Rafael Epstein:
Michael Sukkar is the Assistant Treasurer, part of Scott Morrison’s team. He’s also the Liberal Member for the seat of Deakin here in Melbourne. Michael Sukkar, thanks for joining us.
Minister Sukkar:
Good day, Raf. Good to be with you.
Rafael Epstein:
Budgets are big. Can I ask – this might be hard – is there one thing in the budget, what’s the one thing in the budget that you think tells the story of the budget?
Minister Sukkar:
Well I think, Raf, if I was to boil it down I’d say that the $17.7 billion that we’ve put into aged care. It obviously responds in a significant way to the findings of the royal commission. It is obviously a huge investment in a value that I think that all Australians have and that is that we need to support senior Australians to have dignity in their retirement. But there are other aspects of the budget that recognise that in order to fund that, you need a strong economy. You can’t have one without the other. We make those huge investments only with the ability that a strong economy provides. I thought that aged care was really important. Like most Australians I think we’ve all grown up with an expectation in Australia that we value senior Australians and some of the things that we saw in the aged care royal commission I think were pretty confronting. So that huge investment – nearly $20 billion – I think shows that the heart sits at the middle of this budget, the heart for older Australians, but being realistic about it, you can only do that if you’ve got a strong economy that provides the tax receipts that can fund it.
Rafael Epstein:
Just a quick question on the approach you’ve taken. People have criticised you for not having mandated ratios so this many nurses for this many people. You’ve chosen an American model – which is good in many ways because it will be able to help people chose an aged care home – but you’re focussing on the minutes of care each resident gets rather than a staff-to-resident ratio. Can you explain why?
Minister Sukkar:
Well that was the position that was finally accepted by the Health Minister and the Minister for Aged Care. I mean I think that there’s great logic to that. If we’re looking at the detail of the care that is provided to somebody, I think that having that guarantee of the level of care, not that just someone is available but actually is getting that care I think is as good a proxy as any. I mean, Raf, any package of this size, there’ll be critics. I mean there are critics about Australia’s economic performance yet if you look at our economic performance compared to virtually every other country in the world, we are the envy of the world. So there’ll be critics irrespective of what position you take. I think that providing a requirement of metrics of care around minutes is as good a proxy as any. That’s my view.
Rafael Epstein:
Some of the numbers, I know numbers cannot always be relied on and we’re living in uncertain times, but one of the least heartening numbers in the budget is how much my wage packet is going to grow. But what might get people down every more is that the last seven budgets, your wages growth forecast has been wrong. The last seven times. Seven times you’ve said my pay would grow more than it actually did. So why should we trust the numbers that are in this budget, especially the number on wages?
Minister Sukkar:
Well, Raf, let’s start really where I think is most important for most Australians and that is we now have an unemployment rate of 5.6 per cent. If you look at the forecasts, by mid-’23 we’ll have unemployment at below 5 per cent. Other than a short period between 2006 and 2008, we haven’t had an unemployment rate below 5 per cent for decades. The fact that we have recovered every job that was lost during the pandemic and then some, I think is the key story to tell around jobs…interrupted.
Rafael Epstein:
Its good news, I’m not disputing that I just asked why…interrupted.
Minister Sukkar:
Undoubtedly good news, Raf, which is why I’m surprised that you haven’t asked because it is undoubtedly good news.
Rafael Epstein:
Well I like to surprise you.
Minister Sukkar:
But it’s very related to the answer.
Rafael Epstein:
If the wages number has been wrong for seven years in a row, why should I trust any of the numbers?
Minister Sukkar:
It’s very related to the answer. In the end, in order to create wages pressure, you need a labour market that is at full employment. Whether it’s the Reserve Bank Governor, whether it’s the Secretary of the Treasury, we all agree that in order to create that environment where you have wages growth, where you’ve got that pressure in the labour market, you need to drive that unemployment rate very low. The reason why I started with that is, Raf, is that is the only prescription for significant wages growth and the fact that we’re on that path, I think is very encouraging but again taking a step back. When we were talking a year ago you and I and Treasury were telling us that we should expect an unemployment rate of 15 per cent as a result of this economic meteor which was going to hit the country…interrupted.
Rafael Epstein:
And you didn’t get that which is good news.
Minister Sukkar:
…the fact that we’re at 5.6 per cent now – lower unemployment than when we came to government – the fact that we are moving towards unemployment below 5 per cent, I think is really important to Australians who, not long ago, Raf, many, many hundreds of thousands of them were faced with the dire prospect of losing their job.
Rafael Epstein:
Michael Sukkar is with us. He is the Assistant Treasurer so he is part of Prime Minister Scott Morrison’s financial team. 1300 222 774 is the phone number, I will get to those calls.
