5 June 2019
Transcript - #2019078, 2019

Interview with Deborah Knight, Today Show, Channel 9

Subjects: RBA interest rate decision.

DEBORAH KNIGHT:

Treasurer, good morning to you.

JOSH FRYDENBERG:

Good morning, Deb.

DEBORAH KNIGHT:

You personally put the Banks on notice, warning them to pass on this cut in full, why are ANZ and Westpac holding out?

JOSH FRYDENBERG:

Well, ultimately that's something they'll have to explain to their own customers because I think their customers have been let down by this decision. You've heard from the Reserve Bank Governor himself call on the banks to pass on in full this rate cut which, as you say, is the first in almost three years and we've seen the banks funding costs come down so there's no reason why they don't pass on this rate cut to customers. I do welcome what the CBA and the National Australia Bank have done and for their customers this could see a reduction in interest payments of around $60 a month or around $720 a year. So, it's not insignificant and it will come on top of the tax relief that we're providing to low and to middle income tax earners who could see up to $1,080 in their wallets as a result of the tax cuts that we hope to legislate shortly.

DEBORAH KNIGHT:

And it is unusual for the Reserve Bank Governor to intervene in this way, but at the end of the day, it's a free market, the banks can do what they like. Should they be forced to do more, because, of course the Governor's saying that if they don't pass on these cuts in full it will hurt the economy, can you make them do it?

JOSH FRYDENBERG:

No I can't, these are decisions that the banks will have to explain to their customers, Deb. And we know that people can move between banks and seek a better deal as well and I'd encourage them to always look for the best possible deal for themselves and for their families and for their businesses. But I do want to emphasise that the fundamentals of the Australian economy are sound. We have a AAA credit rating, one of only ten countries in the world to do so. We've seen strong employment growth, something that was referred to by the Governor himself in his statement. We've seen more than 1.3 million jobs being created since the Coalition came to Government. So, the fundamentals of the economy are sound but we are facing economic challenges both domestically and internationally, particularly from the trade tensions between China and the US. I think this rate cut will be welcomed by many, many families and businesses.    

DEBORAH KNIGHT:

Well, the Governor of the Reserve Bank and the Board did act because of those challenges because they do need to boost the economy. Do you think the surplus you announced could be under threat and will you re-look at policies to perhaps boost spending in areas like infrastructure?

JOSH FRYDENBERG:

Well, we have actually outlined in the budget a pro-growth agenda, including the tax relief which is very significant for people who are earning up to $126,000 a year. The extension of the instant asset write off for small and medium sized businesses which could help them get the equipment that they need to expand and grow their businesses…

DEBORAH KNIGHT:

But will you do more?

JOSH FRYDENBERG:

But, we are doing a lot; the $100 billion infrastructure plan is a record spend on infrastructure with major projects across different states and territories as well as creating 80,000 new apprentices. We are absolutely committed to our surpluses as outlined in the budget and we believe that we will meet those surpluses because we can run a strong and effective economy. 

DEBORAH KNIGHT:

Alright, Treasurer, thank you for joining us in Canberra this morning.

JOSH FRYDENBERG:

Thanks, Deb.