7 November 2018
Transcript - #2018056, 2018

Doorstop interview, Commonwealth Parliamentary Offices, Melbourne

Subjects: Economic growth; Labor’s property tax; Prime Minister Scott Morrison’s trip to Queensland; Grattan Institute report on retirement; and US mid-term elections.

JOSH FRYDENBERG:

Yesterday, the Reserve Bank of Australia announced improved forecasts for economic growth and for unemployment. The Reserve Bank said that Australia's economy was performing well. The labour market outlook was positive and business conditions were positive.

This follows on Australia having its AAA credit rating reaffirmed by the leading credit rating agencies of Fitch and Standard & Poor's, a budget that is returning to balance a year earlier than expected in 2019-2020 and an unemployment rate which has fallen to five per cent, its lowest level since 2012.

Our strong economy is at risk from a Labor Party that is promising $200 billion of new taxes: new taxes on your income, new taxes on your business, new taxes on your electricity, new taxes on your retirement savings and a big new property tax with its plans to abolish negative gearing as we know it and to slash the capital gains tax discount.

In ATO data released today, it has shown that 1.3 million Australians currently use the negative gearing rules and that they will all be worse off as a result of Labor's policy; including 16,000 individuals in the Labor-held seat of Canberra, including more than 10,000 in the Labor-held seat of Tanya Plibersek. 

When we look at the people who use negative gearing, they are not necessarily rich. There are 58,000 teachers, 41,000 nurses, 20,000 police and emergency services. And if you own your home, under Labor's policy, your home will be worth less – and if you rent your home, under Labor's policy, you'll pay more for your rent.

Labor's policy was designed at a time when housing prices were increasing. Now, we've seen housing prices decrease for the last 12 months across capital cities. It couldn't come at a worse time for the Labor Party to smash house prices and to increase rents.

Labor's policy has been criticised by economists, from Citigroup to RiskWise to CoreLogic and the threat from falling investor demand in the property market has been outlined by the credit rating agencies. So, only the Coalition can be trusted to ensure that you pay less tax and you keep more of your own money in your pocket and that we can ensure a sustainable, a soft landing for the property market. Any questions?

REPORTER:

Mr Frydenberg, on negative gearing, Labor says you’ve ignored the fact that the fastest-growing cohort of negative gearers own up to six properties.

JOSH FRYDENBERG:

Well, over 70 per cent of people who negative gear only have one property. And we know that two-thirds of those who use negative gearing have a taxable income of under $80,000. The Labor Party, with its big new property tax, will be smashing teachers, nurses, emergency service personnel.

It will be smashing the property values of every single Australian family. And it will be hiking up the rents across the country. There is no excuse for Labor's policy. They should heed the warning signs from our leading economists. Yet just yesterday Chris Bowen, the Shadow Treasurer, is doubling down saying he will take the policy unchanged to the next election and that there is no better time to implement his big new property tax. But unfortunately for the Labor Party, they can't even explain the impact of their own policy.

Chris Bowen and Bill Shorten say it will drive property prices down. Jim Chalmers, the Shadow Finance Minister, says it will drive property prices up. And shadow frontbencher Joel Fitzgibbon said, it will neither drive prices up nor down, just leave them the same.

I mean, Labor’s policy is a shambles, they can’t even explain it. It's been condemned by economists and I have to point out the Master Builders Association who says as a result of Labor's policy, 32,000 jobs will be lost and 42,000 fewer homes will be built. It's time Bill Shorten stopped ignoring the warnings and abandoned this bad, bad property tax.

REPORTER:

The Grattan Institute is calling for the super contribution rate to be 9.5 per cent, not the 12 per cent it’s due to increase by 2025. Is this something you’d consider?

JOSH FRYDENBERG:

No, there are no plansto change what is already legislated.

REPORTER:

Do you think the Prime Minister’s Queensland trip is resonating well outside Queensland, particularly in Victoria?

JOSH FRYDENBERG:

I think it is a very important trip and I think it’s been a very successful trip. He's made a number of significant announcements including for new water projects in Townsville. He's meeting with the local community, he's been well received, not just in Queensland but across the country.

REPORTER:

One MP says it’s going down like a turd in a well. Are they wrong?

JOSH FRYDENBERG:

They are wrong and what Scott Morrison is doing is he's meeting with local communities, he's listening to them and he's announcing policies that will improve their lives and the strength of their local communities.

REPORTER:

Do you think voters in seats like Higgins and Kooyong will warm to this campaign style?

JOSH FRYDENBERG:

Absolutely. You have seen across Australia, Scott Morrison has been well received. He's made a number of significant announcements already as Prime Minister. And just the other week, we saw company tax cuts for over three million small and medium-sized businesses employing seven million people get passed by the Parliament.

Despite the naysayers, including in the Labor Party, we have found a solution to the distribution of the GST and received support in the Parliament for that. We've seen the unemployment rate fall to five per cent. We've seen our National Accounts numbers with economic growth of 3.4 per cent, the fastest rate since the height of the mining boom. We have seen our AAA credit rating reaffirmed by the leading credit rating agencies. All of this good economic data and the important reforms we are making will be put at risk by a tax and spend Labor Party.

REPORTER:

On the mid-term elections, will the result of the US mid-terms have any impact on the Australian economy?

JOSH FRYDENBERG:

Look, we'll wait and see what the results are and they are decisions for American voters, but the Australian and the US economies will retain very close ties. The United States is our largest single investor in Australia and that relationship, enhanced by a Free Trade Agreement that the Coalition put in place, will continue to create jobs in Australia given that one in five Australian jobs is tied to trade. Thank you.