Senator the Hon. Simon Birmingham
Minister for Finance
Leader of the Government in the Senate
Senator for South Australia
Date: Wednesday, 30 March 2022
Dave Marchese: Finance Minister Simon Birmingham is with us. Senator, welcome back to Hack.
Simon Birmingham: Good afternoon. Great to be with you again.
Dave Marchese: There's a lot of stuff in this Budget that sounds really nice immediately, but it doesn't extend very far. Is the Government just trying to buy votes ahead of the election in a few weeks?
Simon Birmingham: No, that's not the case. There's plenty in this Budget that that is about continuing the delivery of our economic plan. And it's a plan that has secured some of the best job and employment outcomes in Australia's recent history. We've got 4 per cent unemployment overall. We've got youth unemployment pushed down below 10 per cent. We inherited at 12.7 per cent. We've come through the COVID shocks, a recession caused by COVID, all of those disruptions, and yet youth unemployment is down significantly. Unemployment overall is headed towards close to 50 year lows and we're building on that plan by supporting digitisation of small businesses across the country, by investing in ways that support skills training by small business, but also the creation of more apprenticeship places, opportunities elsewhere in terms of negotiating more modern and effective training arrangements with states and territories, and billions of dollars of funding to support that. We're investing in manufacturing industries, but they're modern manufacturing. We're supporting innovation in Australia, the commercialisation of innovation through our universities in an ongoing way. And we've got a patent reforms for the clean energy sector...
Dave Marchese: Senator, you've mentioned a lot of things there, obviously, and people looking at the Budget, especially young people, are going to be looking at some of the immediate financial relief that they'll be eligible for. There's a $250 payment for welfare recipients. There's $420 back at tax time for a lot of Australians. But these are one off payments. We've got the cut to the fuel excise that will last six months. What happens in a few months time when wages are still low, the cost of living is still high? What are people going to do then?
Simon Birmingham: So these payments and the cut to the fuel excise are driven and caused by the fact that we're responding to the shocks that have come from Russia's invasion of Ukraine. We want to make sure that Australians can navigate these difficult times just as they manage to navigate difficult times. In COVID-19, where during COVID we used temporary, targeted supports to help business and to help individuals through the shocks that were happening. Now we're dealing with oil price shocks. Those oil price shocks from the invasion of Ukraine aren't expected to be with us forever, but they are hurting right now. And that's why we're lowering the price of fuel by cutting excise by 22 cents.
Dave Marchese: Even without the Ukraine crisis, cost of living was still a huge problem for young Australians. And I mean, it just sounds like you've got here the $420 sounds like a great boost, but a lot of young workers are going to lose a whole lot more next year when the low and middle income tax offset is going to be scrapped. They could be paying $1,000 more in tax. And so is this just smoke and mirrors? Like it looks like people are getting a bit of money now, but in the long run, they're not going to be helped very much at all.
Simon Birmingham: Well, no, the low and middle income tax offset, which people will receive the benefits of in the next financial year when they put in their tax returns and they will get up to $1500 back, but it'll end the financial next financial year. They'll get that money in their pocket then next financial year to support them with the costs. At that time, we extended it as part of COVID recovery measures. It was never intended to be there permanently. It was part of a transition from stage one to stage two of our income tax cut plan. We've introduced stage two and reducing income taxes for Australians and there'll be a further stage three that is implemented in the next Parliament that we've already legislated for. And as long as we're re-elected, young Australians can look forward to a working life where around 90 per cent of them will pay no more than 30 cents in the dollar as their top marginal tax rate. And so that will be a real benefit and it's building on successive income tax cuts that means take home pay is up for many Australians, around one and a half billion dollars a month extra going into the pockets of working Australians as a result of lower income tax.
Dave Marchese: Senator, Scott Morrison said this morning the best way to support people renting is to help them buy a house. It's just not an option for so many young people at the moment. Even with the support measures you've announced, why is housing not more of a priority for the Government?
Simon Birmingham: Well, it is a priority and our policies have helped more young Australians to enter the housing market.
Dave Marchese: But we spoke with some economists yesterday and they said the strategies being put forward by the Government could actually see house prices increase and they’re focussing on people who probably were going to be able to buy a house anyway. Maybe they'll be able to do it sooner now. But we should be focussing more on, you know, much lower income earners.
