Date: Tuesday, 28 September 2021
Topic(s): National Plan; COVID Business support; GST, Net Zero

Mike O’Loughlin: Federal Finance Minister and South Australian Senator Simon Birmingham is in Tassie at the moment. He joins me now live on the line. Senator, good morning. Welcome to Tasmania talks.

Simon Birmingham: Good morning, Mike. It’s great to be with you and wonderful to be in Tasmania.

Mike O’Loughlin: It is, indeed, I mean, one of the few places you can visit freely.

Simon Birmingham: It is absolutely. So look as the federal minister, but one based in my home state of South Australia, I’m delighted to have taken the chance to come and spend a few days with Tassie colleagues, Susie Bowers, liberal candidate for Lyons, as well as Gavin Pearce, Bridget Archer and some of my Senate team as well. And making sure that across that we’re talking to lots of different small businesses, farmers, community groups and really just trying to get a bit of a [indistinct] in Tassie and a sense in terms of how we can continue to help make sure that Tasmania gets through these COVID times, but comes out economically as strong as possible on the other side, which I’m sure Tassie will.

Mike O’Loughlin: Well, you arrived in the state Sunday evening. Have you met with any Tasmanian businesses since then? Because I’m sure you’ve got a pocketful of announcements to make.

Simon Birmingham: Look, I’ve met with quite a wide range of businesses. Everyone from hairdressers and butchers through to farmers in the dairy sector in particular, winemakers, as well as some in construction and range of different sectors date and just on the way to the Winnaleah Irrigation Scheme, where I expect again obviously having a number of discussions about the agricultural opportunities in Tassie. But importantly, what that means for exporting goods out of the island and onto the mainland and further afield around the world.

Mike O’Loughlin: So what’s the feedback you’ve had from these businesses, even in these COVID times, Tasmania has fared? You know, I would say reasonably well, you would have to as well. What have you heard from the businesses in regard to not just the pandemic, but assistance from the federal government in regard to finances and that sort of thing? Financial assistance like we used to have a few JobKeeper, et cetera. What’s the feedback for?

Simon Birmingham: Businesses on the whole are pretty good in terms of their feedback, the optimism that many are seeing growth in a range of those agricultural exports, the strength in the construction sectors, obviously, those who are more tourism dependent is a bit more of a mixed bag, that some in the bus industry or Ashgrove cheese, for example, which I visited yesterday afternoon, or some of the premium accommodation providers are struggling a little bit more in terms of the impact of border closures. And they’re eager to understand how the roadmap out of COVID shutdowns and border restrictions will ultimately apply. And I look forward to the Tasmanian Government outlining the same type of detailed plans as other states are increasingly starting to do. Based on that, Doherty Institute modelling and the national plan that we have outlined that that can give people confidence as higher vaccination rates are hit, which they continue to be day in, day out at really encouraging numbers, including in Tasmania, that that that can give people the confidence that once everyone’s had that chance to protect themselves and their loved ones, that that we ought to see an opening that can get some of those businesses have been doing it a little tougher back to normal.

Mike O’Loughlin: Well, it’s also trying to get back to normal. So it’s a great statement isn’t. I mean, I know the state and federal governments announced what an expanded support package for Tassie businesses just two weeks back. Are you seeing any impact from this as yet?

Simon Birmingham: So we have announced payments to the tune of some $70 million that will be provided in October and November to a range of predominantly tourism affected businesses. And they’re really important to support for those businesses. They’re timed to really get us through to the end of the expected period of lockdowns and shutdowns to get us to that point where we should have confidence in well over 80 per cent of people being double vaccinated and here in Tasmania based on numbers to date, there’s no reason why we won’t see that go significantly higher than 80 per cent,

Mike O’Loughlin: Which does bring us down that reopening there, doesn’t it? Minister, Tasmania has said it will reopen a high risk jurisdictions when every eligible person here has had a chance to be vaccinated. Is this good enough in the context of the federal government’s national reopening target of 80 per cent vaccination?

Simon Birmingham: Look, that target provides the reopening pathway, that’s especially important for those states in lockdown at present for New South Wales, Victoria, obviously in places like Tasmania, where people are currently enjoying widespread free, and abilities to move around in states like this one and my home state, there are fewer restrictions to be eased aside from those border controls. And obviously, making sure everyone’s had that chance to be vaccinated is a sensible thing to do. But it’s also something that everyone will have that chance this year. We have the supply, we have the distribution points across the country. I was chatting to a pharmacist yesterday who now has the Moderna vaccine in their pharmacy. And so people have got the choice at the state hubs and clinics at their local GP’s, their local pharmacies. And if you haven’t had a dose yet, you’re over the age of 12, then it’s time to make that booking and make it happen.

