Topic: Budget 2021-22




Patricia Karvelas: Simon Birmingham is the Finance Minister and my guest face to face. Welcome.


Simon Birmingham: Hello, Patricia. Great to see you.


Patricia Karvelas: Do you expect all Australians to be vaccinated by the end of the year?


Simon Birmingham: Well no, Patricia. The vaccine approvals currently don’t extend, for example, to children. There obviously will be some Australians who, as always, declined to take vaccines. And we will have to see in terms of the vaccine rollout around the take up rates of Australians. I urge all Australians to follow the health advice to get vaccines when they’re eligible to do so. And we have around one hundred and seventy million doses of vaccines that the government has contracted for supply and delivery. And we’re expecting to see a real surge in through the back end of this year. It’s no secret there have been two particular setbacks in the early stages of the vaccine delivery, the first one being the delayed supply of vaccines that were contracted to come from Europe, the second one being, of course, the changed advice in relation to AstraZeneca that sees you limited for eligibility to over 50s. But the strategies are in place there to make sure that vaccines are available in a nationwide programme for all Australians.


Patricia Karvelas: But they’re available. But you can’t guarantee that all Australians will be vaccinated by the end of the year.


Simon Birmingham: I can’t guarantee the behaviour of all Australians or the choices that all Australians will make. The government’s going to-


Patricia Karvelas: Will every adult who wants to be vaccinated be provided with both doses by the end of the year?


Simon Birmingham: We certainly have the supply, the distribution channels and all going to plan. Then obviously we would hope that Australians can exercise that choice and do exercise that choice.


Patricia Karvelas: So that’s what we’re trying to nail down. Will they be able to all adult Australians by the end of the year? Both doses if they want to. Can you guarantee it?


Simon Birmingham: I appreciate you’re looking for an iron clad, rock solid 100 per cent guarantee. What we’ve seen in relation to the vaccine rollout to date, not just in Australia, but internationally, is that there are uncertainties that can occur. So this is a complex process. We are going to do our best to make sure that as we project it is likely in the budget all Australians have the opportunity to be part of a nationwide vaccine rollout by the end of the year. But we have to deal with the uncertainties that are there and be honest about them.


Patricia Karvelas: With respect, why have it in the budget that will happen by the end of the year when you can’t guarantee it will?


Simon Birmingham: Because the budget is framed in a number of ways on assumptions to be able to enable you to make plans around those budget expectations. So we’ve framed what we think are reasonable assumptions about what will be achieved in the budget, but we’re just being realistic and honest with the Australian people as well as elsewhere around the world. You are seeing changes in relation to vaccine availability for children, for example, and no doubt the Therapeutic Goods Administration in Australia will look closely. They probably are already looking closely, I’m sure, at that matter and assessing what will happen there. That may be a subsequent change to the vaccine strategy, of course, there is the likelihood that booster doses will be necessary over the years to come. Again, advice on that to be forthcoming from health experts so that vaccine rollout doesn’t end at some particular magical point in time.


Patricia Karvelas: No, but the two doses. My question was was quite specific about both doses for all adults by the end of the year. And that’s what you’re saying. You can’t guarantee that timeframe. So based on the budget estimates of when people are likely to be vaccinated by why the six month delay to the middle of next year for when your international borders start opening,


Simon Birmingham: That’s about taking a conservative approach around budget estimates. And we want to make sure that the budget is has credibility at all levels. And that’s been acknowledged by the ratings agency and their commentaries around the world about this budget that’s been handed down, that the type of assumptions we’ve used to underpin it in relation to opening up of borders or in relation to iron ore prices are realistic, cautious assumptions put in place. So the budget has genuine integrity.


Patricia Karvelas: So does that mean you think it could happen before the middle of next year? I think,


Simon Birmingham: Again, that’s possible. Patricia-.


Patricia Karvelas: How feasible.


Simon Birmingham: -these are, I’m not going to put odds on it.


Patricia Karvelas: People want to know, business wants to know so they can make plans, people want to know so they can get home.


Simon Birmingham: And I wish I could have predicted the pandemic and how it would behave and every scientific breakthrough that does or doesn’t come along in relation to handling it. But unfortunately, I don’t. You don’t. Nor does anybody else have that perfect benefit to predict the future. What we are doing is planning as carefully and cautiously as we can through this pandemic. And Australians can be grateful. And I thank Australians for their cooperation across the board for just how well we’ve done, not just in keeping Australians safe, but the fact is we’ve got more Australians in jobs today than we had prior to the pandemic. And that’s something that we’ve achieved faster than any other developed nation.


Patricia Karvelas: So you used to have the tourism minister hat on and now you’re very invested in that area. You know it well today, Qantas, has announced that they’re going to cancel most of the international flights scheduled till December. Will they be given another economic package, half price flights? Will the sector be looked after, given the delay there?


Simon Birmingham: We’ve responded at each and every step to circumstances in the pandemic in a way that has kept Australians safe in terms of their lives, but also kept them safe in terms of their job security. And the important thing there is that we will continue to make those assessments as we move through the pandemic. We haven’t been shy about making decisions to protect Australia-


Patricia Karvelas: The decision hasn’t been made as we’re doing this interview. I know that unless there’s a secret decision I don’t know about, but now that we have this information that Qantas has made this decision because of a government decision. Do you expect that they will need more support?


