Topics: Budget 2021    


Fran Kelly:  Simon Birmingham is the Finance Minister. He’s in our Parliament House studio. Minister, welcome back to breakfast.


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


Fran Kelly: The coalition’s new mantra is to spend its way out of the COVID recession. Will this be a budget a Labor government will be proud of?


Simon Birmingham: Surely not, Fran. Every spending decision that we are taking is a careful one. It’s framed against the backdrop of ensuring that we keep our debt low by international standards. Equally, we’re managing in an environment where those debt repayments are much lower than they’ve historically been. And we’re going to continue to keep a very careful watch whilst we focus well and truly on not interrupting and in fact, continuing to support and grow the economic recovery that is well underway. And we are in a fortunate position as Australians to have the best health outcomes in the world in relation to COVID-19 and of course, amongst the best economic outcomes in the world. With remarkably more Australians employed today than at any time in our nation’s history, nobody would have thought that was possible 12 months ago. And yet we’ve achieved that. What we need to do is to continue that economic recovery, that focus on jobs growth, the investment in the essential services that Australians rely on, which this budget will clearly do. But we certainly do it against a backdrop of careful budget management, ensuring that each of those investment decisions we make is carefully targeted against the objectives we have for economic growth, for jobs growth and around essential services.


Fran Kelly: Ok, but you heard Jim Chalmers there, the shadow treasurer, say it’s got to be more than just another trillion dollar political paint job. And it certainly fits the bill of a pre-election budget. This could very well be the last budget before we go to a federal poll late this year or early next year. Why shouldn’t people be suspicious of the government’s conversion to big spending with no cuts to tackle debt and deficit? And why wouldn’t people expect you to convert to the debt and deficit mantra with the austerity built in if you win the next election?


Simon Birmingham: Fran, I heard a whole series of rather cheap slogans from Jim Chalmers there, and he talks about jobs. But the reality-


Fran Kelly: Debt and deficit? Wasn’t that cheap slogan, given what we’re up to now?


Simon Birmingham: No Fran, in fact, coming into this pandemic and the crisis we faced, we were in a stronger position than the rest of the world because we had brought the budget back to a point of balance, because we had been prudent and careful. And as I said in the first answer, we framed this budget very carefully against international comparisons to make sure that Australia’s debt remains low by international standards. That is certainly a crucial part of our competitiveness, our attractiveness as a destination. And we’re going to hold firm to those objectives. But if you listen to the Labor Party there and he talks about jobs, Jim Chalmers, we went into this pandemic with record levels of workforce participation in Australia, having created one point six million additional jobs during our first six years in office. And we’re coming out of the COVID-19 recession with record levels of employment in the nation’s history, having recovered those lost jobs, having got Australians back to work. And of course, we do it in an environment where globally you’re still seeing massive uncertainty as COVID still grips many nations. Great uncertainty in many countries around aspects of vaccine distribution and rollout as well. You’ve got the eurozone slipping back into recession and Australia has to make sure that we continue our economic recovery, which is what this budget will focus squarely on.


Fran Kelly: Let’s go through some of what we know. We think we know the government will use the budget to respond to the royal commission. The treasurer has confirmed that will the extra funding announced tomorrow night be seventeen point seven dollars billion over four years? The Australian seems to have had that figure leaked to them. Can you confirm it for us?


Simon Birmingham: Look, I’m not going to confirm those budget specifics. We will provide a response to the Aged Care Royal Commission, which will be a once in a generation investment in additional services in aged care, focussed on the quality and the safety of aged care for all Australians, the availability of aged care. Choices between residential care and support for Australians to be able to stay at home and people will see that whether it’s investments in standards in quality or workforce capabilities and care time. These are all important factors that the royal commission identified and which we’ve worked hard to provide a comprehensive response to. And they’re part of the essential services Australians expect us to invest in, whilst at the same time making sure that we drive future productivity growth, such as today’s announcements around infrastructure do.


Fran Kelly: I’ll come to some of that. But let’s stay with aged care, 10 billion dollars already been taken out of the system in recent years, what’s called efficiency dividends after that money is restored. If it is seventeen point seven, as the OZ reports, the new extra funding amounts to only about eight billion over four years. Is that going to be enough to fix the deeply entrenched problems uncovered by the royal commission? The one in three residents have experienced substandard care. The one in five have been assaulted. The overuse of physical and chemical restraints, the need for a bigger and better paid workforce. 102,000 people are still waiting for home care packages in June last year.


