MIL-OSI Australia: New banks to provide Australians with more choice

Source: Australian Treasurer

The Coalition Government’s reforms to increase competition in the banking sector are working, with Volt Bank becoming the first bank to transition from a restricted licence to a full licence today.

The restricted licensing framework was introduced by the Australian Prudential Regulation Authority (APRA) in May 2018 to make it easier for new banks to get started and help foster competition in the sector.

The framework allows licence holders to carry out limited banking services for up to two years while they develop their capabilities and resources.

A fully digital, Australian bank, Volt Bank was the first authorised deposit-taking institution (ADI) to be granted a restricted licence – in May 2018 – and now becomes the first bank to transition from a restricted licence to a full licence.

This follows the arrival of Xinja Bank late last year – the second ADI to be granted a restricted licence.

The Coalition Government has introduced a number of reforms to reduce barriers for innovative new entrants into the banking sector, including permitting all ADIs to use the term ‘bank’, providing new businesses with access to crowd-sourced equity funding and mandating ASIC to consider competition as part of its decision making process.

Further, our introduction of the Consumer Data Right, with the banking sector being the first to roll out the initiative through open banking, will be a game changer when it comes to how consumers leverage their data to obtain more tailored products and services and have more information to make better choices.

Increasing competition in the banking sector to give consumers more choice, lower prices and better service is part of the Government’s plan for a stronger economy.

MIL OSI Australia

MIL-OSI Australia: Consultation on amendments to reduce ASIC’s search fees and amend the industry funding model

Source: Australian Treasurer

In line with the Morrison Government’s commitments, today I am releasing for public consultation draft regulatory amendments to reduce and remove the fees for accessing certain information from the online business registries maintained by the Australian Securities and Investments Commission (ASIC).

The draft Regulations provides an exemption to journalists for ASIC’s registry search fees. An exemption from these fees will facilitate free access to important information about companies and financial services providers.

The draft Regulations also cut existing search fees for accessing company roles and relationship extracts $40 to $19.

Separately, the draft Regulations also create a new sub-sector as part of ASIC’s Industry Funding Model. This will allow ASIC to recover the regulatory costs incurred from its close and continuous monitoring of Australia’s largest institutions.

Finally, the draft Regulations make other minor amendments to ensure ASIC’s fees-for-services reflect ASIC’s regulatory costs.

Comments on the draft Regulations close 8 February 2019. Stakeholders are invited to provide their feedback on the Treasury website.

MIL OSI Australia

MIL-OSI Australia: Address to the Sydney Institute, ‘Creating opportunity and encouraging aspiration: The key to a growing economy and a stronger Australia’

Source: Australian Treasurer

“Aussie Rules: what Australia can teach the world”, screamed the headline of The Economist last November. An in-depth analysis of the Australian economy and our remarkable 27 years of uninterrupted economic growth.

A growth story which both sides of politics have contributed to.

It has been on the Coalition’s watch that the GST was introduced, the waterfront reformed, the Future Fund established and a decade of budget surpluses delivered.

Labor oversaw a reduction in tariffs, the floating of the dollar, started key privatisations and moved away from centralised wage fixation in favour of enterprise bargaining. Critically, key Labor reforms had the support of the Coalition in Opposition.

It’s in this spirit of progress that the Coalition has continued to carry the baton of economic reform since our election over five years ago.

Bearing in mind that, with half the population being born after 1980, the majority of Australians have never experienced a recession in their working lives.

As Australians, we all realise how ‘lucky’ we are to live in this country. But of course it is not just luck that got us here and it is no time to be complacent.

What is needed is hard work, good policies and the right values.

So today, as Treasurer, I want to share my thoughts on three important areas:

First, Australia’s remarkable record of uninterrupted growth and the importance of this strong performance continuing in light of emerging global economic risks;

Second, the values and beliefs that drive and underpin the Coalition’s approach when it comes to managing the economy;

Third, our economic plan which has aspiration, productivity, growth and fiscal discipline at its core.

Coalition’s economic record

In politics as in life, you will never get every call right. What matters is getting the big calls right.

For the Coalition, reforms to the tax system, competition policy and workplace relations, along with red tape reduction and budget repair, have all been key features of our economic record over the past five years.

But one of the most significant for the long-term benefit of the country has been our achievements on trade.

In 1991 we had only one free trade agreement, it was with New Zealand. Today, we have eleven and counting. When we came to Government, Australia’s free trade agreements covered around a quarter of our total two way trade, today it is 70 per cent and rising to 88 per cent when current negotiations are completed.

We have secured agreements with our biggest regional partners, China, Japan and Korea, who between them account for around half of our exports worth more than $175 billion per year. More recently the eleven-nation Trans-Pacific Partnership (TPP) was finalised.

Global growth is being driven out of the emerging markets of Asia and the region’s rising middle class, which is estimated to grow to 3 billion by 2030.

The centre of global economic activity has never been closer, leading some to observe that the tyranny of distance has become the power of proximity.

This is good news for the economy as a whole, with 1 in 5 Australian jobs now related to trade.

Whether it is the lobster fishermen in Geraldton, the wine maker in the Barossa or the apple farmer in the Derwent Valley, the biotechnology firm in Rockhampton, the precision engineer outside Melbourne or the fund manager here in Sydney, they are all winners from the trade agreements the Coalition has secured.

But it is important to recognise that these trade agreements just don’t fall into one’s lap. You have to believe in them and the opportunities that they open up, often staring down vested interests that seek to weaken your resolve.

It is no secret that our political opponents equivocated on the China FTA and gave up on the TPP, saying it was “dead in the water”.  They are now threatening to open-up settled agreements and outsource negotiations at the behest of the unions.

It’s through our commitment to free trade, together with our other policy reforms, that sees the Australian economy in better shape today compared with what we inherited.

