Topics: RBA interest rate cut; legislating tax cuts; unemployment rate.
Ali Clarke: Simon Birmingham, after the RBA cut interest rates to 1 percent yesterday, are you worried about our economy?
Simon Birmingham: Well I’m not worried about our economy, our economy’s got great resilience and it’s economic fundamentals are strong, and we’ve got faster economic growth in Australia than in any G7 economy except for the United States. But there are certainly pressure points, pressure points caused by local factors beyond our control like the drought, by global factors like the global trade uncertainty that exists. And all of those things are issues that we know we have to keep responding to and ensuring as much resilience in our economy as possible. That’s why getting more money into household pockets through both tax cuts in terms of fiscal policy and through interest rate reductions in terms of monetary policy, is really important in terms of keeping the economy going, why our $100 billion worth of infrastructure investment is really important in terms of keeping the economy going. And it’s why in my portfolio making sure that we keep finding new trade markets to open into notwithstanding the global tensions between China and the US is really important.
David Bevan: Mark Butler, one percent interest rate means that the economy is barely on life support and it’s easy for the Prime Minister and Simon Birmingham to say well that’s why we need these tax cuts through. Is Labor actually going to get its act together and pass the tax package?
Mark Butler: Well we need more tax cuts through, that’s the point we’ve been making and we need an infrastructure package brought forward. In South Australia for example only 4 per cent of the infrastructure package allocated for South Australia in this year’s budget will be spent over the next four years, 96 per cent of it is in off in the never never as are most of the tax cuts promised by Scott Morrison at the last election. So we are very worried about the state of the economy, interest rates are now at one third of the level they were during the global financial crisis which Joe Hockey at the time described as emergency levels. Economic growth is not going well for three quarters in a row, economic growth in Australia has been running at lower than population growth, which means that per head of population the economy is going backwards. Productivity growth has been negative for four quarters in a row. Wages are running at the low inflation. So Philip Lowe the RBA Governor last night again said we need something more than monetary policy to assist the economy, we need more fiscal policy put into place and we need infrastructure spending to put into place.
David Bevan: But if Labor won’t pass a tax package…
Mark Butler: We passed it last night through the House of Reps.
David Bevan: But we are talking about the Senate here, let’s not be cute here we’re talking about the Senate here. It’s got to get through two houses, if it won’t pass the tax package as clearly spelt out and endorsed at a federal election only a few weeks ago, what’s the point in having elections?
Mark Butler: Well the point David that we’ve been making over the last number of days particularly yesterday in the parliament, is that we’re in complete agreement with the government about the elements of the tax package that apply this year, but the rest of the tax package is off in the never never.
David Bevan: Yes but if you wanted (indistinct) on tax you should have won the election.
Mark Butler: Well the point we’re making is that under the Government’s tax package 1.3 million workers in Australia get no tax cut during this entire term of Parliament. We’ve argued for the 2022 tax cut in the Government’s tax package to be brought forward because we’ve heard the calls from the RBA Governor for more fiscal policy to start propping up the economy. So we’ve said stage two of the Government’s tax cuts should be brought forward to this year, that would be able to happen in a way that was consistent with keeping the projected surplus in the budget for this financial year. We’ve argued that, we’re going to continue to argue it in the Senate over the coming 24 hours.
David Bevan: Sarah Hanson-Young from the Greens should the government just start printing money?
Sarah Hanson Young: I think what they should start doing is actually funding some things that will actually create jobs, infrastructure spending…
David Bevan: Well that’s what Donald Trump’s been doing, he’s been printing money.
Sarah Hanson Young: Well I don’t think that’s the answer, I think the answer is actually spending the money in a more prioritised way so that you actually create jobs and the money flows to the people who need it most. This is the biggest problem the Greens have with the Government’s tax package is that the bulk of the money at the end of the day when it’s all going to be spent, is going to benefit those at the wealthy end. The bulk of the money is going to those who aren’t struggling right now. Meanwhile low income workers who haven’t had a pay rise in donkey’s years continue to struggle, those on unemployment benefits, those struggling on Newstart there is no indication the government is going to move to give them a rise in this term of government. And meanwhile infrastructure projects that would create jobs whether that’s in public transport or helping to make sure that the economy can transition to the jobs of the future through clean technology, that’s the type of job creation and nation building projects we should see funded. When interest rates are so low as they are, this is the time to borrow money create projects, create jobs. Look with the decision that was made by the RBA yesterday, you’ve got to you’ve got to wonder how on earth can the Liberal Party and Scott Morrison crow about being great economic managers. They’re not, they’re driving the economy into the ground, they’re giving tax cuts to their big mates and everybody else can suffer.
Simon Birmingham: Try making that argument Sarah to the 1.4 million Australians who’ve got a job over the last five and a half years, try making that argument to Australians who have seen us get the budget back to a position of balance.
Sarah Hanson Young: What have you done to lift wages Birmo?
Simon Birmingham: The first thing you’ve got to do to lift wages is actually have strong employment levels. And that is precisely what we’ve managed to achieve. And that’s what we consider to be the singular and most important achievement of our government is job creation and getting the unemployment rate down to a level…
Sarah Hanson Young: Helping people get a job by making sure Newstart is at a reasonable level so people aren’t living in poverty, do that.
Simon Birmingham: It is now conceivable that we are actually going to see unemployment sitting where the RBA is suggesting that full employment could now even be achievable and with a figure beginning with 4. That is not something Australia has seen before but it’s something that we’re actually working towards and have got real achievements and accomplishments not just in creating those jobs but overwhelmingly full time jobs in lifting and creating a record number of jobs for young Australians, in getting women’s workforce participation to record levels as well. These are achievements that are part of economic strength in Australia. It’s one of the reasons why people ought to back the Australian economy and that yes there are pressures that we’re having to confront and deal with. But I can tell you as you walk around and talk to other nations they will still want to know how it is that Australia does it, how it is we’ve done 28 years of consecutive economic growth, created these jobs, brought our budget back to balance and can afford to deliver tax cuts that Labor ought to just get out of the way and let through the Parliament to give the certainty to households and businesses so that they can invest for the future.
Ali Clarke: Okay. Well Sir Simon Birmingham, Sir Mark Butler, Madam Sarah Hanson Young, I think I got all of you in there thank you very much for your time.
Simon Birmingham: Thank you Dame Ali.
Ali Clarke: Thank you.