Transcripts → 2022


ABC Radio - RN Breakfast with Patricia Karvelas

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


Date: Monday, 28 March 2022

Budget 2022; Solomon Islands; First home guarantee investment;

Patricia Karvelas: Tomorrow's budget is widely expected to cut fuel excise by between ten and twenty cents a litre to help with sky high petrol prices. A one off $250 cost of living payment is also being tipped while there will be more help for first home buyers and also an $18 billion funding boost for infrastructure projects such as roads and rail. With Labor well ahead in all of the published opinion polls, the budget is taking on even more importance as a launchpad for the Government's re-election chances. The Finance Minister Simon Birmingham joins me right here in our Parliament House studio. Welcome, Minister.

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

Patricia Karvelas: How much will the budget cut fuel excise and for how long?

Simon Birmingham: Well, Patricia, this is a budget that will hand down our long term economic plan for Australia. It will be both responsible and continuing to ensure that our economy recovers from the shocks of COVID-19. That deals with the very uncertain global situation we face in terms of international inflationary pressures and the war that's happening in Europe at present between Russia invading Ukraine. It will respond, of course, to short term pressures such as cost of living. We're very conscious of the pressures that Australian households face-

Patricia Karvelas: So on that question how of how much it will cut the budget, cut fuel excise. The cut has been leaked to The Australian newspaper, which says the reduction will be between ten and twenty cents a litre for six months. Is that what it is?

Simon Birmingham: Well, I'm not going to confirm what's speculation in terms of the budget there.

Patricia Karvelas: I believe that The Australian is quite well sourced there. Is that what you're heading for?

Simon Birmingham: Well, Patricia, that's a very broad range in terms of you saying it's a detailed leak. I'm not going to confirm specific budget measures like that. What I will confirm to Australians and your listeners is that we are very conscious of the short term spikes in the oil price, the inflationary pressures from abroad that are being driven by a range of temporary factors such as the war in Ukraine, such as the global shipping and logistics challenges that we see flowing on from COVID-19. And so we want to make sure that we respond carefully to those issues. Carefully, because it's important that we don't add to those inflationary pressures. But we do recognise that Australians have cost of living pressures in their household budgets. And so what they will see in this budget is something carefully framed to deal with those short term issues, but to keep the momentum going in terms of jobs growth in Australia. In terms of the record apprenticeships, in terms of the growth in first home ownership, all very important elements.

Patricia Karvelas: The price of crude oil could go as high as $180 a barrel. Won't the savings be quickly wiped out? Is there really much in this for motorists?

Simon Birmingham: Well, again, Patricia, you're asking me to debate a budget measure that I'm not about to confirm at this stage because the budget will be handed down tomorrow night. Urge a little bit of patience on some of those things. We've announced some significant things in the lead up to the budget, such as the first home guarantee extension, which is going to provide over 50,000 Australians with the opportunity to get a deposit more easily for a first home.

Patricia Karvelas: Okay let me put the scale to you because clearly the Treasurer made it quite clear that you are going down this road yesterday. It's about the extent that we're not quite sure of. South Australian Senator Rex Patrick spoke to me earlier. He questioned the benefit of any small cut to the fuel excise, urging the Government to at least half the 44 cent tax to give some relief to motorists. I mean if you if it's incremental, will anyone ever notice?

Simon Birmingham: Patricia, Australians I think are always grateful when they see anything that provides them with additional relief and our government sought to make sure over the years that we increase the disposable income of Australian households. It's why people are getting around one and a half billion dollars extra a month in their pockets across the country right now from the lower income taxes that we've put in place. Those income tax cuts, helping people deal with some of these pressures-

Patricia Karvelas: Do you think people will be grateful even if it's worth a cup of coffee and that's it?

Simon Birmingham: Well, Patricia, we'll see what the details are when they're released and we can have those debates then. But these are really important measures to make sure that we respond where we can responsibly to help Australians, but also responsibly in a way that doesn't add to inflationary pressures, doesn't put further pressure on interest rates, which we're seeing coming from around the globe right now. These are some of the most uncertain economic and security times that we've seen for a long, long period. And that is why we've got to handle these things very carefully-.

