Senator the Hon. Simon Birmingham
Minister for Finance
Leader of the Government in the Senate
Senator for South Australia
Date: Wednesday, 12 May 2021
Mike O’Loughlin: Seven billion in structural spending for aged care. We've got Josh Frydenberg’s budget, which delivered the forecast for gross debt to pass one trillion in last October's COVID delayed budget. And he laid out something of a plan to eventually start, I guess, chipping away at the mountain of borrowed money, which was the right thing to do in the short term when COVID-19 hit. But reality says it's going to take decades of growth during uncertain times to repair the economic and budget damage. Five hundred and three billion dollars now in estimated deficits between twenty, twenty and twenty twenty-one and the twenty, twenty-four, twenty-five. So we've got some money to sort of save and pay back. In Tuesday's budget, of course, means an amazing amount of debt, only getting greater. Say good morning to you, the federal Minister for Finance, Simon Birmingham. Good morning.
Simon Birmingham: Hello, Mike. It's good to be with you.
Mike O’Loughlin: Tell you what, that's a lot of money to pay back for, but I suppose the youth will have that to look forward to.
Simon Birmingham: Look, these are very challenging times. COVID-19 has been the biggest hit to the global economy since World War Two. It's been such a disruptive event. And, yes, it has necessitated emergency spending decisions to keep people safe and to keep their jobs safe as well and so we are having to deal with the reality of that. But the good news out of last night's budget is that Australia's economy and our plan is working to an extent that the debt forecasts that were laid out last year are now improving slightly and that we're able to make the types of decisions that we made in last night's budget to fund aged care services and the like, but still seeing net debt lower than was forecast in last year's budget, both in absolute terms and as a share of the Australian economy. And that holds true for the projections right out over the next 10 years.
Mike O’Loughlin: Josh Frydenberg was at pains to point out the deficits are not nearly as bad as was feared last October in the jobs market. Certainly, I mean, that's been outstanding in the way it's come back.
Simon Birmingham: It has. And that has been a fundamental part of what has helped deliver lower deficits than were forecast and will help us in terms of paying for the essential services of the future. So we've now got more Australians in jobs than was the case pre-pandemic and that a pretty remarkable achievement. 12 months ago as the country was slipping into recession, nobody thought we would recover this quickly. Historically, it's taken around eight years for employment to get back, and whilst the unemployment rate is still higher than it was pre-recession and so we do still have a job to do there to get it lower and in fact, in this budget, we're projecting that policies will be able to drive it below five per cent, we do so against a very uncertain global outlook. In Europe, they're facing a double dip recession. So it's not just the health horrors that many of your listeners would have seen occurring in India and the loss of life there. But it's equally the economic horrors that are still occurring in many parts of the world too.
Mike O’Loughlin: To look, the Treasurer points to the unemployment rate will now have to have a four in front of it, I was reading, before wages and inflation will accelerate, but the Reserve Bank Governor, Philip Lowe, last month suggested a sustained unemployment rate, starting with a three was not inconceivable. What is happening with unemployment now, as you've just briefed on, briefly touch on, what are you hoping for?
Simon Birmingham: So we are hoping to see unemployment trend down below four per cent, below five per cent by the end of next year. And that's a very important forecast there. But we should remember, last year, many were forecasting unemployment to be seven and a half per cent or so in around this time, and we've got below six per cent instead. And so Australia's recovery is very, very strong. Tasmania has been a huge part of that. And the policies that we laid out last night are about continuing to drive that unemployment rate lower. So tax support that we'll see 220,000 low and middle income earners across Tasmania enjoy further tax breaks to help the recovery keep going, tax support for investment by Australian businesses to get them to grow faster, to bring forward investment in their productivity that won't just give short term stimulus in terms of the spending, but also will make them more productive for the long term, which is an essential part of our plan to keep jobs growing. But then some really targeted policies where we see opportunities for growth from at one end, the new patent box tax measure that means that new innovations in biotechnology, in medicines and pharmaceuticals in Australia will have a better tax system that encourages them to keep those innovations here to produce and to manufacture them here in the future through, at the other end, to microbreweries and distillery. Again, and many small businesses are often competing against overseas owned global brewers and distillers and the tax breaks we've outlined there, again, about giving Aussie businesses a leg up and a helping hand.
Mike O’Loughlin: Just if I can go more on a Taz related space, if you will, TasCOSC and ACCOSS and there once we've spoken with them on this programme on a number of occasions, and I quote, generating new jobs in the community services industry so that we can properly resource important services like aged care, child care, disability services and mental health. Are you satisfied that this budget's covered off on that?
