Topics: Budget 2022
30/03/2022
8:40AM ACST
Katie Woolfe: It was handed down last night and things are looking pretty positive for the Northern Territory with more than $2.6 billion to be spent on infrastructure projects across the Territory in coming years. Joining me on the line is the Federal Finance Minister, Simon Birmingham. Good morning to you.
Simon Birmingham: Good morning, Katie. Great to be with you.
Katie Woolfe: Great to have you on the show. Minister, amongst these big-ticket items for the Territory, the Federal Government’s flagged a $1.5 billion upgrade for the Darwin port and another $440 million for logistics facilities in three other Territory centres. Firstly, what is that $1.5 billion to the Darwin port going to entail?
Simon Birmingham: Well, this is really about ensuring that that we have the capability for the Northern Territory, which has seen phenomenal growth in its export opportunities in recent years, to keep that growth going. The opportunities around the Middle Arm precinct to be able to invest in seeing more industry, more development, and more export opportunities there is crucial. We see this about investing in the future energy potential of Australia. So, ensuring that we realise the hydrogen potential for Australia as part of the clean energy transition that we in the world are underway and we want the territory just as it is currently an export hub for LNG, to see those benefits of being an export hub in hydrogen, in critical minerals and resources where possible to.
Katie Woolfe: We know the port is currently leased to Chinese company Landbridge. So, is it a new port or is it about actually upgrading some of the facilities or some of the infrastructure nearby?
Simon Birmingham: So these are providing for potentially new facilities as part of part of that long envisaged and talked about development there around the Middle Arm area, ensuring that we actually have that development realised as an industrial hub, as a port precinct, as an export precinct in Darwin and supporting from that Australia’s export growth around 67% of all of Australia’s exports come out of regional Australia. Around 82% of our goods exports come out of regional Australia. And so in this Budget with investments in the Territory, but also in the Pilbara, in central Queensland, in the Hunter Valley, where backing those big industrial centres or potential industrial centres as locations for stronger growth and to keep that export generation going for our country, which is one of the wealth factors that enables us to have achieved some of the lowest unemployment rates in 50 years in Australia.
Katie Woolfe: Minister, I think, you know, very often regional Australians do feel as though they can be forgotten a little bit when it comes to things like the budget and by our Federal pollies. But this budget does seem to focus on regional Australia. Why is there such a push towards the regions?
Simon Birmingham: Very much for the reasons that I outlined that regional Australia is a wealth generator, but not just for itself, it’s a wealth generator for the nation. Those exports help to underpin jobs and businesses right across Australia and city areas as well. And whether it’s in agriculture or the resources sector, with new resources areas such as critical minerals that provide rare earths into different batteries or the like, or whether it’s the growth of the hydrogen sector. And crucially, where we’re investing is also in value adding of these things. Our manufacturing agenda with another billion dollars of support for manufacturing in Australia is about continuing the trend we’ve seen, which is a recovery in manufacturing jobs and more than 1 million Australians are employed in the manufacturing sector again. And so we want to see whether it’s in legumes and grains, the growth of manufacturing in plant protein, whether it is in relation to rare earths that we don’t just ship the ore body out of Australia, but we get some value adding from more processing of those rare earths in Australia, creating more manufacturing jobs. We’re having success there and we’re investing further to secure further success and more jobs to make sure that we keep it going in terms of jobs growth and from that, wages growth for Australians.
Katie Woolfe: So of course, as part of this flagged, are these logistics facilities going to going to be operating down the track in the Territory, but also this $300 million to be spent, as you’ve mentioned, on LNG, clean hydrogen production and carbon capture and storage in Darwin. When is this going to get underway?
Simon Birmingham: So, what we’ve got there is clearly a funding pipeline that that provides many hundreds of millions of dollars of investment over the next four years. But that continues in terms of ultimately billions of dollars of investment over the next decade recognising that building big industries like this take time. Building big infrastructure like this takes careful planning. But it’s a demonstration in this budget of the long-term vision and plans that we have to keep Australia’s economy strong. In this Budget we’ve seen the dividends of economic strength, a higher labour market, more Australians in jobs means we’re paying less in welfare, we’ve got more taxpayers contributing in the economy that’s enabling us to have lower deficits and lower debt than had previously been forecast as a nation. It’s enabling us to invest in different ways in terms of continuing that economic growth and of course, crucially, to recognise that the war in Ukraine and international events are having an impact on the cost of living in Australians. And so, to provide like we did during COVID, targeted support to help people through these short-term crises that come along.
Katie Woolfe: And I will get to that targeted support in just a moment. Before we get there, though, can you tell us a little bit more about what is in the budget for the Northern Territory? I know that there had been some discussion and I’m not sure whether you’ve got this detail with you this morning. But there had been discussion about funding for police in remote communities. Has there been an allocation of funding for that in this year’s budget?
