Topic: Budget 2021-22




Tom Oriti: The Federal Government will spend billions of dollars improving the aged care sector as part of the budget announced last night, so an extra $17.7 billion will be pumped into the sector in response to those shocking findings of the Royal Commission. The Government is also extending tax cuts for low and middle income earners and tax breaks for businesses to encourage spending and drive down unemployment. It assumes international travel won’t resume until the middle of next year. Simon Birmingham is Leader of Government Business in the Senate and the Minister for Finance, and he joins us live now. Thank you for your time.


Simon Birmingham: Good morning, Tom. It’s great to be with you.


Tom Oriti: Great to have you on the show. Not a typical Coalition budget, big spending on a number of programs and policy areas. I mean, one might argue that if Labor went down this path, an Opposition Coalition wouldn’t like it. Has your party’s rhetoric changed here?


Simon Birmingham: This is a Budget firmly focussed still on keeping the economy strong, a plan centred on having lower taxes rather than higher taxes, things that Australians expect from the Coalition. And so what we are delivering to get us through still the Covid-19 pandemic is around $40 billion of measures that that are partly around safety and keeping Australians safe and partly around economic security and keeping the jobs of Australians safe. And that includes significant additional lower tax measures to maintain business investment, deliver tax breaks to low and middle income earners across Australia, all of which are important in terms of keeping our economy ticking over while parts of the world like Europe are slipping into recession. But then over and over a longer term and we’ve got targeted lower tax measures in this Budget, such as our patent box to stimulate innovation in the medicines biotechnology sector or indeed lower tax measures in areas such as for craft distillers and brewers to give Australian businesses a better chance to compete with foreign owned international competitors.


Tom Oriti: It’s all happening during the pandemic. There’s hope in the Budget that everyone who wants the vaccine will get one by the end of the year. But should we trust that assumption, given the slow pace of the rollout so far?


Simon Birmingham: Well, we certainly expect, based on the projections of delivery of vaccines from around the world, to have the numbers of vaccines for those Australians who want one to be able to get one by the end of the year. That doesn’t mean that the vaccine distribution and rollout won’t be continuing into next year. I’m sure there will be Australians still choosing to access vaccines next year. There’s ongoing demands that we’ll face in relation to getting people getting booster shots and likely considerations into the future. And that’s why this Budget also includes provision for bringing the mRNA vaccine technology to Australia and establishing a manufacturing capability here. It’s a brand new type of vaccine technology and so we’ve got to go through the steps of attracting and bringing that technology here.


Tom Oriti: Sure. But let’s say that targets are not met. What impact could that have if so much is riding on it?


Simon Birmingham: Well look the assumptions in relation to what happens from that, such as international border reopening, our cautious assumptions. We’re not saying there will be any change of significant magnitude in international border settings until the middle of next year. And so we have taken a cautious approach there. What’s important overall is that we continue to suppress Covid in Australia because that’s not only what keeps us safe as individuals and families, but it’s also what keeps our economy safe and protects the jobs of Australians. Here in Australia, we’ve got employment levels back up above where they were pre-pandemic we are the first and only advanced developed economy in the world to be able to achieve that outcome. And it comes against a landscape of not only Covid outbreaks and crisis with health impacts in places like India, a devastating consequence, but also even in the European Union, we’re seeing a double dip recession occurring and continued enormous economic pressure elsewhere around the world.


Tom Oriti: No one’s denying that. But, you know, you mentioned the borders there a minute ago. We heard from Margy Osmond in the news this morning. She’s saying Australia risks becoming the lost kingdom of the South Pacific. That was the phrase she used if our borders remain closed. And what’s your message to the tourism and hospitality sector?


Simon Birmingham: Well, look, I don’t think the excitable rhetoric is particularly helpful. And I think the tourism and hospitality sector should also understand that continuing to successfully suppress Covid in Australia is crucial for their sector as well. But if you have significant Covid outbreaks, then we’ll see far greater pain and grief across all sectors, including those sectors. We’ve got more than 650,000 flights that have now been booked as part of our tourism simulation campaign that’s providing huge benefits to the tourism industry across the country. And many operators are actually reporting figures and spending and bookings stronger than they’ve seen before. And now we still want to get international borders open. And our commitment is to do that as soon as we can, but no sooner than it is safe to do so.


Tom Oriti: Can we just speak about aged care, almost $18 billion. Look a big figure Minister, no one is questioning that. But when it comes to delivering care, how will you ensure that the money and that extra care time, you know, we’re hearing about the minutes of care time, gets to the people who need it?


Simon Birmingham: You did right there Tom, that reform is just as important as funding in aged care. And some are questioning whether it’s enough extra dollars. Well, this is a once in a generation additional investment with $17.7 billion. But by putting in place the minimum mandatory care standards, including those minutes of care, 200 minutes per resident per day as a minimum mandated requirement, 40 minutes of that by a registered nurse. But we’re also strengthening the powers and funding to the regulator to make sure that there is transparency and safeguards are in place and crucially around reporting arrangements as well.


Tom Oriti: When we look…


Simon Birmingham: Establishing a new, transparent star rating system, changing the way bed licences are handed out so that there is far greater incentive for good providers to be able to highlight their track record and to be able to expand their operations and provide those opportunities for senior Australians.


Tom Oriti: When we look at the extra promise minutes of care, though, we’re hearing concerns this morning that there’s not enough staff to be able to do that.


Simon Birmingham: And again, that’s why this is an integrated package, more than 33,000 additional training places related to the aged care sector. So we have recognised those potential problems and responded by creating a comprehensive package. And these will be difficult reforms, none of us pretend or believe that that we’re going to be able to just click our fingers and say the aged care sector will overcome all of its problems in the next few months. We know it will take years in terms of implementation. The reforms go beyond residential aged care into the home care sector as well, with 80,000 additional home care places over the next two years, but also then an ongoing commitment to design a more sustainable long-term home care program. Another key recommendation of the Royal Commission that we’re delivering on and that we aim to have in place by the first of July 2023.


Tom Oriti: Okay, we’re almost out of time I’m afraid. But, you know, this is not typical Coalition spending. I mean, that has not escaped anyone’s minds looking at this Budget. Will it be Budgets of austerity in the years to come to pay for it?


Simon Birmingham: Well, look, we we’ve outlined a clear Budget strategy that for now is about driving the economic recovery that is necessary to keep Australian’s job secure, but in keeping jobs secure, to also keep our government revenue and the ability to fund essential services as strong as possible.


Tom Oriti: Sure but there is an election, there is an election ahead. How will you explain to voters how this will be paid off in the years ahead?


Simon Birmingham: By two points, one to make that very important. First is, even with these additional commitments in this year’s Budget, net debt is lower than was forecast in last year’s Budget. So we have taken these decisions in a careful, prudent way and with a growing economy that is enabling us to keep net debt lower. The second point is that we will honour these promises and commitments. And we’ve said consistently that we would fully fund the NDIS that’s coming at an additional $13 billion of costs than had previously been budgeted. But we’ve put them in the Budget, we’re honouring that commitment because we will continue to deliver the essential services Australians rely on. But we’ll make sure that we fund it by continuing to grow the economy and to keep debt under control by doing that.


Tom Oriti: Simon Birmingham, it’s a pleasure. Thanks very much for joining us on the program.


Simon Birmingham: Thanks you. My pleasure.


Tom Oriti: That’s the Minister for Finance, Simon Birmingham.