16 October 2018
Transcript - #2018043, 2018

Doorstop interview, Parliament House, Canberra

Subjects: GST distribution; Australian Embassy in Israel; and Nauru.

JOSH FRYDENBERG:

Okay, well thank you very much. As you know, the GST system has not been working for all Australians. We had a ridiculous situation where Western Australia was only getting 30 cents in the dollar. So, Scott Morrison, then the Treasurer, asked the Productivity Commission to undertake a review.

The states and the territories provided their economic data to the Productivity Commission. As a result of the work of the Productivity Commission and our own work through Treasury, we put forward a reform proposal to the GST.

It will see a floor under which no state can fall, at 75 cents in the dollar; it will see the states benchmarked to the stronger of New South Wales and Victoria; and it will see the Commonwealth put an additional $9 billion over the decade to the states and territories to ensure that they are no worse off.

Now, as you know, this system is transitioned over a six year period from ‘21-22 to ‘26-27. And as a result of that transition, during that time we have two run two sets of books. So, a compromise, a sensible compromise has been reached, which will see the Commonwealth legislate that no state or territory will be worse off under the new system to the period ‘26-27. And in ‘26-27, the Productivity Commission will undertake a review to assess whether the new system of the GST distribution is working efficiently and effectively.

This is a sensible compromise. I pay credit to my colleagues in the party room who have strongly supported this solution. The Morrison Government is providing a national solution to a national problem and I have spoken to state treasurers, Liberal and Labor, and they support this way forward as a reasonable, sensible approach.

JOURNALIST:

Treasurer, do you welcome the Prime Minister’s decision to discuss moving the embassy to Jerusalem?

JOSH FRYDENBERG:

Let me just answer any questions on the GST…

JOURNALIST:

There is no scope for extra funding, do you think you will have to go in topping up the GST pool?

JOSH FRYDENBERG:

Well, as you know just on the numbers the Productivity Commission put together, which was based on the data provided by the states, every state and territory is better off under our plan and we are legislating it.

JOURNALIST:

You disregarded the Productivity Commission recommendations before though, what good is it having another review in ten years times?

JOSH FRYDENBERG:

Well, what that will ensure is that the states can put their best foot forward as to how they think the system should go in the years after that. But what we have from the Productivity Commission is an opportunity for them to assess how efficiently and effectively and how fairly the new GST system is working.

Let me be very clear, when Labor was in government they did nothing about this issue and we had a ridiculous situation where Western Australians were left with 30 cents in the dollar, this threatened the integrity of the GST system as a whole.

What we have come up with is a sensible compromise, a sensible solution that has the support of the states and territories, Liberal and Labor, and has the strong support of all my colleagues.

JOURNALIST:  

Chris Bowen said he was going to recommended Labor pass this even without the safeguard. Doesn’t that show that this is a back down to internal critics?

JOSH FRYDENBERG:

Well, Chris Bowen has had three positions in three weeks on this issue. His leader Bill Shorten went to Western Australia, stood next to Mr McGowan, a Labor Premier and said, I support Scott Morrison’s legislation, I support Scott Morrison’s reforms.

Then, Chris Bowen said, ah well, maybe we’re going to need to take a closer look, maybe I’m not so sure. I don’t think he knows if he’s Arthur or Martha on this issue. The reality is it’s the Coalition who have provided a national solution to a national problem. It’s the Coalition who have brought Liberal and Labor state premiers together in support of this program.

JOURNALIST:

Are you concerned about putting a future government in a straight-jacket with this guarantee they will be unable to re-budget that extra funding?

JOSH FRYDENBERG:

Well, as you know, we believe and we have shown, based on the numbers, that every state and territory is better off and we are prepared to put that additional $9 billion into the coffers of the state and territory governments.

This is very generous from the Commonwealth. This shows that the Commonwealth is helping to provide the essential services that we need across the economy. This shows that the Coalition have listened to some of the issues that have been raised and come up with a sensible compromise and solution.

JOURNALIST:

Have you determined how you are going to pay for the generosity yet?

