6 December 2018
Transcript - #2018085, 2018

Interview with Fran Kelly, RN Breakfast, ABC Radio National

Subjects: Border protection, Sex Discrimination Act, National Accounts, energy and Toondah Harbour

FRAN KELLY:

Josh Frydenberg is the Federal Treasurer and Deputy Liberal Leader. Minister, welcome back to Breakfast.

JOSH FRYDENBERG:

Good morning, nice to be with you.

FRAN KELLY:

Treasurer, before we get to the economy, Labor and the cross benchers are teaming up to pass a bill to evacuate sick people, including all children from Nauru and Manus. Do you accept that the numbers are against the Government and asylum seekers who need medical or psychiatric help urgently could soon be coming to Australia?

JOSH FRYDENBERG:

Well, it is not for me to pre-empt what the decision of the Senate will be and normal processes will take place. But, we have got children off Nauru, we have ensured that the right medical treatment available to all that are there. But, it is very disappointing that the Labor Party has decided to side with the Greens here, in a move that could potentially have dramatic consequences for our offshore border protection policies, because what we have delivered, since we have come to Government, is the closure of seventeen detention centres, the removal of 8,000 children from detention. And now, no longer, are people dying tragically at sea.    

FRAN KELLY:

Sure, we have also seen 400 refugees resettled in the US, without any resumption of the boats. So, there is no evidence, is there, that bringing sick kids and sick adults to the mainland, to mainland Australia, would set off the boats again.

JOSH FRYDENBERG:

Well, we have got all the right treatment to children…

FRAN KELLY:

Well, not according to…

JOSH FRYDENBERG:

But..

FRAN KELLY:

… the MSF, not according to the College of Physicians who we spoke to this morning.

JOSH FRYDENBERG:

But, Fran, what we need to ensure is that we continue to have a robust, strong border protection policy. Because we do know, from intelligence, that there are people smugglers waiting in Indonesia and elsewhere to capitalise on any weakness in our policy.

Now, Kevin Rudd in 2007 told the Australian people that if he was elected he would not unravel John Howard's strong border protection policy...

FRAN KELLY:

… but this is not unravelling offshore detention, it is getting sick people who need urgent attention that they can't get adequately on the island, being treated…

JOSH FRYDENBERG:

and Minster Dutton has made it very clear that anybody who needs the medical treatment, off the island will get it.

FRAN KELLY:

Well, that is not happening, according to Médecins Sans Frontières, according to a raft of Doctors, the government has received signatures of 6000 doctors who are saying people are too ill and that they need treatment.

JOSH FRYDENBERG:

Well, obviously the Government has a different view. But Fran, this is a diabolically difficult area. There are no easy answers to this. But, what we do know is that if we don't have a strong border protection policies, people will seek to capitalise it and the most vulnerable will become the victims.

FRAN KELLY:

Just finally on this, it looks as though the amendment to the Government's Bill in the Senate will come to the house this afternoon, can you guarantee that that migration Bill with the amendment will be put to a vote, the Government won't withdraw the Bill, to avoid defeat?

JOSH FRYDENBERG:

As I said, processes in the Senate will take their usual course and it's not for me to pre-empt what an outcome of the Senate would be.

FRAN KELLY:

The Government will withdraw the Bill will it, just to avoid defeat?

JOSH FRYDENBERG:

Well, like I said, processes will run its normal course, under the leadership of Mathias Cormann and I don't think it's appropriate for me to pre-empt whatever will be the outcome of the Senate.

FRAN KELLY:

Before we get to the economy. The dispute over how to protect gay students from being discriminated against in religious schools. The Prime Minister must not have known he wouldn't have supported his conscience vote on a private members Bill, that actually entrenches according to Labor's legal advice, another form of discrimination. It seems as though not even Mathias Cormann, the Leader of the Senate, knew the Prime Minister was about to make this move. Was this just an attempt to wedge Labor?

JOSH FRYDENBERG:

I don't know why you assume that we didn't know that Labor would support it. I mean, a lot of people in the Labor Party…

FRAN KELLY:

…because there is a clause in it that says Labor got legal advice…

JOSH FRYDENBERG:

…well, no…

FRAN KELLY:

…that just replaces one form of discrimination with another.

