Topic(s): Budget position improvement; Great Barrier Reef; Cost of living;
Laura Jayes: Well, Australia’s COVID jobs boom has helped strengthen the budget bottom line by more than $8 billion over the first half of the financial year. The jobless rate is at its lowest level in 13 years, and more Australians are paying income tax than initially forecast, joining me live now is the Finance Minister Simon Birmingham. This is great news. This morning we see more money into the government coffers, but it is at the same time Minister that businesses in some sectors are still really struggling because of your border closures. So what are you going to do with this extra money?
Simon Birmingham: Well LJ, it is welcome, of course, we’re still running deficits far above what we would wish were the case. But this is an encouraging sign that when the economy is performing more strongly, when unemployment is down at lows such as the 4.2 per cent recorded in the last figures, when you’ve got 1.7 million more Australians in work than was the case when our government was elected, the dividend you get is that you have lower welfare payments, fewer people needing that income support from government and you’ve got more people in jobs working as taxpayers contributing. And then that does help to improve that budget bottom line position and so it’s very welcome. The deficit is still, as I say, bigger than we would wish would be the case and the continued work, of course, to make sure we have that economic recovery, that economic strength, which is why we handed down a budget last year, focussed on ensuring we continue to support businesses through the economic recovery, through the loss carry back arrangements that are there for businesses across Australia, through the type of investment incentives for businesses across the country that are stimulating activity. And of course, the range of programs that are helping to charge activity in a lot of different sectors, particularly the construction sector, are in record infrastructure investments, all of them about making sure that a strong economic recovery that’s been recognised through the continuation of our AAA credit rating yesterday by Standard and Poor’s, recognised by the International Monetary Fund in their projections for economic growth this year, continues into the months and years ahead.
Laura Jayes: Yet the headlines are great, but the state premiers are asking your government to stump up more. So will you provide further financial assistance?
Simon Birmingham: Laura, we’ve already provided some $300 billion plus of financial support that is rolling through the economy through some of those measures I talked about before. In New South Wales in particular, there’s some $63 billion of assistance that has and is still being provided in addition to those sorts of business support measures that we provided in the last budget and that are still rolling out across the country. We also have the individual support payments, the pandemic disaster leave payment arrangements that are in place and are providing many millions of dollars across the country to individuals who are forced into isolation, having to not go to work at different points in time. And those arrangements were all worked through National Cabinet. Now, if there are additional, more targeted, more localised business supports that state governments think are necessary, then it’s entirely appropriate for those states to do that. The scale of economic support provided by the Commonwealth is many times that of what the states and territories have done to date, so I welcome there it being localised and targeted-
Laura Jayes: But no more 50 50, is that what you are saying? No more 50 50?
Simon Birmingham: No, Laura. Look what was broadly agreed at national cabinet was. The Commonwealth would do the economy wide measures as we are in supporting businesses. The Commonwealth would do the individual payments as we are in supporting people who can’t go to work, but where there’s localised targeted actions by the states and territories it’s right for the states and territories to be doing that and to tailor them as they see fit for their communities.
Laura Jayes: Sounds like a hard no. Let’s talk about another big headline the Great Barrier Reef today. Your government is going to spend $1 billion, a reef is endangered and you’re going to take 10 years to spend this money. Why?
Simon Birmingham: This is about continuing the type of work that we’ve been applying over the last few years, we’ve already had a $2 billion program and this now takes that to a $3 billion program of ongoing work. This is about improving the soil quality in the catchment areas that have rivers and runoff into the Great Barrier Reef so that we have fewer chemicals, fewer types of products running into the reef that can cause problems in terms of the water quality in the reef. It’s about pursuing all of the different other aspects of scientific management at a world-class level around reef management. Building on the type of partnerships and collaborations from the billions of dollars already invested and currently invested, and demonstrating that reef management is not something you do just for a year or two, but that it is a long term commitment by governments to ensure the long term health of the reef that supports more than 60,000 Australian jobs. And so this is the reason why we’re making the announcement now to make that demonstration that the work we’ve done is not going to come to an end and it’s not going to only occur for a few years, but it is a commitment to an enduring, healthy, strong Great Barrier Reef supported well into the future.