Mike O’Loughlin: Well, when you’re talking about restrictions, et cetera, and you’d have to be speaking with New South Wales and thinking about they’re saying what lift health restrictions even with more than 600,000 adults unvaccinated and they’re saying by the start of December in Victoria is on track to drop the health restrictions, allowing restaurants and shops to begin trading again from October 11. And Premier Daniel Andrews says those who have not been vaccinated will have to wait until Christmas before they have equal freedoms. I mean, the concern for me and I think for our Tasmania talks listeners, if you’re in a small business minister and all of a sudden they say, OK, you can open the borders. We’ve got people on holidays who’s going to be the policeman to judge when they come into that shop with a with a QR code or check in TAS app, that sort of thing. Are they going to be able to say this person that’s making them a coffee? No, you can’t come in if to those that are unvaccinated.

Simon Birmingham: Look, if that is the rule that a particular state government chooses to put in place, then then it comes down to the state having to explain how they’re going to enforce that. New South Wales, I think, has made it clear that the onus lies on the individual. So businesses absolutely have a right in New South Wales to turn away unvaccinated individuals who are seeking to enter in defiance of those state restrictions. But the New South Wales government, I think, has been clear they’re not intending to penalise businesses or expect businesses are standing on the door, checking every individual, but that an individual, if they are caught out acting in breach of those health restrictions could face a fine or a penalty. And so there’s got to be that that practical effect that clearly, busy retail businesses or the like may not practically be able to be checking every person entering their premises. Companies like Qantas clearly have checks already in place for who’s getting on a plane and adding that extra check, as they intend to do as to whether or not somebody vaccinated is a straightforward thing or a more straightforward thing, at least for them to do so. And I think it is clear that Australians should know that that they will be accorded earlier liberties, greater liberties for a period of time if they have taken the responsible step of being vaccinated. But that is that is an individual business decision or an individual state by state decision. At a federal level, we’re not seeking to mandate. Aside from in really crucial areas such as such as the aged care sector.

Mike O’Loughlin: Well, how do you feel about mandating vaccinations, minister?

Simon Birmingham: Look, I can understand, know I see this, particularly for businesses as something where freedom has to cut both ways. We give Australians the choice to be vaccinated now. Thankfully, the vast majority choose to do so. And I continue to strongly encourage everyone to do so and to drive us up well past 80 and hopefully pass 90 per cent vaccination, but is equally a right and freedom for a business like Qantas or a very small business to say, Well, I’m only going to deal with those who choose to be vaccinated, who are vaccinated, and I think that freedom is an important one for those businesses to be able to hold onto. If they think it’s important for their staff, their customers, their place in the community, then that’s their right. For state governments, they’ve got to make the decision based on the health advice and where they see that as being appropriate, as I said at a federal level, with firmly back to that in relation to aged care settings and different states, depending on their COVID circumstances, are obviously looking at certain other nuanced places or targeted places for requiring vaccination.

Mike O’Loughlin: But it’s interesting isn’t mandating vaccination vaccinations in workplaces or across industries apparently risks creating medical apartheid. Now that’s a fair work, commissioner has warned. Fair Work Deputy President Lyndal Dean described mandatory vaccination and by the way, I’ve had two, so I’m fine. But she described it as an abhorrent concept and is morally and ethically wrong and the antithesis of our democratic way of life and everything we value from Fair Work Commissioner,

Simon Birmingham: I have seen those comments. I gather that was a minority or a dissenting opinion in a Fair Work Commission judgement or ruling that was handed down and that that the other commissioners on that judgement backed the rights in relation to requirements around vaccination, which related to, as I understand it, the flu vaccine for somebody working in health related sectors. And I think I think most Australians fully understand that that if you are working in higher risk settings such as aged care or such as in hospital systems or the like, then it is perfectly responsible for governments to expect that you are vaccinated to protect not just yourself, but crucially, the vulnerable people who you’re working with and to give maximum protections to them. It’s certainly not any type of apartheid in that sense. It is a good sound, public safety and public health practise. Now, more broadly, as you reach into other businesses, other sectors that might consider requiring vaccination when it comes to their staff, there has to be a reasonable basis for them to require that there’s a reasonableness test there, which means that the vaccination must need to be if it’s going to be required, required deposit necessary to protect other staff or other customers or the like in some way. But businesses are free to choose in terms of their customers, whether or not they’re vaccinated. And that’s a matter. As I say, it’s one where the freedom equation, freedom of choice should cut each way that while individuals have a choice as to whether or not they get vaccinated in the vast majority of settings in their life, businesses can have a choice to who they choose to deal with.

