Lower taxes lauded as Treasurer doubles down on budget

By Grace Ormsby

February 21 2020
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New commentary from the Treasurer has revealed the government is still hyper-fixed on maintaining its budget bottom line, with the minister also offering his stance on a possible wellbeing budget, superannuation guarantees and the luxury car tax.

In a recent interview, Josh Frydenberg remarked that the nation has “faced one after another economic events which have been outside of our control, which has adversely affected the budget bottom line”, but applauded what he sees as a “remarkably resilient” economy.

What’s coming next?

Highlighting the trade tensions between China and the US as ongoing, and the continuing drought “which has hit farm GDP and devastated those communities”, Mr Frydenberg added that Australia has also “had the fires and the floods and now the coronavirus”.

“I'm wondering what's coming next,” the Treasurer conceded.

“But I do know that the Australian economy is remarkably resilient.”

He flagged a fall to unemployment in the December period and the government’s announcement of a number of spending initiatives as reflective of federal efforts.

These included the $2 billion national bushfire recovery fund, more than an extra billion dollars for drought support since the election and the bringing forward of $4.2 billion of infrastructure spending and another half a billion dollars-plus for the aged care sector.

“All of these have been done without new taxes or new levies,” the Treasurer said.

“We know that when we went to the election we promised lower taxes and Labor promised higher taxes.”

The wellbeing budget

Continuing his attack on Labor, Mr Frydenberg also took the opportunity to poke ridicule at Labor MP and shadow treasurer Jim Chalmers’ suggestion earlier this week that Australia could look to implement a version of a wellbeing budget, “which redefines what ‘success’ means in terms of economic outcomes”.

A wellbeing budget – like the one recently championed by New Zealand Prime Minister Jacinda Ardern – is based on the notion that a nation’s financial prosperity alone will not sufficiently measure the quality of life felt by its residents

“Look, it's laughable,” he commented.

“I mean, Labor hasn't delivered a surplus since 1989 so it should surprise no one that they are going to look around for some other way to measure economic output.

“They will be looking for any alternative than proper accounting that has seen the Australian government, the Coalition government, deliver the first balance budget in 11 years,” he added, calling it “another thought bubble” from the opposition.

Superannuation increase

The Treasurer also took the opportunity to quell rumours around the changing of already legislated superannuation increases.

“Both the Prime Minister and I have made it very clear; we have no plans to change that legislated increase,” he remarked.

Again on the defensive, Mr Frydenberg commented that “I have to say, whenever the Labor Party talks about superannuation, it borders on the hysterical”.

“I mean, they can't brook any criticism from any quarter about anything to do with superannuation,” he stated.

“That makes them blind to the reforms that we need in superannuation, reforms that we have passed through the Parliament with them objecting in many cases.”

Mr Frydenberg brought up opt-in insurance for young people with superannuation, the cap on fees for low balance accounts and proactive consolidation of superannuation through the Australian Taxation Office of inactive low balance accounts as examples.

“That's what we have done, which is helping Australians, ensuring that their super is not eaten away by unnecessary fees,” he said.

“And it seems the Labor Party are stuck in the ideological conflicts of the past.”

Luxury car tax

The luxury car tax – first introduced in 2000 – has resurfaced as an issue with this week’s announcement that iconic car manufacturer Holden would be shutting its doors.

Stating that the tax was never brought in as a “protectionist measure”, Mr Frydenberg highlighted that the measure will bring “just under $3 billion of revenue coming in over the forward estimates”.

Again, the Treasurer re-iterated the government’s commitment to lower taxes.

“I would never say never about removing the luxury car tax, but I've always got to balance, you know, maintaining the strength of the national balance sheet and ensuring that we are committed to lower taxes,” he concluded.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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