Senator the Hon. Simon Birmingham
Minister for Finance
Leader of the Government in the Senate
Senator for South Australia
Date: Wednesday, 12 May 2021
Peter Stefanovic: It's good to see you. Thanks for joining us, as always. Good to see you in person.
Minister Simon Birmingham: Great to be with you.
Peter Stefanovic: With a lot of spending out there, is this all masking cuts to eventually come?
Minister Simon Birmingham: No, we're delivering on the promises we took to the last election where we said that we would fully fund the NDIS. We said that we would deliver on the recommendations of the Royal Commission into Aged Care. And in this Budget, we are doing that. We're delivering on the plan that we took to the last election, which was to have a stronger economy, create more jobs, to be able to fund essential services. In the interim, of course, we faced a global pandemic and that has certainly hit many things for six. And there's a big economic recovery task to be had. But in this Budget, under this plan, we've been able to fund those essential services while still bringing down projected net debt over the future compared with what it was in last year's Budget.
Peter Stefanovic: So beyond the next election, whenever that is, there will have to be cuts, it will have to be tax rises.
Minister Simon Birmingham: No. What we're doing is very clearly making sure we implement our plan for delivery of those essential services by growing the economy, by creating more jobs. The forecast for 250,000 additional jobs to be created through the policy measures in this Budget, through growing areas like our digital economy, through the pursuit of our advanced manufacturing strategy, through our Ag2030 programme... These are all about creating greater wealth and job opportunities across Australia. And that is what ultimately funds your essential services, and your Budget...
Peter Stefanovic: So just to be clear, you're ruling out tax rises beyond this next election.
Minister Simon Birmingham: Ours is a government of lower taxes. That's why in this Budget, yet again, there are tax breaks for hard-working Australians. That's part of keeping the economy and the economic recovery going. Again, there are incentives for businesses in this Budget to be able to invest. Part of our economic recovery plan, short term incentives that will make business not only more profitable or more better able to be able to employ people in this next couple of years, but also business in a position to be able to be more productive in the long run and to create more jobs over the long run and important niche reforms, such as the establishment of the patent box, key reform in areas of biotechnology, medicines and medical products to be able to bring those not only through the innovation stage in Australia, but to commercialisation so that we can keep more of those production and manufacturing jobs in Australia for the long run.
Peter Stefanovic: Okay, I just want to ask you about the money that's been committed for mRNA. What is that funding?
Minister Simon Birmingham: So we have committed funding to be able to bring mRNA vaccine manufacturing technology to Australia and to establish a vaccine facility in Australia. We haven't detailed how much money is budgeted because there are two very sensitive commercial negotiations that have to be pursued there. The first is with the holders of the vaccine technology companies like Pfizer or Moderna. And the second is then with those you negotiate to establish production facility here. But it is baked into the Budget bottom line. It's part of the contingency reserve in the Budget. We just don't want to publish those figures because obviously we want to negotiate the best possible deal for taxpayers.
Peter Stefanovic: So you've got the state governments of Victoria and New South Wales that are already pushing ahead with that plan. So would this be in partnership with them?
Minister Simon Birmingham: We certainly welcome state partnerships to the table. What we've been doing already and are continuing to do is negotiate with those global pharmaceutical companies to get the technology transferred to Australia. There's no point just saying, 'Here's a bucket of money to have a manufacturing facility in Australia'. You've actually got to go back to first principles here and get those tech companies to bring it to the country in the first place.
Peter Stefanovic: So what would be your hope then if we've got this facility there that would allow us to be able to produce these vaccines and be able to allow us to have these boosters that we're probably going to need every year?
Minister Simon Birmingham: You've touched exactly on the right point there. This is not about the immediate. We've obviously got contracts in place to procure and to deliver the many millions of doses that Australians need in the first wave of the vaccine strategy. But there is an expectation that there may need to be boosters over the long term. There's an expectation that mRNA vaccines may become more commonplace for things beyond COVID, and that's why we want to have that production capability in Australia. This is a new technology. It didn't exist pre-COVID. So, of course, we didn't have that capability here pre-COVID. But we want to make sure we do bring it here for the long run, consistent with the plan we had in last year's Budget for a modern manufacturing strategy and consistent with our intention, in areas like that patent box I talked about before, to leverage Australia's capability as a high tech country able to deliver these medical breakthroughs like we've done with everything from the bionic ear through to wi-fi.
Peter Stefanovic: So when would you like to see that here? What's your idea of when?
Minister Simon Birmingham: We want to make real progress during the life of this year's Budget. So this is about absolutely sealing these deals as quickly as we can and getting the facility established. But it's a long term capability that we're looking at here. This is not some sort of quick fix.
Peter Stefanovic: Migration, it's basically zero until the middle of next year. It's going to have huge ramifications and problems across the board, notably with education- international students as well. Do you think this is going to fuel and feed into the argument that quarantine facilities are going to be needed, extra quarantine facilities are going to be needed, so that we can bring skilled migrants in, so that we can bring international students in as well? Because that's going to service the economy, as you know, in a pretty helpful and big way.
Minister Simon Birmingham: So the Budget has an assumption that says that borders will begin to reopen around the middle of next year. That's an assumption for budgeting purposes. It's not yet a decision of government. We'll make the decision based on health advice. If the health advice is that we can start to do that sooner, we will. Equally, of course, it could be later. We'll just have to make sure that we do it in a way that keeps Australians safe. Because the most important thing for our continued economic strength is the continued suppression of covid-19 in Australia. That is what's enabling us as a country to be able to continue to grow in ways that are unheard of, frankly, across the rest of the world at present. We're the only developed country to have employment levels back up above where they were pre-pandemic. That's a huge accomplishment of Australians, of Australian business and of government policies, state and federal, across the nation that have got us to that point. And we can't jeopardise that. So, yes, we realise and we want to reopen international borders as soon as possible, but we're not going to do it a moment sooner than it is safe to do so. Because otherwise, we're not only jeopardising and threatening the lives of Australians, we're also jeopardising and threatening our economic recovery and the jobs of Australia.
Peter Stefanovic: But like you said, I mean, it could be brought forward or it could be even beyond that. It might not even be throughout the whole of next year.
Minister Simon Birmingham: It's a global pandemic. There are many uncertainties. And that is why the plan in this Budget has been framed very clearly against the global pandemic situation. There's around 40 billion dollars of temporary spending still in this Budget to get us through the pandemic. And so, yes, there are significant measures in aged care and mental health for the future, a part of the delivery of essential services. But the single biggest package, if you like, still sits in that temporary space, just dealing the pandemic.
Peter Stefanovic: Our kids are going to be feeling the brunt here, though. They're going to be paying the price for a while. You've got one hundred- one trillion dollars on the credit card. Is that sustainable?
Minister Simon Birmingham: So all of the outlooks, not just by Treasury but by the Reserve Bank and others are that, yes, it is sustainable. That the key measure there is net debt as a share of the economy. And net debt to the share of the economy comes down relative to what was forecast in last year's Budget. Down in each year, over the next ten years, down in absolute terms, down as a share of the economy as well. So we have been careful in framing this Budget to make sure that we keep it in a position where debt is lower than it was last year under those metrics, because we know we've got to still be responsible-
Peter Stefanovic: And hope that there's no more future shocks.
Minister Simon Birmingham: Well, indeed, we have to. But, you know, the worst thing we could do is jeopardise the recovery and not have jobs for young Australians, not have jobs that can fund those essential services.
Peter Stefanovic: Finance Minister Simon Birmingham. Appreciate your time as always.
Minister Simon Birmingham: My pleasure.
Peter Stefanovic: Talk to you soon.