Topics: Budget 2022;
29/03/2022
9:45PM AEST
Paul Murray: Simon Birmingham is the finance minister. He helped put the budget together and he joins us now to go through it. How are you, mate?
Simon Birmingham: G’day, Paul. Good. And yourself?
Paul Murray: Yeah. Good. So, five things, I think that are good about the budget. I think it helps people right away when it comes to petrol stuff. I think that it helps the right people, particularly the family based stuff, as well as those first home buyer people. I think it helps people get a job. More people get into the trades. I love the money for defence and it sets the perfect battlelines for the election. Okay, so now let’s get to some detail. Now there’s a couple of assumptions I want to get to here, including company tax. So company tax is currently $90 billion. Next year it’s 87 billion. But then the year after it goes up to 103. Why will companies be bigger and able to pay more tax in two years time?
Simon Birmingham: Paul, that’s the dividend of economic growth. Now, crucially, what we’ve done in terms of often as a government, we get more company tax receipts when commodity prices are higher. But what we’ve done in this budget, as we’ve continuously done throughout government, is to forecast that those commodity prices, which are at significant highs at present, will trend down over the next six months to a lower level. So we’re not baking into the company tax assumptions or any other budget assumptions in the forward years, any upside from higher commodity prices. That means that the ratings agencies who have us all as a triple-A credit rating at present will have confidence in the credibility of our budget forecasts and assumptions. But of course, as the economy grows, as businesses grow, as they get stronger, which we forecast them to do, then there will be an upside because that’s what we’re already seeing right now. The dividends of a strong economy are a stronger revenue base. And what we’ve done in this budget is take the majority of that dividend, more than $100 billion of it, and put it towards lower deficits, lower debt. Deficits that will be around half of what they would have been as a share of the economy into the future, so that Australia can be more resilient and more able to withstand whatever the next shock is that comes along.
Paul Murray: Okay, but what about GST? Gst goes from 429 to 458 to 480 to in just four years time, more than half a billion dollars a year. Again, is that the scenario that I can understand, where you have more businesses that are making more money that’s why they pay more company tax. But how do you end up with more people buying more things and therefore paying more GST?
Simon Birmingham: Paul, there are a few different factors driving that. Of course, right now this year we’re dealing with a higher inflation environment. And although that comes down over the next few years to be back within the target inflation bands. That’s still going to be slightly higher inflation than we’ve had in recent years. That higher inflation does mean that of course guest receipts are positively impacted by that. That’s why it’s so important that we do see even higher wages growth, which we’ve got forecasts throughout those years. So real wages growth being realised for Australians, the opportunity from that that will be complemented by our income tax cuts, the next stage of those coming in. If our Government is re-elected, Australians will see the 37% in the dollar income tax bracket eliminated. They’ll see the 32 cent in the dollar come down to 30% and around 90% of all taxpayers will pay no more than $0.30 in the dollar at the top marginal rate. So all of that is about providing more disposable income on top of the real wages growth to help Australians. But those GST receipts will help states and territories. We don’t keep a cent of that money. We pass it all straight through to the states and territories for them to invest in schools, in hospitals, police, local infrastructure and their essential services.
Paul Murray: Yes. Exactly the point I wanted to make to people, which is. Yes, while that number goes up, it’s not about the federal government having that money. The states end up with that money. So next time you hear a state bitching and moaning about getting more money, they are they’re going to be getting half a trillion in just a couple of years time. Now, I love the announcements that have been made for a long time about the PBS scheme. I think this is so important, the Pharmaceutical Benefits Scheme, to put drugs that would have otherwise cost thousands and turn them into just dozens of dollars per dose. The Treasurer mentioned that tonight. Roll the tape.
[Excerpt]
Josh Frydenberg: We have approved more than 2800 new or amended listings on the PBS. That is nearly one every day. Tonight I announce. The listing of Trodelvy for a rare form of breast cancer. Saving patients up to $80,000 per treatment. For the first time this drug gives hope to many young women. Extending their life expectancy and providing an opportunity to spend precious time with their loved ones.
