Transcripts → 2022


6PR - Breakfast with Gareth Parker

Senator the Hon. Simon Birmingham
Minister for Finance
Leader of the Government in the Senate
Senator for South Australia


Date: Tuesday, 15 March 2022

Henderson dry-dock; Cost of living;

Gareth Parker:  Joining me on the line is the Federal Finance Minister Simon Birmingham. Minister, good morning.

Simon Birmingham: Good morning, Gareth. Great to be with you.

Gareth Parker: The timing is surely not coincidental of the announcement?

Simon Birmingham: Well, this is a piece of critical infrastructure that has been under consideration and the decisions around it under development for quite some time now. Melissa Price from WA, the Defence Industry Minister working very carefully through the options and what the Prime Minister will be announcing today is that we have made the decisions after the analysis of what type of option around a dry-dock to pursue, that we're going to proceed with one built by Australian Naval Infrastructure, a government owned entity, so that we have a sovereign capability establishing this critical piece of new naval and commercial shipping infrastructure at Henderson there in the West. It's going to make sure that we have critical capability for our navy in the future. It will maintain sovereignty and provide flexibility. And of course, it's a $4.3 billion estimated investment in WA that will support many jobs during construction and thousands more in terms of supporting the shipbuilding and naval infrastructure activities in the West for decades to come.

Gareth Parker: What does the dry dock actually do? I mean, what works can be done once this facility is constructed?

Simon Birmingham: So this sort of facility will provide for ship lift type capacities. Now there's some further planning around this to decide whether it's what's called a graving dock process, ship lift, floating dock, slipway type needs and all of those detailed designs. Now that we've made the decision around who will build it and the investment profiling around it will all be settled in this next stage of planning so that we can proceed then to construction, which we anticipate will commence around 2023-2024 with operating capability for the facility by 2028 and final capacity fully operational by 2030. So it's a very big piece of infrastructure. It's one that we've been in discussions with the West Australian government about for a considerable period of time. As we've gone through these early stages of analysis,

Gareth Parker: Is the WA government putting in any money as well?

Simon Birmingham: So, we'll work through all the final components around what could be associated infrastructure, but Australian Naval Infrastructure is a Commonwealth owned, a federal government owned entity, so it will be the prime investment partner. There's almost $30 billion worth of shipbuilding projects that are planned in Western Australia out to 2040. And so the ability to have vessels built on this new dry dock is enormous. And we hope with this sort of investment, not only will it provide certainty for Navy and our defence forces, but it will also, as the WA government has made clear in our discussions with them, provide a stronger platform for the many private sector commercial shipbuilding and sustainment operators at Henderson to grow and to secure even more work into the future.

Gareth Parker: Right. Which was going to be my question is this purely for naval use or for commercial private shipbuilding as well, of which there is so much down there? And I think that answers the question.

Simon Birmingham: That's right. So this is about providing a capability that will service both defence and commercial operations. So it is really about growing all parts of the shipbuilding sector and ship sustainment and support sector and industry there at Henderson. We know it supports many, many jobs already many businesses that have grown considerably, and we want to make sure that that growth profile is there for the future, but also as our Navy has expanding needs as we continue to invest considerably in building new ships, new submarines and growing the workforce of our Defence Force, that there needs are met for the future too.

Gareth Parker: Simon Birmingham, the Federal Finance Minister, is my guest. Minister there is mounting pressure to do something about the cost of living, particularly the cost of petrol, given the enormous increases we've seen at the bowser. Are you prepared to consider changes to excise on at least a temporary basis?

Simon Birmingham: Gareth, we have federal budget handed down two weeks today, and the Prime Minister, the Treasurer, myself and other key ministers are certainly working through all of the different and complex issues we face in this federal budget. It's very uncertain global environment with the war happening in Europe between Russia and Ukraine and the impacts that's having in terms of oil prices globally, which is of course, the cause of this pressure in petrol prices in Australia. We can see globally pressures around inflation and the continued challenges in COVID recovery. And so we have to weigh a whole lot of delicate-

Gareth Parker: We understand all of that. But I mean, petrol sort of touches every part of the economy. It's every motorist, every good and service, you know, that needs to be moved around. It's sort of a, it's a growth tax on everything. Is there something that you can do, at least in the short term, to lessen that impact as you're trying to battle inflation that seems to be coming out of the bottle?

Simon Birmingham: Well, what I would reassure listeners because I can't entertain specific budget proposals and we have to frame the budget, make the decisions, and it's announced in the budget in two weeks’ time. But I'd reassure listeners we're very conscious of cost of living pressures, of making sure it's a budget that also doesn't provide any extra pressure for increases in interest rates or other things that would flow through into Australian households. As a Liberal government, we have sought to push down taxes in recent years, and households are getting around $1.5 billion extra per month across the country. That translates, for example, for somebody earning about $90,000 to around $50 a week extra flowing into their pocket. The result of our income tax cut market reforms have pushed through in terms of electricity prices have seen those dropped by about eight per cent over the last two years. So we will make sure we do the same type of hard yards in looking at disposable incomes. Cost of living pressures, but also how we keep our economic strength going. And we've got 1.7 million more jobs across Australia than we had when we were elected. And we don't want to do anything to jeopardise that sort of economic growth either.

Gareth Parker: All right. Simon Birmingham, thank you for your time.

Simon Birmingham: Thanks, Gareth. My pleasure.