Senator the Hon. Simon Birmingham
Minister for Finance
Leader of the Government in the Senate
Senator for South Australia
Date: Thursday, 29 April 2021
Scott Emerson: Federal budget will be delivered on May the 11th. The treasurer has come out today and said no. Well, tough measures in terms of cutting no cuts this time, but he will be aiming to get the unemployment rate down below pre pandemic levels. And he's also promising lower taxes. Simon Birmingham is the federal finance minister. He's got a big say in what happens in the budget and he joins me now. Minister, thanks for being on 4BC Drive.
Simon Birmingham: Hello, Scott. It's great to be with you again.
Scott Emerson: No austerity measures at all. Tough, no tough measures. All this budget. Why not?
Simon Birmingham: Well, this is an economy that is still in a recovery phase. Yes, our recovery is going remarkably well, better than almost any other developed country around the world. And we are thrilled to see more people in work today than they were back in March of last year. And these are remarkable things. But against a very fragile global landscape, we still see these massive COVID outbreaks in parts of Europe, tragically in India and elsewhere around the world, we've seen are a global uncertainty around the vaccine rollout. And that creates a fragility in terms of just how the recovery is going to be sustained. And in Australia, we don't want to risk that. We want to make sure that we stay on the trajectory of getting people back into work, getting the economy continuing to grow. Because it's only in the end through a strong economy with the greatest number of Australians in work and the fewest number on welfare, that will ultimately be able to get back to a budget balance position again too.
Scott Emerson: No austerity measures in this budget are we saying then that we're saving them up for later budgets?
Simon Birmingham: No, we're not saying that. What we've been very clear about is that the way to bring the budget back to a point of balance in the future is by getting more people in jobs and fewer people on welfare. And that's what we did before the pandemic. In the first six years of our term in government, we created close to one point six million additional jobs across Australia. And what that achieved was the lowest level of welfare dependency in the Australian economy in recent modern times. And so it gave us the greatest number of tax payers and the lowest rate of welfare payments. And from that we're able to have a budget coming into the pandemic that was in balance and it was projected to go into surplus in the forward years and with debt very low by global standards. And we're going to follow the proven formula of before, which is to be careful with spending, but really to focus on how economic growth, jobs growth, it gets us into the most sustainable position to be able to manage the budget while still providing all of the essential services Australians expect and rely upon.
Scott Emerson: All right. So a budget that's focussing on growth and creating jobs. What's your target for jobs by the end of 22?
Simon Birmingham: Well, what we're going to do is in the budget will outline what the projections for the unemployment rate are. To date, those projections have all been well and truly exceeded. We were looking at projections in some cases about unemployment right through the first part of this year in excess of seven per cent. And instead we've got one that is below six per cent. And so we've been able to exceed forecasts to date. And when the budget handed down in less than a couple of weeks’ time will update all of those forecasts and that will be there for all to see. And our challenge will continue to be to grow as many jobs as we can and to exceed those forecasts where possible.
Scott Emerson: But one of the issues that people do talk about at the moment is a lack of wages growth. Even as the unemployment rate does come down, we aren't seeing wages increasing at all. Is that part of also the aim of the government is to try to get a bit more wage growth out in the economy as well?
Simon Birmingham: Look, it is. And if you look at what Treasury and the Reserve Bank have said in their estimates, they undertake some modelling to try to work out at what point of unemployment do you see a pick up in relation to inflation. And that's flowing through in terms of wages growth. And previously they've said that existed somewhere around the five per cent mark. They're now thinking that that is closer to the four and a half to five per cent mark. And so that means that our policy is focussed on job creation, which has got us back to that point of more jobs than we had in March of last year. Need to keep creating those jobs to drive unemployment below its current levels, which are remarkably lower than they were at the time our government was elected but higher than they were prior to going into the pandemic. And so we want to get them even lower and to that point where we see wages growth. But crucially, if you look back to some of the previous recessions, and you got to look back a long way. Australia enjoyed 29 consecutive years without a recession, but previously you saw that it took more than eight years for unemployment rates to recover. On current projections, we're on track to do that in less than two years. And so, again, we've been able to buffer the Australian economy incredibly successfully. And our intention is to is to keep deploying those policies where we can that will get businesses to invest, businesses to grow and businesses to create sustainable jobs for Australians that do help us to fix the budget and provide the type of revenue streams that we need to fund essential services into the future.
