MATTHEW PANTELIS:
Let's have a chat with Dr Andrew Leigh, who is the Assistant Minister for Competition, Charities and Treasury, he joins me now. Minister, good morning.
ANDREW LEIGH:
Good morning, Matthew. How are you?
PANTELIS:
All right, thank you. So, a bit of a mixed review of the Budget today. I see polls in newspapers. These are people responding online to questions that have been put in stories. There's 80 per cent of people saying the Budget is poor and very poor. Does that surprise you?
LEIGH:
This is a Budget which is calibrated for the times. We've got a serious inflation challenge in the economy. We know we couldn't have just engaged in the kind of unfunded cash splash that our predecessors engaged in, which left us with a trillion dollars of Liberal debt. The cost-of-living relief needs to be targeted, otherwise it would be needlessly inflationary.
PANTELIS:
That trillion dollars of debt, though, that was bipartisan, wasn't it? A lot of that was COVID spending and both sides ticked off on it.
LEIGH:
Well, the bulk of it was left by the Liberals, which came from a government that said that they would deliver a surplus in every year in office, and yet in nine years of office, never once delivered a surplus. The fact is, what we're doing, Matthew, is putting in place measures which are tailored, targeted, measured and responsible. So tripling the bulk billing incentive, the biggest increase in 30 years, will benefit everyone with a child under 16. The energy bill relief is targeted at people who are most in need. We're putting in place an increase in aged care wages, not just because that sector has historically been so poorly underpaid, but also because we know that if our grandparents and parents are going to be well cared for, we need to make sure there's a stable, secure, well trained aged care workforce.
PANTELIS:
Energy bill relief, Minister, is certainly hot button, no doubt about that. People feeling that pinch in the power bills, we know they're going to go up over winter and come the end of winter, I think some people are in for a horrendous shock with their power bills. But relief is great and will be welcomed by many people of particularly low income, no doubt about that. But it is just relief. It's not permanent. It's a one Budget handout. It's basically our tax dollars back in the form of, here's some money to help with your power bill. But in the future, those bills are still going to be high. We're looking for that $270 that was promised to cut bills and leave them that much cheaper forever and a day.
LEIGH:
Well, there was a promise made two years ago for an outcome in two years time, so let's wait and see on the specifics of that. But what Australians know is that renewables are cheaper. That's why millions of Australians have solar PV on our roofs. And the renewable strike that occurred under nine years of Liberal misrule meant that we didn't get the renewables investment which is needed to drive lower power prices. Here in the ACT we're 100 per cent renewables. We're the only jurisdiction in the country that saw an electricity price fall last year because ACT electricity bills weren't exposed to the Russian invasion of Ukraine and the effect on international energy prices.
PANTELIS:
There's a forecast in the Budget of 700,000 more people in two years, but over the same period, housing construction is going to fall, the Budget says. How do you reconcile that? How do we bring in that many people, and arguably not enough houses right now for people already here? That's a certainty. And yet we're bringing that many more in while housing construction falling.
LEIGH:
Matthew, I think it was inevitable, after having the borders closed for a couple of years, that when you reopen them, there'd be a higher than normal level of migration. If you go around many businesses in Australia, as I do, you'll strike businesses that are desperate to get more skilled workers coming in to fill those skill shortages.
PANTELIS:
Sure, but where are they going to live?
LEIGH:
Well, we need to make sure we're building more houses. That's why we've got the Housing Australia Future Fund, a $10 billion fund to build 30,000 social, affordable homes. It’s stuck in the Senate because the Liberals and the Greens won't vote for it. We need to get more housing built. We put in place incentives through the Build to Rent scheme, which comes out through the Budget, but also investing in homelessness services. So, we're keenly aware of the housing challenges that Australians face and looking to put in place long term solutions for that.
PANTELIS:
The Budget tips that construction will fall.
LEIGH:
We need to put in place more construction. You're absolutely right about that. We need to get it done. We've been in office for less than a year now. We can't fix in less than a year all of the problems that are built up over nine painful years of Coalition mismanagement, where the Coalition basically stepped back from national housing policy over that period. It was a terrible decision. Australians have paid the price for that in the problems that we've got in housing affordability. Right now, the federal government is back in the game. We're keen to act on housing affordability. We've got a whole range of measures, including the Help to Buy programme, which will help young people who can't afford that million dollar mortgage by allowing the government to go in as an equity partner. We're looking at a whole range of incentives to boost the home ownership rate and boost housing construction.