Patricia Karvelas: Okay, let's talk about what we know. There's also another $18 billion for almost a hundred infrastructure projects, mainly roads and rail. Can you guarantee that this money won't be unfairly funnelled into those battleground marginal seats that you need to win?

Simon Birmingham: Patricia, this money comprises funding for major new intermodal terminals in Victoria, which are part of the inland rail that we've been building over a number of years. Those major new terminals sit squarely in the heart of safe Labor electorates. It includes funding for faster rail services to the Sunshine Coast, which would usually be classified as safer Liberal electorates. It contains funding across a range of different environments around the country to deliver the infrastructure needs our country has. We've got a $120 billion pipeline of infrastructure. And what we've said in place as a government is a process where each budget, we update that pipeline so people can see what's coming, where the future investments will go because none of them get delivered overnight. They all require careful planning with local communities, often work with state governments in terms of the delivery of them. But this is about building the nation's productivity. Today the Prime Minister will be out at Western Sydney Airport, something that had long been talked about and indeed that the Labor leader had long called for and despite his six years as Transport Minister, never did a single thing to deliver. We're now building it, starting construction now on the runway.

Patricia Karvelas: You are the Minister for Finance. Voters will remember the commuter car parks and sports rorts saga that, in fact, you're announcing even more money for commuter carparks today. Why should they have any confidence that these projects have all been properly assessed and the money is being handed out on the basis of merit, given what the Auditor-General has found in the past?

Simon Birmingham: So let me do firstly with additional funding for those car parks which comprise in terms of the additional money in the budget announced today, 0.3% of the infrastructure spend. So it's a very small element of delivering-

Patricia Karvelas: It may be but that doesn't mean it's necessarily fair, Minister.

Simon Birmingham: I'm just pointing out, Patricia, that the scale of investment in terms of projects across every major city of the country, across every state of the country, is about helping people to get to work and to get home faster and safer. Car parks to access public transport services are an important part of that. But so too is it about lifting our productivity as a country. And that's where projects like those I've mentioned the Western Sydney Airport, the inland rail, the intermodal terminals, as well as some of the major projects like the North South Corridor in my city, they will all help to drive productivity by getting freight moved faster and more efficiently across our country.

Patricia Karvelas: Minister, Governments rarely get a bounce from budgets and isn't there a danger that voters will see right through this budget if it's full of what Jim Chalmers yesterday called spac filler announcements, specifically designed to try and, you know, fill in the gaps to try and get you across and win another election?

Simon Birmingham: This budget is the next stage in our long term economic plan, and it builds on a plan that has delivered 1.7 million additional jobs for Australians-

Patricia Karvelas: Sure but when you're announcing some of extra payments 5 minutes before an election.

Simon Birmingham: And Patricia, you and pretty much every other commentator is asking me what's the government going to do about immediate cost of living pressures? So you can't have it both ways and suggest that we should ignore those things because to not ignore them would be apparently politically convenient. What we'll demonstrate in this budget is that we're getting the balance right between those long term factors how to keep apprenticeship and skills growth going, how to make sure small business can continue to invest in key areas of their growth. How to make sure that Australia's economy, which has grown faster back from COVID-19 than any of the major G7 advanced economies of the world, which has created not just 1.7 million more jobs but 1 million more jobs for Australian women driven women's workforce participation to record highs in our country and driven youth unemployment to lows created those record numbers of apprenticeships. These are the things that are making a difference to Australians that demonstrate our plans are working and this Budget will build on those plans.

Patricia Karvelas: There's a story in The Australian today. The Solomons Opposition Leader Matthew Wale says that he warned your Government last year about the security agreement, this security agreement between China and the Solomons. Why didn't that raise a red flag at that time about the prospect of a Chinese military presence in the Pacific?

Simon Birmingham: These are very sensitive matters and we don't go to either intelligence briefings we have or discussions that we have with foreign governments about matters-

Patricia Karvelas: But the high commissioner was warned. Was your government aware of this coming?

Simon Birmingham:  And, Patricia, the discussions we may or may not have with the government of the Solomon Islands or with any other government across the region, are not things that we then go and comment on publicly. We are by far and away the largest development partner and assistance provided to the Solomon Islands.

