Topics: Budget 2022    


Nadia Mitsopoulos: Let’s have a more general chat now. I want to bring you my interview with Simon Birmingham, who’s been doing the rounds this morning, and I spoke to him a little earlier. Have a listen to what he has had to say and then tell me if you buy his sell.


Simon Birmingham: Good morning, Nadia. Great to be with you.


Nadia Mitsopoulos: The criticism is that this is a politically motivated budget ahead of an election. Do you concede voters will see this as pork barrelling?


Simon Birmingham: Well, Nadia. I would hope not. And I expect many voters and Australians and West Australians will be grateful for the fact that there is an acknowledgement that the events in Ukraine, Russia’s terrible invasion there, have caused a spike in oil prices and that that has hit petrol pumps and therefore household pockets and bills around the country. And this is about responding to those unforeseen international events in a way not unlike what we did with COVID-19. We can see that Australians are hurting as a result of those global pressures and those oil price spikes, which won’t be with us forever. So once again, we’re responding in careful, temporary, targeted ways. There are relatively small part of the total budget picture and our full economic plan, but they’re an important part to deal with the pressures Australians are feeling right now.


Nadia Mitsopoulos: But they are one off, as you said, temporary payments, for instance, that temporary relief and they are temporary. So it will get people, particularly those one off payments, it will get people through a couple of weeks. Okay. The fuel excise cut will get people through six months. What happens then? Because trade unions say the real issue that this budget does not address is stagnant wages growth. Where in the budget do you address that issue?


Simon Birmingham: In terms of wages growth, this budget shows that as we move beyond these shocks, that global economy’s feeling at present, we can see wages growth picking up thanks to the strength of Australia’s jobs market, which is seeing unemployment push down to 50 year lows, less than 4% unemployment not seen in the lifetime of many Australians.


Nadia Mitsopoulos: How much of a hole does cutting the fuel excise leave in the Budget?


Simon Birmingham: Well, look, it’s a few billion dollars, which is not insignificant. But to put it in some perspective as well in terms of the temporary and targeted nature of this, are overall gains in the economy and in the budget bottom line from having a much stronger economy at present are allowing us to improve the debt and deficit position by more than $100 billion.


Nadia Mitsopoulos: And while your forecast improvements to the budget bottom line, the reality is that the debt is still massive, peaking at $800 billion in the forward estimates. Who’s going to pay for that minister? I mean, that is still huge.


Simon Birmingham: So the debt levels are elevated thanks to the emergency measures we had to put in place through COVID-19, but it was necessary and it was effective. Australia’s economy has rebounded better than any of the other major developed economies around the world. We’ve grown faster back out of COVID, our jobs market is stronger. And so the dividends of that are that we’re now not having to pay a legacy trail of high youth unemployment or the other things that that have crippled the country following previous recessions. But importantly, that stronger economy is enabling us to bring the deficit down faster. And future deficits are forecast to be around half of what they had previously been forecast to be as a share of the economy.


Nadia Mitsopoulos: I’m speaking this morning on ABC Radio Perth in WA to the Finance Minister Simon Birmingham. Minister, the aged care sector, all they wanted was a pay rise for aged care workers. Why didn’t they get one?


Simon Birmingham: Nadia, we put more than $18 billion extra into aged care over the course of the last 12 months for the budget in a range of ways, additional payments that, that provide for improved safety, improved standards, improved staffing conditions and minimum staff guarantees in a number of ways. Wages themselves aren’t set by the government. They go through an independent process through the Fair Work Commission. And so we leave that independent process to set the wages. But we have certainly responded quite comprehensively to the Aged Care Royal Commission and making sure that the quality of care and the availability of home care places, helping to clear a backlog in home care and give Australians that choice of staying at home where they can and getting the care they need in that home environment, or being able to go into residential aged care, knowing that we’re investing in having more nurses available more of the time and a higher quality of care with more safeguards and checks and balances in that sector.


Nadia Mitsopoulos: But Minister, that’s all very well. But it’s you need staff to be able to to do all that. And you could have provided more funding to the providers to be able to pay their staff more. That was the big issue here and that has not been addressed.


Simon Birmingham: Well, we have provided more funding to providers. That was part of the reforms and a number of-


Nadia Mitsopoulos: Doesn’t go to wages. It doesn’t go to wages.


Simon Birmingham: Well, as I said, we don’t mandate the employment terms there. The Fair Work Commission sets wage rates. Some providers do pay above award conditions. And we would encourage them where they can to absolutely do that.


Nadia Mitsopoulos: On the issue of workers. What about incentives to get older people back into the workforce? And the key element there was exempting employment income from the aged pension income test. Why did you not. Why did you ignore that idea?


Simon Birmingham: There have been some changes in the past to create circumstances of greater incentive there for pensioners to work. The truth is they haven’t changed the dial a great deal in the sense that most people once they’ve made that decision to retire and to move on to a pension, that’s a lifestyle decision that they’ve made. So we’ll always keep reassessing and considering those issues carefully. But for pensioners in this budget, we’ve made sure that they are receiving some of this cost of living relief. Crucially, the changes that our side of politics had made previously to the indexation of the pension are yielding real dividends in terms of the growth of the aged pension and that can be seen from increases. Just in the last couple of weeks of around $20 for singles and around $30 for couples in aged pension payments, and they’ll grow again during the course of this year and also for self-funded retirees. We’ve made sure that the arrangements are there for them in terms of drawdown rates are continuing to be more generous, giving them more flexibility about how they manage their retirement savings.


Nadia Mitsopoulos: Minister, finally, the budget also sets aside $985 million for decisions taken but not yet announced. So an extra election war chest there. Will that money include funding for a federal ICAC or maybe some incentives to get people to buy an electric car?


Simon Birmingham: So there is funding in the contingency reserve for the establishment of a Federal Commonwealth Integrity Commission. And we’ve got that budget there we have the legislation for that Integrity Commission and if we could get bipartisan support for its passage, then we would enact that. And those funds are there. And in the interim, we have increased funding into certain agencies such as the Commission for Law Enforcement Integrity in terms of support for achieving net zero. Our investment in hydrogen industries are investment in establishing more microgrids across the country and taking particularly rural or remote communities out of relying on diesel fired generators and being able to have a renewables clean energy microgrid. They’re all really important in the electric vehicles space. The work of the Clean Energy Finance Corporation and the Renewable Energy Agency is really focussed on supporting the infrastructure necessary to see increased uptake in in electric vehicles and making sure that more charging points support, especially in in relation to more high density living areas to achieve that take up is delivered.


Nadia Mitsopoulos: I’ll leave it there. Appreciate your time.


Simon Birmingham: Nadia. My pleasure. Thank you.