2 April 2019
Transcript - #2019064, 2019

Interview with Chris Uhlmann, 9 News, Channel 9

Subjects: 2019-20 Budget.

CHRIS UHLMANN:

Josh Frydenberg, welcome.

JOSH FRYDENBERG:

Nice to be with you.

CHRIS UHLMANN:

Now tell us about these tax cuts. When can people get them?

JOSH FRYDENBERG:

Well, there are two stages to the tax cut. The first stage is that in 13 weeks’ time when people put in their next tax return, they can get back up to $1080, depending on their income. If you are earning between $48,000 and $90,000, you will get the full benefit of that tax offset; and if you’re earning between $90,000 and $126,000 or under $48,000, you’ll get a portion thereof.

CHRIS UHLMANN:

What about really low income earners, what do they get out of this?

JOSH FRYDENBERG:

Well low income earners are getting an increase in the low income tax offset, which will go from $445 to $700, and they’ll get benefits. But, for someone who’s on $21,000, will get $255 benefit when they put in their next tax return.

CHRIS UHLMANN:

You’ve also talked about an energy payment that people can get, which goes to those who aren’t on incomes. Did you think of extending that to people on Newstart – they’re not going to anything at all?

JOSH FRYDENBERG:

Well, Newstart does go up twice a year when it’s indexed. But importantly, the majority of people on Newstart move off Newstart within 12 months. They hopefully go into work, and many have been doing that. Also, people on Newstart get other payments as well. That might be a Family Tax Benefit payment, might be a parenting payment, it might be some other form of payment as well. So it’s different to the pension for example.

CHRIS UHLMANN:

Now at the start of this, there’s no real structural change. The structural change to the tax system comes by…

JOSH FRYDENBERG:

That’s the second stage…

CHRIS UHLMANN:

Yeah, 2024. Did you not think of moving that forward?

JOSH FRYDENBERG:

Well, obviously it’s a balancing exercise, because we want to deliver strong surpluses, which we’ve done tonight with $7.1 billion and $45 billion of surpluses over the forward estimates, and eventually eliminating Commonwealth debt. But also, we wanted to return peoples’ hard earned money to them. Because at the end of the day, it’s not the Government’s money, it’s their money. And we, as Liberals and Nationals, believe people should earn more and people should keep more of what they earn. So we had to get the balance right. But this structural change in 2024-25 is very significant. Because it’s going to see the 32.5 cent tax bracket come down to 30 cents, and by then, it will be covering everyone earning between $45,000 and $200,000.

CHRIS UHLMANN:

Were you scared off doing that, because by the time you get to $200,000 under that system, someone would be getting an $11,000 tax break.

JOSH FRYDENBERG:

But, as a proportion of the overall tax that they’re paying, that’s still less than somebody on a lower income, and so it’s really important that we, as we pointed out through this Budget process, that someone on $200,000 pays ten times as much tax as someone on $45,000. We want to incentivise people to work more, but we also want to reward their effort.

CHRIS UHLMANN:

But you weren’t scared off this by the fact that the Labor Party would say that’s a tax break for the big end of town.

JOSH FRYDENBERG:

Well we’ve created a fairer and simpler system through this and ultimately a stronger tax system.

CHRIS UHLMANN:

Is the big threat in this though, that you’re getting temporary surpluses and you’re going to bank  very, very big debts?

JOSH FRYDENBERG:

Well they’re not temporary surpluses. At the end of the day, they’re growing over time, and we’re getting to over one per cent of GDP midway through this decade. And importantly we’re going to eliminate Commonwealth net debt and that will be a significant achievement, just like John Howard and Peter Costello.

CHRIS UHLMANN:

But the economy is softening, you’ve sensed, there are some real risks to the economy, aren’t there?

JOSH FRYDENBERG:

There’s domestic, and international. Internationally, we’ve seen, in this Budget, growth forecasts reduced, we’ve seen, China slow down to six per cent, we’ve seen the US come down to below three, we’ve seen Europe come down to below two per cent growth, and Japan below one per cent. So, Australia is performing pretty well, relative to that cohort, and we just have to be prepared for the impact of slow down globally, as well as domestically, the housing market has cooled, in terms of new investment, and it’s exactly the wrong time, Chris, for Labor’s housing taxes.

CHRIS UHLMANN:

But you talked about dwelling investment being a problem, but then you did nothing to try and fix it yourself.

JOSH FRYDENBERG:

Well, we’re strengthening the economy, we’re putting more money into people’s pockets, we’re giving small business a significant boost with expanding the instant asset write-off to $30,000 from $25,000 and increasing the number of small businesses that can apply for it by 22,000.

CHRIS ULHMANN:

Do you think you’ve done enough in this Budget to address the concerns of people in electorates like yours in Kooyong in Victoria, who have real concerns about climate change; $3.5 billion towards your plan might seem very underdone.

JOSH FRYDENBERG:

Well the key point is, where do you end up with your emissions reduction policies? And we will beat our targets, just as we beat our previous targets. And the Emissions Reduction Fund that we’ve already in place has been very successful. It’s contracted nearly two hundred million tonnes of abatement at an average cost of around $12. That is very competitive by anyone’s standard. We’ve also put in place new programs to boost energy efficiency by 40 per cent by 2030. And Snowy 2.0 which we’ve committed, through this Budget, over a billion dollars.

CHRIS ULHMANN:

Do you think you need to do more though, to boost your own credibility on climate change, given the way that the Coalition has been perceived? Particularly, in inner city electorates like yours?

JOSH FRYDENBERG:

Well, I know that our focus is on meeting our emissions reduction targets, but doing that in a responsible way. Labor’s all about virtue signalling, you haven’t heard anything from Bill Shorten about the cost of his policy, which actually means he won’t be able to deliver it. What we have done is, we’ve prepared a very measured, considered approach to this issue that reduces emissions, but also doesn’t hurt household budgets.

CHRIS ULHMANN:

Small businesses are also getting a bit of a boost from this, instant asset right off goes from twenty five to thirty thousand dollars and can be claimed from tonight, so an election must not be far away.

JOSH FRYDENBERG:

Well this is an important measure, over 350,000 small businesses have used it, and for example, if you’re buying a van for your nursery business and it’s $29,000, previously you couldn’t write that off, or you would write it off over a number of years, you couldn’t write it off all immediately. You now can. Or if a food manufacturing company is buying a new oven or a grill.

CHRIS ULHMANN:

$100 billion into infrastructure over ten years though, do you think that these numbers that move around all over the place, over ten years, over five years, over seven years. Just use them to inflate the numbers.

JOSH FRYDENBERG:

Well I prefer to talk about the real projects, rather than just the numbers. Because, one of them is Snowy 2.0, we’re modernising the vision of Menzies and Chiefly. Another is we’re turning the sod on the second airport for Western Sydney, that was fifty years of indecision we overcame. There’s a whole series of projects in every state, where we’re investing your money, the taxpayers money, putting it to work to create a brighter future.

CHRIS ULHMANN:

And can you win an election on it?

JOSH FRYDENBERG:

Well it’s all about delivering for the Australian people. They know we’re the party of lower taxes, more jobs, stronger economic growth and guaranteeing essential services. This Budget does that.

CHRIS ULHMANN:

Josh Frydenberg, thank you.

JOSH FRYDENBERG:

Good to be with you.