Mike O’Loughlin: We’re speaking with Simon Birmingham, Federal Minister for Finance, Senator for South Australia. Now let’s talk GST. A paper released by Tasmanian Treasury yesterday predicts that Tassie would be $755 million worse off by twenty thirty one, thirty two under the new GST arrangements from the federal government. First of all, can you explain what exactly these new arrangements look like?

Simon Birmingham: Well, they’re not that new is probably the first observation to make that these were arrangements put in place back when Malcolm Turnbull was prime minister and Scott Morrison was treasurer, and essentially what they do is provide a floor for any state or territory across Australia that says you will get at least 70 cents in the dollar of GST collected in your state, paid back to your state. Now, when you put it that way, most people think that sounds pretty fair that if the people across the state are paying the GST and everybody across Australia does, and the GST is collected as a tax that we collect at a federal level, but we paid every single cent of it back out to state and territory governments. We don’t keep any of it to the federal government that those states and territories should get at least 70 per cent of the GST raised in their state paid back to their state. That still leaves quite a large volume of GST that can be redistributed across the nation. But in putting that law in place, we also negotiated some transitional arrangements and support arrangements that stretch all the way out until 2027. So there is no change in relation to the guaranteed support. While the funds to Tasmania for the GST all the way out to 2027, and indeed the government’s providing some estimated $3 billion in GST payments to Tasmania in 21/22, which represents around 4.1 per cent of the total GST pool. Now, if there are discussions to be had as we approach 2027, well, they can be had by governments closer to that time.

Mike O’Loughlin: Well, considering GST ministers Tasmania’s largest single source of revenue can contribute some more than what, 40 per cent to the state’s income in 2021/22. Certainly concerning prospect, which could have a huge impact on our already struggling health and education sectors surely.

Simon Birmingham: The 2027 is not just after the next federal election, it’s after the federal election after that. So it’s quite some time off into the future now. As I say, there’s a need to be discussing particular practical impacts of how projections may look post 2027. Then, of course, those discussions can be had closer to that time when it will be far easier to model and ascertain just what the impact may look like. I appreciate that people may be attempting to model that right now, but it is quite a way of in the future and the extent to which GST distribution arrangements are operating at that time depend upon a lot of different factors around state revenues and an economic activity in quite a few years to come.

Mike O’Loughlin: Well, when you think about it, when you read about it now and this is for our children’s future, for Tassie to be $755 million worse off, but Western Australia to be fifty seven point five billion dollars better off. I know the Premier Peter Gutwein in budget estimates this month. He took a bit of a swipe at Western Australia, which I think was a good thing over GST distribution, saying its government should be embarrassed to receive more than its fair share. I mean, that’s and realistically, if you’re thinking, let’s talk 27 or let’s talk twenty thirty one into thirty two, we’re still if you go to twenty thirty one thirty two, we’re estimated to be, what, $100 million per annum worse off. And that’s on an ongoing basis. And that comes from the Treasury document

Simon Birmingham: Mike, is 70 cents in the dollar really more than your fair share? That’s the equation that we’re all having to deal with. Is it really unfair for a jurisdiction to only be getting 70c in the dollar back of the GST being paid in that jurisdiction?

Mike O’Loughlin: Can I just ask if you could maybe, the phone, some a little bit about that phasing out happening there, senator, if you don’t mind with the phone?

Simon Birmingham: Well, we’re on the road. If we can pull over, [inaudible]

Mike O’Loughlin: Yeah, we’d keep talking. We’re getting there. But I lost a bit of that as well. Let’s move on. If we can turn to climate change, I know you’ll have to go shortly. But this calls for Prime Minister Scott Morrison to attend the Global Climate Change Conference, which is COP26 in Glasgow. That’s November. Now, how can it even be an option for him not to attend something so critical for our future because he said, Oh look, he possibly doesn’t want to go into quarantine again? This sort of thing, he should be there.

