Topics: Jobs data; Ukraine; China; SA election; Budget; Kimberley Kitching
17/03/2022
4:05PM AEDT
Greg Jennett: Simon Birmingham, on some very busy days for the Liberal Party in South Australia, thanks for joining Afternoon Briefing. Why don’t we start with the solid economic news that’s come through today, an unemployment rate hovering around 4 per cent. Just how low can it go?
Simon Birmingham: Well, it can go below 4 per and our ambition is to keep the economic growth and the jobs growth in Australia going so that it does drive below 4 per cent. To see 375,000 more jobs created than we had pre-COVID-19, before the pandemic, is an amazing achievement. Recessions usually leave a massive tail of unemployment and especially youth unemployment, whereas what we’ve managed to achieve from our government’s economic policy settings and the hard work of Australians has been a remarkable recovery from the COVID induced recession. A world leading recovery in terms of the rate of economic growth in Australia, beating G7 nations, the rate of jobs growth in Australia, setting a global example, and this really is a vote of confidence that Australian employers and businesses are showing by taking on more and more Australians and demonstrating that they have confidence in the nation’s economic future.
Greg Jennett: Sure, it’s unquestionably strong, but it also carries a risk of inflation. The whole calculation around a low unemployment rate is, isn’t it, that it will generate or should generate wages growth? Does the risk of that inflation give you pause for thought then about this cost of living package that is being baked into the budget?
Simon Birmingham: This is indeed a very challenging and uncertain environment that for all of the good news we have in the jobs numbers and in the strength of Australia’s economy. It sits against a global environment where we still face the challenges of the COVID recovery, and in Australia, the first winter with COVID and the flu to run concurrently. We face the challenges of inflationary pressures. And whilst Australia is doing much better than many other nations and has in fact an inflation rate running around half that of the United States, we do face the knock on effects of those other nations and we face a war in Europe and the disruptions that’s causing to supply chains as well as the humanitarian catastrophe that is unfolding there. So it is a deeply uncertain time against which we frame the budget, and we do so very clear in our objectives to ensure we keep the economic growth going in Australia, we keep the jobs growth going in Australia because that’s the most important pillar for Australians in terms of addressing any pressures they face is to have a job and to have the income that comes from employment. But we also do so mindful of the fact that with those global inflationary pressures we don’t wish to add to those. We don’t wish to put any additional pressure than is already there from the rest of the world for upwards movement in interest rates and they’re the times of careful calibration that we are weighing.
Greg Jennett: Isn’t that exactly what you would do if you overegg some sort of feel good cost of living support to households?
Simon Birmingham: Greg, I’m not going to go into obviously speculating on individual budget measures, and I appreciate that’s not exactly what you were asking. But in terms of the nature of how we support Australian households, we’ll start firstly by being mindful of what we’re already doing and have already achieved to help households. The reality is our income tax cuts are providing for somebody earning about $90,000 a year, $50 per week extra in disposable income that they wouldn’t have had under a Labor Government. And that’s around $1.5 billion a month extra going into Australian households in lower income taxes and more disposable income. Energy market policies have been working to the extent that we’ve seen electricity prices drop around 8 per cent over the last two years in a demonstration that we can tackle those sorts of cost of living pressures successfully. And of course we’ll look very carefully in this budget how we frame any areas of additional policy settings or support to balance those uncertain international trends and environments we face, and the fact that we do want, of course, to keep the economic growth as strong as possible, the job opportunities as strong as possible, but also to balance, as we’re very clear, not putting extra pressure on interest rates or inflation.
Greg Jennett: Okay. Let’s move on to some of those international factors of uncertainty. We’ve heard the Prime Minister speaking from the West, backing in Joe Biden and other Western leaders saying that if necessary, we would be prepared to sanction China if it doesn’t find a voice against Vladimir Putin and the aggression being shown in Ukraine. Doesn’t that carry with it, wouldn’t that carry with it substantial risks for the Australian economy given still to this day our great dependence on China trade?
Simon Birmingham: Regrettably, Greg, China has shown a willingness to sanction Australia by way of tariffs on our barley industry and our wine producers, by way of non-tariff barriers impeding the trade in live seafood, timber and a range of other products. And they’ve done that for no legitimate purpose or reason. What we, of course, have made clear is that when it comes to Russia’s war on Ukraine and the terrible toll that’s taken, we will work collaboratively with all of the international partners willing to come to the table to take whatever steps are necessary to try to force Russia to back off and to make Russia pay a price for it, and we are going to continue to do that.
Greg Jennett: And do you think it’s likely that that could be extended across to Beijing?
