Senator the Hon. Simon Birmingham
Minister for Finance
Leader of the Government in the Senate
Senator for South Australia
Date: Sunday, 16 May 2021
Kieran Gilbert: Finance Minister Simon Birmingham joins us live. Minister, thanks so much for your time. Let's start with aged care. Is this going to be enough? Seventeen point seven billion dollars or is there more to come?
Simon Birmingham: Kieran, it is a once in a generation investment in the aged care sector and most importantly, it's not just about the dollars. It is also about the reforms and how you use the dollars and what you do with them matters most. And so we've given a very comprehensive response to the aged care royal commission. In doing that, we've identified, yes, areas of investment, but also reforms, reforms to guarantee minimum care times. Two hundred minutes per resident per day, at least 40 minutes of that with a registered nurse. We're guaranteeing other reforms as well in relation to the way in which, for example, bed places are allocated so that you can actually change and grow accommodation in the highest quality providers. And we know and consumers will know they're the highest quality providers because of the reforms around transparency, around regulation and auditing around safety. And so this is a very comprehensive set of policies-
Kieran Gilbert: But most economists say it needs to be 10 billion a year and this is 17.7 across four years. It's nowhere near enough.
Simon Birmingham: This is $17.7 billion across four years on top of already very existing, very significant existing levels of investment. Quite notably there you've got the fact that we have already added huge numbers of extra home care places in recent years. In fact, by the time we've added the additional 80,000 places over the next two years in the home care sector, home care places under the coalition will have grown by 227 percent since we were elected. Mammoth growth in that sense. But it is also, Kieran, I think a significant study in contrasts. You've got Labor once again, so I saw in the preview, wanting to talk about whether there should be additional policy or settings in aged care. But they're not actually announcing any. There is no detail-
Kieran Gilbert: But it's not just Labor. The royal commission says it needs to be about ten billion dollars a year. I know you can undertake good reform, but dollars also count at the end of the day. And this is this is nowhere near what most experts in the field are saying needs to be spent.
Simon Birmingham: The royal commission didn't put that sort of figure in relation to it, it identified a range of actions and the government has responded to those actions. It made recommendations in areas such as a ten dollar per resident per day, increasing in contribution from government. Government is taking that step to address sustainability and other quality issues whilst then making other funding decisions to drive those other reforms.
Kieran Gilbert: So there's really it's not just a down payment with more to come. Is that is that basically what you say? This is it.
Simon Birmingham: This is a comprehensive set of reforms and investments in the aged care sector. We stand by this as being a very considered and complete response to the royal commission. There are further, further elements of building upon it that are part of responding to those recommendations. For example, the royal commission recommended that there be a new model of home care delivery implemented from 2023. We've agreed to do that and we'll go through the process between now and then in building up that new model so that further reforms have come as part of implementing the royal commission recommendations, but Kieran we're the ones getting on and doing it. Last election, there was not a single additional dollar committed by the Labor Party for aged care, not a single new policy that was going to make any difference. And still we see simply all talk but no action from Labor when it comes to aged care, we're delivering.
Kieran Gilbert: What about what about the wages front? Should this be a bigger priority for the government? Because you've had flat wages for eight years and now we're going to see declining wages in real terms. Is that good enough after so long in office?
Simon Birmingham: Well, Kieran, we have seen some odd movements in relation to inflation coming out of the COVID-19 induced recession, we saw a very unusual period of negative inflation, which is causing a short spike initially before we return to more normalised trends overall, we're looking at we're looking at a very, very flat period for low inflation, low interest rate levels. And so it's unsurprising that wages growth in that environment remains relatively flat. But again, and we've looked carefully at situation around wages growth. We've got the analysis in from the Reserve Bank and from the federal Treasury. And that analysis shows that the effective level of full employment that we should be striving towards is closer to where to the sub five per cent level of unemployment. And that's why this budget is all about framing the economic growth to get us into that territory, driving unemployment below five per cent-
Kieran Gilbert: Is that? Is that a strategy to boost wages? Is that the strategy to boost wages or should the government be doing more to boost productivity and lift wages? Because, as I say, they've been flat for the best part of a decade.