Simon Birmingham: I don’t accept some of the suggestions about budget reductions in aged care. We’ve seen continued growth in investment and indeed under our government we’ve also substantially invested in recent times in additional home care packages, in particular to support the sector, as well as additional areas of investment that have flowed, especially during the pandemic period. But in relation to the royal commission, it did identify a number of problems and challenges. Scott Morrison called the royal commission. We’ve now worked through its recommendations. The royal commissioners didn’t agree on all of their recommendations. So we’ve had to take a careful and cautious approach to ensure that we respond to them in ways that deliver the step up in relation to the quality of care, the availability of care, the support for the aged care workforce that the royal commission recommended, as well as support across the residential care settings and the home care settings. And Australians will be able to see tomorrow night that we have a very comprehensive response, but also one that maintains the principles people would expect of us being careful in relation to how we are structuring and building those programmes and cautious in relation to the extent of what is a very record investment of new spending already.


Fran Kelly: Clearly, there’s a lot to be done and the royal commission indicates there’s a lot of money to be spent. And I don’t think at the moment Australians are quite keen for this to happen on the cheap. The focus, one of their focus understand that the money tomorrow night will be a better paid and better trained aged care workforce. Are we talking more registered nurses to meet the ratios set down in the royal commission? Is the government committing to those staffing ratios?


Simon Birmingham: So as you’ve heard me mention, workforce is certainly part of the work of the aged care royal commission, and it’s part of our response which will be detailed tomorrow night and-


Fran Kelly: That will commit to staffing ratios?


Simon Birmingham: Those areas of workforce support. And again, I’m not going to pre-empt the comprehensive response to the aged care royal commission that we will provide, but we are focussed on ensuring senior Australians in residential care get the support they need. And that support, of course, includes time with registered nurses, time in care and support that people should rightly expect to receive. It equally involves making sure that we support the workforce and as a government during the pandemic and prior, we have invested increasingly more in the skilling of Australians. And so the skilling of the workforce for the care industries is a key part of how we ensure we have the workforce we need for the future. Just as last week’s announcement in relation to our digital economy is similarly about providing a skilled workforce in growth sectors of the economy that are about a modern, productive economic environment that we’re building for Australia.


Fran Kelly: And there’s going to be money for an extra 10 billion for infrastructure. How much of this will be used to target seats the Coalition wants to win at the next election? The two billion dollars for the Great Western Highway upgrade through the Blue Mountains takes in the marginal Labor seat of Macquarie, for example, the projects in northern Tasmania and central Queensland are where seats are in play. Is the government at it again, basically?


Fran Kelly: Fran, these are investments that will stand well and truly to their merits, their investments that have been worked up overwhelmingly with state and territory governments who have identified the priority to deliver these types of infrastructure projects. Every dollar that we invest in relation to infrastructure generates around four dollars’ worth of additional economic activity and gains across the economy. The projects themselves during their construction phase create additional jobs and additional economic activity. But of course, also then once built, they provide a productivity dividend for businesses and a liveability dividend for Australian households and families by ensuring that travel and commute times are cut down by improving the safety of travel around the country. And ours is a government that has done some of the big projects and is delivering upon them for Australia for years and years, the Western Sydney Airport was kicked down. The can was kicked down the road in relation to a second Sydney airport. We’ve made the decision. We’re building it. The building is happening right now. The same can be said in relation to the Inland Rail. And we’ve seen today’s announcement is support for a new intermodal terminal in Melbourne, which again, is a big productivity boost, an asset that complements that work in relation to not just building roads to get people home faster, but building the infrastructure that makes our nation more productive.


Fran Kelly: All right, Minister, almost out of time, but on the international borders, the Prime Minister’s indicated it will take the international border, will stay closed indefinitely. He says he doesn’t quote – see an appetite amongst the Australian people for any change to the border arrangement. The budget will include an assumption that the border won’t be open until at least 2022. – There’ll be a federal election within a year. Governments with tough border policies have done well at the ballot box. Is that the lesson the federal government’s taken from the states? Keep the borders shut until the election.


Simon Birmingham: We’re taking the lesson from our success to date in managing COVID-19 decision in February of last year to close Australia’s borders to China, followed by decisions to close our borders to Italy, to South Korea, to Iran. And then, of course, right across the globe has been perhaps the single most important factor in keeping COVID-19 out of Australia, therefore keeping Australians safe and Australian jobs safe. And Australians want us to maintain that ability to keep them safe and to keep their jobs safe. And the border controls are a key part of that. And so we will absolutely maintain them because in doing so, we’re saving the lives of Australians and we’re protecting their jobs.


Fran Kelly: Simon Birmingham, thanks very much for joining us.


Simon Birmingham: Fran, my pleasure.