Senator the Hon. Simon Birmingham
Minister for Finance
Leader of the Government in the Senate
Senator for South Australia
Date: Thursday, 15 April 2021
Steve Price: The economy, it seems, has bounced back out of covered with an extraordinary strength. We have a unemployment rate that's down to five point six per cent, although a number of the new jobs, it would appear a part time. We've got a stock market that's on fire and we've got a real estate market that is pretty much out of control. Finance Minister, Senator Simon Birmingham has been good to join us. Senator, good morning.
Simon Birmingham: Good morning, Steve. Great to be with you.
Steve Price: You too. Thanks. To join us in discussion with your fellow ministers, particularly Treasurer Josh Frydenberg and the PM, have you all been surprised at how quickly the economy bounced back?
Simon Birmingham: We've seen growing strength in the Australian economy for quite some months now. And time and time again, the economy has indeed exceeded expectations. We saw that Treasury and other independent experts were predicting unemployment rates could have gotten as high as 15 per cent at the worst times of the pandemic and instead we're now looking at an unemployment rate that's at five point six per cent. We've got more people in work today working more hours. We've got more people in terms of women or young Australians coming back into the workforce pleasingly as well. To get back to that point of more people in work, working more hours than was the case prior to COVID-19 hitting. Absolutely, remarkable situation. Very much the envy of much of the rest of the world.
Steve Price: Are we convinced that there's not hidden amongst the figures that have not yet dropped? Because we don't have, of course, the figures, the economic figures post the end of of JobKeeper? Are we expecting that there will be some bad news in there about a smaller business, smaller to medium sized businesses that have simply not been able to survive through this JobKeeper is finished and we are going to see some small businesses collapse in numbers that we perhaps haven't seen yet?
Simon Birmingham: Yes Steve, we have acknowledged all along that the end of JobKeeper and indeed as the recovery continues, we shouldn't expect at all just to be a linear trajectory of good news that there will be, of course, some potential bumps along the way. That's the reality that the economy often faces. You know, there's prior to COVID-19, we had around 400,000 Australians who would move in and out of jobs in the labour market in any one month. And so the sort of estimates that Treasury has that there could be around 100 to 150,000 Australians impacted by the end of JobKeeper are consistent in broad terms with the type of monthly movements in the labour force that we might expect to see. But we shouldn't expect that it will all be as great a news as yesterday and in recent times have been with just the continued strong trajectory. But all our policy settings today appear to be working as we had hoped. The effort to shift from broad based economic supports to more targeted economic supports, we trust will also continue to save many jobs and protect many businesses.
Steve Price: The vaccine roll that's hit a speed hump. It's got the wobbles. When you've sat down with Treasury to do your numbers and projections forward. Had you- had you worked out that you thought that the international borders would have been opened sooner rather than later, which may now not happen? And what sort of financial impact is it going to have on Australia if we have to remain with those international borders closed into next year?
Simon Birmingham: We've always been very cautious with the types of assumptions that are made. But we will revisit all of those when it comes to the budget next month and look carefully at what impacts around potential for border opening and so on may have. I think it's important to remember that Australian customarily back in 2019 spent some sixty five billion dollars leaving the country and visitors to Australia has been around 45 billion dollars coming into our country. So the sort of a mere movement of people in and out isn't necessarily an economic negative. But we appreciate the importance of being able to move or other aspects of doing business, trade, commerce and so on that are important. That said, we're not going to rush to reopen any aspect of the borders before it is appropriately safe to do so. Closing the borders at the start of last year was perhaps the singularly most important decision our government took to keep Australians safe from the spread of COVID, and that it's a decision that continues to keep us safe. If have a look around the COVID in Australia each day. We tend to record a handful of new cases each day, all of them overwhelmingly in medi hotels in those quarantine facilities. But very much a daily reminder of the fact that without the strong water protections in place, we would see COVID spreading rampant across the community
Steve Price: Here in South Australia, in the South Australian government has done a pretty good job. South Australia's been locked up and locked down a bit, but in general, COVID has not had an impact there. The PM yesterday raised the prospect of allowing international travel, the borders to open, that we might have people coming back into the country. But he wants businesses and business people in particular to be able to travel. And then when they came back, if they travelled while they were vaccinated, they could home. They would actually be able to go into home quarantine rather than the hotel quarantine. Would you be a supporter of that?