Growing faster than any G7 country, except the United States, Australia’s GDP growth is at 2.8 per cent compared to 2.1 per cent when we came to Government.

Over 1.2 million new jobs have been created, driving unemployment down to 5.1 per cent compared to the 5.7 per cent when Labor left office.

Importantly, more than half of the 1.2 million jobs created have been filled by women, with a record number of females now in the workforce. They are also being joined by growing numbers of young people, with over 100,000 young people getting a job last year, the highest number on record.

Annual average growth in government spending has been reduced to 1.9 per cent, the lowest of any government in fifty years and half what it was under Labor. Spending restraint and good economic management are making possible a return to surplus and an end to the decade of deficits.

In the words of Standard & Poor’s, the Government has been recognised for its “fiscal prudence” and “better budget performance”.

As MYEFO indicated, the cumulative surpluses over the next four years will be $30.3 billion, with surpluses rising to 1 per cent of GDP in 2025-26.

Net debt as a percentage of GDP will fall from around 18 per cent today to 1.5 per cent in the medium term.

This is important because as Reserve Bank Deputy Governor Guy Debelle has said, “In terms of government, public debt is sustainable until it is not.”

The strength of the economy is not only helping us deliver record spending on the essential services people need without increasing taxes, but provides the flexibility and resilience to respond to challenges as they arise.

Just as Howard and Costello’s strong budget management prepared the nation for the unexpected shock of the Global Financial Crisis, the Coalition is again rebuilding the buffers that will mean Australia can better absorb the impact of any future economic and financial shocks.

As the Prime Minister has warned, there are storm clouds hanging over the global economy.

Persistent trade tensions, high global debt levels and a contraction in growth in several key economies have changed the global outlook.

The German and Japanese economies recorded negative growth in the September quarter, while China has seen its growth slow through the year to its lowest rate since 2009.

Overnight, the International Monetary Fund updated its forecasts, downgrading growth from 3.7 to 3.5 per cent, noting the “global expansion is weakening and at a rate that is somewhat faster than expected” and saying “the risks to more significant downward corrections are rising” as investor sentiment has deteriorated, assets have been repriced and debt burdens have increased.

Domestically, the drought is having an impact, the housing market has softened, there are signs that credit growth is being constrained and the pick-up in wages growth remains gradual.

While the RBA in its most recent monetary statement in December said that “the Australian economy is performing well”, they did point to some uncertainty in the outlook for household consumption.

This is where confidence in the housing market is key. Economists and credit rating agencies have raised the potential adverse impacts to the economy that would flow from a hard landing in the housing market.

While regulatory interventions to date have put the housing market in the words of Governor Lowe “on a more sustainable footing”, what the economy can ill-afford right now are punitive tax policies that would will hurt both supply and demand and are completely inappropriate in the current environment.

Coalition’s values

It’s against this backdrop that our economic plan with its focus on growth, productivity, aspiration and budget repair, takes on even greater significance as we navigate the currents ahead.

Our values are key:

  • Encouraging the individual and their enterprise;
  • upholding personal responsibility;
  • maximising choice;
  • supporting families;
  • backing entrepreneurship and small business;
  • rewarding effort and hard work;
  • upholding the rule of law;
  • ensuring a safety net which is underpinned by a sense of decency and fairness

These are all values that go to the heart of what the Liberal and National Parties are all about.

These values are as relevant today as they were when Sir Robert Menzies founded the Liberal Party more than seventy years ago.

They are in our DNA, they define our national purpose and they are what motivate people to join the Liberal Party and run for office.

These values underpin our core beliefs.

  • That the invisible hand of capitalism delivers far more than the dead hand of socialism.
  • That Government is not the solution to every problem.
  • That fairness is achieved through equality of opportunity, not equality of outcomes.
  • That Government has no money of its own. It’s the people’s money and every dollar of tax is a dollar less in their pocket.
  • That we should be optimistic and outward looking, confident in the knowledge that our people are our greatest competitive advantage.
  • That communities work from the ground up, not the top down.
  • That intergenerational equity requires fiscal discipline as the next generation should not have to pick up the tab for the last.
  • That people should be encouraged to be self-reliant, but be absolutely assured that that if they need it, the safety net will be there.

Coalition’s economic plan

These values and beliefs are reflected in our policies and drive our economic plan.

Our plan, recognising that the private sector employs nine out of every ten workers, is focused on making sure that businesses stay competitive, keep investing and continue to hire more workers.

This is the pathway to wealth creation, job creation and higher wages. And it can only be achieved by boosting productivity through lower taxes, targeted spending, flexible labor markets, significant infrastructure and opening up new markets.

This is all about expanding the productive capacity of the economy so that we can grow the pie, providing a better future for all Australians.

Our plan, which is working and is being rolled out over the medium term, will deliver:

