18 December 2018
Transcript - #2018097, 2018

Interview with Chris Smith, Breakfast Show, 2GB

Subjects: Mid-Year Economic and Fiscal Outlook.

CHRIS SMITH:

Treasurer, welcome to the program.

JOSH FRYDENBERG:

Chris, good to be in your great city.

CHRIS SMITH:

Your good news didn't last long. I made mention of that because all of a sudden, as you were popping champagne corks and telling us the good news, it was overshadowed by a sex scandal.

Have you picked up the telephone to thank Andrew Broad yet?

JOSH FRYDENBERG:

Well, look, clearly Andrew's conduct was unacceptable and he's done the right thing to resign his post but the focus for me and the Prime Minister and our Government is on delivering a stronger economy, not as an end in itself, Chris, but actually to deliver the better education and health services, the infrastructure needs to bust the congestion in our cities, the support for the drought-stricken communities, the defence of our nation, commissioning new vessels to be built here in Australia to defend our shores. That's what a strong economy can do and that is what we are doing with producing the best set of numbers in over a decade.

CHRIS SMITH:

Yeah, and that is a good sell line, but can you sell it effectively because you have had record employment, we have had a good economy, we now hear the news about returning to surplus a little earlier and double the advantage. We're better in terms of growth than many of the G7 nations but why is the Coalition so far behind in the polls? It's not sticking.

JOSH FRYDENBERG:

Well, as you know, we've still got six months or so until the next election and people will focus on the economy because that is what really matters to them and they will remember what it was like when we came to government just over five years ago: unemployment was high, growth was lower, investment was in free fall and there were deficits predicted for years to come. We've turned that around and as you said in the introduction, the 2018/19 budget deficit, which was estimated to be $14.5 billion in May of this year, will now be $5.2 billion and the surplus is nearly doubling to $4.1 billion and we'll have cumulative surpluses over the forward years of more than $30 billion and we can now start to pay back Labor's debt, which they left us.

CHRIS SMITH:

Okay. Your opposite number, Chris Bowen, is saying today that there are a lot of international factors that have weighed in to your budget surplus and he's made the point that people don't have the extra spending money, bills are rising, property prices are falling, we've got a trade war between the US and China, the Federal Reserve raising rates and we're not a good, competitive place for businesses to invest.

You haven't had any light in the end of the tunnel on corporate tax discussions, but I don't know, have we got a situation where you've accidentally fallen into these numbers or has this been something that's been premeditated?

JOSH FRYDENBERG:

Well, it's truly pathetic to hear that from Chris Bowen.

I mean, he talks down the Australian economy and we know that Labor last delivered a surplus 30 years ago and when they were last in government they had the best terms of trade, the highest commodity prices that Australia had seen in more than a century.

You know when they were last in government, Chris, iron ore was at $180 a tonne? Today it's at $60 a tonne and for every $10 that iron ore price rises that's worth more than $1 billion a year to the budget and they still couldn't deliver a budget.

The reality is that the Australian economy has outperformed all the other G7 nations since we've come to government.

Labor always thinks that they're unlucky in government and that the Liberal and Nationals are the lucky ones. But the reality is, it doesn't matter what the question is, for Labor the answer is always higher taxes and when people go to the ballot box at the time of the next election, they have to ask themselves do they want their property to be worth less, do they want to pay more rent as a result of Labor's plans to abolish negative gearing? Do they want to lose the benefit of the franking credit that they're a retiree who saved hard for their retirement and not put the burden on the public purse? Do they want to pay more for their business taxes? Do they want to pay more for their income taxes? Do they want to pay more for their electricity bill?

That is what the Labor Party is promising the Australian people at the next election. They're so arrogant, they're so cocky, they think they've got it in the bag but I think there's another… I think the Australian people are going to be well aware of the Labor Party and their plan for higher taxes.

CHRIS SMITH:

Alan's listeners are truly not impressed by the fact that we have enormous debt in this country, $351 billion net debt growing every day, once you get into surplus, explain to my listeners how we can get that debt down to zip?

JOSH FRYDENBERG:

Well, as you also said, we have predicted the surpluses will be more than a percentage of GDP in time and that we will see debt come down from where it is today, at just over 18 per cent of GDP, down to 1.5 per cent and that's because we are delivering good growth in the economy.

One of the benefits of having a strong economy is that more people are in work and when more people are in work, not only are they paying more taxes as a result of having a job, but also there is less welfare benefits and one of the things that's been overlooked, Chris, is that we now have the lowest number of working age Australians in welfare, or as a percentage in welfare, for 25 years. And we were able to save over $1 billion in this midyear budget update yesterday just by the fact that there were less jobseeker payments because more people were in work.

CHRIS SMITH:

Moving people from welfare to work which has got to be a good thing.

JOSH FRYDENBERG:

Correct!

CHRIS SMITH:

I'm running out of time. One quick one. When will we hear about these next round of tax cuts coming from this $9 billion that you've got a war chest sitting there for? Do we have to wait until the April budget or will you deliver another Christmas present?

JOSH FRYDENBERG:

Well, we're obviously focused on allowing people to keep more of what they earn, that's what Liberal Party and National Party governments do, and we've already legislated tax cuts for small businesses and for households, for the crane driver and the cafe owner listening to your show today.

We have delivered tax cuts for all them but we will make announcements between now and the budget on April 2 but let's hold Labor to account for their big taxing, big spending agenda.

CHRIS SMITH:

Alright. Thank you very much for your time and have a great Christmas.

Thank you, Josh.

JOSH FRYDENBERG:

Merry Christmas to you.

CHRIS SMITH:

Okay, the Treasurer, Josh Frydenberg.