Topics: MYEFO; JobKeeper; Australia-China trade relations; state borders;
Luke Grant: Now, as we mentioned, the Mid-Year Fiscal and Economic Outlook has been released today. The budget deficit is $16 billion lower than had been forecast just two months ago. It’s reliant on plenty of things like state borders remaining open, a vaccine from March, and the containment of localised outbreaks. On the line is the Finance and Trade Minister Simon Birmingham. Senator Birmingham, great to talk to you. I hope you’re well.
Simon Birmingham: G’day, Luke. It’s great to speak with you again too. Thanks for the opportunity.
Luke Grant: Not at all. And to you. I appreciate your time very much indeed. It’s 10 weeks and down $16 billion. We are talking forecasts here, but it’s changed in a very short period of time. For people who think: oh, well, you know, we can’t rely on these forecasts. What do you say to them, Senator?
Simon Birmingham: Well, it has changed a bit, but people, I think, need to appreciate that we are dealing with, of course, incredibly challenging circumstances. What is pleasing about today’s update is the forecasts have by and large all changed in the right direction. So we’ve seen more Australians get back into work faster than we had anticipated, and that’s evidenced by today’s employment data, with now another 90,000 jobs created over the month of November; 84,000 of those, full-time jobs. And we’ve got around 740,000 jobs that have been created across the country in the last six months. So that getting people back to work is happening faster than we had expected, which is good news. And what that means, of course, is that there is less demand on government payments, more government revenue coming in in terms of what it means for tax forecasts. And so all of that is the type of virtuous cycle that we want to keep continuing into the future by driving that jobs recovery and growth, which is so essential to our success.
Luke Grant: You’ve been very measured. I’ve watched with interest what you’ve had to say about China. But it doesn’t appear like the trade relationship is going to repair itself well with the help of you and others anytime soon. To what extent have you included that in these figures?
Simon Birmingham: Luke, I think you make a reasonable observation there, that a high degree of patience is going to be necessary in relation to the China trade relationship. We will have to maintain a sense of calm as a country in supporting our exporters as they seek to access other markets and pursue other opportunities which we’ve created for them through trade deals with a raft of other nations that we’ve secured. We’ve got to maintain consistency in all of our policies and values. That means being consistent about not selling out Australian values, maintaining our national security settings, but also consistent in the message that we send to China, which is that we value the partnership with them and we want to actually sit down and resolve these issues to enable our exporters and businesses to get back to business. Now in today’s budget update, we indeed have updated various forecasts taken from agriculture and resources departments and agencies that look at some of the decisions China has taken, such as their duties they’re applying to barley and wine, and this is all factored into the improved overall outlook, which reflects the fact that some things are getting a little bit more challenging, such as those issues. But elsewhere, we continue to see strong recovery from the COVID recession, and that’s what we’re very focused on making sure we continue.
Luke Grant: How do you account for all those people that will come off government benefits, those that have had their jobs maintained, or at least have received a payment? Thankfully, I think you’ve done a brilliant job with the Government by not signing Australia up for years and years of extra payments like previous governments have done. This had a start point and will have an end point, which frankly it should. But when that comes along, will there be- is there a concern about what happens to the economy at that point?
Simon Birmingham: If you look back right to the start of when programs like JobKeeper were born, and the Government set out some very clear principles that were going to guide our decision making through this. That support that we had to provide should be temporary, it should be targeted, and it should be proportionate. And we’ve sought to really stick to those principles on the way through, recognising that this was an incredible period of time with great uncertainty as you’ve said, but the temporary nature is important because we know the pandemic will end. This isn’t a shock to the Australian economy because there was anything particularly wrong with the Australian economy. It’s a shock because there was a global pandemic by the name of COVID-19 that’s hit all nations around the world.
So, that’s why we thought support should be temporary, targeted and proportionate, which is where we’ve really sought to, in terms of programs like JobKeeper and the JobSeeker supplement, step them down over a period of time, adjust the rate of that support, adjust the different eligibility criteria, in recognition that you didn’t want to have a significant shock that came when those programs came to an end. And I think, again, what we’ve seen in terms of not only today’s economic update, but also today’s employment data, is that those decisions have been demonstrated so far to be the right ones, that we are seeing that growth in people getting back into jobs, more people coming off of JobKeeper than we had anticipated, which means that the step downs that we had sought to calibrate are working in terms of their calibration of people moving swiftly and quickly as they can off of these programs, and businesses getting back on their feet and graduating from reliance on these programs, which enables us to stay the course in terms of keeping that temporary and targeted nature of the programs.
Luke Grant: We’re speaking to Senator Simon Birmingham, the Australian Finance and Trade Minister. If there is a state border closure, Senator, even if there is for a week or two, do we have the knowledge of what impact that has on the figures? I assume somewhere someone said, you know, if one state or two states close their borders to, for example, New South Wales, that will have some kind of impact. And do you know what that impact is?
Simon Birmingham: So, obviously, there’s a- it depends to that as to which state closes to another state…
Luke Grant: Of course.
Simon Birmingham: … and the scale of impact there. But we do know that there are real impacts. The only week in recent months in which consumer confidence went backwards rather than improved was the week in which South Australia faced its cluster, wherein lockdown there was announced and where states were variously closing their borders to South Australia. And so, that reverberated across the nation with consumer confidence slipping backwards, whereas every other month it has grown and grown and grown to very, very strong levels again now. So, people will understandably look at what’s happening in New South Wales with a degree of concern as to what does this mean. But the message, and I gave it on Perth radio a couple of hours ago, that I would urge people, including the different state premiers, is to recognise that what Gladys Berejiklian and the New South Wales Government have done through the course of this year is world leading in terms of the capacity to be able to identify where different COVID clusters have come from, to get on top of them through world class contact tracing and isolating practices, and to ultimately extinguish those clusters. Tthe New South Wales Government has shown a capacity to do that time and time again. And I encourage the other states to recognise that capacity, to give it time to work, rather than to risk undermining the returning confidence that we’re seeing for Australians to be able to cross state borders again, plan to reunite with loved ones ahead of Christmas, plan work trips and other things that ultimately help to underpin recovery of jobs in some of the areas of the economy that remain relatively more fragile than those that have come back already.
Luke Grant: Simon, time has got us. Thank you so much. You’re very generous with it. Can I wish you and your family all the best for Christmas.
Simon Birmingham: Thank you, Luke. And to all of your listeners, you’ve done an incredible job out there showing great Aussie resilience this year. Let’s keep it going into hopefully a much better 2021.
Luke Grant: Thank you, Senator Simon Birmingham.