19 November 2018
Transcript - #2018076, 2018

Interview with Karl Stefanovic, Today Show, Channel 9

Subjects: Migration numbers; Labor’s housing tax; and US-China trade.

KARL STEFANOVIC:

Josh, good morning to you.

JOSH FRYDENBERG:

Good morning, nice to be with you Karlos.

KARL STEFANOVIC:

Okay, I reckon you're on to a winner with migration numbers, why don't you cut them?

JOSH FRYDENBERG:

Well look, the permanent visas have been coming down. But the important thing about migration is to ensure that people go where the jobs are and many of them are in regional Australia and we want to ensure that that happens.

But we also want the states and Commonwealth to work more closely together to plan for the increase in population. That's why Scott Morrison has set up a $1 billion congestion-busting fund. Because, for example, we have seen in Melbourne, 2,700 people come into the city every week and the State Government has just failed to plan for that increased population.

KARL STEFANOVIC:

The issue in this poll is interesting, in that it surveyed people in affluent areas and not so affluent areas, and the overall opinion was that people want less migration.

JOSH FRYDENBERG:

Australia has been a wonderful multicultural country, immigration has made us what we are today, but we do need to prepare for the increased population. That's where governments, state, federal, local have to work closely together and that's our focus.

KARL STEFANOVIC:

Did you say you are going to reduce the numbers?

JOSH FRYDENBERG:

No, we have seen permanent visas come down, but what we really want to focus on is getting people to where the jobs are.

KARL STEFANOVIC:

Okay, let’s move on. Aussie Home Loans founder John Symond says Labor’s plans to abolish negative gearing would be disastrous for Australia’s housing market and could send us into recession. It’s big news coming from him. It won't be that bad, will it?

JOSH FRYDENBERG:

It’s going to be very bad. Anyone who owns their own home, under Labor's policy, their home will be worth less. Anyone who rents their home, under Labor's policy, they’ll pay more. The view of the economists, the Master Builders Association, Aussie John and many, many others is Labor's policy will be a terrible outcome for people with debts in their own home, people who are even looking to get into the housing market.

KARL STEFANOVIC:

The policy will level the playing field for first home buyers though, make it easier?

JOSH FRYDENBERG:

Well, first home buyers are getting into the market in high numbers, more than 100,000 have got a home loan approval over the last year, which is the highest number since 2009. But you don't want everyone's value of their home to go down and effectively that's what Labor going to do.

KARL STEFANOVIC:

So effectively you’re saying that under Labor the price of houses will go down.

JOSH FRYDENBERG:

Dramatically, and that's what we have seen from the economists. And the people who negatively gear are not necessarily rich, I mean there’s 58,000 teachers, 41,000 nurses, 20,000 police and emergency service personnel who have put aside a little bit of money to have an investment property. They should be allowed to continue to do so. Labor's policy is a disaster.

KARL STEFANOVIC:

Can I point out the obvious that house falls seem to be going okay under your Government.

JOSH FRYDENBERG:

It’s been managed and that's the key point.

KARL STEFANOVIC:

Is it?

JOSH FRYDENBERG:

The Reserve Bank of Australia has said that the housing market has now got to a sustainable level. By Labor ripping $30 billion plus out of the pockets of Australians with changes to negative gearing and capital gains tax…

KARL STEFANOVIC:

Okay, hang on, hang on, are you saying to me this morning, Josh, that you are managing house price falls?

JOSH FRYDENBERG:

We have managed the housing market through the Australian prudential regulator…

KARL STEFANOVIC:

You have to explain that to Australians then, who have lost the value of their homes, that you are responsible for their house falls going down.

JOSH FRYDENBERG:

What we have said, Karlos, is that APRA who is the prudential regulator has done the right thing in tightening some of the lending standards. But from here on if you have Labor's policy you will see prices go down dramatically. That is not a good outcome.

KARL STEFANOVIC:

I'm not sure what the difference is.

JOSH FRYDENBERG:

One is a managed listening to the experts, the other is a tax grab. Pretty clear.

KARL STEFANOVIC:

Okay, you are managing house is prices falling, you are managing the value for Australians in terms of their houses going down?

JOSH FRYDENBERG:

The prudential regulator Karl, said very clearly that they needed to manage investor-led growth in the market. So, they have done that. Now, they have eased those changes. What Labor is proposing is a big $32 billion tax grab, tax grab in order to help their own spending promises, but at the same time decrease substantially people's value in their home. It's a very clear difference.

KARL STEFANOVIC:

Okay, let's talk about China. They have clashed with the US again, this time at the APEC Summit in Singapore, Treasurer, it seems like it’s a significant trade war this, brewing. Australia is caught in the middle?

JOSH FRYDENBERG:

Well, Australia has an interest in everyone playing by the rules of the game when it comes to trade. We have $800 billion of imports and exports a year. We are a capital importing country. China is our number one trading partner; the United States is our number one investment partner. We want an open rules-based, transparent trading system.

KARL STEFANOVIC:

Alright, thank you for that Treasurer. Appreciate your time. It looks like a rubbish day in Melbourne.

JOSH FRYDENBERG:

Four seasons in one day, I don't know what the weather is going to be like when I get out there.

KARL STEFANOVIC:

Well, it looks alright at the moment, Treasurer. Thanks for your time, appreciate it.

JOSH FRYDENBERG:

Good to be with you.