing business and that means money that these small businesses would otherwise spend on red tape can be spent on either employing people or expanding their existing business.

BRIAN CARLTON:

Treasurer, you've been most generous with your time today. I genuinely appreciate it. Are you going to win your seat of Kooyong? 

JOSH FRYDENBERG:

Absolutely is what I'm intending to do there and I was out there on the weekend and the feedback from my constituents was very positive, but I'm not complacent and…

BRIAN CARLTON:

Sorry to interrupt you. The reason I have to ask that question is because you were in arguably the most blue‑ribbon seat in the country. It was the safest Liberal seat and now we're actually having discussions about whether Josh Frydenberg can hold the safest Liberal seat in the country.

JOSH FRYDENBERG:

Well, the answer is I will hold the seat, but I'm not complacent. I'm working very hard to win the trust and respect of my local constituents just as I have over the last three elections. Spending time in my local community, whether it's with the small businesses, whether it's with school kids. I mean, I held an environmental forum the other day with school kids, the day before I met with church leaders from across my electorate. I'm making announcements in relation to small infrastructure grants and the like for sporting groups. There are things we're doing every day to deliver for the people of Kooyong. But I don't think there is anything called a safe seat anymore to be honest. The fluidity of politics is much greater than it was in the past. There is more people in that middle who are making up their decision as to how to vote when they go into to the ballot box than ever before and I'll just continue to work hard and deliver for my local community.

BRIAN CARLTON:

If the election goes down, if you lose and the leadership is spilt…

JOSH FRYDENBERG:

We're not…

BRIAN CARLTON:

…will you put your hand up for it? 

JOSH FRYDENBERG:

I'm not focussing on losing, I'm focussing on winning and supporting the Prime Minister who I think is doing an outstanding job. I'm very proud to be his Deputy, I'm very proud to be the Treasurer and we have the work cut out for us, but certainly we have a very strong story to tell about our economic plan and our National Security Plan. And I want to say being here in Tasmania it's terrific to see how our Federal plan and Will Hodgman's plan is working very strongly. I mean, when we came to Government, the unemployment rate here in Tasmania was 7.5 per cent, now it's down to 6.2 per cent and as we've talked about, strong boost to tourism and to…

BRIAN CARLTON:

The Tassie economy's on fire, no doubt about that.

JOSH FRYDENBERG:

…you now, 3.3 per cent growth in the Tasmanian economy, business confidence is up. It's a great story to tell. Things are going right here in Tasmanian and the Federal Government is doing its part to help that continue into the future.

BRIAN CARLTON:

I just have one final question. Are we doing enough for young people?  Are we too focused on, the noises I keep getting back, we're very focused on the Baby Boomer generation, we're very focused on what you might call older Australians at the expense of younger Australians. That question does not come from a young Australian, by the way, but somebody about my age.

JOSH FRYDENBERG:

OK, well, let me give you a couple of statistics, which are probably not always known by your listeners. The first is over the last financial year more than 100,000 young people got a job and that was the highest number on record. So, young people are getting into jobs, aged 15 to 24, in numbers that they have never previously seen.

BRIAN CARLTON:

Are they full-time jobs or a couple of days a week? 

JOSH FRYDENBERG:

9 out of the last , 9 out of 10 jobs that have been created by this Government over the last couple of years have been fulltime jobs so we've created over 1.2 million jobs. Tony Abbott was poo‑pooed when he said he'd create a million new jobs and he and this Government have now beaten that. So, we're delivering lot more jobs and that's a result of a strong economy. The other statistic, which I think's interesting is, again, over the last financial year over 100,000 people who sought, as first home buyers, sought a loan, got approval. Again, that was the highest number in nearly a decade. So, people getting into the housing market like never before, people are getting a job like never before. There's still a lot more work to be done, but while the Labor Party will run around with a very negative narrative about everything that's taking place, the reality is on the ground things are different, job creation is strong, Government spending on essential services is up, our infrastructure plan is being rolled out and the growth in the Australian economy is higher than when we came to Government and the unemployment in the Australian economy is lower than when we came to Government. That is a result of a Coalition taking the hard decisions over more than five years.

BRIAN CARLTON:

Treasurer, Josh Frydenberg, I very much appreciate your time this morning. You've been most generous. Thank you, good to see you.

JOSH FRYDENBERG:

Great to be here.