Simon Birmingham: This budget has a huge skilling agenda that we've put into it, providing big opportunities for Australians to access training and skilling for the future in the aged care sector, for example, whilst we're investing significantly in both the quality and safety of residential aged care and the availability of home care places, there's also funding for more than 33,000 additional training places in aged care, recognising that there's a workforce challenge that has to be met there. We also see the need to keep providing opportunities in areas of apprenticeships and so our apprentice wage subsidy scheme is creating an extra 100,000 apprenticeship places across the country, making sure that we drive forward those opportunities to shift and to get as many Australians into work in those areas of skills need as possible, because that is ultimately how we have a sustainable budget by having fewer people on welfare payments, more people in jobs, paying taxes.
Mike O’Loughlin: What about creating a fairer and safer future for women?
Simon Birmingham: This is a budget that both on economic security and women's safety takes those issues very seriously. So, again, on economic security, we are removing what was a minimum income threshold of four hundred and fifty dollars per month before superannuation payments were made. And by removing that, we provide a significant benefit mainly to Australian women who are missing out on super payments for casual jobs, lower income casual jobs across the country. We're also providing greater access to childcare support for families with more than one child in particular, so we're targeting it there at those where there's a real barrier to making the choice to go back to work if people wish to do so. But then on the safety front, there's also support in terms of payments that are available to help people facing a domestic violence situation to be able to leave home if need be, and to get support to relocate, as well as additional support in terms of access to the legal system and through the family courts in particular. And in Tassie there's some extra support for family court services and access to make sure that the system there works as strongly as possible.
Mike O’Loughlin: Now, I just spoke with Stephen Jones, Shadow Assistant Treasurer. He was concerned that there's no mention of addressing the gender super gap in the budget but you've brushed over that.
Speaker2: Well that's exactly what that elimination of the four hundred and fifty dollar threshold helps to do, because it provides greater support to Australian women who tend to miss out more as a result of that threshold being in place at present. But then at the other end of life as well, the measure we’ve put in place for older Australians to have the choice post the age of 60, to sell the family home, downsize in terms of the size of home they're living in, and bank up to 300,000 dollars of the proceeds from that into superannuation. Once again, we've seen those types of top up measures disproportionately go into women's superannuation accounts at that stage of life. And so we can see that as providing a benefit there, too.
Mike O’Loughlin: But Minister in reality, the budget has failed to provide hope for the thousands of Tasmanians who are languishing on the public housing waiting list and struggling to get by in the Coalition's multi rate of income support. I mean, there really needs to be more assistance here.
Simon Birmingham: Well, the income support, the JobSeeker payment to be increased by 50 dollars as part of the budget measures that are outlined last night. So that's been providing and is providing an additional level of income support for JobSeeker. It’s the biggest increase in JobSeeker payment that has occurred in decades. But we're also, in terms of Tasmania, focussed on Tas-specific measures of how we help Tasmanian businesses grow faster. So further changes to the Tasmanian Freight Equalisation Scheme will mean that Tassi businesses can get the inputs that they need to operate at a cheaper level to them, which makes them more competitive when it comes to producing goods that often go back to the mainland and enable them to create more jobs and opportunities for Tasmanians.
Mike O’Loughlin: It's interesting because we spoke earlier with economist Saul Eslake about the housing situation. He wants to know why is it that the federal government keeps doing things that increase house prices?
Simon Birmingham: Well, I don't accept that. You know what certainly we are doing is providing greater support on the demand side for people to be able to be first home buyers or indeed for single parents to get into the housing market. The measures we put in place include being able to use superannuation accounts as saving vehicles for the future and to be able to store up to 50,000 dollars of savings there towards a home deposit. We're also providing government guarantees to bridge the gap to avoid mortgage insurance for tens of thousands of Australians to be able to get into the housing market with lower deposits than would otherwise be necessary to avoid that mortgage insurance cost. And indeed, that measure I talked about before, that is around senior Australians having the choice of downsizing their home and an incentive for them to do that and put some money away into their superannuation for their retirement is also about freeing up more housing stock for young Australian families for the future.