Simon Birmingham: The best strategy to boost wages is to get as many Australians into jobs as possible and to create that tension in the labour market that drives potential wages growth into the future. And so that is exactly the strategy that we are pursuing and driving that employment growth up, unemployment down below five per cent. We already have a record number of Australians in jobs, but we know that there's room in the labour market for more. And under this budget, you can see the settings creating a further 250,000 jobs and doing so by implementing our economic plans, a plan for the digital economy, a plan in relation to manufacturing with a manufacturing strategy, a plan in relation to the agricultural sector with our-
Kieran Gilbert: Was it always your plan to spend to have a high spending budget. Was that always part of the plan as well? Or at any time in the cycle, were you actually thinking about reining in spending?
Simon Birmingham: Well, this is a budget that that achieves lower debt levels in each of the next 10 years than had been forecast in last year's budget. So we have managed to bring this budget down, cheeping forecast debt under control. You were just spending much of the first part of the interview asking me whether we're spending insufficient amounts in areas. In the end, we've framed this budget carefully and we've framed it to make sure that we keep taxes low, a very-
Kieran Gilbert: But did you considered reining in spending at some point during the deliberations. Was it always the plan to have a high spending budget?
Simon Birmingham: We considered each of the spending proposals very carefully throughout the budget cycle, and we weighed in-.
Kieran Gilbert: In broad terms?
Simon Birmingham: -we weighed just what the nation could afford. We always intended to deliver on our promises, a promise to implement recommendations and respond to the recommendations of the aged care royal commission. Our promise to fully fund the National Disability Insurance Scheme and the prime minister's promise to take action in relation to suicide prevention-
Kieran Gilbert: It sounds like you're reigning in spending, though, and not having a high spending budget. Was that on the table at one point?
Simon Birmingham: Kieran, every budget, you consider how you make sure you address the pressures and priorities you've got in the most responsible way possible. That's what we did. But it was always on the agenda to have to address and to respond to some of those critical areas of promises that we had made around aged care, disability services, suicide prevention and the like. These were crucial commitments that we have made to the electorate right back at the last election, we said, and that we would fully fund the NDIS. We said that we would respond comprehensively to the aged care royal commission. We said we'd take action on suicide prevention. All of those promises are delivered upon in this budget, notwithstanding the fact that it's a budget framed in the most uncertain of times due to the COVID-19 pandemic.
Kieran Gilbert: On the India repatriation flight. Anthony Albanese says the fact that some Australians have contracted COVID as a direct result of not being brought home to safety is a result of the federal government's complacency. What do you say to that accusation?
Simon Birmingham: I reject that. Border protections and keeping our borders closed to international arrivals and then handling them very carefully on a case by case basis has been an essential component of keeping COVID-19 out of Australia and therefore keeping not only Australian lives safe, but Australian jobs safe. We wouldn't have a record number of Australians in jobs today if COVID-19 had-
Kieran Gilbert: Except those Australians in India.
Simon Birmingham: Kieran, we wouldn't- I'm just making the point here. We wouldn't be in the condition we are as a country if we hadn't taken firm approaches in relation to border control. And they remain a very important ongoing factor in how we don't just save Australian lives, but also how we save Australian jobs and businesses and secure our economic future. Now, throughout the pandemic, we've managed to facilitate the return home of many hundreds of thousands of Australians, including more than 20 thousand coming back from India during the course of the pandemic. And yes we see deeply challenging and troubling times in India right now and we are working to make sure that we can continue the repatriation of Australians from India, but we're doing so in a way that doesn't jeopardise the health outcomes and the economic outcomes that Australia has enjoyed throughout this pandemic.
Kieran Gilbert: Just before you go, we've got a worrying situation, almost a risk of a full scale war now in Gaza. How worried are you about that spiralling crisis?
Simon Birmingham: They are deeply troubling scenes that we can see coming out of Gaza, and of course, we have deep concern for the potential loss of life, the ongoing instability that is caused. We continue to urge all parties to desist from actions that can elevate the risk of ongoing violence and tension. To return to a position where they are able to discuss and negotiate. We fully respect and understand Israel's right to protect itself and its citizens. But equally, we would urge the parties to find a means to move back to discussions and dialogue, ultimately working towards the two state solution. But this is a problem, as you will appreciate, that has troubled Middle Eastern politics for many, many years.
Kieran Gilbert: Simon Birmingham, thank you, appreciate it.