Michael Sukkar you will have expected to be asked about a debt and deficit disaster. When you labelled Kevin Rudd’s government like that, our debt was 10 per cent of the economy. Scott Morrison’s debt is 40 per cent of the economy so it’s four times as much. Again if he was a disaster for having a much smaller debt, but your excellent stewards of the economy, how do we know which of your words to value? How do we know how to trust you?
Minister Sukkar:
Raf, a couple of things. Firstly, I think that the comparison between the global financial crisis and what we faced last year, is not a valid comparison. If you look at global growth, the pandemic is 45 times more destructive than the global financial crisis. 45 times more. Something that we haven’t seen for 100 years. So to compare our economic response now to what occurred then is not really a valid comparison. I suppose the rhetorical question that I’d ask you in response, Raf, is what spending program that was put in place last year would you not have proceeded with?
Rafael Epstein:
It’s not a question about the spending programs, it’s a question about why we should trust…interrupted.
Minister Sukkar:
It’s a question about government spending, Raf.
Rafael Epstein:
Can I restate the question?
Minister Sukkar:
Is it the $100 billon JobKeeper program? Was that spending that you wouldn’t have proceeded with? I think that’s a fair rhetorical question in response.
Rafael Epstein:
Well ever since Paul Keating was Prime Minister, the Coalition has focussed on debt. Now all of a sudden, when we’re spending more than we’ve ever spent and the debt is many times greater than it ever has been under Labor, all of a sudden debt’s a good thing? Why shouldn’t people question your word?
Minister Sukkar:
You’re sort of verballing me there, Raf. The reality is you’ve got to respond to the circumstances in which you find. Now, yes, you could be ideological about it and say ‘well we’ve been hit with a one in 100 year economic shock, we will be ideological and not respond in the way that we should’ or you take the circumstances as they’re presented to you and you do what needs to be done. Whether it’s – as I said – keeping 3.5 million people employed through the JobKeeper program, whether it’s ensuring that 1.5 million Australians receive the coronavirus supplement through JobSeeker, whether it’s the million people who work in the residential construction industry being supported by HomeBuilder. I think that it’s important to say well what programs were wasted spending according to anyone who’s being critical about debt levels. Now we came into Covid-19 in a position of relative fiscal strength compared to any of our comparable nations. We came in with a balanced budget that we had delivered, we were on track to deliver a surplus and then Covid-19 hit. So we came in in a strong position and what we’ve seen even between the budget that was delivered in October last year to now – just in eight months – we’ve seen the position of the budget improve by more than $50 billion. Now it’s about the quality of the spend but, Raf, if you’re saying to me…interrupted.
Rafael Epstein:
I’m just asking you a question.
Minister Sukkar:
I’m sure but if through the implication of the question you’re saying to me that Raf Epstein is concerned about debt then, yes, it means we’ve got to spend every dollar wisely, we’ve got to ensure that it’s either encouraging aggregate demand or improving the capacity within the economy, driving down unemployment because in the end, growing the economy is the thing that will bring our budget back into a sustainable position and by any measure, if you look at Australia on any metric, we’re at the top of the leader boards as far as economic indicators.
Rafael Epstein:
And the final point. Growing the economy of course relies on the state of the pandemic. The budget says it’s based on giving every adult two doses of the vaccine by the end of the year. But that’s not a government policy or a government aim. How can it be an assumption central to your economic numbers but not be a government goal?
Minister Sukkar:
Well there are a lot of examples like that in the budget, Raf. I’m not sure how familiar you are with how budgets are put together but, for example, one assumption that’s built into the budget is international travel not recommencing until the middle of 2022. Now that’s not a government objective, it’s not a government policy, it’s just a best estimate of the Treasury. Now we would all like international travel to resume as soon as possible. So there’s a difference between government objectives and what we expect to happen and when we’re putting together a budget, you have to take into account all the factors of what you assume is going to happen and that’s not directed by government policy that’s directed by what the Treasury believes is the most likely scenario. So again, travel by the middle of ’22 – not a government objective but the best assumption of Treasury and the same goes for the vaccine rollout and a range of other things.
Rafael Epstein:
The newsrooms going to hate me. The final question, I lied. Are you going to cough up some cash for quarantine outside of hotels? The Victorian Government has thrown that idea at you. Do you think that’s going to happen?
Minister Sukkar:
Raf, I think that we’re looking at the Victorian Government’s proposal in good faith. Obviously there’s funding for Howard Springs. We will look at it closely. That’s all that I can say. I think there’s some pretty important processes to go through before you spend that sort of money – to go back to your earlier question about the wise spending of taxpayer’s recourses – but we’re looking at it very closely.
Rafael Epstein:
Okay. Thanks for your time.
Minister Sukkar:
Good on you, Raf.