[End of Excerpt]
Paul Murray: So I want to ask you a very specific question. Is there something very small, very personal to you that you’re proud of, that you’ve been able to deliver in the budget? Because I know that when the health minister has been able to get a specific drug listed, that’s something special. Obviously you’re a Senator for South Australia, so I’m sure there’s a road or something like that. But what’s the one little thing in there that’s not going to be in the coverage but you’re proud to have been able to do with this power and in high office.
Simon Birmingham: Thanks, Paul. I think probably most importantly over the last couple of years, because we’ve done it again in this budget, is the support around mental health and very targeted support to make sure that it’s there for young Australians. But I think importantly as well, there have been measures there to support young women, particularly postnatal support around mental health. I’ve known people who’ve needed that sort of assistance and I know that it’s just so crucial that those services are there. And I guess the result that we’re able to achieve from budgets like this is that we can responsibly invest in those sorts of services, in mental health, in medicines for Australians, in making those tangible differences that make Australia one of the best countries in the world to live in. In so many other parts of the world, you don’t get medicines as cheaply as Australia can provide the best medicines. You don’t get access to leading mental health services, you don’t get the type of things that we are so lucky to have, but we can only have them because we can afford them as a country. And for that is why we’ve got to keep our economy so strong.
Paul Murray: Last one. Each way Albo and his shadow treasurer, they did their homework. They were in the lock up, filling out all the papers, got out the calculator. This was their hot take. This is what he just released on Twitter. Roll the tape.
[Excerpt]
Anthony Albanese: G’day. I’m in the budget lockup and I’m here with my Shadow Treasurer, Jim Chalmers. And what this Budget represents is again after almost a decade in office, they want a second decade, but with falling wages and with a trillion dollars of debt, with nothing to show for it.
Jim Chalmers: That’s right, Anthony. It’s a bit more like a pamphlet than a plan and the thanks that Australians get after all that they’ve been through the last couple of years. And there’s another feature of this budget they don’t want you to know about. So there’s a cash splash in their political desperation before the election. But buried in these budget documents is $3 billion, at least in secret cuts after the election. This is the thanks that people get.
[End of excerpt]
Paul Murray: Let’s deal with the cuts bit. What the hell are they talking about?
Simon Birmingham: Well, Paul, I have not the faintest idea because there are absolutely no such things to be found either in the document, buried or otherwise. We’ve been very transparent in this budget. What we’ve done is bank most of the dividends of a stronger economy into having lower deficits in the future. But we’ve been clear about where we’re investing in small business, in skills, in national security, crucially, and in supporting the essential services and cost of living relief. But that was a pretty pathetic and shallow exercise there. Now, Anthony Albanese is going to have his chance on Thursday night. Jim Chalmers has said the Labor Party is going if they win the election, to have another budget this year. So that means they’ve got to front up when it comes to Thursday night and actually be open about what they will really do if they win government because there’s a lot of vague promises they’re making at present that come with multi-billion dollar price tags, vague promises when they say free TAFE. Does that mean they’re going to take on all of the costs of TAFE from state governments? Vague promises when they say they’re going to extend out virtually free childcare no matter what a person’s income is. That comes at tens of billions of dollars of extra cost. There are vague promises around raising the rate of JobKeeper or expanding paid parental leave even beyond what we’ve managed to do as a government. So are they going to do all of these things? Are they fair dinkum about it? And if so, how much more is the debt going to be or how much higher are the tax is going to be? These are the tests that Anthony Albanese has to answer on Thursday night. If he and Jim Chalmers are being fair dinkum about the fact they intend to bring down a budget, presumably within weeks of winning an election were that to happen.
Paul Murray: Tonight was Frydaynomics. We get Albonomics on Thursday and on the behalf of smokers, thank you for not putting the taxes up. Thank you, Birmo. All the best.
Simon Birmingham: Thanks, mate. My pleasure.