JOSH FRYDENBERG:
The Australian economy is recovering strongly. Around half a million jobs have been created since last October’s Budget. Australia has outperformed all major advanced economies in the world over the course of the last twelve months. But the job is not done. There is still a lot of work to do. The virus is still with us. More than 800,000 COVID cases around the world every day. Europe has gone into a double-dip recession. Here in Australia, we recently saw Western Australia go into a lockdown. We must secure the economic recovery, and this Budget secures Australia’s economic recovery. There are a number of measures in this Budget designed to keep Australians safe by extending the COVID-19 health measures, like Telehealth support for GPs, respiratory clinics and the procurement of vaccines. In this Budget, there is a great and real focus on creating jobs. We have a historic opportunity to take unemployment from 5.6 per cent today to where it began at the start of this crisis, and even lower. As you can see, Treasury have forecast that unemployment will go below 5 per cent by the end of next year. In 2006 and 2008, unemployment got below 5 per cent for a sustained period. But you have to go back to the 1970s to find another time where Australia enjoyed unemployment at those lower levels. In this Budget, we’re investing significantly in skills, in infrastructure, in providing tax relief for families and by extending the instant asset write off and loss carry back measures for another year. Businesses are investing strongly, off the back of the Morrison Government’s economic incentives and they are continuing, because normally during a recession, you do see a capital strike [inaudible], largely as a result of those investment incentives that we have been providing. There’s also significant investments in the digital economy, in energy, female workforce participation and childcare. This Budget also makes some very significant investments in guaranteeing the essential services that Australians need and rely on, particularly aged care at $17.7 billion. With respect to aged care, there are significant reforms around home care, residential care, workforce and the role of the regulators. There is a significant mental health package, significant support for women’s safety, with respect to safe houses, financial assistance for those fleeing domestic violence, legal assistance, work for the family law system. In this Budget, there are significant new spending commitments on the NDIS to ensure that it remains fully funded, as it always will be under the Coalition Government. With respect to the Budget bottom line, you can see that improvements have come from more people being in work. This has delivered more income tax receipts, as well as a lower welfare bill. Net debt, as a proportion of GDP, compared to what was forecast at Budget night here has come down each and every year. Net debt to GDP is a key indicator of financial and fiscal sustainability. While Australia’s debt levels have risen, they still remain low by international standards. This is a crisis that Australia finds itself in through no fault of its own. The strong position Australia has found itself in today with the recovery really gaining momentum is not the result of luck, because Australians make their own luck.
SIMON BIRMINGHAM:
Thanks very much, Josh. This is a Budget that keeps Australians safe from COVID, safe in their jobs, and safer throughout their lives. It’s a Budget framed against a global pandemic. It is continuing to wreak havoc in health terms and economically across much of the globe. It’s why in this Budget we see around $40 billion of further support for health and economic related measures to see Australians through the pandemic. To keep them safe in their lives, to keep them safe in their jobs. It’s a Budget that also delivers on the commitment we made at the last election to a strong economy, to jobs growth, seeing the creation of some 250,000 forecast additional jobs, but also to delivering the essential services that Australians rely on. That’s why in this Budget we have a comprehensive response to the Aged Care Royal Commission that sees $17.7 billion of additional support across residential aged care and home care; investments that will ensure guaranteed mandatory, minimum time for aged care residents, 200 minutes per resident per day, 40 minutes of care within that with a registered nurse to ensure we have increasing availability of homecare places some 80,000 additional homecare places which represents growth since our Government was elected of 227 per cent in the number of homecare places available for Australians in their senior years to see the support they want when they chose to stay at home and access care. We’re delivering in our response to reviews in relation to mental health, we’re delivering on our commitment to fully fund the NDIS and in doing so supporting a projected 530,000 Australians. We’re delivering in relation to women’s safety, women’s economic security, whilst also still seeing record levels of investment for medicare, in schools, for veterans, and across importantly our defence forces and our national security settings. We have made sure though that in terms of funding these provisions we do so in charting the course of continued economic growth that will drive the revenue and the Budget’s sustainability as evidenced by the fact that net debt is lower in each and every year of the forward estimates and the medium term in this Budget compared to what was forecast last year. We have been able to make sure that we pay for these additional investments and we do it by committing to a strong economy in the future, a strong economy fueled by our investment in skills, our investments in the digital economy strategy, our investments in Ag2030, our investments in backing in last year’s modern manufacturing strategy, with reforms to create a patent box, all of which was designed to make sure we maintain the economic growth, jobs growth that gives the fiscal dividends the power to invest in the services Australians need.