Simon Birmingham: I think, being subject to all the caveats the PM also outlined yesterday, he was he was asked at a community forum about circumstances as to how we might reopen. And he talked through how some of that could work but he was also very clear that there was a lot of health advice to still be had and a lot more progress in terms of knowledge about the vaccines and particularly the impact they have on transmission rates that need to be understood. If we find as we keep getting more evidence and knowledge from the scientists and experts that getting a vaccine dramatically reduces the risk of you transmitting it to somebody else, as well as dramatically reducing the risk of getting sick yourself, then we could certainly have a look at forming consensus across the states and territories around how vaccinated people might be able to enjoy a slightly more ability to travel, to look at options for isolation that may better reflect changed risk profiles people who have been vaccinated. But we're not at that stage yet, and there's still quite a bit of analysis to be done, quite a bit of evidence to look at and right now, with all the border protections that have done so much to keep Australia so safe, will be firmly staying in place.
Steve Price: Business people would be, I think, very much in favour of at home quarantine. I'm a friend of mine, has just come back from three months doing business in Japan. He lands in Sydney this morning. He's got to go into two weeks hotel quarantine in Sydney. He doesn't know what hotel he's going to go into. And clearly that takes two more weeks out of out of his business life. If we want this economy to continue, and we've got great figures so far. But if we want to continue this economic growth, we have to reopen at some point, don't we?
Simon Birmingham: Well, we do at some point, absolutely. And it's prudent to be thinking about how that might occur and to be analysing all the different pathways for it to occur. But it's also important to not jump ahead of where we are at in this regard. The fact that we keep recording new cases pretty much each and every day in one or two states of returning Australians in hotel quarantine facilities is a reminder that hotel quarantine is still necessary. And without it, we would we would face COVID outbreaks right across the Australian community as a result of individuals being able to more freely, come back into Australia and engage with other Australians going about their daily lives. But as I said before, if we build up data and understanding of how receiving a vaccine changes the risk profile for an individual and the likelihood of them transmitting COVID to somebody else, if we find that it dramatically reduces that risk of transmission, well then then of course it makes sense to, based on that evidence, reassess how those people in future might be able to move in and out of the country. And if we can get to that stage, that will certainly be very good news for Australian exporters and other businesses reliant on international engagement, as well as, of course, many Australians who have faced heartbreaking circumstances over the last 12 months in relation to sick relatives overseas, deaths overseas and other significant family occasions too.
Steve Price: In a former life you were in charge of tourism. Are you fearful of what might- what has happened to some of our big tour operators? Obviously, with no international tourists, they've had to pivot to try and attract Australians to go and travel and go to tourist spots. They might not have been for a few years. But I imagine things in Far North Queensland aren't particularly healthy. And I even imagine in your own state of South Australia, there are some people doing it tough. How are we going to help them?
Simon Birmingham: Look, it's a mixed bag in the tourism industry, no doubt about it, that those who have product that appeals to the domestic market to Australians holidaying at home are enjoying boom times at present. Some of them have got conditions that have never been as good as Australians do seize the opportunity to holiday across a great country. And equally, others who tend to cater more for international visitors, tend to cater for people who take longer trips and more sort of the more traditional overseas type holiday. They're still struggling. I guess that's one message to Australians thinking about planning a holiday during the course of this year. Don't just make it a short weekend getaway and a drive destination, plan on a proper, decent break, book with tour operators and travel experience providers. And don't just book your own flights and accommodation. Think about the value add you can bring to your holiday that will really help to support businesses. We are supporting people to make those decisions. The policy we announced a month or so ago now around support for the airline sector and driving demand in the airline sector is clearly working. I see on the front page of the Financial Review today, Jane Hrdlicka the Virgin Australia CEO, saying that they have just had two of the biggest sales days in the 20 year history of their company over the past 10 days. And so that certainly shows that Australians are embracing those policies to get them travelling again. And that's great news for our tourism operators and also many, I think, city hotels and so on that are relying more on corporate travellers. We see clearly that come back into the fold too.
Steve Price: And as the ex-South Australian. I can recommend anyone listening to this go for a holiday in Adelaide. You won't regret it, will you, Simon?
Simon Birmingham: Steve, you're going to give me the free kick, indeed. Kangaroo Island is a magnificent spot. But equally, all the different wine districts that SA is known for.
Steve Price: McLaren Vale, Adelaide Hills, Mount Lofty House.
Simon Birmingham: For the thrill seekers you can head across to Port Lincoln and do a bit of diving with the sharks. Or if you're not so keen on the sharks, you can swim with the sea lions.
Steve Price: Well you are in federal parliament. So you are very experienced at diving with sharks, so you probably don't need to go and do that.
Simon Birmingham: I've seen one or two in my time.
Steve Price: Good on you. Thanks for your time.
Simon Birmingham: Thanks so much Steve, my pleasure.