  • Legislated tax relief for 10 million working Australians, which will see a whole tax bracket abolished and 94 per cent of people paying no more than 32.5 per cent in the dollar.
  • Fast-tracked legislated tax relief for 3.3 million small and medium sized businesses, employing around seven million people, and providing an instant-asset write off encouraging them to invest in their business.
  • Once-in-a-generation reforms to the distribution of the GST, creating more equitable and sustainable outcomes for all States and Territories and all Australians.
  • Increased access to finance for small business with a $2 billion fund, while cutting around $6 billion in red tape and ensuring that small businesses get paid on time and are not used as a bank by big businesses.
  • Enhanced productivity and competitiveness of the construction sector with the reinstatement of the Australian Building and Construction Commission and establishment of the Registered Organisation Commission as a cop on the beat, helping maintain the rule of law.
  • Funding for over 500 major projects with a record $75 billion in infrastructure investment, including a second airport for Sydney after fifty years of indecision; the Melbourne Airport rail-link; the Inland Rail; upgrades to the Bruce Highway in Queensland; the Metronet project in Perth, Road Corridor Projects in Adelaide and the Bridgwater Bridge replacement in Tasmania.
  • A $1 billion Urban Congestion Fund to reduce average commute times and ease the burden on our public transport system as our population grows and the cost of congestion in Australia’s capital cities estimated to double between now and 2030.
  • An unprecedented $200 billion defence investment plan, promoting advanced manufacturing and creating jobs across the country.
  • A better deal for energy consumers, by removing the ability of networks to game the system; simplifying retail offers; underwriting new generation and expanding the iconic Snowy Hydro project with the largest renewable energy storage project in the Southern Hemisphere.
  • Strengthened rules applying to multi-nationals, bringing $7 billion of sales into the Australian tax net each year.
  • An additional 300,000 apprenticeships through a $1.5 billion Skilling Australians Fund, which will equip young people with the skills necessary to compete successfully in the jobs market of the future.
  • Improved affordability and access to housing by unleashing supply, assisting first home buyers to build a deposit through super and incentivising more private investment in affordable housing. Over the last year, more than 100,000 first home buyers received loan approvals, the highest number since 2009.
  • Opportunities for people to move from welfare to work, by encouraging mutual obligation and providing incentives for businesses to take on young employees under the PaTH Program, which has seen 70 per cent of young people who participated in an internship be in employment three months later. These programs have helped the Government deliver the lowest number of people of working age on welfare in twenty-five years. We should never forget that, as the Productivity Commission recently reminded us, that the one constant that matters most in tackling inequality and poverty is having a job.
  • Much-needed reform to our superannuation system with legislation before the parliament that will boost the retirement incomes of millions of people. This will be done by preventing the erosion of their balances through a cap on fees in low balance accounts, banning exit fees and avoiding the cost of inappropriate insurance within their super.
  • Record levels of funding for health and aging programs with a 75 per cent boost for hospital funding and the new listing of 1900 medicines on the PBS, including on the weekend the addition of another life-saving drug, this time for lung cancer.
  • A Medical Research Future Fund which is on track to reach $20 billion by 2021, making it one of the largest medical research funds in the world.
  • Choice in education with our $300 billion School Funding Package, which will see funding per student increase by more than 60 per cent over the decade.

All of these initiatives and more are being delivered through fiscal discipline and while returning the budget to surplus. Importantly, this is being done with a tax-to-GDP speed limit that ensures we live within our means, but which the Labor Party now says serves “no useful economic purpose”.

In addition to continuing to roll out these initiatives across the economy, the Government will soon receive the final report from the Hayne Royal Commission. This follows the recent release of the Productivity Commission’s landmark inquiry into the efficiency and competitiveness of Australia’s $2.7 trillion superannuation system.

Central to the Government’s thinking in responding to these reports will be restoring trust in the financial system by delivering better consumer outcomes including in retirement.

This requires a culture of compliance and accountability, regulators that are fit for purpose and an acknowledgement by the sector that people must be put before profits. All of this must be achieved without inadvertently strengthening the position of incumbents or unduly restricting the flow of credit or other vital financial services that Australians need and the economy relies on.

In his Interim Report, Commissioner Hayne makes the telling observation that “much more often than not, the conduct now condemned was contrary to the law”. He makes clear that while behaviour was poor, misconduct when revealed was insufficiently punished or not punished at all.

This raises the issue as to whether new laws are required or whether existing laws simply need to be better enforced. Simplification may be, according to the commissioner, a better route rather than adding “an extra layer of legal complexity to an already complex regulatory regime”.

After three years of painstaking work, the Productivity Commission’s report into superannuation has provided some compelling insights into how the current system is failing to advancing the interests of all members.

The health of Australia’s superannuation system is fundamental to the strength of the national economy and the quality of life in retirement of every working Australian, so we must get it right.

Calling out the “anachronistic” design flaw at the heart of the system with default funds a product of our industrial relations system, the Productivity Commission says current arrangements give rise to an unlucky lottery for members.

With a series of changes including more aggressively weeding out underperforming funds, the establishment of an independent expert panel to select ”a best in show” short-list and the decoupling of default fund selection from the industrial relations system, the Productivity Commission finds members could be $3.8 billion better off each year. For somebody entering the workforce today, this could see them $533,000 at retirement or about double what their retirement balance could otherwise be.

Unlike our political opponents our response will be focussed only on one thing: the best interests of all members.

Conclusion

With our economic plan working and a whole series of significant reforms underway, there is no room for complacency. The IMF have provided a timely reminder of what could be around the corner.

What is absolutely certain is that as a nation we cannot afford to fall for the false prophets who would have you believe:

that a country can tax itself into prosperity;

that a government can redistribute what its economy doesn’t produce;

that economic growth can be achieved while punishing aspiration.

For Labor, the pursuit of class warfare is more than just rhetoric. It is at the heart of their policies from tax to trade to industrial relations. It’s a dark shadow, not a light on the hill.

Labor and their co-conspirators in the ACTU are promising to rewrite the economic rule book, disrupting the economy as we know it and sending a chill through every workplace. With the ACTU wanting to install their union organisers on every company and government board including the Reserve Bank of Australia, it is no wonder that the Business Council has warned that the ACTU’s plans could send Australia “back into the dark ages”.

Blinded by its obsession with class warfare, Labor is ignoring the message from the Productivity Commission that our tax and transfer system has worked well in sharing income growth and reducing inequality.

In the words of the then Chair of the Productivity Commission Dr Peter Harris, “This will be instantly rejected by some, since it is not the popular perception. But it is the unquestionable fact.’

In other words, no political party has a monopoly on fairness or equality.