Simon Birmingham: Well, I don't accept the idea that these are people who would have been able to buy a house anyway. For many people, the difference in being able to scratch together a 5 per cent house deposit versus a 20 per cent house deposit is a world of difference and if they can get the 5 per cent together under our Home Guarantee, then that's going to give them an opportunity to stop paying rent and start paying off their mortgage. It's worked to date in helping many thousands of extra first home owners into the market, but it's not the only thing that we've done in last night's Budget. We committed a further $2 billion towards the National Housing Finance and Investment Corporation. What they do is they work with social housing providers around the country to provide for affordable housing solutions in Australia. So we're pursuing this at both ends of the spectrum there.
Dave Marchese: Someone says no one can buy a house because no one has secure jobs because the Government wants to employ temporary full time servants. That's Shannon from Newey. We've got I mean, the unemployment rate is down. That's great. Underemployment is still a huge issue, though, Senator. It's something that needs to be addressed. We're going to be in debt for a long time. These deficits are going to go on for as far as the eye can see. And it's going to be young people who'll be paying back this in the years ahead. Why is there not more support for young people now to set us up to do that?
Simon Birmingham: Well, you seem to be saying why are there deficits at present and why aren't you spending more money? All in the same question there. What we did in last night's Budget was reduce the level of the deficits significantly…
Dave Marchese: We just want to make sure the money is going to the right place. And we want to make sure that young people are the ones that are being supported, considering they're the ones that are going to have to pay back all this money in the long run.
Simon Birmingham: They are and young Australians are the biggest beneficiaries of what we achieved through COVID-19 in terms of keeping the jobs market strong. From previous recessions what we saw was a tale of six, seven, eight years of really high levels of youth unemployment coming out of those recessions. From this recession, from the COVID-19 recession, we've actually managed to bring youth unemployment down following that recession. So rather than young Australians potentially face years on the dole, unable to get a job, we've actually got a situation where that avenue into the jobs market is more secure, is safer and stronger than it was before. And we've also managed to significantly reduce the projections around future deficits and the debt that was being incurred, because the strength of the Australian economy has meant we've reduced by more than $100 billion the forecast deficits that were expected to happen over the next few years. And so that's a big improvement. What we did last night with the Budget, we seek to get the balance right, reduce the deficits, invest in terms of the continued strength of the economy in those areas of research and commercialisation, the digital economy, manufacturing skills, but also provide some that also to provide some dividends, as we were just talking about, to people who are doing it tough right now.
Dave Marchese: We're going to move on. One of your own colleagues, the Liberal Senator Concetta Fierravanti-Wells, has described Scott Morrison as a bully who has no moral compass, someone who isn't fit to be the Prime Minister. How can Australians trust Scott Morrison as PM if his own colleagues don't?
Simon Birmingham: Well, I think it's sad that Connie, who has had 17 years to serve in the Parliament, thanks to the Liberal Party's endorsement of her, but she lost her pre-selection last weekend. I understand that she's disappointed from losing her pre-selection and having been beaten there by the Foreign Minister, Marise Payne, and distinguished former general Jim Molan. But ultimately these things come to an end and it's unfortunate that she's chosen to lash out rather than to reflect on her contribution and service over the last 17 years.
Dave Marchese: Does it disturb you, though, that she's said that he's a bully and she's been treated in this way?
Simon Birmingham: Well, look, we saw a number of weeks of debate about the culture within the Labor Party and allegations flying between the trade union and Labor members and otherwise. And I didn't really seek to weigh in on those in any heavy handed way. And I think the next election should be determined not on those debates inside the Labor Party or with disgruntled figures inside the Liberal Party. The next election should be determined on job opportunities for Australians who will keep them safer and stronger, who'll keep taxes lower, who will invest more in terms of keeping our nation safe and secure.
Dave Marchese: Senator, though the problem here is that it's not just Senator Fierravanti-Wells. We also had Barnaby Joyce calling Scott Morrison a hypocrite and a liar a year ago. We also had the French President Emmanuel Macron, saying that he was a liar. We also had reports of an unnamed Minister in Government calling him a horrible person and a complete psycho. This is building up to be quite the description of the Prime Minister. You know, people are obviously very concerned about this.
Simon Birmingham: And they've been weeks of coverage following Senator Kimberley Kitching death that that I don't want to trawl through and I'm not going to cite this union source or that Labor source or that figure with their opinions. You know, these sorts of disputes and disagreements happen inside political parties as they happen inside any large organisation. I think that that we are far better off spending our time debating the policies for Australia, the well-being of Australia and the direction of the nation. And that's where my energies will be in the next election.
Dave Marchese: All right, Senator Simon Birmingham, thank you very much for coming on Hack.
Simon Birmingham: My pleasure. Thanks so much.