Simon Birmingham: I sincerely hope not, Greg, but we will do what is necessary. We’ve extended the sanctions from Russia to Belarus, recognising the fact that the Belarusian leadership has shown a disregard for the lives of Ukrainians, the sovereignty and independence of Ukraine in their aiding and abetting of Russia. And they should pay a price for it. And so too should any other country who aids and abets Russia in this terrible conflict that they’re engaging in. But our message to China remains the same, and that is that we urge China to use the power they have to try to get Russia to change its approach, to step back from the human catastrophe and huge human toll and loss of life that they are inflicting upon the Ukrainian people. And China can do that. They have the ability to change this outcome and we urge them to do so. And we would warmly welcome that and see that as an enormous act of goodwill by China were they to engage in that way.
Greg Jennett: Alright, but let’s bring it back home, literally now to your home state anyway. As the most senior federal Liberal in the Morrison government, is it apparent to you that the benefit of incumbency, which was clear early on in the pandemic for state and territory governments, has now evaporated, gone, and that the Marshall Government may well realise that to its own cost very shortly.
Simon Birmingham: Well, Greg, perhaps before I tackle the two matters there, your question around the impacts of COVID-19 pandemic on governments and on public perceptions. There’s little doubting that we have moved from perhaps an easier stage of management of COVID a year or two ago, where simply closing borders, applying lockdowns and keeping COVID out was the approach that could be successfully applied, and that when doing so, governments were able to give people their lives largely as normal. Omicron changed all of that in a very significant way, that COVID in our community transmits faster, has created many irritants and disruptions to the lives of people since November last year. And whilst happily Australia has one of the highest vaccination rates in the world and has got some of the best health outcomes and lowest rates of loss of life in the world, the irritants are still there for people and I think that is a challenge now in terms of people living with COVID, but annoyed and irritated by the different interventions in their lives that has changed the dynamics and does mean it’s a different paradigm.
Greg Jennett: So is that weighing on the Marshall Government there? Is that weighing now clearly on the government there in South Australia, and by extension, I guess perhaps the Morrison government too?
Simon Birmingham: Well, we’ll see in a couple of months as to what it means at a federal level and many of the individual restrictions are implemented at a state and territory level. There’s no doubt, I don’t think it’s a help in in a state context, even though Steven Marshall and his government have a very good track record in terms of their management of COVID and the saving of lives and the demonstration that Australia’s health system, despite the campaign being run by the Labor Party in this state election, has held up very, very well to the pressures of COVID and our hospitals have held up as they have right across Australia in terms of handling COVID-19. But this election is a bit of a fork in the road moment for South Australia. Steven Marshall’s government in the last four years has led a transformative agenda in this state in getting more businesses, more business investment that has driven jobs growth in areas of higher skill, of higher wages. And that trajectory is one that can be quite transformative for our state over the years to come if the plans and the approaches that Steven Marshall has applied can be realised. So I hope South Australians see as they approach an election on Saturday, the importance of that business and economic and jobs and investment oriented approach that Steven Marshall has brought, because that is how you pay for services. The Labor campaign has been all about spending on different things, but they haven’t identified an effective means to have the strength of economy and the income flows into state government to be able to pay for those sorts of commitments in an enduring sense.
Greg Jennett: Well, we’ll get a verdict on that soon enough. Can I just ask you finally. Simon Birmingham, the chamber in which you work in the Federal Parliament, Senate, does it have a work culture problem that may not be restricted to the Labor Party? But obviously I couch this question in the in light of Kimberley Kitching and some of the reports that have emerged since her death, is there a work culture problem at large in the Senate?
Simon Birmingham: Greg, Parliamentary democracies are robust things. They both within parliamentary chambers, but also across parties and indeed within parties, rely upon a strength of debate and a contest of wills and ideas. And that does mean that the contest sometimes gets willing. It should always be as respectful as possible, in my view. I’ve been asked many questions over the last year or so in particular about different cultural issues in relation to Parliament House parliamentary staff, and I’ve instigated with the with the Prime Minister and the Government, a range of reforms that we are applying to provide better support for parliamentary staff, to address a number of cultural issues. But insofar as those things being aired in the media at present relating to Kimberley Kitching go, many of them really are matters for the Labor Party to answer questions on. And so I would defer to them aside from simply again acknowledging Kimberley’s contribution and service and the tragedy of her passing at such a young age in such an unexpected way.
Greg Jennett: Yeah, understandable. Simon Birmingham, thanks for your time and for joining us. I think for the first time this year on Afternoon Briefing. We’ll talk to you again soon.
Simon Birmingham: Thanks, Greg. My pleasure.