But what is not fair is Labor’s $200 billion of new taxes that will hit retirees, homeowners, renters, small business owners and all those aspiring to build a better life for them and their families.

Labor’s tax and redistribution agenda is one of the most radical, aggressive and dangerous Australia has ever seen. Putting at risk our prosperity and harmony and taking us back decades.

No wonder there is now a growing chorus of opposition. Australians are starting to see Bill Shorten’s plan for $200 billion in taxes for what it really is.

At the next election, Australians will have a clear choice.

Between a Labor Party with its $200 billion of punishing new taxes and a Coalition that has kept its promise of delivering more than 1.2 million new jobs, cutting taxes, growing the economy, redefining our trading relationships that lock us into the emerging markets of Asia and providing an unprecedented social dividend with record spending on health and education.

We are repairing the nation’s finances and on 2 April will announce a budget surplus, the first in more than a decade.

All of which is possible because we have a strong economy and an economic plan that is working.

The choice for the people of Australia could not be clearer.

MIL OSI Australia

MIL-OSI Australia: The Coalition Government’s record of support for small business

Source: Australian Treasurer

Joint media release with
Senator the Hon Michaelia Cash
Minister for Small and Family Business, Skills and Vocational Education

Bill Shorten and the Labor Party simply cannot be trusted when it comes to supporting small and family businesses.  When Labor was last in government, 519,000 jobs were lost in the small business sector. Now, they want to introduce a new tax on trusts that will hit at least 300,000 small businesses.

The Coalition Government’s record of support for small business speaks for itself.

  • We are cutting the corporate tax rate for small and medium-sized businesses to 25 per cent and increasing the unincorporated small business tax discount rate to 16 per cent.
  • We have extended the instant asset write-off for a further 12 months to 30 June 2019.
  • We abolished the carbon tax, lowering energy prices.
  • We established the Australian Building and Construction Commission (ABCC).
  • We established the Small and Family Enterprise Ombudsman.
  • We developed a new plan to ensure small and medium-sized businesses get paid on time.
  • We are making it easier for small businesses to access finance with the $2 billion Securitisation Fund.
  • We have slashed $6 billion of red tape.
  • We have streamlined GST reporting so businesses can easily and quickly lodge their business activity statements online.
  • We have signed free trade agreements with China, Japan and South Korea as well as the Trans-Pacific Partnership.

In contrast, Labor:

  • repeatedly voted against tax relief for small businesses;
  • want to reverse the independent umpire’s decision to modify Sunday penalty rates, meaning small businesses would pay higher rates than big businesses that do deals with the unions;
  • want to increase electricity bills for Australian small businesses through their reckless renewable energy target and “economy wrecking” emissions reduction target; and
  • want to abolish the ABCC, leaving 350,000 small construction businesses at the mercy of militant unions like the CFMEU.

Further, Labor has previously said it would change the legislated definition of small business, denying businesses with turnover between $2 million and $10 million access to important tax measures, denying around 100,000 small businesses access to the instant asset write-off and denying around 30,000 small businesses access to the unincorporated tax discount.

Small and family businesses contribute hundreds of billions to the Australian economy and employ almost seven million Australians.

Bill Shorten and the Labor Party will roll over to their union masters who are demanding more power to interfere in the day-to-day running of Australia’s small and family businesses.

As part of our plan for a stronger economy, the Coalition Government has a comprehensive set of policies to support the continued success of small and family businesses.

MIL OSI Australia

MIL-OSI Australia: Interview with Jon Faine, Morings, ABC Radio Melbourne

Source: Australian Treasurer

JON FAINE:

This year’s Federal election will as much as anything be about the economy. Elections always are. Josh Frydenberg, a leading Victorian Liberal is the Member for Kooyong and the Treasurer in Scott Morrison’s Federal Government. Mr Frydenberg, good morning to you, happy New Year.

JOSH FRYDENBERG:

Nice to be with you, Jon, and sad to hear that you will be hanging up the boots at the end of this year.

JON FAINE:

Yes. There’s a lot of water to go under that bridge between now and then. I’m sure I can have a lot of fun in the remainder of 2019. Kelly O’Dwyer’s…

JOSH FRYDENBERG:

We’ll beware some big-swinging fist fights with politicians between now and then.

JON FAINE:

Hope so. Kelly O’Dwyer’s surprise announcement leaves the Liberal Party yet again reeling. First of all, is it that that seat Higgins in inner suburban eastern suburbs Melbourne, absolutely Peter Costello, Robert Menzies territory. Is it earmarked for a woman?

JOSH FRYDENBERG:

It’s never gone to the left of politics, that seat, since its inception, I think back in 1949. Kelly…

JON FAINE:

The same was said about Wentworth and Malcolm Turnbull’s resignation.

JOSH FRYDENBERG:

Well, Wentworth and Kooyong are both federation seats so they’ve even been around longer. But there is no such thing as a safe seat these days. The electorate is much more volatile and we’re not taking anything for granted in Higgins or anywhere else. I want to pay tribute to Kelly. This has obviously been a hard decision for her, a personal decision for her, but she can be very proud of what she’s achieved in public life. A very significant contribution over the last decade, including most recently with the women’s economic security statement and the things that we’ve done around child care, domestic violence, paid parental leave, superannuation, all the things that she’s had something to do with as a leading female member of our Cabinet.

JON FAINE:

Okay. Well, you got all of that out, but you didn’t answer my question. Is the seat earmarked now for a woman to replace Kelly O’Dwyer?

JOSH FRYDENBERG:

I would hope so, there…

JON FAINE:

But you don’t believe in quotas as a party?

JOSH FRYDENBERG:

We don’t. We obviously want to see more women in the Parliament.

