Transcripts → 2022

TRANSCRIPT

6PR - Breakfast with Gareth Parker

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

Transcription:
PROOF COPY E & OE

Date: Wednesday, 30 March 2022

Topic(s):
Budget 2022

Gareth Parker: We'd love to hear from you about this federal budget and what it means to you. Are you happy with it? Are you unhappy with it? Are there elements of it that are going to work for you or for your business or for your family? Does the cost of living assistance go far enough? Is it just a naked attempt to buy your vote? 133 882. We know some of the key features; there’s the 22 cent per litre cut for fuel excise for the next six months – that could save you $30 a week if you're filling up two cars each week. There's the $250 cash payment to pensioners, the 6 million recipients of other government assistance. There is also the increase of the low and middle income tax offset from $1080 to $1500. That will happen when you do your tax returns after July 1. Joining me on the line is the Finance Minister, Simon Birmingham. Senator, good morning.

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

Gareth Parker: So that cost of living assistance I just outlined cost $8.6 billion. Is that the price tag your government’s put on winning the election?

Simon Birmingham: No, Gareth, it's the price tag of responding to unforeseen international events. The war in Ukraine that's seen a huge spike in oil prices and that's flowed through in ways that are hurting Australians, and so just as we did with COVID-19, where when we had big disruptions, we responded in temporary and targeted ways through measures such as JobKeeper, we're doing the same here, responding in temporary and targeted ways to these oil price spikes, which we don't expect to be there forever, but which are causing pain right now. And it's not only about helping households, as important as that is, this is also important to maintain consumer confidence and business confidence across the economy. But it will make a meaningful difference to Australians who are busy in terms of going about their lives, their getting to and from work, getting the kids to and from school, all of the other activities and making sure that that people aren't having to pay such elevated petrol prices with a 0.22 cent a litre reduction that will save around 15 bucks every time somebody goes to fill the car up is a meaningful difference together with some additional, carefully targeted payments to those who need the help most.

Gareth Parker: It is temporary and indeed that is the criticism of Anthony Albanese and the Opposition Labour Party. They say that it's basically crafted to get you through to the election and then households are back on their own again. How do you respond to that criticism?

Simon Birmingham: It’s targeted to deal with temporary international factors that we see. As I said before, the oil price spikes that we've been facing aren't expected to be with us forever. So we've made sure this is in place as a measure to respond to those. But we don't want a situation where we undermine the nation's ability to invest in critical infrastructure, in roads or the like in the future. We've been very responsible with the overall shape of the budget in this budget by making sure that of the significant gains we could make from having more Australians in jobs and more taxpayers contributing across the economy and fewer people receiving welfare payments, that we've been able to bank more than $100 billion of savings to have lower deficits than had previously been forecast to be the case. Therefore, lower government debt going forward compared with what had been forecast before. That's about preserving capital for the future. We're continuing to invest in a long term economic plan to keep fuelling this jobs boom that we're seeing in Australia and the strength of the Australian economy. But we know where people are doing it tough and where unforeseen factors come along. Government should respond in a responsible way and that's precisely what we're doing.

Gareth Parker: Petrol prices may prove to be temporarily higher, they may not. That's for the future. But what the Treasury is tipping is that wage growth this year will be 2.75%, but inflation will be 4.25%. That shows that people are going to be poorer at the end of the year than they are now, doesn't it?

Simon Birmingham: That does show the real pressures from some of those global shocks that are hitting the Australian economy.  Now inflation in Australia is running at around half that of the United States or other parts of the world, so we are managing these shocks better than many other nations...

Gareth Parker: But so is wage growth….