Laura Jayes: We love an enduring commitment, but the fact is that you’re going to an election this year. So can you tell us how much of this money will be spent in the forward estimates? That’s how we can hold you to account.
Simon Birmingham: Yes, Laura, look, all of all of those details are being released as as part of the program there. Obviously, some of the programmes we have out of those couple of billion dollars are ongoing over the next few years. But some of them were coming to a close. And so we’re wanting to make sure there’s continuity of support there. I don’t have the year by year figures to my fingertips right now, but certainly the Environment Minister in announcing these details with the Prime Minister today will be showing real ongoing year by year investment that we’re making in supporting science, research, water quality, all of the different things that are necessary to keep the reef as strong and healthy as possible.
Laura Jayes: I know you haven’t decided to fund this through the Great Barrier Reef Foundation. Was that just too hard this time around?
Simon Birmingham: Well, the foundation spending is part of that profile of year by year spending activities. The foundation was never the only thing that we funded in the past. It was important leverage point to get more private sector support into investments, philanthropy into the Great Barrier Reef. But it was sitting alongside the funding that we were providing into the Great Barrier Reef Marine Park Authority. The funding programs we had through the Reef Partnership Agreement with the Queensland government. All of these things need to continue in ways that that ensure the reef is given the support and focus in health support alongside, of course, our net zero commitments. And they’re a very important part of getting global action and support to to address climate change as a threat to the reef. But it’s not the only threat to the reef in terms of management, of agriculture, of shipping, of trade, of tourism, of those other things that we can manage in ways to help reef quality and health too.
Laura Jayes: What is your promise on interest rates and petrol prices to use still maintain there’ll be lower under a coalition government?
Simon Birmingham: I will certainly, Laura, you can see already that the Labor Party has been out there making more spending commitments and promises than our government has, and its spending will be higher under a Labor government. And now those types of higher spending will manifest themselves in ways that do put pressure on interest rates into the future. So that’s the real threat for Australians in that regard that a big spending Labor government either results in higher taxes or higher spending that drives potential for higher interest rates, and those are real threats. Now we know that for many Australians, the pressure of petrol prices is a real thing right now. Obviously, it’s driven by international factors out of the Middle East, out of the Ukraine, Russia tensions, a range of factors that are driving oil prices higher right around the world. But what our government has done in terms of addressing cost of living pressures for Australians comes through tax cuts, $30 billion worth of tax cuts delivered to date and $1.5 billion each and every month of additional disposable income going into the pockets of Australian families and households with more tax cuts on the way. The work we’ve done in energy markets has seen energy prices, electricity prices actually fall in recent times compared to the vast increases we saw under the previous Labor government. They’re the contrast in terms of a government doing what it can to make sure it helps keep interest rates low, keep taxes lower, have electricity prices lower and help people address those cost of living pressures.
Laura Jayes: Well, in November was the Prime Minister that made the promise around petrol prices and interest rates, can you still maintain that promise?
Simon Birmingham: Laura, I’m very confident that under a coalition government with the type of economic management we have demonstrated, with the fact that as we showed pre-pandemic an ability to bring the budget back to a point of balance to show restraint in spending where possible, that will be an important driver in terms of keeping interest rates as low as possible and lower than would be the case under a more profligate, bigger, higher spending Labor government that would risk creating the type of pressures in the economy that drove interest rates higher. It is important, as during the pandemic, we’ve seen monetary and fiscal policy operating together, operating in a way where when we needed to provide additional support across the economy, that we did just that to households, to businesses to make sure people got through the pandemic. And that’s what’s given Australia some of the lowest fatality rates, some of the best economic outcomes, some of the best vaccination rates amongst the world. But then, of course, as we now see that economic strength in place, it’s equally important that we ensure monetary and fiscal policy continue to work in ways that complement each other. We don’t want to see interest rates having to go up unnecessarily. And it’s why, of course, we’re not going to over stimulate the economy in ways of providing, for example, more grants or support than is than is necessary. We make sure we stay as targeted and focussed as we can.
Laura Jayes: All right. To be debated another time. Simon Birmingham, thanks so much for your time. We’ll see you soon.
Simon Birmingham: Thanks, Laura. My pleasure.