The Prime Minister's new salesman Josh Frydenberg is refusing to give a free kick to Labor on the GST.
The newly appointed Assistant Treasurer - a position that has been more or less vacant since March last year when Senator Arthur Sinodinos stepped down - has spent the first month of the year "hitting the airways" just as Prime Minister Tony Abbott directed him to.
As the man who will help lead the Coalition's tax reform effort, the fight against multinationals, future superannuation and financial advice reforms, and be part of government's "razor gang", the task that lies ahead is monumental, but a perfect fit for someone who so obviously has ambitions to one day be leader.
In his electorate office, in leafy upper-middle-class Camberwell, he keeps hammering the scripted government line that "there will be no increase in the GST or broadening of the base".
Frydenberg, the 43-year-old grandson of Polish Jewish migrants, has progressed rapidly through the Liberal party.
After graduating in law and economics, he started his career at law firm Mallesons Stephen Jaques but soon was working as a senior adviser to foreign minister Alexander Downer and as a senior national security and industrial relations adviser to former Prime Minister John Howard.
He played tennis in his younger years, and after his Canberra adviser roles, had a brief stint as a jackaroo on a sheep station in South Australia. In 2005 he joined Deutsche Bank as a director of global banking. Apart from a short period studying at Harvard, he stayed at the bank until the 'Liberal leadership' seat of Kooyong came up for grabs in 2010, the year he finally entered parliament. (Kooyong's previous incumbents included Andrew Peacock, Petro Georgiou and of course Sir Robert Menzies).
Frydenberg, who now takes on one of the most complicated portfolios in the ministry, has already spent the past week hosing down Labor's attempts to paint them as liars, following comments by another senior Coalition minister, Andrew Robb, that there is a need to lift the 10 per cent GST rate and broaden the base to include fresh food and education.
So when asked whether - despite the Coalition's promise that there will be no change to the GST before the next election - it is on the agenda for the longer term, he refuses to bite, mostly. It will be part of the tax white paper, of course. But he then repeats that same line, "we have no plans to increase the GST or broaden the base", before launching into his thoughts about how he will help navigate perhaps two of the most important economic jobs in this current government – tax reform and budget reform.
"I've been mulling this issue over my head about where do we go, what are my guiding principles," he says in our interview, after a series of meetings that same day with leading movers and shakers in tax including prominent tax lawyer Mark Leibler, Tax Commissioner Chris Jordan and the Inspector-General of Taxation Ali Noroozi. Also sitting in on the interview is senior adviser Phil Lindsay, who has advised a host of ministers on tax including Sinodinos and Howard government treasurer Peter Costello.
When it comes to tax reform, Frydenberg, is acutely aware of what a hard sell the government has. "We'd be very conscious of the need to take the public with us on tax reform," he says."You've got to produce a package of changes which leave the taxpayer better off. In the context of the introduction of the GST, it was the abolition of whole lot of other taxes, together with tax cuts."
This is something that Abbott government adviser and pollster Mark Textor has also been arguing. Textor's view, is that you cannot have tax reform such as increasing the GST, without compensating households with personal tax cuts, and/or greater spending on health and education. But Treasurer Joe Hockey has already ruled out a GST rise and corresponding personal tax cuts, at least in the immediate term.
So where is the tax system headed?
Frydenberg talks about some key principles that will guide the debate in coming months. The former minister for deregulation has a habit of characterising complex subjects into key points.
Among these are that Australia needs a more internationally competitive tax system. Here's the first hint that further company tax cuts are on the way. "We are a net importer of capital in Australia, so our company tax rate needs to be at a level that makes us an attractive place to invest and where commercial returns can be made," he says.
"We've got 10 companies paying a third of our company tax, and our company tax as a proportion of taxes is the second highest in the OECD. Have we thought about what happens to our tax base if we were to lose one or two of those companies?"
On the GST, with the proviso that there are no current plans to raise it, he says, "let's have the debate in the tax white paper".
"If we want a sustainable tax base overtime we have to look at the overall mix, and that takes into account direct and indirect taxes," he says.
The second issue on Frydenberg's mind, is how those big bad multinationals can be made to pay more tax. The government has been viewed as not doing enough to tax US tech companies such as Apple and Google, who get away with paying no or little tax on billion-dollar profits.
The debate in 2014 finished with Australia looking to bring in a Europe-style "Google tax", although that was also, in the end, hosed down by Hockey. Frydenberg says he is confident in Tax Commissioner Jordan's ability to bring in more revenue from multinationals, saying Jordan's appointment was "one of the only good decisions Wayne Swan made as treasurer".
Apart from repeating the usual government mantra that multinationals need to pay their fair share of tax, Frydenberg says he also wants a tax system that is geared for this "new digitalised world".
Just in time for Boxing Day, when big retailers are given the perfect platform to reiterate their long-running campaign to reduce the $1000 threshold for taxing online goods, Frydenberg aggressively pushed that message. It naturally made headlines, but the following day's newspaper letter pages were filled with complaints about this the government introducing another tax on consumers.
"This is not about a tax grab; this is about fixing a tax anomaly because Australian retailers are operating with one hand tied behind their back," Frydenberg says.
He doesn't mention personal tax cuts, but does acknowledge that since most taxes collected by government are from individuals and companies, there's a need to "get the balance right between income taxes and consumption taxes [GST]".
There's also the sacred cow taxes like negative gearing that no government is politically brave enough to touch. Both the head of the government's national commission of audit, Tony Shepherd, and head of the financial system inquiry David Murray have suggested that superannuation tax concessions are ill-targeted and benefit people on higher incomes.
Murray has gone further and singled out tax concessions such as negative gearing, saying it distorts household borrowing and presents a big risk to the financial system. Frydenberg says "we will respond to the Murray recommendations in due course".
He moves on to his next point: how to increase workforce participation with an ageing population. "We need to think about how we can make it more attractive for people to stay in the workforce rather than making it more unattractive for them to retire," Frydenberg says.
Frydenberg, is one of six ministers - the other five being Abbott, Treasurer Joe Hockey, Finance Minister Mathias Cormann, Nationals leader Warren Truss, and Social Services Minister Scott Morrison – who make up the Expenditure Review Committee and decide at budget time what services and programs get funding, and what ones get cut.
"If we can keep expenditure under control that enables wholesale reform," he says, an indication that if there's not more spending cuts to come, at least there won't be big spending.
Textor holds the view that if business wants tax reform, then it's the job of business to sell that. Frydenberg says: "It's a team effort" with government.
Tax Institute senior tax counsel Rob Jeremenko says Frydenberg will have to play a crucial role in building the 'why' case for tax reform with the voting public. "The huge task of being across the detail of tax policy will be gifted by Joe Hockey to the Assistant Treasurer, who will have the tough job of selling the need for any tax reform," Jeremenko says.
It's also clear, that in talking about a mix of direct and indirect taxes, there's a government view that the GST, in the longer term at least, cannot remain a no-go topic. There needs to be a discussion about lifting the rate and broadening the base, and instead compensating low-income households. I put that proposition to Frydenberg one last time.
"We have no plans to increase the GST or broaden the base," he quickly fires back.
Correction: This article originally stated that Senator Arthur Sinodinos had stepped down as Assistant Treasurer to face corruption accusations at ICAC. This was incorrect. Fairfax Media apologises to Senator Sinodinos for any embarrassment caused by the error.