JOSH FRYDENBERG:

Fran, there are a lot of people in the Labor Party that have different views on this particular issue. What we want to do is ensure that no students, no kids, are discriminated based on their sexual disposition or their gender. These were restrictions that were actually put into the Sex Discrimination Act by the Labor Party in 2013. We're trying to remove them and we wanted to do so by Christmas. The opportunity for a conscience vote would be the quickest and surest way for that to happen. But at the same time, we want faith-based schools to maintain a degree of autonomy within their school grounds. For example, to ensure kids go to chapel in accordance with their faith. There is nothing wrong with that. We think we have got the balance right and we are prepared to have a conscience vote. I don't know why the Labor Party is holding it up.  

FRAN KELLY:

This was the tension that Philip Ruddock with the Ruddock Review was exploring. The Government has had the Ruddock Review recommendations since May, I understand. We still haven't seen it. Why would the Prime Minister expect the Parliament to vote on this issue, settle this issue, without first giving consideration to the Ruddock Review? What is the point of it then?

JOSH FRYDENBERG:

Well, this has been an area where both sides seem to agree. But, the Labor Party won't allow us to quickly get this done. The Prime Minister said he will bring the 76 votes to suspend standing orders and to get this piece of legislation passed today and for the life of me, I do not understand why the Labor Party is dragging their feet.

FRAN KELLY:

Because they think it's discriminatory.  

JOSH FRYDENBERG:

Well, it's not.

FRAN KELLY:

You are listening to RN Breakfast. Our guest is the Federal Treasurer, Josh Frydenberg. Josh Frydenberg, as you head into an election year, of course the Government's strongest asset is the economy. Yesterday's national accounts, though, signalled storm clouds ahead. The recent quarterly growth is 0.3 per cent, annual growth falling to 2.8 per cent below expectations and the RBA target. Consumer spending has fallen to a five year low, primarily because a lack of wages growth. Flat wages are now a big brake on the economy, what are you doing about that? Are you putting pressure on business to lift wages given their profits are up? 

JOSH FRYDENBERG:

Well, just a week or so ago, we had the Wages Price Index which indicated wages jumped by 2.3 per cent which is the biggest jump in three years. The Reserve Bank Governor has said publicly that as the economy continues on its positive trajectory and growing, you will see more tightness in the labour market and as that spare capacity is eaten away, there will be upward pressure on wages. And we have seen that in some areas. But the numbers yesterday do indicate that the Australian economy is performing well, Fran. At 2.8 per cent growth, we are still growing faster than any G7 nation, except the United States, and we are growing faster than the OECD average. And certainly much faster than when we came to Government. Our track record in creating more than 1 million new jobs and having our AAA credit rating reaffirmed, and next year we will deliver a budget surplus, is a pretty damn good record.  

FRAN KELLY:

Sure, but people are dipping into their savings to stay afloat. That's what we got out of yesterday's figures. That's going to hit the economy next year, just when you are getting ready for an election. There is this political instability. Chris Bowen told AM this morning that the leadership instability of the Government has hit the economy, do you accept that?

JOSH FRYDENBERG:

No. Let me just take you through a contrary view to what you just put to me about the Household Savings Ratio at 2.4 per cent. It actually reflects two things. One is historical low interests rates. The RBA has reaffirmed the cash rate at 1.5 per cent and has done so for over two years. This means that if people put money in the bank, Fran, they are not going to get a great return. But also, the 2.4 per cent Household Savings Ratio reflects the fact that people feel confident to spend. The time when the savings ratio has been really high was actually during the GFC when they didn't have the job security. I actually see that in a different way to you.

FRAN KELLY:

Sure, but how do you know if its confidence or desperation forcing them to dip into their savings?

JOSH FRYDENBERG:

Well, because the times it has been very high has been the times when there has been instability in the Australian economy, like the GFC. What we saw in the last quarter was that it was 2.8 per cent and now it is 2.4 per cent. Business confidence and investment confidence is up. But, one of the stories that came out of yesterday's National Accounts was the fall in mining investment. That did fall substantially, at over 7 per cent. Some of those big construction LNG projects have now been completed and are now coming into the production phase. What that underlines is how important the resource sector is to the Australian economy too.  

