Budget 2021: Treasurer Josh Frydenberg says Budget will fire up nation’s post-pandemic revival

Josh Frydenberg says he hopes other States will follow WA’s lead in slashing unemployment and has revealed that helping to insulate exporters against further China trade disputes will be part of next week’s Federal Budget. Ahead of a weekend of putting the final touches to the nation’s balance sheet — and running a Mother’s Day Classic with wife Aimee on Sunday — the Treasurer sat down with The West Australian to talk about what could be his last Budget before a Federal election. Pandemic Budget Mr Frydenberg said next Tuesday’s Budget would still very much be a “pandemic Budget” and most of the spending measures would be temporary and targeted. “Monetary policy is constrained, so we cannot take the recovery that we are seeing for granted. We have to consolidate the gains, we have to secure the recovery and that’s what this Budget is about,” he said. “What you will see on Tuesday night are policies that are consistent with Coalition philosophy. Lower taxes, support for private sector to create jobs and invest, stronger regions, support for families and encouraging home ownership.” Mr Frydenberg said ensuring the jobs recovery was front and centre was paramount and that the rest of Australia should follow WA’s lead. WA’s unemployment currently sits at 4.8 per cent — the lowest State in the country — compared with the national rate of 5.6 per cent. “We want other States to follow WA’s lead to get their unemployment below 5 per cent,” he said. “We have to secure the recovery and that’s what this Budget is about. Driving the unemployment rate lower from where it is to where it was pre-pandemic and even lower and we have a historic opportunity to drive that down given the historic resilience of our labour market.” Pre-election document Mr Frydenberg said he could not rule out this being his last Federal Budget before the next election. Asked specifically if it was an election Budget, he said: “I’ll leave that to you.” “The Prime Minister’s stated intention is to have an election sometime next year,” Mr Frydenberg said. And on if he could say he would definitely be delivering another Budget, he said: “Hopefully I have a lot more Budgets in me”. Whether it was his last one or not, Mr Frydenberg said it was about being measured. China Mr Frydenberg said the record iron ore prices currently being secured by Australian companies would be reflected in the Budget and the conservative assumption in the last Budget and mid-year economic outlook of it returning to $US55 a tonne this year would no longer be the case. “We revise our assumptions in the Budget,” he said. But while not giving away the price assumption, Mr Frydenberg said it was not simply an iron ore price boom that was holding up the Budget. “The Budget position has strengthened largely off the back of a stronger labour market,” he said. “The revenue numbers from iron ore are certainly helpful and substantial. “The increasing revenue from a higher iron ore price is substantial in the Budget but so too is the improved Budget bottom line from all the people in work.” However, he said continued tensions with China were reflected in the Budget and diversification for exporters — such as those in the mining sector — would be a targeted strategy. “There is a focus on creating more opportunity for our exports ... we encourage diversification,” he said. Big measures Mr Frydenberg said that mental health would get a major funding boost along with aged care and domestic violence support. “There is significant new funding for mental health in this Budget, across a range of areas. Treatment and prevention,” he said. It is understood the package for mental health is more than $1 billion. “There will be more money for domestic violence and it will be significant. There is a significant investment to women’s safety as there is also in women’s economic participation.” Housing support Along with single-parent support, Mr Frydenberg will also announce 10,000 new places for the new home guarantee to allow first-home buyers to purchase a property with a deposit of 5 per cent. And the First Home Super Saver Scheme will be increased from a maximum of $30,000 voluntary contributions to $50,000, meaning people can use the superannuation scheme to save tax on the money they are saving for a deposit. “The Morrison Government understands the importance of owning your own home and the significant economic and social benefits home ownership provides,” Mr Frydenberg told The West Australian.