QUESTION:
Treasurer, across the four years to 2023-24, taxation receipts are expected to improve by $24-25 billion last year, how much of that is a result of record iron ore prices and given iron ore has significantly contributed to propping up the Budget, why aren’t you thanking the mining industry for calling out iron ore and its impact more?
JOSH FRYDENBERG:
Well today we’re giving a very big thanks to Western Australia and the iron ore industry because we are seeing record prices and that is driving higher company tax receipts and more export dollars for Australia. The breakdown over those four years is that about $44 billion in increased tax receipts has come from income tax receipts and around $25 billion from company tax receipts, so I want to make the point that driving more people into work is leading to higher income tax receipts but also a lower welfare bill. The welfare bill, those unemployment benefits effectively halving over the forward years. What we have seen in the forecasts that we’ve put forward is a conservative forecast with respect to the iron ore price. Three quarters later than what was forecast at last year’s Budget, we still have the iron ore price coming down on a glide path to $55 by the end of the March quarter next year. Now of course if iron ore stayed at an elevated level, up to $150 until that period as opposed to coming down at that glide path, it’s going to be worth an extra $12 billion or more to the Budget. So we’ve got a significant benefit to the higher iron ore prices, the Treasury have always been pretty conservative when it comes to iron ore.
QUESTION:
The Budget is forecasting that you will have the population largely vaccinated by the end of the year, and yet the borders will pretty much remain closed until mid-year. Why is that, that it would take six months from vaccinating the population, is this just about the next federal election, are you concerned that people that are vaccinated can still catch it, why are you not prepared to open the borders sooner?
JOSH FRYDENBERG:
Well let me make a few points, the exact wording in the book is about the vaccine is likely to be rolled out by the end of this year to all those Australains who want that vaccine, there’s assumption that they’ll get those two doses by that time. When it comes to the borders gradually reopening from next year, we also talk about Sam, some student cohort numbers coming in from the end of next year, but both Simon and I spoke this morning with the Secretary of my Department and the Chief Medical Officer, and it is difficult business making assumptions such as this in the middle of a pandemic, so they’re by definition imprecise. But it’s not just the vaccine rollout that’s important in taking to account the opening of the international border, you have to understand what’s happening with the virus globally and we’re seeing the virus generate new strains and transmissibility and other factors that have to be worked through before the medical advice would give the green light to open the borders. I do also want to make the point and Simon might want to add to this, that so far we’ve seen more than 2.7 million Australians receive the vaccine, that’s more than 10 per cent of the population. 30 per cent of the population of those Australians over the age of 70. Last week we saw more than 400,000 vaccines delivered, that was more than 7,000 a day extra compared to the week prior, we’ve got more than 5,000 contact points now in place using GPs and others around the country to distribute that vaccine and more supply is coming on, obviously the AstraZeneca vaccine made through CSL, but also the Pfizer vaccine. So, we’re very hopeful of that plan continuing to roll out with respect to the vaccine, but when it comes to international borders, it’s an imprecise business.
SIMON BIRMINGHAM:
And, Sam, I just want to emphasise, in relation to international borders, it is an assumption in the Budget that informs the projections in the Budget. It’s not yet a decision of government in relation to when international borders will reopen. International borders we wish to see reopen as early as possible, but no sooner than it is safe to do so. The key assumption within the Budget is that Australia continues to successfully suppress the spread of COVID-19, and so that requires us to maintain international border restrictions, at present, which have been of utmost importance in relation to successfully suppressing the spread of COVID, and it requires us to also make sure that states and territories maintain their successful regimes of testing, tracing, isolating, that allow us to deal effectively with any outbreaks that occur. And, keeping Australians safe from COVID has also helped to secure their jobs and our economic strength that’s why that remains such a key [inaudible].
QUESTION:
Just on debt and debt projections, it states in Budget Paper 1, page 10, that you can pay down debt as a proportion of GDP without running surplus budgets. Is that only sustainable under low interest rates? How sustainable is that position with rates so low?
JOSH FRYDENBERG:
That is based on the assumptions that Treasury have made that for the next decade, we will see the growth in the economy outpace the growth in the interest rate. And so that is a key assumption of Treasury. But there’s also some detail about the cost of servicing our debt, which is at 0.8 per cent as a proportion of GDP today, getting up to 0.9 per cent. I point you back to the 1990s where the cost of servicing debt as a proportion of GDP was around 2 per cent. And what we have focused on is ensuring that we can meet our debt obligations, and in fact our debt obligations today, in actual terms, are lower than they were a couple of years ago.