Patricia Karvelas: You can't confirm whether you were warned that this was coming?

Simon Birmingham: I'm not going to go into discussions we have with foreign governments about different issues in terms of particularly sensitive issues around security, presence or otherwise in our region.

Patricia Karvelas: These are directly on the record, quotes-

Simon Birmingham: By an opposition leader, and I'm not going to respond to those by talking about the discussions we may or may not have with the government of the Solomon Islands. Just like I wouldn't-

Patricia Karvelas: Smoke and mirrors though, if the government was warned. Why didn't you better plan for this? I mean, this is an unprecedented threat to Australia. Why didn't the government invest and plan earlier?

Simon Birmingham: Well, let's look at the facts in relation to the Australia Solomon Islands relationship. We are by far and away the largest development assistance partner with the Solomon Islands. We have extended the bilateral security treaty between Australia and the Solomon Islands at the request of the Solomon Islands government following the diplomatic work that we have there. We were the partner of choice by the Solomon Islands Government when it came to who would help first and foremost in response to their recent security pressures. So our work and our diplomatic efforts there are extensive, they are broadly successful, but we will continue to work with any partners across the region to discourage them from undertaking any actions that could undermine their sovereignty. Australia respects sovereignty of our international partners first and foremost and to discourage from any actions that could undermine the peace or stability of the Pacific region. Where Pacific responses such as what we did in terms of responding to the recent troubles in the Solomon Islands are the best and most effective way for us to achieve that continued peace and stability in the region.

Patricia Karvelas: Let me ask this question. How much more money does there need to be for defence and national security, especially with this new agreement which will see this Chinese naval base in the Solomon Islands?

Simon Birmingham: Well, we have continued to grow investment in defence as is well known publicly. We inherited a defence budget was at its lowest level as a share of the economy since 1938. That's where Labor had cut defence spending too. We've reinvested to re-establish it to some 2% of GDP. We have forward estimates growth of defence in excess of 5% per annum. That's enabling us to expand the size of our defence personnel by some 18,000 over the next decade to invest in a range of new capabilities for our Defence forces as well. And again, the Budget will detail precisely where some of those additional priorities that we see in terms of defence spending need to be to keep Australia secure and to enable us to respond to those threats in our region.

Patricia Karvelas: Before I let you go. The last budget, before the last election, given, you know, delivered in the same sort of time frame before the before an election, was widely credited as kind of saving that election. Do you really think that you can do that a second time round?

Simon Birmingham: Patricia, this is a budget for Australia's future. Now the election will present a choice and will present a choice between a Coalition government with a track record of keeping taxes lower and driving them lower. Of driving jobs growth higher. Of keeping our economy safe and secure through the most troubled of times. And of investing in our national security. That sends-

Patricia Karvelas: Do you accept though that the shine has come off your government? It's not quite Scott Morrison isn't a new Prime Minister like he was last time.

Simon Birmingham: The choice will be a real choice and it's a choice up against Anthony Albanese and the Labor Party who cut defence spending to its lowest level since 1938, who have a poor track record when it comes to jobs growth and to the management of our economy. And so we will happily stand on those competing track records and today highlighting our first home guarantee investment, the fact that we have again achieved growth in areas of first home ownership in Australia, turning around declines that we'd seen during Labor years and achieving positive outcomes.

Patricia Karvelas: On that issue ACOSS says that that it will push up the house prices at a time when interest rates are going up that actually the promise will cause more trouble to the housing market and to affordability.

Simon Birmingham: Well, we reject that. These are measures about supporting particularly young Australians. But indeed last year we targeted single parents, for example, in terms of receipt of the home guarantee because the pensions review we undertook made it very clear that in terms of security in old age and retirement, one of the most the most important factor is home ownership. So home ownership is about setting people up for income security right throughout their life and into their retirement years. And we absolutely make no apologies for investing more in a scheme that is working to get more Australians in as first home owners. And we want to see more of that, which is why we're expanding the scheme.

Patricia Karvelas: We're out of time. Thanks for coming on, Minister.

Simon Birmingham: Thanks, Patricia. My pleasure.