Topics: Labour force data; vaccine rollout; superannuation reforms
Laura Jayes: Well, more Australians are now back in work than before the pandemic, the unemployment rate unexpectedly dropped to 5.1 per cent. Most of those who found work found full time work. The Australian economy remains in recovery mode, but the Treasurer says it is roaring back. It’s great news indeed. But, are there are a few things we should be worried about. The Minister for Finance, Simon Birmingham, joins us live from Adelaide this morning. Minister, thanks so much for your time. It’s great news indeed, but there are a few warning signs in these numbers?
Simon Birmingham: Good morning, Laura. Look, this is very encouraging news, and especially for the 987,000 Australians who have secured employment since May of last year. This is really a demonstration of just how strongly our economy is coming back, how successfully our economic recovery plan is working. And nobody had anticipated that we would see unemployment getting down to 5.1 per cent at this stage. It’s well beyond market expectations. And it really is a testament to the resilience of Australian business and Australians and the success of those policies that have been supporting them through these challenging times. Now, we handed down a budget just a few weeks ago, and that was a budget that looked to see a further two hundred and fifty thousand jobs created and to drive unemployment below five per cent. That remains our intention to continue to see that jobs strengthen across the Australian economy and to get the unemployment rate even lower over the next few months and years.
Laura Jayes: Yet we’re not far away from having a four in front of it. And you say it surprised the market that may have even surprised the RBA. Is it still feasible that rates remain as low as they are until 2024?
Simon Birmingham: Well, that is a matter for the RBA. They operate with full independence in this space, but the governor has continued to be fairly clear that he expects to see rates at these very low levels right through the medium term, that they, of course, will monitor all of the economic conditions in their assessment. But inflation remains quite low in Australia and in general, still across the world, there are pockets of issues that obviously everyone will monitor carefully. But I think we can have confidence that we are in an environment where the cost of borrowing will remain relatively low and that that will continue to contribute, as it has been, to an environment that is stimulating investment across the Australian economy. And it’s one of the key things to remember here, that in the last national accounts figures and GDP figures, we saw real growth in relation to business investment. That’s being driven in part by our policies of full expensing but that business investment isn’t just going to generate jobs in the short term. It creates more productive and competitive businesses for the medium and long term as well.
Laura Jayes: The banks seem to be already moving on interest rates, at least fixed rates. Are you worried about that?
Simon Birmingham: Again, it’s for the banks to assess conditions as it is for the RBA to make its own independent monetary policy as we have always supported. But the government is confident in terms of the projections that are there, that we continue to see improving economic conditions. And if anything, that’s a good challenge to have with much rather have the challenge of seeing unemployment figures exceed market expectations, growth stronger than market expectations. They’re the good challenges to have and they’re the ones that we want to keep confronting.
Laura Jayes: And inflation are you worried about that?
Simon Birmingham: We’re not worried about inflation at this stage, but of course, that is always part of the economic puzzle. Now, the RBA is, as we’ve already discussed, will maintain their close watching brief in relation to inflation. But we’re certainly not in any immediate risk of seeing inflation break out of that target range that the RBA operates within.
Laura Jayes: AstraZeneca. Let’s get the vaccine roll that now is no longer recommended for those under the age of 60. What do you say to many Australians who might be feeling a little anxious about this decision, given the risk is two in four million? And if you look at the evidence around the world, it’s even more infinitesimal than that.
Simon Birmingham: Well, Laura, that’s just it, I would remind Australians that, right, since the beginning of the pandemic, Australia has taken a very cautious approach to keep Australians safe. We’ve done that in relation to the advice about the closure of our international borders, the measures we’ve taken to keep Australia safe through having world class testing, tracing, isolating systems in place. And we’ve also done it in relation to the policies around the vaccine. And so we’ve put the health and safety of Australians first and foremost, and they should have confidence in the advice of the health officials and regulators when it comes to this latest piece of advice and the vaccine rollout. Of course, the government’s acting on it, but it is equally clear, if you had your first dose of AstraZeneca and you are in that 50 to 60 age group, then you should proceed with getting your second dose of AstraZeneca. The people should continue to go ahead and make bookings to get their vaccines. In fact, I’m getting my first dose later today. So this is something that we should all be making those bookings when and where we’re eligible and following that advice.
Laura Jayes: And once again, if you get vaccinated, what freedom does it bring? Are we any closer to knowing that?
Simon Birmingham: Well Laura, once again, the first thing about getting vaccinated is it protects your health, it reduces the risk of you dying or you facing serious illness. And even in the small outbreak that we recently had in Victoria, the evidence was there in terms of some of those older Australians who had been vaccinated and had relatively mild effects in terms of contracting COVID. So, that’s the first criteria.
Laura Jayes: That’s right. And that was great news wasn’t it because is doesn’t it show that the vaccines are working and we perhaps don’t need lockdowns or interstate closures?
Simon Birmingham: It does it does show very encouraging things they Laura and so as the vaccine rollout continues to ramp up and we’ve got well over six million doses that have been administered now and we’ve got two point four million doses of Pfizer forecast to be coming through in July, that’s going to continue to get us closer and closer to a point where we can then look at the health advice at that stage and determine how different things can reopen. But there’s still a little way to go in that rollout. And as we’ve seen this week, the health advice can change unexpectedly. It’s done so multiple times along the way. And so we’ve got to get much further along the path of that vaccine rollout to then look at the health advice as it stands at that time.
Laura Jayes: Just one last question on superannuation. What happened in the Senate yesterday? Pauline Hanson really vote to increase her own super?
Simon Birmingham: Well, she proposed certain tax changes that that mean tax penalties for certain annual contributions don’t apply. But on the whole, what happened in the Senate yesterday was a passage of superannuation reforms that will ensure for many Australians they don’t see their contributions eroded by paying fees across multiple funds, by holding on to low performing funds for long periods of time with small amounts of money in them that just get eaten up, but instead that we get more of a market in place for superannuation, where there’s transparency, where there’s competitiveness, and where people understand better how they can take their money from one fund to another fund to choose the highest performing outlet for what is ultimately their money and their retirement savings.
Laura Jayes: Ok, Simon Birmingham, thanks so much for your time, as always.
Simon Birmingham: Thanks, Laura. My pleasure.