Kieran Gilbert:
Today, let’s go live to Assistant Treasurer Daniel Mulino joins us from Melbourne. And now, as we cover a lot of news today, Daniel, I want to start with the Prime Minister’s speech. A billion dollars to businesses affected adversely by the Middle East crisis. What sort of businesses will receive the interest‑free loans?
Daniel Mulino:
Oh, thanks very much for having me on this morning, Kieran. And yeah, look, this is a really important measure. It’s going to be leveraging the National Reconstruction Fund so that no‑interest loans can be directed to companies that are particularly affected by high and uncertain fuel prices, but also companies that find themselves at the heart of supply chains. So, this is going to be really important in terms of both alleviating some of the pain that the most affected businesses are feeling, but also helping our economy move. And importantly, based upon decisions already made by the government, but also discussions with the banks, we’re expecting that we’re going to be able to see some of these loans moving within the next fortnight.
Gilbert:
We’re talking sort of freight companies, things like that, that, that are really going to be at the forefront of these costs because quite frankly this, there are many, many companies that will be hit by the increased costs of the higher fuel price.
Mulino:
No, exactly. I think we’re talking about companies in the realm of the supply chain. So, that would include freight companies. It might also include companies where there might be, you know, construction impacts or impacts with, you know, apprentices, there’d be a range of different ways in which companies might be affected. And this is going to be a really important support in addition to the fact that we’ve cut the fuel excise by 50 per cent for 3 months. So, that’s also going to help a lot of the companies that we’re talking about. That’s going to significantly reduce petrol and diesel prices. And we’re already seeing that flowing through.
Gilbert:
The Treasurer hasn’t committed to a net savings package as part of this Budget. Why is that? Is it because of the crisis? Because right now it looks like the government should be making spending cuts.
Mulino:
Oh, look, I think what the PM and the Treasurer have both indicated is that this is going to be an ambitious budget. And I can just frame this in terms of it being a budget that we’ll build on 4 years where we’ve achieved significant savings already. And in fact, in the MYEFO we had savings of the forward estimates in terms of decisions made by government. So, the MYEFO was itself very ambitious. But what we’re going to see is savings and also reform in a range of areas. But also the Treasurer has signalled, we’re going to see tax reform in this Budget. So, it will be an ambitious budget, but we’re also going to be doing all of that so we can accommodate –
Gilbert:
There will be savings [indistinct]. You know, the inflationary environment – Daniel, sorry to interrupt – but the inflationary environment, you know better than anyone, necessitates the government to reduce its spending as a percentage and as a part of the economy. The Treasurer and others are not committing at this point to, to have a savings package, a net savings package. Don’t we need to be heading in that direction?
Mulino:
So, what I’d say, Kieran, is if you look at the period leading up to the disruption that we’re, the dislocation that we’re experiencing at the moment in the global economy and geopolitics. So, we came to government when inflation was over 6 per cent and rising. And in our first few budgets we were managing an economy where that inflation rate came down so that it had a 3 in front of it. We were able to do that with targeted, important, material cost‑of‑living supports that included tax cuts for every Australian, that included cheaper medicines and rent assistance. So, it is possible to manage the macro economy to deal with the inflationary challenges while at the same time providing supports to people who are most vulnerable. And that’s the kind of balance that we’ll achieve in this Budget. We are going to achieve savings in some areas and there are areas where we need to look at that, but we also need to have –
Gilbert:
Is it important that it’s a net save, though? Would you like, you know, you’re a very well credentialed economist. Is it important as a signal as well that the government’s taking it seriously? Is it important to have a net save? I know you were saying there’ll be savings and so on, but as an overall envelope, shouldn’t you be taking heat out of the economy or does this crisis change all of that?
Mulino:
Look, so what I would say is I’m not going to signal any of the macroeconomic kind of targets the budget will be looking at at this point in the cycle. But again, I’d go back to the fact that in our first few budgets we achieved significant savings while at the same time providing targeted, meaningful supports. And that approach saw us achieve a reduction in inflation from over 6 per cent and rising to with a 3 in front of it. So, the approach that I think we need to adopt is that we need to balance fiscal responsibility and achieving savings, while at the same time acknowledging that where there are economic disruptions, you do need to responsibly provide support to the most vulnerable.
Gilbert:
And on saying it’s the most ambitious and important budget to date, when you raise expectations like that, you know that it will be ambitious. Is it going to have significant reform? Because you know that you’re going to be nailed if it doesn’t, given you saying how this is going to be ambitious, is it, will it have significant reform? Not just tinkering.
Mulino:
Well, what I would say is that, you know, we are going to include in this budget savings. We will also include some tax reform. And again, I can’t skip through all the details there, but that’s something which is going to be an important element of it. But what I would also say is that it’s going to continue on the important productivity reforms this government has already begun. And there have been some really important productivity reforms that the government’s locked in. For example, the EPBC Act reforms late last year, freezing the national construction code, really important reforms in training. So, when you talk about a budget, it’s not just about the fiscal numbers, as important as they are. It’s also about where you’re spending and how you’re spending, the quality of the spending.
Gilbert:
On the gas trigger, the minister Madeleine King, saying to the gas companies, get it sorted or we will use the stick, you know, or the trigger, as it’s called, but guarantee the supply for Australians. And this is a very popular measure. If she needs to use it, she’ll use it. That’s the message to these gas companies. I’m surprised that she even has to threaten them at the moment. Given where we are internationally, you’d think that they’d know themselves to get on with it and agree to supply Australians what they need.
Mulino:
Well, look, yeah, my understanding is that discussions are underway with the minister, but that it hasn’t led to a resolution yet. I think it’s entirely appropriate for the minister to lodge a Notice of Intent to say to the exporters, you have to provide this guarantee for that quarter, otherwise we will step in. And I think you’re exactly right. The Australian community rightly expects the government to use these kinds of tools where we can’t achieve an industry led solution. Look, I would be surprised if industry doesn’t land on the kind of supply guarantees. But if they don’t, then the minister will rightly step in.
Gilbert:
Yes, indeed. I think a lot of our viewers would agree with her and you on that one. Assistant Treasurer Daniel Mulino, thank you.