David Speers: Simon Birmingham, welcome to the program.
Simon Birmingham: Hello, David, good to be with you.
David Speers: So why did the Liberals lose so badly after just one term in office?
Simon Birmingham: David I think there’s always when an election is lost, there are a number of factors at play. I think that history will judge Steven Marshall’s government for its policy achievements and its management more kindly than the electorate did yesterday. The economic confidence he delivered to South Australia, the ongoing growth in what will be higher paying more highly skilled jobs in South Australia for many years to come. The transformation of schooling in SA, the investment in hospitals. These will all be positives which he will be marked up for. But clearly today is a deeply disappointing day for the Liberal family in SA to have that result. The campaign was one in which we saw the Labor Party run a very targeted, very singularly focussed campaign around hospitals and ambulances. Now I think there were many misleading aspects to that campaign and even the Electoral Commission found so in the last day or so. But that again is a reminder to all of us that we can’t underscore the potential for Labor to run these types of scare campaigns, just like they did with Mediscare against us back in 2016, and particularly when they can roll out the public sector unions to devastating effect.
David Speers: So is that your take on this election result? The electorate was tricked?
Simon Birmingham: No, not entirely, David.
David Speers: So why did the Liberals lose?
Simon Birmingham: I think. I do think that that Labour’s campaign was effective. But I also think, as the Electoral Commission found, that it was based on misleading statements and that of course is something that does mean that some voters potentially were tricked. But equally I think COVID did play a very difficult role for Steven Marshall. When he opened the borders from South Australia to the rest of the country on November 23, it was November 24, the very day after that Omicron was first reported to the World Health Organisation as a variant of concern. You couldn’t have had perhaps more unlucky timing than Steven Marshall faced in that regard, and that the carefully calibrated plans he had for reopening were clearly blown out of the water at that time and that did create then real challenges for the government through the run up and the lead up to the election, and of course, in terms of what the narrative of their campaign was.
David Speers: Okay. But you’re saying bad luck, the electorate was tricked. It doesn’t sound like there’s any reflection on or acceptance that the Liberals did anything wrong.
Simon Birmingham: As I say, David, I think they were a very good government in many ways and that this was a very short run campaign. Peter Malinauskas and the Labor Party and I congratulate Peter and will work with him as closely as I can for the good of South Australia. But, I think they really launched their campaign in a short, targeted, focussed way. You’ve already had Mark Kenny on your program acknowledge that it was a singularly focussed campaign by them, and it was for any South Australian living here. You’d be hard pressed to identify one other issue outside of health and ambulance ramping that they really campaigned on.
David Speers: Okay, but you’re not accepting any mistakes, fault, problem or blame on the Liberal side?
Simon Birmingham: David, no government is perfect. And so there will be lessons from the campaign.
David Speers: That’s what I’m getting to. What are those? What’s the lesson, and what’s the lesson for you with an election just around the corner federally?
Simon Birmingham: I think part of the lessons are in terms of campaign strategy, tactics and understanding where Labor will come from, the lessons in terms of ensuring that we define the questions for voters going into the campaign and in the federal election, we are facing some of the most uncertain global times that we’ve seen for a long period, with the ongoing aftershocks of COVID 19, the impacts of a more inflationary environment around the world, and, of course, the tragedy of war in Europe. And these global uncertainties mean that careful economic management, strong management of our national security practises are the types of things upon which we need to ensure Australians are focussed when it comes to voting at the Federal election.
David Speers: Okay, but are you more nervous after last night’s result?
Simon Birmingham: Our election was always going to be a challenging one and I don’t think we’ve ever underestimated the challenges that lie ahead. But we also remain very determined to make sure Australians understand the choice ahead of them. And that choice is between a strength of leadership and a strength of economic management. Our governments delivered with 1.7 million more jobs created, and Anthony Albanese in a Labor Party, and in Anthony Albanese, a leader who’s never seen a higher tax that he hasn’t supported at some stage, and whose credentials in terms of economic management or national security are completely untested.
David Speers: Let’s talk about economic management. You’ve got the Budget coming up a week from Tuesday. Cost of living is a big concern for many Australian families right now. Who should be expecting some relief and what should they expect?
