Michael Rowland: It’s been a huge week in federal politics with the final parliamentary sittings before the March budget. Lots to cover. Let’s bring in the Finance Minister Simon Birmingham from Adelaide. Minister, good morning to you.
Simon Birmingham: Good morning, Michael, good to be with you.
Michael Rowland: I want to talk about jobs and national security, but let’s start with the foreshadowed early closure of the Eraring power station in the Hunter Valley in New South Wales. Now Angus Taylor, your colleague, the energy minister, says Matt Kean, the New South Wales energy minister, is delusional in thinking a giant battery, which the New South Wales government is going to help build will help fill the gap once that power station closes. Who’s right here?
Simon Birmingham: Well, it’s not going to be the sole solution, and I think even McCain’s acknowledged that. And it’s why what the Commonwealth government has already been investing in in terms of extra generation capacity, such as a Snowy 2.0, the biggest renewable project in the southern hemisphere, but also the Kurri Kurri gas power station that we have already got underway in the Hunter that we’ve provided $600 million in equity to make happen is a crucial investment in terms of stability, reliability and affordability for energy going forward. And it was one much criticised when we made that decision. But now people can see just how necessary these things are going to be if other closures are going to be brought forward.
Michael Rowland: The closure of this, the foreshadowed closure of this plant really reflects where the market’s going right? Inexorably towards renewables?
Simon Birmingham: It does demonstrate that, and it does say why investments like Snowy is so important. The transmission upgrades that we are investing in across the country. The connection between New South Wales and South Australia that will give New South Wales more access to the renewable energy sector generation in South Australia. The Marinus Link connection between Tasmania and Victoria again about making sure that Tasmania’s wealth of hydropower is pumping in. And of course, our investment then in transformative technologies elsewhere like hydrogen, which is going to be so crucial as a substitute energy source in other parts of the world, and we want to make sure we build Australia’s export profile in the years to come.
Michael Rowland: Okay. Jobless rate of 4.2 per cent in January, which is great news, obviously. Are you worried about the falling number of hours worked as we saw in those figures?
Simon Birmingham: Look, the falling number of hours worked was unsurprising, given Omicron. What was really pleasing, though, was to see that employers were still hiring, that we actually kept that unemployment rate at 4.2 per cent figure nationally, the lowest rate Australia has had for unemployment in 13 years, the lowest youth unemployment rate in 14 years and the biggest workforce participation rate amongst Australian women ever. They’re very encouraging statistics to show that policies are working, jobs are being created and there’s great resilience there that as restrictions are further eased from COVID-19 and as international borders are open next week to tourists, we can expect to see those hours worked come back. And as the Reserve Bank has forecast, hopefully that 4.2 per cent figure even pushed down below four per cent, which would be quite a historical achievement.
Michael Rowland: When are Australian workers going to start seeing wage rises as a result of all of this?
Simon Birmingham: Well, look what we know is that as we get more pressure in the economy in terms of closer and closer to full employment, that that should yield wages dividend. The Secretary of the Treasury, appearing at Senate estimates this week talked through where he saw opportunities for increased productivity in the economy. That we are seeing significant investment by non-mining sectors across the Australian economy, stimulated by some of the policies we put in place investment incentives in the last two budgets that’s driving that non-mining sector investment that along with it, record investment in skills, record investment in infrastructure can help to lift productivity, which then in an environment of close to full employment, does start to then then drive stronger wages outcomes.
Michael Rowland: Okay, now turning to national security. Now in a previous couple of portfolios who have held international facing roles as trade minister for one. Are you comfortable with some of the language the Prime Minister has been using this week regarding Labor and China?
Simon Birmingham: Michael, yes, I think contrast in election campaigns, and we’ve got an election in a couple of months time across Australia. Contrast between competing sides, their track records, what the leaders say is always an important part. We were just talking about jobs before, and the contrasting record will paint there of 1.7 million more jobs overall and one million more Australian women employed than when we were elected. But in terms of national security, there’s a contrast as well that in the 2012-2013, the Labor government cut defence spending in real terms by more than 10 per cent and drove Australia’s investment in defence to its lowest level as a share of the economy since 1938. We promised that we would lift that and return that to at least two per cent of GDP in terms of defence spending. We’ve not only delivered that promise, we’ve exceeded that promise, and that has proven to be a very prescient decision given how our security environment has changed so significantly since 2013.
Michael Rowland: Okay, I hear what you’re saying about comparing a contrast on defence spending, but do you endorse do you agree with the prime minister when he accuses Labor of trying to appease China, fully aware of the historical overtones of that word?
Simon Birmingham: Michael, it does concern me that Anthony Albanese fronted up to the National Press Club a couple of weeks ago and said that he thought China should lift the coercive economic actions they’ve taken against some of Australia’s industries. Well, some is not good enough, and again, it’s a contrast in what leaders say and what parties stand for. We have been very clear that whether it is cattle producers in Queensland, live seafood exporters in Tasmania, wine producers in South Australia, our resources sector across WA. Any sector facing those coercive economic pressures that China has applied. China ought to cease doing that in all of those instances, and there’s no room to have grey zones in terms of the language. Australia has to show resolve and firmness as well as, of course, the willingness as always to sit down and engage and they’re important messages to convey.
Michael Rowland: Would you use the word of appease when it comes to Labor and China?
Simon Birmingham: Well, I think you can I mean, appease is in some ways, if you accept that some areas of coercion are OK-
Michael Rowland: -you agree that Labor is, you agree that Labor is appeasing China?
Simon Birmingham: Well, I think Labor has got to make sure that when their leader speaks, he is strong and clear and consistent in what he’s saying about the approach Australia would take. Now I don’t want to see a Labor government elected and I think national security, defence investment, these are all crucial areas that we will contrast in the election. And so I hope we don’t have a test as to how Labor respond there and whether some industries get pushed under a bus in the process.
Michael Rowland: Okay. Simon Birmingham in Adelaide. Thank you so much for joining us this week.
Simon Birmingham: Thank thanks, Michael. My pleasure.