Subject: (Budget 2015)


DAVID PENBERTHY: Joining me now is the South Australian Liberal Senator, The Assistant Minister for Education and training, Simon Birmingham; Simon, thanks for your time. What ever happened to the budget emergency?

SIMON BIRMINGHAM: Well David we still face very serious and challenging budget circumstances and some of the announcements in this year’s budget would not have been possible without the very difficult decisions taken last year. We have made significant inroads in terms of reducing the $123 billion of deficit that we inherited from the Labor party by more than $40 billion and we’re presenting in this budget a credible, but steady, path back to surplus. We’ve also faced some pretty tough times in the last 12 months, the nation’s iron ore prices, that we get paid for our export, have been halved since the last budget from around $90 per tonne to $48 per tonne contributing to the largest fall in terms of trade in the last 50 years…and what of course that means is that government revenue is down, and down by about $90 billion. So, we’ve faced a $123 billion deficit that we’ve inherited, a $90 billion write-down in terms of revenue, but still we are managing to reduce the size of the forward deficit, get a pathway back to surplus and now put some serious investment back in to support jobs and small businesses and families in the future.

DAVID PENBERTHY: But all of those facts you’ve just rattled off about things like the iron ore price fluctuations, they of themselves are a reason for scepticism about your predictions, about Joe Hockey’s predictions about the state of the budget deficit. I mean the papers show, the economic papers show, that somehow between 2015-16 and 2018-19 the deficit is going to drop by $35 billion to $6.9 billion. Now, I totally take your point about the extent that which the Australian Labor Party blew the money that John Howard and Peter Costello had bequeathed them, but aren’t you guilty here of overspending and risking your chances of securing a surplus purely to save your political hide?

SIMON BIRMINGHAM: No, not at all. This budget is about not saving the government’s hide, it is about ensuring that Australians have the best chance of getting jobs and opportunities and what we want to make sure through our investment in the small business package, through our support of families in terms of initial childcare assistance, is to make sure that we are marrying up people who want to work with employers who are able to give them jobs and it’s really important that we try to drive stronger economic activity. Now, we are confident that the forecasts in this budget are cautious, careful forecasts based on realistic projections of what will happen and, of course, are reflecting the fact that we’ve had this significant reduction in commodities prices, particularly the iron ore price, that has had an impact on the budget bottom line this year, but we believe we can work steadily back from there having made lots of reductions in wasteful areas of government spending, having achieved many savings over the course of the last year, being as prudent as we possibly can and continuing to look for efficiency and savings right across government, but in doing all of that we are able to invest back in to the community, getting small businesses a tax cut they’re going to enjoy, giving them the benefit and the incentive to invest in their business; all of that should create more jobs across the economy and with that we are then providing really specialist support, particularly to disadvantaged youth to try to reconnect them in to the labour market and have a greater marrying between people needing work or wanting work and employers and their capacity to deliver jobs in the future.  

DAVID PENBERTHY: We’ll jump over now to talk to the Labor member for the federal seat of Port Adelaide, the Shadow Environment Minister, Mark Butler; Mark, thank you for your time. You would have to concede that unlike last year’s budget which was full of nasties and full of surprises, there are a lot of measures in this budget that are going to be of benefit to middle income families and also to small businesses, yes?

MARK BUTLER: Well we welcome the small business package, although we have made the point that the two major elements fail to the ones that Labor had in place…which is the small business tax cut…or in the case of the accelerated depreciation…were Labor policies that Joe Hockey got rid of in his first few months as Treasurer and has now put back in place. Nonetheless, we welcome the small business package and think that that’s a good change of heart on the part of Joe Hockey, but in no way is this a families budget. There’s a childcare package there that I think is worth us working through and has good aspects to it, but it’s funded entirely by incredibly cruel cuts to family payments that were put in last year’s budget…for budget repair purposes. So there’s no net improvement for families for this budget, if anything, there is a net deterioration particularly given yet another petition by Tony Abbott on paid parental leave.

DAVID PENBERTHY: A ransom note is a good analogy. It’s a ransom note for the Labor Party too, isn’t it? Because the politics of it are that if you guys decide to block this in the senate on the grounds that you want to defend the family tax benefits from the cuts in last year’s budget, you will then be accused of standing between the Australian people and a big $7 billion bucket of money for childcare.

MARK BUTLER: look, there is good reason to do more things in childcare but, you know, there is not good policy to respond to ransom notes. These family payments are incredibly cruel cuts from last year’s budget. The modelling from that, which is the major economics modelling unit out of Canberra, said that for a $65,000 single income family with two school aged children, it would amount to about $6000 out of there household budget every year, so at best this is a terrible case of robbing Peter to pay Paul just to get some well needed childcare improvements and we’re not going to respond to that.

DAVID PENBERTHY: We’ll jump back to Liberal senator, Simon Birmingham. Simon, is this a pre-election budget? Do you think that Australians will be going to the polls on the back of this later in 2015?

SIMON BIRMINGHAM: No, I’m confident the government will run its course because we want to do everything we can to create the certainty and the stable environment needed for businesses to make good investment decisions and that’s why we’re encouraging small business to invest more in their businesses through that to become more productive, more competitive and be able to create more jobs…and I’ve got to say, in response to some of Mark Butler’s criticisms, you have to realise that every governments budget is always about priorities and choices, there’s only so much money to go around, of course the Labor Party never quite seems to learn, and we think in terms of supporting families, it is most important to direct our support through the childcare package that we’ve provided for, that we provide the greatest opportunity to help those families where both parties may need to go to work or in single parent families where the one parent needs to go to work…give them the support to get back in to the workforce when they choose to do so. We’re still providing significant support to stay at home parents, up to the age of six or until the children are in school, through the family tax benefit system, but then there is an expectation, if you like, that people should be looking, if they can, to get back in to the workforce and we’re providing, as I say, more incentives for small business to employ and more assistance to get people in to jobs. The $1.2 billion national wage subsidy to really target the long term unemployed, a $331 million youth employment strategy to particularly work with those who are disengaged from the workforce…

DAVID PENBERTHY: …Just finally, senator Birmingham, you as a senator, that deal with the Lambie’s, the Leyonhjlm’s and the Xenophon’s and all of the people who make up the zany tapestry of Australia’s upper house. Do you have a message to them about the measure that you’ve brought down last night?

SIMON BIRMINGHAM: I think that it is a wonderful and vibrant tapestry of course, David. Look, the message to the cross benchers and the message to all Australians is that this is a sound and prudent budget that is trying to get the nation’s finances back on track, but also provide the right incentive for small businesses to employ more people and to help more people back in to work and that is a reform agenda that they should all embrace.

DAVID PENBERTHY: Senator Simon Birmingham and the Member for Port Adelaide, Mark Butler, thank you both for your time.