Mike O’Loughlin: We heard from Deputy Prime Minister Michael McCormack too Minister earlier this week, about 320 mil promised for road and infrastructure spending, our funding here in Tassie. But forward estimates show that less than a third of that is to be spent over the next four years. So, what's the hold-up
Simon Birmingham: Well these new projects? There are existing projects underway in delivery right across the country in terms of infrastructure spend. And obviously when it comes to big projects, road projects and so on, there is planning and approvals at contracting etc stage that means we have to plan well in advance for the delivery of those sorts of projects. But I think the investment in the Bass highway safety, freight efficiency upgrades, the types of other measures there around the Midland Highway upgrades will be welcomed by many Tasmanians. And it’s certainly been strongly advocated for by Gavin Pearce, by Bridget Archer, by the Tasmanian team, just as the improvements in Tasmanian freight equalisation scheme have been passionately argued for by the Tasmanian members of the Government in Canberra.
Mike O’Loughlin: Look, there is so much to talk about. And I guess we have limited time. But Tasmania, an aged care, that's a major problem here, as I know you've been made aware in this budget starts to fix the crisis. Is it all about the home network packages? More than 10 billion over the forward estimates will be in this budget in terms of aged care spending. But how much for Tassie? Because we've had a royal commission, you're probably aware of that, which has indicated that the sector is in dire need of reform and additional funding, do you really think it's enough.
Simon Birmingham: So it's seventeen point seven billion dollars over the forward budget years of additional aged care funding. But it's not just about the dollars, it's about the reforms that those dollars drive as well. And so we will be mandating in terms of aged care facilities that there are minimum levels of care provided, personal care provided to residents. So that's a minimum two hundred minutes per resident per day that must be provided in aged care facilities, 40 minutes of that, at least by a registered nurse. So we're really stepping up the expectations in response to the Royal Commission in that regard. We're doing so whilst significantly increasing the level of scrutiny that's applied, strengthening the regulator, making more transparent the findings of those regulators, and changing the way in which bed places are allocated so that indeed people will have more freedom to choose in future and to access beds in the higher quality facilities where that transparent regulation in reporting shows that, as I think we touched on before, extra training places for the aged care workforce of 33000 and yes, and an additional 80,000 home care places across the country, which is all about making sure that we give people choice in where they go and under our government, the number of home care places, once we've finished implementing this, will have grown by 227 per cent since we came to office. So we really have been creating more and more opportunities for Australians to get that care and support to stay in their home if that's their choice.
Mike O’Loughlin: Now, Josh Frydenberg said the budget minister is, of course, his third as Treasurer and your first, I believe, as Finance Minister, well I assume that international borders would open next year, but remember in October's budget treasury, you assumed that the international border would open this year. And then when you do get to the actual fact of it, do we really want them opened already when we can't get hotel quarantine right?
Simon Birmingham: So we're taking a cautious approach to all of the assumptions that underpin the budget. And the important word there when it comes to international borders is that it's an assumption. It's not yet a decision of government. We have to for budgeting purposes make some sort of assumption in there. But the decision to reopen international borders will be made wholly solely on what will help us to maintain the suppression of COVID across Australia. That health advice is the driving part of our plan there, because ultimately our successful suppression of COVID has kept Australia not only safe in terms of health outcomes, but much stronger economically than we've seen around the rest of the world. And so we will continue to hold a very firm position in relation to international borders. Our government made the decision in February last year to close them to China, to close them then to Italy, to South Korea, to Iran and ultimately to the rest of the world. We've been able to safely reopen with New Zealand, but we will take a careful and cautious approach there. If we can open them sooner, we will. We want to open them as soon as is possible, but certainly no sooner than it's safe to do so.
Mike O’Loughlin: Look, there's a lot more to talk about women's health and more. But when you think of when you look at the budget, I mean all the bells and whistles. I've said this before, cash splash, the carefully targeted areas. To me, this means that and because the federal government has done a good job with COVID and keeping them out and keeping us fairly safe. So it's going to be a federal election. I just want you to tell me, is it August or September?
Simon Birmingham: The election is due next year. Exactly when the prime minister chooses to call it, it is something that is up to the prime minister in that regard? But this budget is the next stage in our recovery plan for the nation as we handle COVID-19. it is framed very much as to how we keep our economy growing, keep Australians safe in their lives and in their jobs, and making sure that we have a strong enough economy to fund things like aged care into the future.
Mike O’Loughlin: Look, it's been a pleasure talking with you, Simon Birmingham, Federal Finance Minister. And I hope you get a chance to pop to Tassie more often and we can you can come in the studio and we'll have a further chat.
Simon Birmingham: I love to do so, Mike. Thanks so much.
Mike O’Loughlin: Good to talk to you. Indeed. If you have a question of anything we spoke about with Simon Birmingham, the Federal Finance Minister, to let us know once hundred to.