Scott Emerson: Now, I'm talking to Simon Birmingham, the Federal Finance Minister. Minister, let me just turn to national security and also our relations with China. Today, we saw what I thought was quite an extraordinary statement by the head of ASIO, Mike Burgess. He said we should be expecting a terrorism attack here in Australia in the next 12 months. How much of a risk is it that we are going to have that terrorism attack in the next year?
Simon Birmingham: It is an ever present risk. And we have been very conscious in the government that though we face different and emerging challenges, the pandemic that we never foresaw of strategic challenges in our region of a more assertive China, some of the other challenges is of extreme religious based terrorism, of extreme ideologically based terrorism. Don't go away just because you've got new pressures. And so continue to invest in agencies like ASIO who have shown enormous capacity to disrupt potential terrorist attacks in the past. And whilst Mike Burgess is acknowledging there is a real threat for the future, I know that he, his team, Australian Federal Police and all of our national security agencies continue to work to share intelligence and to gather information that best enables them to disrupt and prevent any future terrorism attacks as much as possible. And listeners should be reassured that we're dealing with a global pandemic, that we're focussed on economic recovery, and we haven't lost sight of those important other areas of national security too.
Scott Emerson: The minister, says an ever present danger. But Mike Burgess went one step further that he said expect a terrorism attack in the next 12 months.
Simon Birmingham: If you look back at some of the work ASIO has done over recent years, and you can say there's a constant pattern of ASIO identifying likely terrorist attacks and then successfully preventing them through that identification. Now, the old said that they won't be able to always identify every single possible attack. But what we will continue to back them to do is to have the resources they need, the cooperation with other agencies here in Australia and with other intelligence sharing partners around the world to give the best possible chances of identifying what that may be that we've seen elsewhere in the world. Tragically, the rise of so-called lone wolf attackers who operate more in isolation and those types of things, become harder and harder for even the best security and intelligence agencies to identify and prevent
Scott Emerson: Well, Mike Burgess's comments, the head of ASIO, his comments today just followed on hard on the heels of the comments by Mike Pezzullo, the head of the Home Affairs Department, when he talked about the drums of war are beating. When you take into account both those comments, should Australians be feeling worried at the moment?
Simon Birmingham: Australians should know that though they live in uncertain times and they're uncertain on the range of levels that we have canvassed, they're uncertain due to the pandemic. They're uncertain due to the continued presence of extremist ideologies that drive terrorism. They're uncertain, caused by changing geopolitical factors from a more assertive China. All of those things create risks, but the government is aware of those risks. We're not turning away from them. And that our focus is on the safety and security of Australians, both their personal physical safety and their economic safety and security is at the forefront of everything that we do. And in terms of investing in our defence forces, many people probably wonder in some of the years gone by why we were scaling up our defence investment capability with more than 90 billion dollars of new naval shipbuilding capability being established in Australia, not just the capability of the ships and submarines, themselves with the capability to do it and destroy them, to build it in Australia, to build more defence industries in Australia, all of which are so crucial to our long term security prospects.
Scott Emerson: So you support and endorse those comments from Mike Pezzullo, the drums of war are beating?
Simon Birmingham: Well, we live in these risky times, but we also are a government that firmly wants peace. We want cooperation in our region and we want constructive relations with all of our regional partners. And whilst we won't compromise on Australia's values, Australia's sovereignty to achieve economic ends or otherwise, and we will certainly continue to engage constructively as we can with any partner around the world in the interests of all of our peaceful coexistence, because that is the ultimate objective. But we also have to be realistic about the times we live in and in being realistic and be prepared for different eventualities that could occur. And that's what we've done as a government. Worked to be prepared for the worst, but try to achieve the best. And we've achieved that very much through these pandemic times for Australians and we hope to be able to achieve that on some of the other threats we face too.
Scott Emerson: Minister Simon Birmingham, appreciate you being on 4BC Drive this afternoon.
Simon Birmingham: Thanks Scott, my pleasure.