JON FAINE:

But if a man with greater merit, greater potential, greater capacity is to nominate, then under your party rules they’ll win, won’t they?

JOSH FRYDENBERG:

Well, the Prime Minister, Kelly O’Dwyer, myself and others have made it very clear that we would like to see a female candidate in Higgins.

JON FAINE:

Then why not just introduce quotas?

JOSH FRYDENBERG:

Because we have a grassroots democratic process…

JON FAINE:

Which this time must choose a woman?

JOSH FRYDENBERG:

Well, it’s very clear that we need more women in the parliamentary party and there are a number of leading candidates, female candidates who have declared an interest in that seat. But I will leave it up to the branch members to make that decision because something that occurs in the Liberal Party doesn’t always occur with our political opponents, which is that we leave it to the branch members to decide who to select to be their representative.

JON FAINE:

Except here the Prime Minister, the Treasurer, everyone else is sending a signal to the branch members saying you can choose anyone you like as long as it’s a woman?

JOSH FRYDENBERG:

Well, look, it’s no secret there’s been a debate about getting more women into the Parliament, whatever political persuasion they are representing. In the case of Higgins, Kelly has been a very strong member and has done a lot to promote the cause of women across the country and I think it’s fitting that her replacement is a woman.

JON FAINE:

Is Julie Bishop about to pull the pin too?

JOSH FRYDENBERG:

I haven’t heard that. I know that again Julie can be very proud of what she’s achieved in public life as Australia’s first female Foreign Minister and those decisions are purely personal ones and I would leave that to her and her family to decide.

JON FAINE:

It would make a lot of sense for someone who has held high office in successive governments not to have much of an appetite for being in opposition?

JOSH FRYDENBERG:

Look, as Kelly made it very clear, there will be people who seek to misinterpret her difficult but very personal decision. I have to say to you the way Bill Shorten and Sally McManus and others from the Labor side have responded to Kelly’s announcement has been deeply disappointing.

JON FAINE:

In what way?

JOSH FRYDENBERG:

Well, Sally McManus said that she’s thrown in the towel and I felt that that was a petty response, it was a partisan response, it was a pathetic response…

JON FAINE:

Well, she’s from the trade union movement, she’s not from the Business Council.

JOSH FRYDENBERG:

Well, but she also understands that the decisions of people to enter Parliament and to leave Parliament are often very personal and Kelly made that very clear in her public statement that there are complex reasons and that she wants to, with her husband John, have a third child and that it does take its toll being away from home for weeks on end, particularly if you have a senior role such as Kelly does as a Cabinet Minister. Again, Bill Shorten tried to politicise an issue even though there are plenty of people on his side who have announced that they’re leaving politics like Kate Ellis, like Jenny Macklin, like Jacinta Allan and even a male…

JON FAINE:

Jacinta Allan?

JOSH FRYDENBERG:

And a male member Tim Hammond in Western Australia. They’ve made their public reasons for wanting to leave Parliament very clear. Jacinta Collins, sorry.

JON FAINE:

Senator Jacinta Collins?

JOSH FRYDENBERG:

Jacinta Collins.

JON FAINE:

Jacinta Allan is the Transport Minister for the State Government. She’s not going anywhere.

JOSH FRYDENBERG:

Well, that will be a decision for her. But in terms of the Federal sphere, we’ve seen Jenny Macklin, Jacinta Collins, Kate Ellis, Tim Hammond announce that they’re leaving politics for a variety of reasons, often citing personal family reasons and it doesn’t matter which side of politics you’re from, you should respect the fact that someone has made that decision not to seek to make a political advantage out of it.

JON FAINE:

Let’s keep going talking about the internals of the Liberal Party even though I know you would rather not. Do you want to see Peta Credlin in the Federal Parliamentary Liberal Party?

JOSH FRYDENBERG:

I want to see the strongest possible field.

JON FAINE:

Do you want to see Peta Credlin?

JOSH FRYDENBERG:

I want to see the strongest possible field and, again, that will be a decision for Peta herself. She obviously has a very strong set of credentials and seems to be very active in the media with formal roles there. But as to whether she wants to run for politics, again that will be her decision. But from a party position we would like to see the strongest possible field of candidates for what is a really important seat for us to hold at the next election.

JON FAINE:

Kelly O’Dwyer faced a massive internal revolt over changes to superannuation that she brought in and a number of people, including prominent Melbourne lawyers, targeted her and said that she was attacking the very fundamental principles of the Liberal Party, which is that you’re free to accumulate assets and wealth without the government taxing it. Jack Hammond QC was one of the leaders. Did that cost her a lot of local support?

JOSH FRYDENBERG:

Look, they’re questions you would have to direct at the people who are making those comments.

JON FAINE:

No. You’re the Treasurer. It’s part of your portfolio responsibility to oversee some of this.

JOSH FRYDENBERG:

Well…

JON FAINE:

It’s got budgetary implications.

JOSH FRYDENBERG:

No. You’re asking me to comment on a hypothetical situation of what you said in your words, “Costing her local support”. She has and she had very strong local support.

JON FAINE:

No. She had an internal revolt in Higgins on her hands.

JOSH FRYDENBERG:

Well, in any political party any member will have issues with some of their constituents or indeed some of their branch members. But Kelly was re-endorsed just like other colleagues in the Federal Liberal Party were. She has contributed an enormous amount to Federal political life and in terms of what the party has contributed and delivered for Australian women, that is also a very significant legacy that she can leave and that she can point to, which your listeners are interested in because that’s what makes a difference to their life around paid parental leave or childcare…

JON FAINE:

Sorry. The government that has…

JOSH FRYDENBERG:

…around domestic violence, around superannuation.

