“The Productivity Commission said exactly the opposite,” he said. “It said we had made strides in recent years in reducing inequality.” The answer for those families was “not to redistribute the pie but to grow the pie”. Loading “We are focusing on ensuring the economy remains strong, which is not an end in itself but can provide the essential services that people need”. Opposition Leader Bill Shorten has warned of "accelerating inequality" to attack government policies including elements of the $144 billion income tax cut and the continuation of negative gearing for property investors - two areas to be targeted in the event of a Labor victory.

Central to the debate is a Productivity Commission finding in August that "sustained growth has delivered significantly improved living standards for the average Australians in every income decile" since the late 1980s. The commission found that the share of Australians in poverty -- those with incomes that are less than half the national median -- has held steady at about 9 per cent. It said income and consumption inequality had risen "slightly" over three decades but that other measures found no clear trend at all. But the ACTU and the Australian Council of Social Service have both issued detailed studies about rising inequality in their respective campaigns for shifts in policy on industrial relations and welfare. The Treasurer said his attitude to policy had not changed since his maiden speech, quoting Abraham Lincoln, whose portrait hangs in his new office: “Government should only do for people what they cannot do for themselves and no more.” He said the Coalition still had an appetite for ambitious tax reform in the face of a hostile Senate and the abandonment of the tax white paper by the Turnbull government.

But despite advocating for a debate about raising the GST when he was assistant treasurer to increase the tax base, Mr Frydenberg ruled out any changes under the Coalition. “The GST is set and we have no plans to lift it,” he said. Mr Frydenberg named youth unemployment and housing affordability as two of his top priorities where “work was currently underway”. Treasurer Josh Frydenberg has nominated housing affordability and youth unemployment as early areas of policy focus. Credit:Alex Ellinghausen “We have got actually the lowest proportion of people on welfare today than in the last 25 years,” he said.

“Having a job and particularly as a young person getting into the workforce creates discipline and provides income and they are great qualities to have. That is a great start to a young person's life.” He said he was working on expanding the PaTH program - which provides internships of up to 12 weeks to young people - and other measures to bring down youth unemployment below its current rate of 11.1 per cent. The $750 million program, which provides businesses with a $1000 payment for taking on an intern, has come under criticism for a slow take up rate amid concerns it is perpetuating a culture that encourages employers to cycle through interns rather than hire permanent workers. In a bid to build policy measures around younger Australians who have felt locked out of the economic growth story, Mr Frydenberg will also put housing affordability back to the top of the agenda. The issue was a focus of last year’s budget but slipped off the Turnbull government's radar as house prices in Melbourne and Sydney fell over the past year.

The Treasurer said he was re-examining measures to improve housing affordability and “currently has things underway in that area” but would not elaborate on specific policies. Despite the focus shift to more social issues, Mr Frydenberg said the Coalition remained committed to its tax cut agenda. “The economy does not run on autopilot,” he said. A plan to bring forward tax cuts for businesses earning under $50 million that have already been legislated could be in place as early as December, when the mid-year financial and economic update is expected to form a mini-budget. The $3.6 billion tax cut acceleration from 30 to 25 per cent would wedge Labor and put them in a position of having to repeal already legislated tax cuts if they were elected next year.

Mr Frydenberg said any acceleration would not hamper the return to surplus but would not comment on any plans for further income tax cuts than the $144 billion already legislated. September’s final budget outcome is tipped to show a better than expected result, raising the prospect of a return to budget balance for the first time in a decade - a year earlier than foreshadowed in May. The Reserve Bank has warned Mr Frydenberg the biggest threats to the Australian economy were rising trade tensions between the US and China, a slowdown in demand from the domestic Chinese economy and inflation from too much fiscal stimulus in the US. The Treasurer said Australia was a great beneficiary of a global rules based trading system.

"So that is something we have to watch," he said. "But the overall message is that the Australian economy is strong and has good momentum.” Loading Replay Replay video Play video Play video