3 April 2019
Transcript - #2019061, 2019

Interview with John Laws, 2SM

Subjects: 2019-20 Budget

JOHN LAWS:

The 2019 Federal Budget has been labelled as the ultimate pre-election Budget with voters heading to the polls next month. The Morrison Government’s decision to announce the parcel of tax relief seemed absolutely inevitable, and it now it feels like the first election strategy has been officially put out in front of the Australian public. I’m delighted to say I have the Treasurer Josh Frydenberg on the line at this very moment. Treasurer, good morning.

JOSH FRYDENBERG:

Good morning, John, nice to be with you.

JOHN LAWS:

It’s very good to be able to talk to you, Treasurer, thank you for your time. This was your first time delivering the Federal Budget, do you think it’s going to be your last?

JOSH FRYDENBERG:

Well, I hope not, I’m working to ensure that all Australians have a better economic future and this Budget sets out the next stage of our economic plan to do exactly that. The surplus that we announced, John, is no accident, $7.1 billion, and it’s the first payment on Labor’s debt that we inherited. But because we are now paying down the debt, there is more money to be able to invest in the things that matter to people, the essential services that we can fund, record funding for schools, for hospitals, for roads, for aged care. There was a big package of measures to do with mental health and youth suicide in the Budget…

JOHN LAWS:

Yes, that’s a very, very important issue, the mental health thing, I think it’s been neglected for so long, it’s about time somebody grabbed hold of that and did something very, very strong to it because it’s a real mess, I think.

JOSH FRYDENBERG:

Well youth suicide is a national tragedy...

JOHN LAWS:

Dreadful...

JOSH FRYDENBERG:

and the Budget has a series of measures designed to tackle that tragedy, and one of the measures is perinatal support, another measure is 30 new Headspace centres, and other initiatives to reduce the waiting lists, early psychosis treatment, and special support for Indigenous people with more peer support for them as they tackle some of the challenges in life.

JOHN LAWS:

You – ah, you might have jumped the gun a bit, mightn’t you, by declaring that a surplus is on the horizon?

JOSH FRYDENBERG:

No, a $7.1 billion surplus, ah, for the financial year 2019-2020…

JOHN LAWS:

Are you sure you haven’t jumped the gun on that?

JOSH FRYDENBERG:

Not at all. This is the product of six years of disciplined decision-making, surpluses don’t happen by accident...

JOHN LAWS:

No...

JOSH FRYDENBERG:

...they don’t happen overnight, and we have reduced the rate of spending growth to half of what we inherited, and also we’ve kept taxes low, and your listeners will really benefit from the tax cuts that we announced, the most significant tax cuts since the Howard government. So if you’re a teacher, or a tradie on $60,000 a year, as a couple, you’ll have an extra $2,160 in your pocket from 13 weeks’ time when you do your next tax return, and for that – that’s going to be very significant.

JOHN LAWS:

Who’s the – who’s the best Treasurer we ever had?

JOSH FRYDENBERG:

Peter Costello.

JOHN LAWS:

I knew it, I knew you wouldn’t have to wait too long to think that over.

JOSH FRYDENBERG:

I’ve been speaking to him in recent days, he’s been a good source of advice, and he obviously knows how to deliver a Budget surplus, more than one…

JOHN LAWS:

Yes, he certainly does that, and he’s a very, very good bloke in the Australian vernacular, a very good bloke.

JOSH FRYDENBERG:

He is, and he’s got Australia’s best interests at heart. And in this Budget, what we’ve tried to do, John, is grow the economy as well. There’s half a billion dollars skills package to get people the skills that they need for today and for tomorrow, there’s also a hundred billion dollars on infrastructure. We want to bust the congestion in our cities, we want to unlock the potential of our regions, we want to put in place fast rail, and there’s billions of dollars in the Budget for that. But of course we also want to get our regional communities back on their feet, particularly the ones that have been hit by flood and drought. And there was a lot in this Budget for our regions.

JOHN LAWS:

Yep. Ah, and speaking of Peter Costello, which we were, he managed to deliver and maintain Budget surpluses, why hasn’t anybody been able to replicate that?