QUESTION:
Treasurer, in light of the need to continue suppressing COVID, have you, and I can’t find it, and that probably won’t be news to you, but I can’t find it, a line that says that you’re going to support the plan of Victoria to set up a quarantine facility?
JOSH FRYDENBERG:
Again, that application, if you like, or that proposal from Victoria, was put to the government. The Prime Minister has already commented on that, and we are working through that proposal. We’ve had the relevant departments...
QUESTION:
...Is the money there if you make a decision?
JOSH FRYDENBERG:
Well, again, I’m not going to jump to any conclusions with respect to your question. We’re working through that proposal.
SIMON BIRMINGHAM:
Paul, without jumping to any conclusions on that particular proposal, I would emphasise that in this Budget, we have maintained contingency reserve provisions that are slightly elevated above the pre-COVID historic norms, recognising that government may need to respond to further unforeseen circumstances in dealing with the pandemic.
JOSH FRYDENBERG:
Katherine, Katherine. Sorry, I was doing a Prime Minister. Katherine, Katherine.
QUESTION:
Forgive me if I haven’t understood this because the response to the Aged Care Royal Commission has only recently turned up. But, as I understand it, you are accepting that a central recommendation of the Royal Commission, which is to give elderly people a right to receive proper treatment, that the government is not necessarily accepting that there will be civil penalties attached to the exercising of that right; i.e.: if an elderly person gets substandard care, they may not be able to seek legal redress. So, are you accepting the right or are you not accepting the right?
JOSH FRYDENBERG:
Well, our focus in this budget has been on achieving the outcome of improving the quality and the safety of aged care by strengthening our regulators, by ensuring that there are 1500 more audits a year, with a new Act, and new authority. In this budget, there is a significant aged care package, as you allude to; it’s not just more money, it’s also more reform. And with respect to home care packages, there’s another 80,000; with respect to residential care, we’re putting in an extra $10 a day, per resident, into the base funding, as well as a minimum number of minutes at 200, as Simon alluded to. There’s a whole lot of workforce provisions as well, designed to strengthen the workforce. So we are doing our best to ensure that Australians in aged care get the highest quality service, and of course can do so in a safe manner.
QUESTION:
Treasurer, there are always doubts about forecasts in the budget, probably no more than this year and last year. What’s your personal level of confidence in this outlook that we see in this document today, how confident are you that it’ll happen?
JOSH FRYDENBERG:
Well, I’m confident that we’ll create jobs and that this budget will secure Australia’s economic recovery. We have seen the labour market be enormously resilient, and David our focus is creating jobs. We have seen in this budget, a forecast from Treasury that the measures will create some 250,000 jobs by 2022-23. Now that underpins the forecast that unemployment will get back below five by the end of 2022, and 4.75 by 2023.
QUESTION:
So how confident are you that you can deliver 250,000 jobs in the next two years?
JOSH FRYDENBERG:
I’m confident that we can implement the measures in this budget and drive more jobs, consistent with what has been forecast.
SIMON BIRMINGHAM:
A hallmark of our government’s approach has been always to try to be conservative in relation to the way in which we budget and the assumptions that apply, hence the fact that historically iron ore prices have exceeded our budget expectations because we’ve taken a conservative approach. The unemployment forecasts and predictions made by Treasury are for unemployment to be slightly higher than what the Reserve Bank has suggested. So again, a cautious approach that Treasury is undertaking in that regard, a cautious approach in relation to international borders. It is about providing maximum confidence in relation to the Budget settings that we outline.
QUESTION:
Treasurer, the Government is asking the women of Australia to trust you with their safety from domestic violence, to be not harassed in the workplace, to be able to get back into the workforce. When you look at the measures in the women’s budget statement, that the childcare subsidy doesn’t kick in for a year, the funding for the DV services, that extra funding is short-term and ad-hoc which is something that people in that sector say prevents them from having long term planning, and some of the extra funding is also for trial. So given some of those uncertainties, why should the women of Australia trust this Government to look after those key areas of safety and security? And can you also guarantee that going forward the Government will continue to release a women’s budget update alongside the Budget, and even at MYEFO as well?
