Topics: Budget 2022    


Andy Park:  Simon Birmingham is the Finance Minister. Welcome to the ABC’s Parliament Studios. This cost of living focus there obviously aimed at the next few weeks rather than long term structural change. Are you banking on voters not seeing past this election?


Simon Birmingham: Andy, what we’re doing here is responding to international events that have come and struck Australia as they have many other countries around the world and Australian motorists from the spike in oil prices that’s happened since Russia’s terrible and tragic invasion of Ukraine. Those spikes aren’t expected to be with us forever. So we’re providing that relief at the bowser in terms of the $0.22 per litre cut to fuel excise for the next six months, as well as relief targeted to low and middle income Australians and to those on fixed incomes like the aged pension and other income support recipients to make sure that they get a helping hand to push through these particular difficult times.


Andy Park: Our audience is listening to this and saying, Why did you not use this opportunity to address the more long term structural issues? Come September, the fuel excise will be wound back. You know, wages growth won’t be addressed as the electorate is demanding. Won’t these temporary measures provide just short term Band-Aids and cost more in the long term?


Simon Birmingham: Well, these temporary measures are responding to a temporary problem in terms of the oil price spikes that we see. But, of course, we know that elsewhere in the economy, the need is there to make sure we see good growth going forward in wages. And the budget does show that our economic plan, which is seeing record levels of employment and unemployment, now pushing to a 50 year low below 4% and headed to 3.75%. Also helps to drive wages growth. Wages growth forecast to be 3.25% next year, real wages growth ahead of inflation next year and growing out to 3.5% over the forward years. So a demonstration that the plan is delivering in that regard and of course that real wages growth is on top of the fact that we’ve already legislated the first two stages of our income tax cuts, which have meant that disposable income for Australian households is up significantly around one and a half billion dollars per month extra going into the pockets of Australian households right now.


Andy Park: Let me ask another way. Let’s assume you and I are sitting here and it’s September. The fuel excise cuts have run out. The one off payments of $420 have come and gone and have been spent. What would the government have to show for its nine years in government then?


Simon Birmingham: What we would have to show is record levels of employment. 1.7 million more Australians in jobs today than we were elected. 1 million more Australian women in jobs today than when we were elected. Record levels of female workforce participation. We would have to show lower income tax rates for many Australians, stage one and stage two of our income tax cuts implemented, targeted to low and middle income Australians, delivering them already that one and a half billion dollars a month extra. Equally, we have to show lower company tax rates for small businesses down to $0.25 in the dollar, the lowest company tax rates in 50 years in Australia in this budget building on that in supporting small business and to do more and skilling their workforce with additional tax depreciation incentives there for skills investment and for technological investment, I could keep going about what we’ve got to show from my time in government.


Andy Park: These are all contingent on assumptions. The first two questions-


Simon Birmingham: Sorry, many of them are facts of what’s happened.


Andy Park: Well, the assumptions are based on, I suppose, the fuel price and volatility in energy costs. Russia’s invasion of Ukraine won’t continue to cause rising fuel prices. You’re also banking on winter COVID outbreak being like Omicron, not like Delta and not more severe. So are these assumptions realistic?


Simon Birmingham: Well, Andy, we’re also assuming that iron ore prices and coal prices and things that have fuelled a huge surge in revenue in our budget come down over the next six months to historic much lower averages. So there are a range of assumptions underpinning the budget which are actually quite conservative assumptions in their projections. It’s why the international ratings agencies continually give Australia a triple-A credit rating, because we, as we have in this budget, do better than what we’ve budgeted. In this budget we have been able to bank more than $100 billion worth of improvements to the budget bottom line, meaning that deficits are lower than had previously forecast. The sensitivity analysis in the budget shows that if globally high commodity prices were to continue for just an extra six months, there’d be about a $30 billion addition to revenue into government and a significant improvement in the budget bottom line. But we don’t assume that we assume the opposite out of prudence and caution.


Andy Park: Okay, let’s move on RN Drive. My guest is Finance Minister Simon Birmingham. The Australian Medical Association says last night’s budget was a missed opportunity for well to address public hospital funding with nothing to address backlogs and growing demand. The pandemic has added to existing pressures on the system. What’s in this budget to address those waiting times?


Simon Birmingham: Well, indeed, extra money for the states and territories is there for them. So we continue to provide direct funding in relation to delivery of health and hospitals agreements to the states and territories and elements of that are demand driven funding. So the more states and territories get done in terms of procedures and services, the more the Commonwealth pays. But in addition to that, the dividend, one of the other dividends of a stronger economy is that untied GST funding flowing to the states and territories is up significantly as well. Close to $12 billion extra next year alone going through to the states and territories. For them to be able to invest more in their hospital systems or their school systems or their law and order activities. Now the Commonwealth provides leadership in terms of primary health care, where we’ve got Medicare bulk billing rates at record levels, where our investment in preventative health, in mental health initiatives have been and are at record and growing levels and you saw more investment in mental health last night.


Andy Park: Senator Hanson has joined Concetta Fierravanti-Wells in telling Parliament that Mr. Morrison is unfit to be Prime Minister and lacks a moral compass. How damaging are these concerns? Because I assume you’re going into this election campaign banking on the stability that your government can prove that it has?


Simon Birmingham: Well, this will be the first election since John Howard, where the same prime minister goes to this election as the last election and that is a mark of stability in what has been incredibly tumultuous times.


Andy Park: So what is Senator Fierravanti-Wells? What’s her motivations then?


Simon Birmingham: Well, I think her motivations are fuelled by the fact that she lost her Liberal Party pre-selection and endorsement last weekend. Some 500 plus Liberal Party members had their say on who would be on the New South Wales Liberal Senate ticket and after 17 years of opportunity to serve in the Australian Parliament, Connie lost that pre-selection to the Foreign Minister, Marise Payne and former distinguished general Jim Molan. I understand her disappointment, but that’s no reason to lash out. I’m not going to respond in terms of personalisation of attacks. Our government wants this-


Andy Park: But this doesn’t go to the Party’s female problem or women’s problem, as it’s been called?


Simon Birmingham: No, I don’t believe it does. I think what last night’s budget and the previous budgets show is our investment in getting outcomes for Australian women, be that in terms of $1.3 billion of women’s safety investments last night, further improvements to paid parental leave. As I said earlier, record women’s workforce participation, they’ve all delivered real outcomes to help Australian women. And it’s an example we’re going to focus this election on the policies. The achievements of the Government are plans for the future that we outlined in this Budget last night, are careful management of the economy and we’re not interested in the personalisation of these sorts of attacks no matter where they come from.


Andy Park: Appreciate your time tonight.


Simon Birmingham: Thank you, Andy. My pleasure.