JOSH FRYDENBERG:

Well, I think the challenge has been to bring spending under control, which is what was done, and unlike the Labor Party, we believe there should be limits to the amount that you’re taxed. You see we have an internal discipline; it’s called a tax to GDP ratio, which is effectively the amount of tax compared to the size of the economy. The Labor Party has no pretence about following that, and the reason why is they have $200 billion of higher taxes. So it doesn’t matter if you’re going run a business, or if you’re going to work, as a normal worker in a broader business. You will be hit hard by Labor’s taxes, not to mention what they’re doing in the housing sector, on retirees, on your superannuation. And higher taxes to chase higher spending never ends well.

JOHN LAWS:

No, it never works, it never will be. You can never tax yourself out of poverty. You’ve promised voters $158 billion in tax cuts over the next decade. Do you think Labor will be able to promise similar cuts? Will they promise it anyway?

JOSH FRYDENBERG:

Well they’re the party of higher taxes, so don’t look at what they say, look at what they do. And they’ve actually opposed our earlier tax cuts and the fact that we’re flattening out the tax system. You see under our plans that we announced last night, 70 per cent of taxpayers will be in the tax bracket from $45,000 to $200,000 and they will pay no more than 30 cents in the dollar. So they could move multiple jobs over the course of a career, and stay within the one tax bracket and not be hit by bracket creep, which is obviously a real problem and disincentive to further work. And so I think that’s really important and the $2160 that goes into people’s pockets in 13 weeks’ time, as a couple for example. That’s money that goes towards the quarterly energy bill; that’s money that goes to the monthly mortgage; that’s money that goes to the yearly car insurance. That’s what makes a difference to people’s lives.

JOHN LAWS:

Okay, at the risk of sounding cynical, because I am: are these cuts the easiest way to bribe low- and middle-income earners to vote against Labor?

JOSH FRYDENBERG:

They are the easiest way to return money to the people that is their money.

JOHN LAWS:

Okay, but also, there’s got to be an ulterior motive…

JOSH FRYDENBERG:

Well, we want to increase the economic activity across…

JOHN LAWS:

And you want to increase your vote too.

JOSH FRYDENBERG:

Well, actually it’s not about us, it’s about them. It’s about the Australian people, John. This is a Budget for the Australian people. This is a Budget that allows them to keep more of their earned income. I mean we want people to work, to earn more, and we want people to keep more of what they earn. There’s a big difference, at this election, between the Liberal and the National Parties, who believe in lower taxes, and our political opponents who want to increase taxes. And the Australian people will have a choice: they’ll be able to vote for a party that wants to lower taxes in the Liberals and Nationals under Scott Morrison, or they’ll vote for Bill Shorten. And higher taxes means lower economic activity, it means lower wages and it means less jobs.

JOHN LAWS:

Five hundred and twenty-eight million dollars set aside for the Royal Commission into disability abuse, which has got to be stopped. How long is the Royal Commission expected to take? It’s a lot of money set aside, $28 million [sic] dollars.

JOSH FRYDENBERG:

Over $500 million dollars. It’s going to take a number of years, and obviously it’s going to go…

JOHN LAWS:

I’m sorry, $528 million, I meant.

JOSH FRYDENBERG:

It’s going to go around the country, and again, people have been let down, just as in aged care. They’ve been let down by their service providers, by people who were supposed to know better and look after themselves. And I think that this Royal Commission, both the one into aged care and the one into disabilities will make a difference and get better outcomes for the community.

JOHN LAWS:

Okay, Treasurer, what was the point of recently reopening Christmas Island only now to decide to close it again?

JOSH FRYDENBERG: Well, it’s always been our policy to keep it closed. It was the Labor Party that really, ignored what would have been the best possible advice to them, which is to ensure that our borders stay secure; that we have rigorous protection; that we keep unauthorised arrivals from coming into this country. And that means maintaining the offshore processing system as it is. That’s our policy; unfortunately, Labor seeks to unwind that.

JOHN LAWS:

Okay, you’ve been very generous with your time, for which I thank you Treasurer, and I hope we get to talk again. And let’s hope that everything is going to be better for Australia, because that’s all that really matters, isn’t it?

JOSH FRYDENBERG:

That’s all that matters. It’s about the Australian people. This Budget delivers for them. It means easing the cost of their living, it means putting in place tax cuts and infrastructure spend that is a record amount and of course a new skills package. All of that builds a stronger economy, the product of which is more money on hospitals, schools, and the other essential services.

JOHN LAWS:

Good on you, well said. Thank you very much, Treasurer.

JOSH FRYDENBERG:

All the best.

JOHN LAWS:

Thank you, bye.