JOSH FRYDENBERG:
Well this statement that we’ve put out there is very substantial, and it details initiatives not just around women’s safety but also women’s economic security and women’s health and women’s leadership. Now a lot of these measures will have an enormous impact on the ground, like the grants that we’re providing to women who are fleeing from domestic violence, like the additional legal support, whether it is legal advice for people who are going through the court system, but also work through the court system to protect the interests of the child. And there are a number of specific measures in here with respect to that. With respect to the Respect@Work report, we’ve put out a comprehensive response to that. With respect to child care that you raised, we have targeted our $1.7 billion commitment, particularly at families who have more than one child in child care. Where we see that rebate increased to 95 per cent for the second subsequent child in child care, and we remove that cap. We’ve also seen Treasury analysis that would indicate this could boost GDP by up to $1.5 billion a year and see up to 300,000 additional hours worked every week. These are significant reforms. Now we would like to introduce it into effect earlier than mid-next year but again there are some technical issues which the Department has been advising the minister on, with respect to changing IT and computer systems which are behind that.
QUESTION:
In 2024-2025, the Budget deficit is forecast to be $57 billion, same year as your stage 3 tax cuts are about to come in. Are they affordable given that? And secondly, this might be more of an accounting question, but with the mRNA factory funding, we don’t know how much, on page 134 of Budget paper 2. Is the cost of that investment in your decisions made but not announced or is it already embedded somewhere, we don’t know where, in the Budget?
JOSH FRYDENBERG:
I’ll deal with the tax and then I’m sure Simon will want to talk to the mRNA. The tax cuts, stage 3, they’re legislated, they’re affordable and they’re [inaudible]. They will create a much fairer and stronger tax system. We’re abolishing a whole tax bracket, 37 cents in the dollar tax bracket, and you will see 95 per cent of Australian taxpayers pay a marginal rate of no more than 30 cents in the dollar with that marginal rate of 30 cents between $45,000 and $200,000. Critically important is the fact that the progressive nature of our tax system remains with stage 3. The top 5 per cent of income earners will pay around a third of the total income tax [inaudible], before stage 3 and after stage 3. And the same sort of proportions also apply to the top one per cent of income earners. What stage 3 does, it effectively locks in the LMITO long term and permanently. So if you’re on $45,000 a year, you are $1,080 better off permanently under stage 3 compared to [inaudible] before these three stages took effect. So the Coalition has legislated around $300 billion of tax cuts in the last four budgets. And in last year’s budget we brought forward stage 2 by two years and we added the LMITO. I want to make very clear that this year’s Low Middle Income Tax Offset is designed as a stimulus measure. They’re not permanent features of our tax system. It’s designed as a stimulus measure because we’re not out of the pandemic yet and we need to boost aggregate demand as we did last year. But the real beneficiaries of the tax cuts in tonight’s budget are low and middle income earners. They’re the tradie and the truckie and the teacher and the nurse who earn between $48,000 and $90,000 and they will be $1,080 better off at the end of the tax year. $1,080 better off. A couple will be $2,160 better off. And this also backs off the $25 billion in tax cuts we provided in last year’s [inaudible]. So Andrew we have provided substantial tax relief, because the Coalition will be always the party of lower taxes.
SIMON BIRMINGHAM:
And Andrew on the Budgeting question in relation to mRNA vaccine manufacturing capability, we see this as being important for the long term to meet future potential COVID Booster Supplement requirements, the potential advance of those sorts of vaccines and medicines in terms of other distribution application, not just in the next few months of couple of years, but for the long term. And that’s why we’ve made that Budget decision in terms of funding allocated to it, and that funding is provided, but is not for publication in the Budget papers because there are essentially a couple of stages of commercial negotiations necessary. One relates to the technology transfer from the paper holder of the vaccine and the other obviously relates to the production of it within Australia and the operator of one of more manufacturing facilities, and so clearly to preserve the commercial negotiation sensitivities, those figures are provided for, but not for publication.
QUESTION:
On the NDIS, we’re spending more $13 billion on the NDIS which benefits about half a million people, meanwhile there’s $2.3 billion spent on mental health, which we know affects one in five Australians, why is that? What’s your response to those who inevitably say ‘we should have spent more on the mental health crisis’?