Simon Birmingham: …well, that's not so much the case, people are falling even further behind in other parts of the world. Importantly, because we've got such a strong labour market we're seeing wages growth picking up. The estimates of Treasury and experts see wages growth growing to 3 ¼ quarter per cent for the next financial year starting on 1 July this year - that becomes real wages growth ahead of inflation forecasts and that growing further to 3 ½ per cent over the forward years. So by keeping jobs growth strong, by investing in productive infrastructure and in areas of our economy like small business, skilling Australians, digital technologies, we're able to help to drive not only the jobs growth, but achieving 50 year lows in unemployment and also an economy that can fund and support wages growth to overcome these inflationary pressures.

Gareth Parker: So, as you know, wages have hardly budged for years. Would employees be justified in asking their boss for a 4.25 or higher per cent pay rise this year?

Simon Birmingham: Well in each business or environment that's a matter or for the circumstances of those businesses.  We're forecasting and expecting to see, based on the expert evidence, stronger wages growth into the future, wages growth that exceeds inflation. But in each different enterprise and each different circumstance employees will of course negotiate to the terms of those circumstances. And where businesses can afford to do more, we encourage them to do more and want to see that happen across the economy. And the way to do that is to ensure that they’re as strong and as profitable as possible. And that's why this is a budget that particularly backs our manufacturing industries with $1 billion further of investment there; we've seen manufacturing employment tip back up above 1 million Australians under our government and we want to keep that growth in value-adding in the Australian economy going. We want to make sure that our resources sector remains strong and has the opportunities to diversify into new areas of critical minerals and rare earths and so investments in those sectors and in infrastructure up in the Pilbara becomes a crucial part of keeping that wealth generator for Australia strong. The opportunities in cleaner energies which we're supporting through investments in hydrogen, as well as changes to tax arrangements to encourage low emissions technologies to be commercialised in Australia – these are all about setting us up for the long-term future and creating the jobs and economic strength that we've got right now and ensuring it continues into the future.

Gareth Parker: Just want to ask you about infrastructure, because there is about 14% of this infrastructure spend that's happening here in Western Australia. We've got 10% of the population, so it's about a 40% over and above our population share. I've been covering budgets for long enough to know that's usually not the case. There's an argument to say that this Coalition is Mark McGowan's best friend when it comes to funding his Metronet and other road transport project.

Simon Birmingham: Well we certainly are proud of being good friends for Western Australians and you know ours is the Government that has delivered a fairer share of the GST that is seeing WA receive an estimated $5.9 billion of GST payments this year - that's a more than 10% increase - a more than $500 million increase on last year. Yes, the investment in critical infrastructure projects, but it's a recognition that WA is a wealth generator for the country. Your contributions to our economy keep the rest of the country stronger as well and with the growth pressures that come from stronger employment, from stronger business growth, you've got to invest in the infrastructure to support populations and to keep that coming. And so we're very proud to do that in the West, whether it's in terms of supporting transport initiatives like Metronet; whether it's supporting the resources sector and infrastructure to keep it growing and to diversify as I spoke about before; or the investment in defence and shipbuilding capabilities in WA, they’re all critical parts of delivering for Western Australia and keeping not only WA’s economy strong but through that, Australia's economy strong.

Gareth Parker: Just lastly, Simon Birmingham, there is a skills shortage, a labour shortage in this country as we know, that will persist despite immigration coming back and despite the very good efforts that we've already talked about on the programme to boost apprenticeships. Why was no consideration given in this Budget to allowing pensioners and retirees to work a few more extra hours without affecting their pension? There was an opportunity there, I thought, to do something on that, but an opportunity that you chose not to take.

Simon Birmingham: We have made some steps in that direction over recent years, but in truth, they haven't really turned or changed the dial all that much that for pensioners and retirees once they've made the decision to exit the workforce, those sorts of changes haven't been proven to make a tangible difference. Now, of course, we'll always continue to talk and work with seniors and retiree advocates in different ways. It's why in this budget, providing some of that extra support to Australia's pensioners is an important part of the budget, just as we've also provided measures for self-funded retirees to support them in the way they manage their superannuation and retirement savings more effectively.

Gareth Parker: Okay. Thank you for your time.

Simon Birmingham: My pleasure.

[ENDS]