Simon Birmingham: We’ll look at all of the evidence that’s there-


Patricia Karvelas: Is their evidence because that that there is a case?


Simon Birmingham: We’re getting huge uptake in relation to growing domestic travel. At present, more than 650000 of these subsidised tickets have been sold and are providing a boost right across different parts of Australia right now. Many tourism operators are actually reporting the fact that their bookings are looking stronger than they’ve ever looked before. Now some are doing it tough as well. So there’s a movement in relation to what’s happening in the tourism industry. And so we’re going to look carefully at all of the analysis going forward. And we’ll do that in relation to airlines too.


Patricia Karvelas: Those half price tickets that you mentioned. Is that a scheme that you will look at extending given this decision?


Simon Birmingham: I think we’ll have to look cautiously in that regard. Let’s be very mindful of the fact that Australians alone are now freely booking and travelling across Australia with a fairly high degree, it seems, of confidence in making those bookings. So these incentives have had the effect we wanted, which was to lift the confidence to book, which had been so shattered by different state border closure decisions and so on, that if we’ve got that confidence back then, Australians, we would hope and trust will continue to book and holiday across Australia and support our tourism industry.


Patricia Karvelas: So on the current projections, the current numbers, you don’t see a case


Simon Birmingham: As I said, we will look at the evidence as it unfolds throughout the course-


Patricia Karvelas: The evidence as it stands today. Right now.


Simon Birmingham: At present, I see evidence of a program that has worked for its intent, which was to provide support to the tourism industry across the country, but also to restore confidence in relation to domestic travel. And it appears to be doing both those things.


Patricia Karvelas: Ok, so have you had a conversation today? Has anyone senior in the government had a conversation with Alan Joyce?


Simon Birmingham: I haven’t had a conversation today with Alan Joyce. Alan talks to senior members of the government with a degree of frequency, and I’m sure he will do so when it’s appropriate, when he needs to talk through any of Qantas’s different decisions. We did earlier this year, as you acknowledge, put in place a support package for Qantas in particular to deal with the international workforce. That was with some commitments from Qantas in relation to the maintenance of staff. All along we’ve said we want to make sure that Australia maintains an international carrier into the future, and that will obviously continue to be a key principle for us.


Patricia Karvelas: It seems to me and I watch these things very closely, we’ve spoken many times that there has been a shift from the government in relation to borders and the speed at which we want to reopen. Why has there been that shift?


Simon Birmingham: I don’t think there’s been any shift-


Patricia Karvelas: When you were talking about wanting to reopen and now it seems that there is a delay.


Simon Birmingham: Let me be clear. We want to reopen as fast as we can, but no faster than it is safe to do so.


Patricia Karvelas: So if I get everyone vaccinated, why not? Why can’t we reopen at the start of next year?


Simon Birmingham: Because the vaccination in and of itself may not be the sole silver bullet. There’s a lot of other evidence to come in around how it is that the vaccine protects against other variants-


Patricia Karvelas: Have you made a determination then?


Simon Birmingham: On health advice on how on the best health advice we have at the time. Way back in February last year we used the best health advice at the time and our judgement to close Australia’s borders to China, then we did so in relation to Italy, in relation to South Korea, in relation to Iran and ultimately in relation to the rest of the world. Now, we will take the same type of cautious approach in relation to reopening of the borders, because essentially the most important COVID assumption in the budget is that we continue to successfully suppress COVID-19. That’s what’s enabling Australia’s economy to be back operating at such a strong speed, at such a strong level of recovery and to have guaranteed so many jobs of Australians. And that is why we need to maintain those important protections around our international borders for as long as is necessary there to save lives, but also to save businesses and jobs.


Patricia Karvelas: How many years do you think we’ll need to quarantine people?


Simon Birmingham: Patricia, I don’t know in that regard. That depends, again, potentially on the nature of what the vaccines provide, enduring protection for the scale of that-


Patricia Karvelas: What’s the advice that you have?


Simon Birmingham: We don’t have all-


Patricia Karvelas: Victorian documents which called for this new quarantine facility, which you’re considering, say, two to three years. Is that what the government’s considering?


Simon Birmingham: There are a range of possibilities, depending on the different variants and mutations that occur.


Patricia Karvelas: But realistically, we might be quarantining people for up to the next three years. Right.


Simon Birmingham:  It’s possible, but it also may not be likely. And so I don’t want to raise that sort of sense that there is going to be some ongoing enduring notion or requirement in relation to quarantine. And, yes, we might need facilities for a while, but equally, we may find that there is sufficient medical evidence to give us confidence to be able to reopen. What Australians should know is we will do as we’ve done all along, which is follow the medical advice. And in following the medical advice and acting on it, we’re going to keep them safe. And by keeping them safe, we’re keeping their jobs safe. And in this budget, we’re going further in terms of keeping their jobs safe to look to how we grow a further 250,000 jobs for the future.