JON FAINE:

The government that has as few women representing in its population in its senior ranks as 30 years ago. Where the leader of the National Party and Deputy Prime Minister had to resign over a scandal and is still, you would have to say, circling around a party that can’t organise the pre-selection of women in winnable seats, only in marginal seats, where you’ve been described internally by Julia Banks and Kelly O’Dwyer herself, you’re a party that looks as if you’re a bunch of homophobic, anti-women, climate deniers and now you’re presenting yourselves to the people for re-election.

JOSH FRYDENBERG:

Well, I will talk, if you want to talk about the contribution and the success of Liberal women, let’s do that. Because Linda Reynolds is the first Brigadier, female Brigadier from the Australian Defence Reserve. We have Sarah Henderson who was an anchor on the ABC before entering into Parliament. Jane Hume you mentioned earlier has been very successful in the financial services industry. Nola Marino has been a dairy farmer and the list goes on. These are women who are in our parliamentary ranks who are having senior roles, who have contributed to the community before entering politics and continuing to contribute when they’re in politics. Now, we have an internal target of reaching 50 per cent female representatives by 2025. That’s our goal. We haven’t adopted the quota system but at the same time when opportunities like the Higgins pre-selection come about, we’d like to see a female candidate in that role. But I can point to Gladys Lew in Chisholm or Kate Ashmore in Melbourne Port soon to be called McNamarra, as a number of females that we have running in key seats for us at the next election here in Victoria.

JON FAINE:

Greg Hannan former candidate for President of the party is going to nominate, I understand.

JOSH FRYDENBERG:

And that is absolutely his entitlement under party rules.

JON FAINE:

Jeff Kennett says that Kevin Andrews and Julie Bishop should also go?

JOSH FRYDENBERG:

Well, look, Jeff has opinions about lots of things but again they’re going to be personal decisions, Jon, for those individuals and for anyone else. But people’s decisions to leave politics are taken irrespective of which political party they represent and we’ve seen plenty of names and announcements from those on the other side of politics too.

JON FAINE:

We will get to the economy next.

JOSH FRYDENBERG:

That would be nice.

JON FAINE:

But on the machinery of it, you’ve had a clean out of the leadership of the Victorian Liberal Party. What’s the actual process? Who decides, who is going to call the shots? Your secretary resigned over Christmas, the party secretary resigned. So who is going to call the shots and what’s the process?

JOSH FRYDENBERG:

About, sorry?

JON FAINE:

Preselecting a candidate?

JOSH FRYDENBERG:

Well the party will be announcing the nominations are open today. They’ll stay open for a period of time. Then what happens in the Liberal Party is that the branch members who have met certain criteria, namely that they’ve been in the party for a certain period of time will come together for a pre-selection. There will be hundreds of people present. There will also be represented not just from the local branch electorates but also from what is known as called the State Council, that is from representatives from across the State who are party members.

JON FAINE:

So you won’t have any intervention from head office, it’ll all be done at local level.

JOSH FRYDENBERG:

This will be a grassroots branch member-driven pre-selection as is the case in the Liberal Party.

JON FAINE:

Turning to the economy. Your portfolio which is going to be front and centre for the Federal election, Innes Willox is in the media this morning saying that politics is hurting the economy. He’s saying you need to somehow reassert the needs of the nation and the economy over the politics of the day. In other words, special interests, whoever shouts the loudest is getting what they want at the moment in Australia, if I can paraphrase his speech.

JOSH FRYDENBERG:

Well, the biggest special interest is the union movement and they are going to cause…

JON FAINE:

No, big fish, surely Treasurer…

JOSH FRYDENBERG:

…fear and consternation in the business community because what the Labor Party…

JON FAINE:

Well, it was the banks who said they didn’t want a Royal Commission for months. That’s why you didn’t call one.

JOSH FRYDENBERG:

Well, the Labor Party are determined to allow militant unionism a free reign in our workplaces and that will lead to less flexibility, less jobs. The abolition of the Australian Building and Construction Commission. So, if I was Innes Willox and indeed the business community, and we’ve heard from them often, that I would be very concerned about Labor’s industrial relations agenda. I would be very concerned about their class warfare rhetoric and the attack from Bill Shorten on business, recognising that business helps create nine out of every 10 jobs across the country but also their high taxing agenda. I mean their changes around franking credits, for example, will not only hurt retirees but it will hurt the ability of companies to grow and to raise capital.

JON FAINE:

It hurts the richest people in the country those who can afford, it seems like the top 2 or 3 per cent who can afford to have shares and portfolios with franking credits making it a substantial part of their income.

JOSH FRYDENBERG:

It might be an inconvenient truth for you, Jon, but the people who are having the benefit of what are called these excess franking credits are actually members of the community who have saved for their own retirement and don’t have very high incomes.

JON FAINE:

Well, they’ve structured their affairs to take advantage of what effectively is the subsidy for the taxpayer.

JOSH FRYDENBERG:

Not at all. This has had bipartisan support for decades because of the fact that it does help some of the lower income earners or…

JON FAINE:

Sorry, how do franking credits help low income earners?

JOSH FRYDENBERG:

The people who have saved for their retirement…

JON FAINE:

Franking credits help people with low incomes? How?

JOSH FRYDENBERG:

Because these are the very people who have put aside money for their retirement, often in a Self-Managed Super Fund…

JON FAINE:

Self-funded retirees are not low income.

JOSH FRYDENBERG:

Well, I can tell you that anyone…

JON FAINE:

It you’ve got enough assets and income to not need the pension, you’re not low income.

JOSH FRYDENBERG:

Jon, if you’re having a self-managed super fund you will be on average over $12,000 a year worse off…

JON FAINE:

Because the way you’ve structured your affairs Treasurer. You have to have at least $1 million in a Self-Managed Super Fund before it’s worth setting up….

