Topics: Australia-China trade relationship; Government reshuffle; Budget Update; JobSeeker and JobKeeper.
18/12/20
08:51AM
Spence Denny: Now, we know that a coalition reshuffle is predicted for today and that Senator for South Australia, Simon Birmingham, already has been appointed as the Finance Minister and will relinquish Trade, which is expected to go to Dan Tehan. Senator Simon Birmingham, good morning to you.
Simon Birmingham: Good morning, Spence. Good to speak with you.
Spence Denny: Just, sort of, the Trade portfolio briefly if we can, before we can talk about Finance. But, the story in The Australian today, that China is forcing tens of millions of residents in large cities to ration heating and electricity use because of a shortage of coal. Is there an element of schadenfreude sneaking in for you there as the Trade Minister, Simon Birmingham?
Simon Birmingham: Well, I have said for a little while now that we shouldn’t just see the disruptions to trade in a binary sense as hurting Australian businesses. And of course, they are and that’s where our prime concern is, but that China needs to realise that this disruption disrupts Chinese businesses and ultimately, has flow on impacts for Chinese consumers. And that’s why open trade has helped so enormously. If you look back over the last few decades, Spence, the greatest really economic miracle of our lifetimes has been the rise of China, lifting hundreds of millions of people out of poverty. And that’s come about by a more open economy, engagement with the rest of the world, trading relationships. And we want to see that type of human advancement that gives people longer lifespans, better living standards, better health care, better education across our region continue. And it’s why we continue to urge China and all nations to engage in ways that facilitate those optimal outcomes.
Spence Denny: You come into the finance portfolio at a time when the Government’s haemorrhaging money. When does the road map to surplus start?
Simon Birmingham: Spence, I mean, right now, our strategy around budget management is focussed on still getting Australians back into employment because without that economic success, without a strong economy and Australians in jobs, then there is no roadmap to budget balance or surplus, because obviously we need an Australian economy where people are paying taxes to fund the services that we all rely upon. And pleasingly, what we saw in the budget update yesterday is that business conditions are better than had been expected when the budget was handed down. Growth is stronger. More Australians are in jobs than had been anticipated. Some 740,000 Australians have had jobs created in the last six months. We’ve got 85 per cent of the 1.3 million people who lost their jobs or were completely stood down back at the start of the pandemic, are now back into workforce. And what that means is that it has a number of knock-on effects. Most important being for those families and households that they’ve got a job. But it does also mean that we’ve seen a reduction in terms of the draw on government payments, on some of those social safety net payments and an increase in some of the expected revenue. And so although it’s still a big deficit forecast, it is now smaller than had been the case before. And that’s the trend that we just have to keep continuing.
Spence Denny: The statistics tell a story, but this is a real story via text: I just got my Christmas present from Centrelink – from 1 January, JobSeeker goes back to around $600 per fortnight. Does the Federal Government think you can survive on this poverty payment? The cost of food and living expenses have gone up significantly in recent times. And, well, he’s clearly in a situation where he feels as if that’s just going to be insufficient to have a reasonable life. What do you say to our texter, given that the intention is to scale back JobKeeper and JobSeeker?
Simon Birmingham: So this budget update is a bit of a reflection on the scale of some of the decisions that are there. That we, in this budget update, had made the decision to extend the extra coronavirus supplement that’s attached to JobSeeker. And even extending it at a slightly lower level, it’s still a $3.2 billion cost for all Australians to make that extension just for one quarter, just for a few months. And so these are all difficult, challenging decisions in terms of getting the balance right as to where the social safety net level sit. We have responded, through the course of this pandemic, to provide additional support that we always said would be temporary and would be targeted. And we’ll look again more closely at all of those issues, as we have, as we get closer to that now March deadline.
Spence Denny: What about beyond March, is there- are there any plans at this stage to extend the JobSeeker supplement?
Simon Birmingham: There are and JobKeeper is slated to come to an end at the end of March. It’s been a really important emergency measure, but it is the single largest intervention in the Australian economy that a government has ever rolled out. It was necessary for the times because we’ve never lived through times like these in our modern economic circumstances, but it’s also not affordable for the long term future. So in keeping everything proportionate to the circumstances, as we get unemployment not back to where it was, that’s going to take some years to get it back to where it was, but certainly improving along the way; we have to be mindful as to how we get that balance right. Your opening question to me in the finance space was about the debt and these are things that we have to juggle and balance, they’re not easy. But it’s why our ultimate focus and our prime focus at present is still on job creation. And yesterday’s update shows that rather than unemployment peaking at 8 per cent, it’s now forecast to peak at 7.5 per cent. That’s still higher than we want and our projections are it will still take some years before we can get unemployment back to where it was pre-pandemic.
Spence Denny: Senator Simon Birmingham, thank you.
Simon Birmingham: Thanks Spence. My pleasure.