Patricia Karvelas: The Prime Minister’s been quite positive about this Victorian quarantine facility. What sort of time frame are we talking about for that to get approval?


Simon Birmingham: We’ve only recently received the proposal from Victoria. We acknowledge that it’s a more detailed proposal than any other ideas that people have come up with. And so we’ve committed firmly to work our way through that proposal and work with the Victorian government.


Patricia Karvelas: Can you give me some indication? Because obviously to get the construction underway, you need to have quite a tight deadline for making a decision.


Simon Birmingham: Look, we’ll make the decision in a timely way. But these things we’ve got to work through all the relevant issues with the state government. We have a quarantine system that is highly effective across Australia at present.


Patricia Karvelas: Let’s not have that debate. Let’s park it because some people are uncomfortable with it. But I want to know-


Simon Birmingham: Sorry, but the facts do speak for themselves.


Patricia Karvelas: But when there’s a leakage it causes maximum disruption.


Simon Birmingham: Certainly and can you guarantee me that some other facility wouldn’t have any leakage?


Patricia Karvelas: Well, the Howard Springs facility hasn’t right at this stage. So if such a facility was built, it seems the best practice-


Simon Birmingham: Challenge in relation to any international arrivals is ultimately that you have human interactions that occur. And from human interactions, you can end up with transmission by human error or by other factors that occur. So let’s not pretend that there is an absolutely bullet-proof scenario short of having nobody arrive in the country. And I don’t hear anybody-


Patricia Karvelas: Okay. Do you urge other state governments to do as Victoria has done and put forward a comprehensive proposal like this?


Simon Birmingham: I think that is a matter for state governments.


Patricia Karvelas: Would you like to see them do it?


Simon Birmingham: No, that’s a matter for state governments in their judgement. We’ve indicated how we are responding constructively to the Victorian proposal. That’s what we’re doing sensibly. But, you know, we’ve got a lot on as a government at present. Haven’t had a lot of budget questions in this interview.


Patricia Karvelas: Projections around the pandemic and the rollout of the vaccine it’s all linked isn’t it, to the economy?


Simon Birmingham: And how about talking about investments in relation to jobs growth, investments in relation to the type of tax and stimulatory measures? How about our investments in relation to aged care, to mental health, the funding of the National Disability Insurance Scheme? There are a lot of things in this budget that we have done both to keep Australians safe in relation to the pandemic, but also to deliver them for with increased job prospects in the long run, as well as the essential services they rely on.


Patricia Karvelas: We have been covering all of those measures extensively today. Are you worried by the CBA’s prediction that Australia could lose its triple-A credit rating because of persistent budget deficits?


Simon Birmingham: Well, I’m very pleased to have seen the feedback today from international ratings agencies that have been very positive about this budget. That acknowledged the fact that the forward projections in relation to net debt in this budget are lower over the next 10 years than they were in last year’s budget. They’ve acknowledged the fact that the assumptions underpinning this year’s budget are cautious and careful assumptions, and that gives me great confidence in relation to the way they will continue to assess Australia.


Patricia Karvelas: Would you describe this budget as labor light?


Simon Birmingham: This is a budget that’s built still on the premise of keeping taxes as low as possible. It’s a budget where we continue to deliver on our income tax reform plans that see the vast majority of Australians over time move to a top tax bracket of 30 cents in the dollar. It’s a budget that extends tax cuts for low and middle income Australians. That creates tax incentives for businesses to invest more across the country. These are very Liberal National Party measures to make sure we get the economy going even stronger and create more jobs.


Patricia Karvelas: But some ideology has certainly been suspended. Are we still in an ideology suspended phase, as John Howard recommended?


Simon Birmingham: We’re still facing a pandemic. And indeed, for those words that the treasurer has quoted of John Howard’s that in times of crisis, you shouldn’t be driven by ideology.


Patricia Karvelas: When does ideology come back to the decision?


Simon Birmingham: This remains globally a time of crisis, you need only look not only at the health outcomes in countries like India, but take a look at the economic circumstances in places like Europe facing a double dip recession. And so we’re dealing with great global uncertainty. Australia is managing to buck the trend globally in a health sense and economically, and this budget is investing carefully to make sure we maintain those outcomes for Australians.


Patricia Karvelas: It must be hard. Final question to you. As the Finance Minister, finance ministers like to keep a budget tight to see deficits projected for so long. Does that keep you up at night?


Simon Birmingham: I would certainly wish we weren’t in this situation. But the global COVID crisis has been the biggest shock to international economies since World War Two. And so we are having to respond in ways not seen for generations. And we have responded in those ways. Economies right across the world are dealing with much larger debt situations than they had before, but they’re also dealing with much larger debt situations than Australia has. We came into this crisis. With debt that was much lower relative to other economies, and we are going to come out of it with debt that is much lower relative to other economies as well. And the careful management we’ve had to date has given us a dividend there that’s enabled us to fund essential services in this budget. Yes, but to do so with those debt projections for the future still lower than they were when last year’s pandemic budget was handed down.


Patricia Karvelas: Minister, thanks for coming in.


Simon Birmingham: Thanks, Patricia.