JOSH FRYDENBERG:

Jon, there is 900,000 individuals who don’t have self-managed super funds who are going to be hit by the changes to franking credits and why is the Labor Party exempt industry funds and retail funds from the changes to franking credits? But the changes around the retirees tax is just one of many…

JON FAINE:

Sorry, can we just go back. Do you want to retract what you said about how the franking credit changes will affect low income people? You’re talking about self-funded retirees who have to have at least $1 million in assets. They are not low income people. And if that’s where you’re focusing your attention, you’re completely missing the point that welfare stagnation and wage stagnation is affecting more Australians by far than any change to franking credits.

JOSH FRYDENBERG:

Jon, these are people who aren’t the so-called rich. These are people who have actually saved for their own retirement. Some are in self-managed super funds, others are not. These are people who have been targeted by the Labor Party because they’ve saved for their own retirement.

JON FAINE:

Treasurer, who are you governing for? Who are you governing for? People with self-managed super funds or the rest of us?

JOSH FRYDENBERG:

We’re governing for 25 million Australians.

JON FAINE:

25 million Australians don’t have self-managed super funds.

JOSH FRYDENBERG:

Well, it’s not just for, but this is the point. It’s not just people with self-managed super funds who are affected by those changes to the retiree tax and the franking credits. The same with the 1.3 million people who currently negative gear, two-thirds of whom have taxable income, under $80,000.

JON FAINE:

The Labor Party has made it clear their arrangements will not alter.

JOSH FRYDENBERG:

And what is very clear is that when the people who currently negative gear sell the property, they will be selling into a market where there are fewer buyers. Rents will go up because people…

JON FAINE:

Well, the markets are already down. The Labor Party aren’t in power but the market’s already down.

JOSH FRYDENBERG:

Jon, their policies have had an impact and that’s what the independent economists and property analysts have said.

JON FAINE:

No. It’s the banking changes. You can’t borrow money. That’s what’s having an impact. There’s no more interest-only loans. That’s what’s having an impact…

JOSH FRYDENBERG:

Jon, if you think that you can rip out $200 billion with higher taxes from the economy without a significant impact on consumer demand, without a significant impact on employment, you’re wrong.

JON FAINE:

Retail over Christmas, it’s the centre Labor Party’s fault too?

JOSH FRYDENBERG:

The Centre for International Economics have made it very clear that Labor’s changes around capital gains tax, there will be up to $1 billion less for the States.

JON FAINE:

So it’s the Labor Party that ruined Christmas trading?

JOSH FRYDENBERG:

Jon, in terms of the Australian economy domestically, the fundamentals are strong. What is of concern is a Labor tax and spend agenda which will see $200 billion hit families, hit small businesses, hit retirees, hit investors. They’re targeting aspiration and they’re doing so in a way that uses a very blunt instrument.

JON FAINE:

We need to get on to a few other quick things. First of all, Tasmanian Senator, Liberal Senator David Bushby announces he’s resigning and within an hour that it’s announced he gets the plum government job of being Consul-General in Chicago. That’s what makes people furious about politics, isn’t it? In a snapshot, that’s exactly what people hate?

JOSH FRYDENBERG:

Well, Jon, it might upset you but people from both sides of politics have been appointed to overseas positions where they can continue to serve the community and the government.

JON FAINE:

No. When your government came into power you immediately cancelled the appointment of Steve Bracks to being Australian Trade Consul to New York because he was from the wrong side.

JOSH FRYDENBERG:

And we’ve allowed.

JON FAINE:

He had to unpack his suitcase, he was so close to leaving.

JOSH FRYDENBERG:

And we’ve allowed many members of the Labor Party, who they’ve appointed to positions, to continue in those roles too.

JON FAINE:

Is there something wrong? Is it a corruption of the public process that a Liberal politician within an hour of resigning a Senate seat in Tasmania is appointed to a Government, a lucrative Government job in America?

JOSH FRYDENBERG:

Well, the people who have served the Parliament have still contributions to make in public life and that is why the Labor Party and the Liberal Party have, over the years, appointed people. Now I will give you a very good example. Kim Beazley, former Labor leader appointed to become Australia’s ambassador in Washington. When we came in, he obviously continued in that role and he served Australia with distinction. We have other members of Parliament who are serving in our diplomatic service.

JON FAINE:

Pill testing – yes or no?

JOSH FRYDENBERG:

I’m not going to buy into that, but obviously I’m very concerned by the number of young people who have lost their lives through the illegal taking of drugs.

JON FAINE:

Thank you for your time on all of those matters this morning and a great way to start the year. Undoubtedly there will be many more to explore the economy and other issues as we head towards the Federal election.

JOSH FRYDENBERG:

Happy to be back, Jon. Thank you.

JON FAINE:

Josh Frydenberg, Member for Kooyong, Treasurer in Scott Morrison’s Federal Government.

MIL OSI Australia

MIL-OSI Australia: Interview with Ross Greenwood, Today Show, Channel 9

Source: Australian Treasurer

Subjects: Economy; budget; Labor’s housing tax, and women in politics.

ROSS GREENWOOD:

Josh, just first up, let’s go to the economy and all of that type of thing. The Prime Minister here, last week, said there were economic headwinds. Does this mean that your ability to get the budget back into surplus, you will have a budget in April, of course, is that diminished by those economic headwinds that the Prime Minister is talking about? 

JOSH FRYDENBERG:

We will be delivering the first budget surplus in over a decade on April the 2nd. We have seen a record number of women in the workforce, we have seen a record number of young people get a job over the past year. And so, the fundamentals of the economy are strong and that has enabled us, Ross, to spend record amounts on education and health.

But, the Prime Minister is right, we are seeing globally China slow-down from its previous highs, Europe has been gripped by Brexit and those trade tensions between the US and China…

ROSS GREENWOOD:

But, also, house prices are falling here, construction is down, people aren’t spending as much money it would seem, aren’t they headwinds that really could affect the economy and that surplus?