JOSH FRYDENBERG:
Well it builds on our existing spending which is more than $6 billion. And we are ensuring that through the mental health reforms, we are extending Headspace, which has been a successful program. We are putting in a Head to Health centre for adults with mental health issues. We’re also extending the types of services that you can receive under Medicare, which is important. For people who have attempted their own life and been hospitalised, we are providing after-hospital treatment. We’ve got substantial programs and research around eating disorders, which is a growing challenge across communities. So the mental health spend is very targeted, and very substantial. It’s a national priority. It’s well beyond politics to know that suicide is the single largest single cause of death of Australians between 18-24, and so this Budget is designed to get more support to those who need it. Also to boost the workforce as well, and it does follow the Productivity Commission Report. With respect to the NDIS, it’s an estimates variation, there’s been increased demand, increased costs of those programs but under the Coalition we will always fund it.
SIMON BIRMINGHAM:
The investment in mental health is quite transformative there and shouldn’t be underestimated in the sense that establishing a new network of Head to Health centres across the country and some 40 adult centres and satellite centres will ultimately exist, there will of course be some 15 new kids centres established as well and this is potentially the most significant in transformative approach in supporting access to mental health services for adults and for children just as young Australins have had access through the Headspace network established like the Howard Government.
QUESTION:
Treasurer , your Budget also assumes that no state border closures, but we also know there’s still risk and we’ve seen another infection in South Australia today, are you relying on undertakings in your Premiers and Chief Ministers for that or are you just crossing your fingers?
JOSH FRYDENBERG:
Well Karen actually what it does assume, and look at the words quite carefully, it talks about no extended lockdowns.
QUESTION:
So how do you define that?
JOSH FRYDENBERG:
Treasury make a number of assumptions with respect to it but its not a repeat of Victoria, in short. We don’t know what’s around the corner with respect to the virus. We know it’s very stubborn, we know it’s very deadly and we did see a statewide lockdown recently in Western Australia. So the assumption is that there will be new cases, we’re not eliminating the virus, you can’t do that. We’re seeking to successfully suppress it. And our economic recovery does depend on our successful suppression of the virus so my message to the Premiers is of course to have a proportionate response when outbreaks occur and the best in class for that has been Gladys Berejiklian in New South Wales.
QUESTION:
So it’s a hope, Treasurer, rather than a guarantee?
JOSH FRYDENBERG:
We’re in the middle of a pandemic. There’s uncertainty domestically and globally and we’ve made assumptions based on the best medical advice to us.
QUESTION:
Just on safety. Out of the $1.1 billion allocated, you’ve set aside $12.6 million over three years for emergency accommodation but for victims of domestic violence seeking emergency accommodation on housing. You’ve allocated some $80 million for data collection, why haven’t you given more for emergency housing? Is there no way you can give them just a little bit more than that?
JOSH FRYDENBERG:
We already have programs and this builds on existing programs. The Women’s Safety Package is extremely substantial and it builds on record spending prior to tonight’s Budget. And as I said earlier, it’s [inaudible] facets of the response. Counselling, legal assistance, financial assistance and of course, emergency support like accommodation.
QUESTION:
Treasurer sorry just two quick ones very quickly. One on vaccines and assumptions. Can I just pick up on something you said to Sam's question? Is your assumption that every Australian who wants one can get two shots of the vaccine by the end of the year?
JOSH FRYDENBERG:
The assumption is that every Australian who would like to get two shots of the vaccine will be able to do so by the end of the year.
QUESTION:
I’ve just done some very rubbery pen and paper maths but there’s still something like 36 million shots need to be given by the end of the year, that’s something in the realm of 1.2 million per week as of now we’ve done 400,000 in the last week, what confidence do you have that we can triple that number every week from now…
JOSH FRYDENBERG:
Well as you know not everybody is lining up to have the vaccine, it’s very carefully worded there, it’s based on those who seek to have that vaccine to do so.
QUESTION:
Treasurer, just on preschool funding, you said that you’re going to put $2 billion into preschool funding in the hope of increasing participation, what’s your Government going to be doing to increase Indigenous preschool given its impacts later in life?
JOSH FRYDENBERG:
Well there’s been a number of initiatives in closing the gap around how to build….
QUESTION:
Specifically in this Budget.
JOSH FRYDENBERG:
Well, there’s 2,700 places for Indigenous girls to keep them at school and to help them into the workforce, that’s about school and keeping them in school. In respect to preschool, these measures apply equally to Indigenous communities across states and territories as they do to non-Indigenous communities. This is a significant commitment, $2 billion, for preschools and what we’re seeking to do is not just pay for enrolments to ensure we get attendance.
QUESTION:
It must be pretty tempted to go to an election after a Budget like this?
JOSH FRYDENBERG:
I’ll leave that cynicism to you. Thank you.