Topics: Budget 2022
Sylvia Jeffreys: Some backlash this morning after the budget announcement with many slamming them for prioritising the cost of winning over the cost of living.
David Campbell: For more, let’s bring in Finance Minister Simon Birmingham in Canberra. Minister, good to see you. You’re splashing more than $8 billion of one off payments, tax rebates, a cut to the fuel excise. These are all short term measures. We know that. Why should voters feel confident that this is going to be a fiscally responsible budget?
Simon Birmingham: Morning, guys. Because these are measures that are all part of a longer term economic plan that’s generated unemployment rates that are headed towards 50 year lows in Australia and it’s created some of the strongest economic outcomes in the world and that is allowing us to have lower levels of debt and deficit than had previously been forecast. We’re actually saving around $100 billion compared with previous forecasts and keeping those deficits low into the future, but also to respond to unforeseen international circumstances, just as we did with COVID-19, with temporary targeted support to get Australia through the shocks of COVID. We’re doing the same in response to the shocks that have been caused by Russia’s war on Ukraine. The impact that that is having in terms of a spike in global oil prices, that won’t be with us forever. But the spike is real and it’s hurting at the petrol pump right now. And that’s why the 22 cents a litre cut to fuel excise, which will provide about a $15 saving every time somebody fills up their car over the next six months, is a real action that we can do today to respond to those international events.
Sylvia Jeffreys: Okay. But a lot of people this morning, Minister, are wondering what happens in six months’ time when that expires, when the one off payments are done and the tax rebates have passed through? Will the cost of living be lower in six months’ time, or is this a budget built on fantasy?
Simon Birmingham: Well, I mean, what we’ve seen are really sharp peaks in oil prices since Russia invaded Ukraine. They’re not expected to be with us forever. And so that’s why we’ve done targeted measures here. Just like, as I said, we did during COVID-19, things like JobKeeper responding to the circumstances there, helping Australians where we can. We still have to be responsible with the budget. We still need funds in the long term to invest in roads and infrastructure, in the things that fuel excise helps to pay for. But in the short term, because our economy is going so well at present compared to the rest of the world, we’re able to return some of that to Australians to help alleviate the impacts of those international events.
Sylvia Jeffreys: How much money do you think will be paid for petrol in six months’ time? How much a litre?
Simon Birmingham: Well, I can’t put a precise figure on that,
Sylvia Jeffreys: More or Less?
What we do see that in terms of what the global price of oil is, we’re expecting that to come back down to to lower levels within that six month period. And so that should see the price of petrol come back to levels that it was before Russia invaded Ukraine to provide a greater stability there. So that’s what we expect in terms of the forecast that these huge spikes we’ve seen in recent weeks and should come off. We’re going to save 22 cents a litre at the bowser in the meantime. That will help many people with getting to work, getting to school drop off and to sports and a whole range of different things that petrol price pressures add to the cost of. And in addition to that, we’ve got some permanent measures to help Australians with the cost of medicines and to make sure that they are as low as possible, especially for those who need to use a lot of medicines and most crucially, the longer term plan around investments in manufacturing, in apprenticeships and in skills support for Australians and record infrastructure spending, all designed to keep jobs growth strong, unemployment low and drive wages growth higher, as we can see in this budget is expected to be from the 1st of July.
David Campbell: There’s still going to be inflation issues in the future, obviously, for whatever government’s coming in next. Now, this year alone, we’ve seen teachers, nurses and transport workers strike. They’re demanding higher wages. The aged care sector is absolutely in crisis. They’re crying out for higher wages. They’re crying out for better conditions. Is there anything that you can categorically assure these workers today that those wage rises, not just 250 bucks in the next coming few weeks for this election, but the wages will rise over the coming years?
Simon Birmingham: The best way we can achieve wage rises is to keep the economy strong and jobs growth strong.
David Campbell: So that’s not, so you’re not guaranteeing them any wage rise at all?
Simon Birmingham: What we’ve shown in this budget is that all of the best economic forecasting shows that we’re going to get real wage rises.
David Campbell: The problem is Minister people can see that this is a payment for the election coming up. You’re saying cost of living, that’s not going to go anywhere in the next 12 to 18 months, whether you’re in government or not. So what they’re saying is, what are you going to do outside of giving me $250?
Simon Birmingham: What we’re going to do and what we are doing this week generated one of the strongest economies in the world that has actually achieved employment levels at their lowest, unemployment, at their lowest levels in close to 50 years. That does then have a flow on impact in terms of wage rises. And this budget shows that real wage rise growth will occur in the next financial year and through the forward years, that we will see around three and a quarter per cent growth in wages next year and growing over the next couple of years to three and a half per cent. That’s about making sure that we see those dividends flow through. Now the Labor Party can go out or the unions can go out and make sort of hollow calls around wage rises. But the only way you achieve them in truth is through having that economic strength, that jobs growth and the type of measures that we’re investing in, in supporting small businesses and supporting growth in manufacturing and innovation, in ensuring our exports remain strong. These are the ways you achieve that. What we can do in the interim, while we’re dealing with these temporary international issues, is precisely what we are doing by providing targeted relief, responsible relief to those who need it most.
Sylvia Jeffreys: Finance Minister Simon Birmingham, we appreciate your time this morning. Thanks for joining us. And Opposition Leader Anthony Albanese joins us a little later in the program