Simon Birmingham: David, it’s not going to surprise you that I won’t reveal specific Budget items here, but Australians should be reassured that we are very cognisant of those global inflationary pressures, particularly the pressures on oil prices that have flowed through to petrol pumps across Australia and have other impacts seen in prices around Australia. And so we are working carefully through how to calibrate a response to what appear to be hopefully more temporary spikes in inflation and more temporary spikes in fuel prices and how we can ensure we provide targeted assistance to Australians that addresses those temporary spikes, build upon the fact that as a government we’ve increased disposable household income for Australians through our income tax cuts to the tune of about one and a half billion dollars a month that’s going into those household pockets. We’ve equally increased disposable income by driving electricity prices down by 8%, so off of that track record, Australians should have confidence.
David Speers: A lot of prices have gone up and consumed those sort of reductions you’re talking about. So again, should all Australians expect some help?
Simon Birmingham: Well, Australians should expect that we will build on that track record of helping them and that we will be looking at this environment, which is a unique one, with some real temporary spikes and surges in commodities like oil, and our desire to ensure that we provide a commensurate response to assist Australians, particularly those low and middle income families who we know do face the pressures in relation to additional costs and additional petrol costs more greatly than others. And so we are calibrating this Budget though carefully because we cannot have a situation where we add to those inflationary pressures from overseas.
David Speers: This is the thing. How do you put cash in people’s pockets without fuelling inflation further?
Simon Birmingham: That’s why you respond very carefully. And it’s about then the strength and care that you bring to your economic management. And we’ve demonstrated a willingness to do what’s necessary, for example, during COVID-19, in turning on extraordinary income support, but also to do what’s difficult in terms of turning it off. Remember, that when we turned off JobKeeper, the Labor Party said it should have been extended and continued when we stopped other income support payments during COVID-19, they said they should have been continued. All of that would have cost more than $80 billion extra on top of the record spending that was being made. And all of it was proven to be unnecessary given the fact that employment continued to grow strongly after each of those decisions that we took, so again, the key you bring is crucial.
David Speers: So, let’s focus on the Government. The economy, we’ve seen further, you know, strong figures on the economy, the unemployment rate in particular this week. And yet we’re still seeing a budget position that’s weak. You’re still forecasting deficits as far as the eye can see. Can you keep blaming COVID for that, or is it the reality that the extra spending on defence and aged care, health, NDIS. That’s the reason we’re looking at a structural budget deficit for years to come?
Simon Birmingham: David, you’re right that that the employment outcomes are remarkably and incredibly strong. 375,000 more jobs today than there were pre-COVID, and an unemployment rate at 4% and that is translating into economic strength with Australian economic growth stronger than the G7 nations.
David Speers: Why is the Budget so weak?
Simon Birmingham: We will hand down a Budget that shows that gross debt will peak earlier and lower than had previously been forecast. So in fact, we’re delivering on what had been our fiscal strategy that we outlined, which was to ensure that economic growth drove down debt as a share of GDP. And we are delivering there in that sense that that gross debt will be coming in at a lower level at an earlier time than had previously been forecast, thanks to the stronger economic growth, thanks to the stronger employment outcomes we’ve achieved.
David Speers: Will the interest bill on that debt also be lower, or will that be going up?
Simon Birmingham: David, the details there again will be released in in the Budget. We have been able to lock in longer term arrangements in relation to government debt, taking advantage of the low interest rate environment. But of course we are susceptible to interest rate movements as a government just like households are. And it’s why, again, Australians will have to think carefully at the next election. We’re not the party who will go to the next election with vague promises to increase the rate of childcare spending to Australians regardless of their income or with vague promises in terms of investment in areas such as increases to JobSeeker allowance or indeed with other areas the Labor Party particularly is spending hundreds of billions of dollars.
David Speers: Let’s stick to what you’re doing if we can, Minister. Your spending plans, though, and just getting back to the point I’m making about the Budget, the structural deficit in the Budget, your spending remains above 25% of GDP for all your forecast years into the future. If you’re going to have a cap on tax the money you’re collecting, why aren’t you putting a cap on the amount you’re spending that only seems to be increasing?