FRAN KELLY:

Okay, Treasurer. You have carriage of the legislation to force the energy companies to sell assets if they are guilty of market misconduct. It looks as though you are going to get a win on that today, that will be passed it seems. Yesterday, the Energy Minister, Angus Taylor, demanded that state owned generators in Queensland lower their prices. And if they don't, the state government will be forced to divest. The Queensland Premier says she won't be selling and if he wants to start a war with Queensland, she says he's got one, which I imagine is the last thing you need. Will you amend the legislation to ensure that the Queensland Government won't have to sell off government-owned assets to a private company- it won't have to privatize.  

JOSH FRYDENBERG:

Let me be very clear with you. The legislation states that the divestment of assets, if it ever came to that, in the instance of state-owned asset, would only go to another state-owned entity. Let me be very clear. This is, again, another Labor Mediscare type campaign. So, if you've got that very extreme situation, and it is only one part of the Bill, but if you've got that very extreme situation where a Government was forced to divest an asset, it would only go to another government entity. In Queensland's case, they've actually created another entity of government-owned infrastructure. They have separated their renewables out from their thermal generation. The legislation will be very, very clear for everybody on that matter. This is a scare campaign from Labor. I can't understand why the Labor Party is so reluctant to support the ACCC and court orders, like they have in the United States, like they have in the United Kingdom, to actually call out the misconduct of energy companies and to ensure that the Australian families and businesses get the lower energy prices they need and deserve.

FRAN KELLY:

Treasurer, just on another issue. The revelations this morning, we heard this story on AM, when you were Environment Minister back in 2017, you ignored critical departmental advice about a proposed development, a massive development, on environmentally sensitive Queensland wetland. It was to be undertaken by Walker Corporation, which is a major Liberal Party donor, why did you reject the advice from the experts in your own department who said the project was "clearly unacceptable." 

JOSH FRYDENBERG:

Well, Fran, with the greatest respect, you haven't told the whole story there. The first thing to say is that greatest proponent of these projects, other than obviously the Walker Corporation, has been the Queensland Labor Government. They have been strong advocates for the development of this project, as was the local council, because of the thousands of jobs it could create. This was not an approval of the process, this was merely an opportunity for the Department of the Environment to undertake under the EPBC Act which is available to the Minister, a proper assessment. And the assessment could include mitigation and offsets and other conditions that could apply. So, it was not an approval, it was merely allowing as the Minister can under the EPBC Act, a proper assessment. And, by the way, this Walker Corporation, I don't care who the proponent of it is, it is only appropriate for something of this kind that you can actually get a proper assessment being big donors to the Liberal Party too.

FRAN KELLY:

I'm not suggesting that you didn't have the power to do it, but your Department said it should be struck out completely because it would cause permanent and irreversible damage to the ecological character of a Ramsar Wetland…

JOSH FRYDENBERG:

and the Department also pointed out that there was this opportunity for the Minister to enable more information to occur and for more information to be gathered that could look at mitigation offsets and the like. This was only one-step of the process and it was not an approval. It was merely an opportunity to get an assessment that the Queensland Labor Government was pushing very hard for. And you are right, the Ramsar Wetlands are very sensitive. There are migratory species there, there are dolphins, there are turtles, there are birds. We have to be extremely careful in these areas, but this merely was just allowing a process to take its normal course.

FRAN KELLY:

In the same year that you were presented with this project, the Walker Corporation, donated close to a $250 million to the federal Liberal Party and something much less than that to the Queensland Labor. Nearly $250 million, were you aware of that?

JOSH FRYDENBERG:

I don't know who they donate to…

FRAN KELLY:

…you didn't know that?

JOSH FRYDENBERG:

...I obviously read the ABC AM report…

FRAN KELLY:

…but I mean at the time.

JOSH FRYDENBERG:

Well, the Walker Corporation is a very well known Australian company with interests right across the country. But the biggest proponents of this, advocates of this, is the state Labor Government- the Palaszczuk Government- as well as the local council because of the jobs it would create, the marina it would establish, the ferry system and the tourism jobs that it would create for the local area. It was only appropriate to start an assessment process, no approval was given, these are sensitive areas. But please, for the sake of balance, ensure that the proper, full story is told.

FRAN KELLY:

Treasurer, thank you very much for joining us.

JOSH FRYDENBERG:

Thank you.

FRAN KELLY:

Federal Treasurer and Deputy Liberal Leader, Josh Frydenberg.