Simon Birmingham: Okay. So, I don’t think we’ve got a specific one there, but to support the Northern Territory, we see some real growth in funding going into the NT Government. For health, there’s around $560 million for Northern Territory health and hospitals, for education and skills, there’s around $488 million. But importantly in terms of untied payments to the NT Government through GST related revenue, we see that going up with an estimated $3.7 billion of payments to the Territory and that’s an increase of $372 million for the NT Government to invest in police, in law and order and health and hospitals in schools as they see those priorities. And it’s a very significant 11% increase in funding being made available and once again that’s one of those dividends of a stronger economy.
Katie Woolfe: And I know that those GST shares, it’s always something that there’s a bit of argy bargy about between the Federal Government and the Northern Territory Government. In years gone by, the Territory Government claiming that the GST had been cut for the Territory. But from what you’re telling me this morning, there’s an 11% increase.
Simon Birmingham: There is an 11% increase this year, which is obviously double-digit growth, hundreds of millions of dollars, $372 million extra in GST payments flowing into government coffers. And as I said, that is a recognition that the states and territories at the frontline of service delivery of police, hospitals, schools need those resources and so those funding streams flow in a dedicated way to them.
Katie Woolfe: If you have just joined us, we are joined on the line this morning by the finance minister, the Federal Finance Minister, Simon Birmingham. Minister, we know that more broadly there will be a $0.22 per litre cut to fuel prices which will hopefully provide that relief in coming days. We’re hoping to Darwin motorists who are currently paying over $2 a litre. How quickly are we going to see this saving and what’s going to be done to ensure that it is indeed passed on quickly.
Simon Birmingham: So, the saving will flow through over the next couple of weeks and we will put it through the Parliament as a law today. So, acting immediately following the budget that $0.22 a litre equates to about 15 bucks every time somebody fills the car up. And it’s a recognition that those international factors, the tragic, terrible war in Ukraine, have seen a real spike in oil prices and with that spike, we want to help people while they are very, very high. We know they won’t stay at these super elevated levels forever, but for now it’s hurting. We will make sure and have made sure that the Australian Competition and Consumer Commission has the powers to check in on fuel prices to ensure that if anybody is doing the wrong thing, there are potential multi-million-dollar penalties that will be applied. So, we are confident that people will see that reduction in $0.22 a litre flow through to the bowser over the next couple of weeks.
Katie Woolfe: Yeah, good. I know that a lot of listeners are going to be pleased to hear that, because I’ve got to tell you, in a place like the Territory and also in regional Australia, we know that the cost of petrol going up means that the cost of living goes up as you’ve, as you’ve mentioned there. And there is going to be for low- and medium-income households, they’re going to receive a $420 cost of living tax offset. Nationally, the Government says that 10 million Australians will benefit. Minister It is a good step, but who’s eligible?
Simon Birmingham: So, so in terms of that additional payment, it’s going to support, as you say, around 10 million Australians, around 90,000 Territorians will receive that support. It basically applies to all low- and middle-income earners from about $120,000 down. So, it’s covering a wide range there. And in addition to that, we’re providing a top up for aged pensioners, carers, veterans, those on jobseeker, making sure that they receive a relatively consistent top up of support. When you take into account the recent indexation of pensions that happened, providing around 500 bucks over the course of the year there, which is really about making sure that those who are getting the benefit from lower fuel prices, they’ve also been paying higher costs in supermarkets and elsewhere as a consequence of these spikes. So, these payments, again, targeted, temporary, responsible. We want to make sure that as oil prices stabilise, we get the budget back to normal as much as possible too. But right now, while Australians are doing it tough, this is something practical that we can do to help them without having long term negative impacts on the budget.
Katie Woolfe: Now there does seem to be a lot in this year’s budget for the Northern Territory. Minister, does the Coalition see the seats of Solomon and Lingiari as being winnable ones?
Simon Birmingham: Well, we certainly compete hard in those seats, but the reason we’re investing in the Northern Territory is because we see the economic potential of the Territory to grow, to see more jobs created there, to see more business opportunities in the Territory, and for the Territory to be a bigger wealth generator for the rest of the country too. And so, it’s about the long-term plans and vision that we have for the Northern Territory. We want to ensure that that its success is a part of Australia’s future success. But when it comes to the election campaign, we will certainly campaign hard for the two seats in the Territory.
Katie Woolfe: And we will indeed speak to the Labor Party later in the week as well with their budget reply. Minister, is the budget anything other than an attempt to win the election?
Simon Birmingham: Katie, it’s much, much more than that. We have actually taken the vast majority of benefits that have flowed in terms of more revenue or reduced spending to the budget from a stronger economy and put that against lower deficits, more than $100 billion reduction in deficits in this budget than had previously been forecast. Debt will, as a consequence, be lower than it previously forecast. That’s setting Australia up to be more resilient in the future.
Katie Woolfe: Well, Federal Finance Minister Simon Birmingham, we really appreciate your time this morning. Thanks so much for having a chat with us and talking us through how the budget is going to benefit the Northern Territory.
Simon Birmingham: Thanks so much, Katie. My pleasure.
Katie Woolfe: Thank you. Thanks very much.