PANTELIS:
The issue is that a lot of people, middle‑class aspirational people, feel neglected by this. There was talk in the first few months of the government that tax cuts, the stage three tax cuts, may have been on the table for being axed. I assume now that is well and truly a thing of the past? Those tax cuts are set in stone.
LEIGH:
Those tax cuts don't take effect until next year and our position hasn't changed. But I would say that it's not just middle‑class Australians that are aspirational. I think all Australians are aspirational and want the best for their kids. And we've taken that in mind as we've put this Budget together. The change in the Parenting Payment (Single), for example, which ensures a higher rate of payment for single parents whose youngest child is aged between 8 and 14. The incentives we're putting in place to allow people to move from welfare into work, those place based initiatives that have worked really well in places like Burnie, Logan and Mildura have seen increases in school attendance rates among young people and declines in youth crime. So, we've got to work with the aspirations of all Australia to lift everyone up together.
PANTELIS:
All right. The increase in Rent Assistance, 15 per cent for people who qualify for that will be undoubtedly extremely welcome. But it doesn't help, again, supply properties, it doesn't create more places for people to rent. Rent Assistance, fantastic. But for people who have a roof over their heads, the rest yeah, again, it's the shortage of properties, isn't it?
LEIGH:
Commonwealth Rent Assistance is well targeted and so that's why we've chosen to increase it. A significant increase that'll flow to some of those who are really doing it tough, right now. Rent prices rose more slowly than housing sale prices for a number of years, but over the last twelve months rents have gone up markedly for many Australians and are really pushing Australians to the brink. But you're totally right, Matthew, and the challenge is how we build more homes. And when you talked before about migration, one of the other important factors for your listeners to bear in mind is that migrants are overrepresented in the construction sector. In many parts of the construction sector, the challenge is getting enough skilled workers. In some cases it's going to be migrants building those new homes. And that's the story of Australia in the post‑war era, and it's very much the story that we're seeking to make today. Rising home ownership, rising living standards and more homes for more people.
PANTELIS:
And Assistant Minister for Treasury, our debt is heading up to $1 trillion, $20 billion a year on interest repayments. The surplus, I'm sure, very welcome, but the money being put back into the Budget. But surely we need more of them to help rein in that debt, to use the surplus, the government spending less than it's taking in in taxes, creating a surplus, that's what it is. So, using that to pay off that debt, we need more surpluses, don't we?
LEIGH:
Under our predecessors, there were no surpluses anywhere to be seen.
PANTELIS:
Well, that's the past. What about the future, though?
LEIGH:
Well, the future comes from making those responsible decisions. So, in Josh Frydenberg's last Budget there were revenue upgrades. He spent them all. In the last two Labor Budgets, we've seen revenue upgrades where we've banked 87 per cent of the savings, banked those into building the surpluses that allow us to pay down debt. Interest repayments are the fastest growing category in the Budget and we've seen that come down quite significantly over our last two Budgets as a result of the responsible decisions that we've been making. Those decisions aren't easy. We're having to re‑profile a whole range of profligate investments that were made by our predecessors. But we do recognise that when we make the hard decisions, then we can bring down those interest repayments and ultimately we're able to spend more on services and not have higher taxes than we would otherwise.
PANTELIS:
Your predecessors' Budgets, though, have enabled you to deliver the surplus, amongst other factors, iron ore, exports, et cetera, coal. Those things have led to the surplus. COVID, surely you have to acknowledge, was a big factor on the last government.
LEIGH:
There was absolutely a COVID crisis, no one denies that. But in terms of the revenue upgrades, only about a fifth of that is to do with commodity prices. Twice as much is to do with the increase in wages and the low unemployment rate that we've seen under our government. 3.5 per cent unemployment isn't just good in social justice terms, in terms of people being able to get a look into the labour market, who wouldn't have a chance otherwise. It's also really good for the Budget bottom line. And it's a reminder that trickle‑down economics doesn't work any near as well as flow‑up economics. That idea that when you look after the most vulnerable, everyone benefits. And one way that's true is that when you've got more people in work, you have more tax revenue and lower income support spending.
PANTELIS:
All right. Dr Andrew Leigh, Assistant Minister for Treasury. Thank you for your time this morning.