Treasurer Josh Frydenberg finds all the vital signs in order

The new Treasurer has met with the nation’s most powerful financial regulators for an update on the economy.

Treasurer Josh Frydenberg, left, meets with Reserve Bank Governor Philip Lowe. Picture: AAP

Josh Frydenberg, in his second day as Treasurer, has met with the ­nation’s most powerful financial regulators for an update on the economy, the housing market and their response to the financial services royal commission.

The new deputy Liberal leader, who chose to be Treasurer following last week’s leadership spill, told The Australian he was “reassured” by meetings with Reserve Bank governor Philip Lowe, Australian Prudential Regulation Authority boss Wayne Byres and Australian Securities & Investments Commission chairman James Shipton in Sydney yesterday.

“The economy has good momentum and is moving in the right direction,” said Mr Frydenberg, who was energy minister in the Turnbull government.

“They are expecting to see unemployment come down further, and for wage growth to pick up.”

The Treasurer, who was briefed by Treasury secretary Phil Gaetjens yesterday, will meet the head of the competition regulator, Rod Sims, in coming days.

Stressing that the government was “back to work”, Mr Frydenberg listed improving economic statistics, including a falling unemployment rate (now 5.3 per cent), economic growth above 3 per cent, and strong business and consumer confidence.

“The risks to the global economy are trade tensions, an unexpected rise in US inflation, and the managed transition under way in China from stronger growth to lower growth and a more sustainable financial system,” the Treasurer said.

The comments came as Westpac lifted its variable mortgage interest rates by 0.14 percentage points, the first of the major banks to begin raising mortgage rates.

“ASIC and APRA are very focused on engaging constructively with the royal commission and await its findings,” Mr Frydenberg said.

He said he preferred to defer comment on the Productivity Commission’s report on inequality, which raised questions about Labor’s claim that inequality was soaring. Andrew Leigh, Labor’s junior Treasury spokesman, told The Australian yesterday it was “pretty clear” inequality was higher than a generation ago.

“In the last year we’ve seen ave­rage ASX100 chief executive pay going up 9 per cent and wages for the average worker have barely kept pace with inflation,” he said.

Outgoing Productivity Commission chairman Peter Harris on Tuesday said wealth inequality had risen a little in recent years but income inequality had fallen since the financial crisis.

Mr Harris suggested the political focus on inequality had distracted attention from the plight of the most needy.