Simon Birmingham: David, we outlined the fiscal strategy and updated it over the last couple of Budgets and it was clearly one where in the first stage it was about cementing and securing the economic recovery for Australia and especially job outcomes for Australians because the greatest risk to budgetary management and security in the future would be if we had a circumstance where unemployment, particularly youth unemployment, had followed the trajectory of previous recessions, where it had taken years and years and years to get people back into work that would have left a tail of long welfare bills and of course reduced taxation receipts. We’ve fixed that. It enables us to move into this second phase, which we always outlined, was not about seeing a rapid ability to return to surpluses, but an ability to work towards that by lowering those deficits as a share of the size of the economy. And that is working, and this Budget will demonstrate how that strategy is working.
David Speers: Let’s turn to the war in Ukraine. The Government’s today announcing a further $75 million package of support that will include more weapons. Can you give us an idea what that includes?
Simon Birmingham: So, it’s around $21 million worth of additional weapons and support for Ukraine. These are more defensive weapons and support to assist the Ukrainian government and people in their efforts to withstand the assault that Russia is undertaking on them. We have seen the terrible human toll and tragedy as Russia is violating international laws and showing complete disregard for women, children and human life. And that’s why we are standing so strongly with the Ukrainian government and responding specifically to their requests wherever Australia can.
David Speers: Can I ask you about the sanctions Australia is imposing on Russian individuals? Is the so-called Magnitsky law which came into effect in December being used here at all? There does seem to be some confusion about this. My understanding is pre-existing laws are being used for these sanctions.
Simon Birmingham: David, my understanding is that there is a mix in terms of the detail as to how the sanctions are being applied, but that we were in a position under our existing sanctions regime to deliver a number of actions there in terms of sanctioning, particularly Russian institutions and entities. And we’ve been able to build on that with sanctioning individuals. Our effort there globally is one that is having an impact in terms of pressure in Russia. And I think an impact greater than people had expected at the time the global community started talking about sanctions, that’s in part due to our willingness to extend that into the financial transfer systems.
David Speers: Right, just look at the laws being used, though. I mean, the detail provided from the Foreign Affairs Department lists the laws and legal instruments, but not the new Magnitsky law. Is it being used?
Simon Birmingham: David, as I said, the technicalities there, I’ll leave the Foreign Minister and DFAT to outline the point is that we have been able to act under our legal architecture as comprehensively as, as frankly almost any other nation in terms of financial entities, corporations, oligarchs, politicians, Vladimir Putin himself. And we will continue to do so, and that Scott Morrison has led in encouraging others to go further with things like the financial transfers system, which has really applied pressure in terms of the Russian economy and individuals.
David Speers: Finally, on the treatment of Kimberley Kitching within the Labor Party, your colleague Peter Dutton says if Labor won’t hold an enquiry, others in the Senate will look at options they can take. Would the Government support some sort of Senate or other enquiry?
Simon Birmingham: David I think these matters are first and foremost matters for Anthony Albanese. You know full well that if the boot were on the other foot, if a Labor senator or shadow minister was sitting in this chair at present and the allegations pertained to a Liberal or National individual, then you would have had a string of outraged comments coming from those Labor figures, as we have seen, and that they would be calling for Scott Morrison to take strong action. Anthony Albanese should stop hiding, should stop hiding behind existing processes and vague answers and refusing to turn up to press conferences. And he should respond. He should show some semblance of leadership because at present it’s completely absent.
David Speers: Okay. But my question was if he won’t hold an enquiry, Peter Dutton’s suggesting the Senate might do something. You’re the Senate leader. Would you support some other form of enquiry?
Simon Birmingham: I’m yet to see any proposal that I think we would support, David. I think these are matters for the Labor Party and for Anthony Albanese first and foremost to address. We’re seeing the issues are not being raised by Liberals, they’re being raised by union leaders, by Labor Party figures, by those within Labor ranks. And it is a dereliction of leadership by Anthony Albanese to not be responding to those directly and addressing these issues. He would always grandstand if it were the Liberal Party, and yet he’s missing in action when it’s the Labor Party.
David Speers: Alright, Finance Minister Simon Birmingham, thanks for joining us.
Simon Birmingham: Thanks, David. My pleasure.