Treasurer Josh Frydenberg lashes Labor’s Anne Aly over recession comment
Treasurer Josh Frydenberg has lashed Labor MP Anne Aly over her recessions claims as he addresses the threats to the Australian economy.
Federal Budget
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Treasurer Josh Frydenberg has slammed Labor MP Anne Aly over her comments that “a recession could be on the cards” but wouldn’t rule out the possibility that it could happen as soon as next year.
Speaking exclusively to news.com.au in New York today, Mr Frydenberg described Dr Aly’s assertion — which she made to argue against the full tranche of the government’s tax plan — as “uninformed and embarrassing”.
“The truth is the Australian economy is widely admired for its success and talk such as that from the Labor Party is not an accurate reflection of where the economy is at,” Mr Frydenberg said.
“We’re absolutely looking at continued economic growth but we’re not complacent about the challenges that we face.
“We have an economic plan that is designed to strengthen the economy and to meet the challenges that we face.”
The economy grew by 1.8 per cent over the past year, its weakest performance since September 2009 and the poorest result since the global financial crisis.
The Coalition has pinned its hopes on passing $158 billion in income tax cuts to stimulate the economy. But it’s yet to lock in the support it needs from Labor or at least four crossbenchers in the upper house to get the three-stage package across the line.
Labor supports the first stage of the $158 billion plan, which will mean extra cash for low and middle income-earners.
But it believes the later stage — which from 2024-25 lowers the tax rate from 32.5 per cent to 30 per cent for those earning $45,000 to $200,000 — shouldn’t be legislated years in advance and may be skewed toward the wealthy.
Labor backbencher Peter Khalil broke ranks yesterday by declaring the Opposition has no choice but to pass the full Coalition tax cut plan if it refuses to split the package.
Mr Frydenberg told news.com.au the package would not be broken up into pieces and would only be passed as a whole.
“(Labor MP) Jim Chalmers should swallow his pride given he was one of the architects of Labor’s high tax agenda that they took to the Australian people at the last election,” he said.
“And recognise that the Australian people want lower taxes not higher taxes and support our tax package in full.”
Anne Aly: Our economy looks like it's going into a recession, we don't know if the tax package is affordable.@tomwconnell: Don’t you think it’s a bit dangerous to say we are about to go into a recession?
— Sky News Australia (@SkyNewsAust) June 19, 2019
Aly: A recession could be on the cards.
MORE: https://t.co/Zfn4BVKMES pic.twitter.com/PKhxS86r7j
On Wednesday, Dr Aly told Sky News she wouldn’t endorse stage three of the plan because “our economy is now in a recession, or it looks like it is going into a recession”.
“How do we know what the economy is going to look like in 2024 and whether or not these are affordable?” she said.
“I want a bit more information about exactly how this is going to impact on the people that I represent before I support future tax cuts. Very happy to support tax cuts now.”
Productivity growth is Australia is extremely poor according to the national accounts, it remains unsurprising that the #RBA governor continues to implore the government to do more on infrastructure and in the productivity enhancing reform space #ausbiz pic.twitter.com/t9AHYRtXIA
— Alex Joiner (@IFM_Economist) June 5, 2019
Dr Aly pointed to the Reserve Bank’s decision to cut interest rates to record lows before watering down her statement. “Perhaps a recession is a big thing to say, but certainly the economy is not doing as well,” she said.
“A recession could be on the cards and I think it’s something we need to talk about and take into account when making decisions.”
Responding to her comments today, Mr Frydenberg said Dr Aly’s statement was “uninformed and embarrassing”.
BIGGEST THREAT TO OUR ECONOMY
He said the biggest threat to Australia’s economy was the US-China trade tensions. But he wouldn’t be drawn on whether or not the dispute had the potential to propel Australia’s economy into disaster should it escalate further.
“The trade tensions are creating uncertainty in the global economic outlook so Australia is no different to a whole series of countries that are affected by a weakening in the investment sentiment that flows from the tensions,” he said.
“We call for cool heads to prevail.”
Mr Frydenberg said the Australian government’s position was that it’s “not coming in the middle of this dispute” but wants “tensions to subside and a rules-based trading system to be promoted and strengthened.
“Those issues are to be resolved by the two countries involved,” he continued.
Earlier today, Mr Frydenberg told a business audience at a Credit Suisse luncheon in New York that he had “forcefully” put the argument for free trade instead of imposing restrictive tariffs on China, to US Treasury Secretary Steven Mnuchin and US National Economic Council boss Larry Kudlow.
“The US is Australia’s number one investor and China is Australia’s number one trading partner so Australia is probably uniquely placed in the middle of those tensions,” he said.
“Our message here in New York, in (Washington) DC, and across Europe and the G20 has been free trade, which creates one in five Australian jobs, is actually good news for the economy both in Australia and more broadly. Tariffs cost jobs, free trade creates jobs.”
“Trade tensions have also affected us, not because the China-US tariff war has actually led to a whole lot of new tariffs, in fact the tariffs only cover about two per cent of world trade.
“It is because it negatively affects the global economic outlook. It leads to the deferral of investment decisions and a reduction in trade volumes. So both the IMF and the OECD have cut the economic outlook.”
Pleased to address investors today at a business lunch hosted by Credit Suisse in New York, an opportunity to promote the benefits of investing in Australia 🇦🇺 🇺🇸 pic.twitter.com/uxTetaVlW2
— Josh Frydenberg (@JoshFrydenberg) June 19, 2019
Asked how the Trump administration’s economic policies, including those on trade, had affected Australia, Mr Frydenberg said the US “has focused on deregulation and the tax cuts have also shown how that can boost economic activity”.
“The US economy is growing strongly and they’re getting the benefit of the big tax cuts,” he told news.com.au.
“We learn the lessons of other economies.”
megan.palin@news.com.au | @Megan_Palin
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