JOSH FRYDENBERG:

There is a cooling of the housing market, but what we don’t want to see is the housing market to be hit with a new big tax, namely the plans to abolish negative gearing from our political opponents. So, that is a real danger.

ROSS GREENWOOD:

Ok, then the other thing about this also is, would you say that the Australian economy, if it is back in surplus, is robust, is it healthy? What sort of state is it in right now?

JOSH FRYDENBERG:

The fundamentals of the Australian economy are good, but the Prime Minister is absolutely right. We need to prepare for a winter day, we need to deal with these cold headwinds.  

ROSS GREENWOOD:

Okay, so, is it the problem that you say, yes, there might be some issues around the place, but its broadly healthy. Isn’t that at odds with what the family, listening here at home are saying. They’re seeing tight wages, they’re seeing falling house prices, they’re seeing higher electricity prices. So, therefore, your view of the economy might be different to the view of the economy of people who are sitting here, watching it at home?   

JOSH FRYDENBERG:

Well, certainly the lived experience of Australians right across the country is of energy prices that are too high and we have also seen the impact of the drought.
But, we have also seen record job creation, much lower than when we came to Government and that is an important point.  

ROSS GREENWOOD:

Your side of politics, does it have a female problem? Kelly O’Dwyer has quit, there are obviously issues in terms of other female representatives who are not there anymore. Is there a problem with women inside the Coalition?

JOSH FRYDENBERG:

We want to see more women in our parliamentary party, but we’ve also got outstanding women in the team right now. We’ve got the first female…   

ROSS GREENWOOD:

But, the question is whether there is enough, that is the whole point.

JOSH FRYDENBERG:

Well, we want to see more and actually at this election, we’ve got a number of very strong female candidates in important seats that we must win.   

ROSS GREENWOOD:

Alright, that you must win. And that’s going to be the key going into the thing. I want to take you into your tennis career, were you any good?

JOSH FRYDENBERG:

My ambitions were far greater than my talents, Rossco.  

ROSS GREENWOOD:

Okay, but you took a year off during your gap year to have a crack at the satellite tour, what was that like?

JOSH FRYDENBERG:

It was great, travelled the world. Had a few losses, had a few wins. But the point is, I got to fulfil my dream. I didn’t want to finish school, actually.   

ROSS GREENWOOD:

Is it true that you beat Mark Philippoussis in a doubles match, is that right?

JOSH FRYDENBERG:

Yeah, I did, and it went to a tie-break with Pat Rafter up in Queensland…

ROSS GREENWOOD:

And did you beat him there?

JOSH FRYDENBERG:

No, he took the honours…

ROSS GREENWOOD:

So you were that good, in other words you could actually be on the same court with these sort of fellows at that time in your life?

JOSH FRYDENBERG:

On the same court, but not necessarily winning.  

ROSS GREENWOOD:

Nah that’s right. So, in terms of tennis, you also were an Oxford Blue twice, you played for Oxford University. You travelled the world with them, so you know, you’ve actually played some reasonable tennis.

JOSH FRYDENBERG:

Well, now I eat for a living, as you know, Ross…

ROSS GREENWOOD:

That’s right. Are you a better tennis player or Treasurer?

JOSH FRYDENBERG:

Well, I hope to be good at both.

ROSS GREENWOOD:

Let’s have a crack, let’s see how good he was. Treasurer, The Josh Frydenberg here, on the people’s court.
Have a bit of a go at this Josh.

JOSH FRYDENBERG:

Ok.

ROSS GREENWOOD:

Look at this, here is a bit of action from last night. Here we go. Well, that’s not me.

JOSH FRYDENBERG:

Ross, bend the knees Ross.

ROSS GREENWOOD:

C’mon on Josh, oh look at this, it’s going well, isn’t it. Well there’s the Treasurer going, oh look, there we go.

JOSH FRYDENBERG:

So, are you going to teach Ash Barty a thing or two Rossco?

ROSS GREENWOOD:

Well, I’m not going to teach Ash Barty anything, except the cricket I would have thought. But, how about you Josh? Now are you still any good as a seniors vet tennis player, Josh?

JOSH FRYDENBERG:

Ah well, I try to get on the court a bit. But, it is fantastic to see so many Australians come out to the open. It is a really national event.

ROSS GREENWOOD:

The Treasurer, I got to tell you, the Treasurer Josh Frydenberg. He is the Treasurer and also a tennis player as well. Well done Josh.

JOSH FRYDENBERG:

Thanks Ross, great to see you.

MIL OSI Australia

MIL-OSI Australia: Consultation on mutually-owned financial institutions tax changes open

Source: Australian Treasurer

The Morrison Government continues to promote competition in our banking system with today’s release of draft regulations to change the tax rules relating to the treatment of certain financial instruments issued by mutually-owned financial institutions.

The draft regulations seek to rectify a current disadvantage experienced by mutually-owned financial institutions (such as building societies and credit unions) compared with other banks. The disadvantage arises as existing rules provide different tax treatment for certain financial instruments issued by banks, compared with similar instruments issued by mutually-owned financial institutions.

This change continues the delivery of the Government’s commitment to implement the recommendations of the inquiry into Reforms for Cooperatives, Mutuals and member-owned Firms, conducted by Greg Hammond OAM. These important reforms improve access to capital, remove uncertainties and barriers, enabling cooperatives and mutuals to invest, innovate, grow and compete.

The draft regulations and explanatory material is available on the Treasury website. Interested parties are encouraged to provide their views by 11 February 2019.

Submissions can be emailed to financialservicestax@treasury.gov.au during this period.

MIL OSI Australia