Simon Birmingham: The government will be there at senior levels. There’s no doubt about that ministerial or prime ministerial levels and decisions around that will be made over the coming weeks. The prime minister has only just returned from meetings at the United Nations in New York and meetings with President Biden and other leaders, particularly of Quad Nations in Washington. So it’s understandable that at present there’s a lot happening in Australia. It is not the case that leaders always attend every one of these, these climate change discussions that that occur, these conference of the parties, as they’re called, in fact, most times the vast majority of years. Australia’s prime minister does not attend, but are responsible ministers attend now. This time around, we’ll work through that over the next few weeks. What matters most is the fact that we’ll be taking serious policy decisions to those discussions that that will really be outlining the plans in Australia and how they are building on the fact we’ve had a 20 per cent reduction in Australia’s emissions since 2005. And we want to make sure that we keep those emissions going down on the trajectory towards net zero.

Mike O’Loughlin: Well, unlike our new friends in the United States or they’ve been friends for a long time and the United Kingdom, we are in here in Australia. I mean, we’re yet to commit to a target of net zero emissions by 2050. I mean, why are we lagging on this so much? I mean, is it is it the Nationals holding us back? Is it Barnaby and Canavan just having a little chat to themselves saying, Oh, hang on, we’re looking after the farmers?

Simon Birmingham: Well, the National Party and indeed Liberal MPs and senators are asking the right questions about making sure that we protect jobs in Australia and economic opportunities in Australia, and it’s crucial for us, but it’s also got to be done in an environment of driving us towards net zero. And the thing about our side of politics and the Liberal and National parties is you don’t like you do with Labor, get the commitment first and questions about how we protect jobs after what we’re doing is looking at all of this in an integrated way, how we get to net zero as soon as possible. The prime minister said preferably by 2050, but doing it in a context that also protects Australian jobs, particularly regional jobs, across Australia. And it’s why we’re investing such record sums in creating new hydrogen industries, such as the opportunities at Bell Bay in Tasmania. It’s why we’re investing in terms of increased soil capture to help make our farmers better able to operate as contributors to net zero and in doing so also improve their productivity along the way. And these are the smart things that we are investing in as part of our technology, not taxes agenda to achieve net zero, but also to protect the jobs and livelihoods of Australians on the way through.

Mike O’Loughlin: And Minister, if I can. How are things looking for Bell Bay, I should say, to become one of the one of those proposed hydrogen hubs. Has it been definitely locked in?

Simon Birmingham: So look this this was certainly something that that I had a few discussions, particularly with Susie Bower candidates aligned yesterday that she has particular skills and knowledge around that sector, and the opportunities of the hydrogen industry were very excited by the possibilities of Bell Bay. I’ve spoken with Andrew Forrest, Twiggy Forrest, who I know is eager to pursue significant investments there, and I think those discussions with him personally, as I know Prime Minister Morrison has had. And so I think we’re quite buoyant about the prospects there. There’s a process underway to select the hydrogen hubs under the multimillion dollar programme that we’ve announced a really supercharge that hydrogen industry and potential in Australia. And I’ve no doubt that we’ll be announcing those sites when that thorough analysis is completed over the coming months.

Mike O’Loughlin: Well, we’re looking forward to it because obviously the injection into this state will be absolutely phenomenal with green hydrogen. So I’m hoping for that. Listen, in regard to the GST, though, I mean, realistically, that’s so terribly important to Tasmania. Do you think it’s correct that Western Australia can just go on in the future, even right now looking at it for someone reading that in the paper that’s in Tasmania saying, Oh, well, we’re going to lose it, we won’t have that. We just might have trouble just paying for hospitals, education, etc.. It is so serious. I mean, you can’t just sort of push it to the next election. I hang on. We’ve got one after that as well.

Simon Birmingham: Mike, I get that and nobody is going to entertain a proposition where Tasmania is unable to service its schools and hospitals, and it’s important very much that we continue to support that as we do. But I think this is also well understood as making the point before we’re only talking about WA receiving a floor of 70 cents in the dollar of GST collected. Now, that’s not a deal specific to WA that applies across all states and territories that they get back 70 cents in the dollar. Tasmania will, on all projections, continue to receive well over the amount of GST collected in Tasmania paid back into to support it. But there is an absolute guarantee there all the way through until 2027. And so Tasmanians should be confident that that there is no threat to any of those expected funding streams any time soon for any of the years to come.

Mike O’Loughlin: Well, look, we hope so, and we appreciate that your time this morning. I know you’re busy, but do enjoy your visit and I know you’re having a chat with Gavin, a few others as well. So enjoy your visit in Tasmania. It’s been a pleasure to speak with you this morning. Simon Birmingham, Federal Minister for Finance, Senator for South Australia.

Simon Birmingham: Thanks, Michael. Always a pleasure. Happy to do so again.