JOSH FRYDENBERG:

We’ve made it very clear that we will be reconciling all those numbers in the Mid-Year Economic and Fiscal Outlook in December.

JOURNALIST:

Is the Government concerned that up to 15 Middle Eastern embassies are meeting today to discuss the announcement from Scott Morrison this morning that the embassy in Israel will be moved to Jerusalem rather than Tel Aviv?

JOSH FRYDENBERG:

Look, I obviously welcome and strongly support the Prime Minister’s announcement today, it’s principled, it’s right for Australia. We stand by Israel, a country that is a democracy in a sometimes wild Middle East, a country that has a long history with Australia.

Let’s not forget, it was Australia who stood by Israel at its time of its independence in 1948 and next year, Australia and Israel will be celebrating 70 years of diplomatic relations. It’s a partnership which reflects our values, it’s a partnership which reflects our history and it’s a partnership which looks forward to the future…

JOURNALIST:

Is this a serious reaction though or a knee-jerk reaction to Wentworth?

JOSH FRYDENBERG:

Look, as Scott Morrison has made clear, this is an issue he has been thinking about and that this is an issue which has been raised previously and Australia…

JOURNALIST:

Have you raised it with him?

JOSH FRYDENBERG:

Well, I’m a member of the leadership team and as the Prime Minister has made clear, he’s discussed this issue with both the leadership team and in Cabinet.

And today in the Party Room a number of colleagues stood up to congratulate Scott Morrison for the strength of his position, for the principled position he has taken, which is in Australia’s long term interests.

JOURNALIST:

Is this something that you’ve been lobbying for personally though, being Jewish?

JOSH FRYDENBERG:

No, it’s got nothing to do with my religion. Just like this has got nothing to do with Scott Morrison’s religion. At the end of the day, what we want as Australians, regardless of our religion, regardless of our background, is we want our national interests advanced.

And Australia’s national interests are advanced in a partnership with a democracy in the Middle East which is next year, celebrating 70 years.

JOURNALIST:

But do you imagine that it’ll be welcomed by the Jewish community in Wentworth?

JOSH FRYDENBERG:

Absolutely.

JOURNALIST:

In Wentworth?

JOSH FRYDENBERG:

Look, whether it’s the Jewish community in Wentworth or in Kooyong or in Higgins or any electorate across the country, it will be welcomed. But it’s not just being welcomed by members of the Jewish community. That’s very short-sighted to think so. It’s being welcomed by a broad cross-section of people across the country.

JOURNALIST:

Do you expect it to be welcomed by Middle Eastern nations though who have concerns about the US moving its embassy from Tel Aviv to Jerusalem?

JOSH FRYDENBERG:

Well, one thing I’ll say about the United States’ position is that you saw successive presidents, you saw George Bush Senior, you saw President Clinton, you saw Barack Obama and then of course you saw Donald Trump all make statements before they got elected that they would commit to moving the American Embassy to Jerusalem.

Now, only Donald Trump delivered on that but obviously we make decisions based on Australia’s interests, and as the Prime Minister made very clear, this is an announcement that he has made based on Australia’s interests.

JOURNALIST:

Do you want children and their families to be urgently brought off Nauru and could that involve bringing them to Australia or to New Zealand?

JOSH FRYDENBERG:

Well, the first thing I’d say is we assess every case on its individual merits and obviously put a priority on the interests of the child. The second thing I would say is that we do need to have strong borders.

What has been shown in the past, if we hesitate in this area, we do invite unauthorised boat arrivals in their tens of thousands. That was the Labor Party’s tragic record, which saw more than 50,000 unauthorised boat arrivals, which saw 17 detention centres constructed, which saw 8,000 children in detention, which saw a massive budget blowout and most tragically of all, saw hundreds of people lose their lives at sea.

That is the result of a bad policy. That is what occurred under the Labor Party. In contrast, we have taken the tough decisions and we have helped protect Australia’s borders. We won’t compromise on that, but we will obviously assess every individual case on its merits and put the priorities of the children first.