KIERAN GILBERT:
Let’s get some reaction in terms of the budget and implications of the floods for the federal budget, one week today. The Assistant Treasurer Stephen Jones joins me now. And the Treasurer, Mr Chalmers, has made it clear this will have a significant inflationary impact, the floods. Obviously, a very real human impact with tens of thousands of people evacuated right now.
JONES:
Yeah, look, our hearts go out to all those people in Victoria and in New South Wales and Tasmania whose communities are being devastated, some of them once again, by the impact of these floods. Yes, it is going to have an impact on grocery prices. In those areas, those crop-growing areas that have been affected, that are under water, it will have an impact, and that will be felt relatively soon, as there’s a shortage in some of those goods on the supermarket shelf. We – our number one objective right now, though, is working with the affected communities, I’ve got to say, Kieran. And we’ll deal with the downstream consequences in short order. But number one, let’s ensure that communities that are in crisis are supported, and that’s exactly what we’re doing.
GILBERT:
When we’re looking at the growth numbers for next year and beyond, two and a half per cent is what we’re expecting. It’s not going to be that figure, is it, next week?
JONES:
Yeah, look, the IMF, in fact, most of the international forecasters, are downgrading growth numbers right around the globe. You can't have your major trading partners, whether it’s the US, the UK, Germany – in fact, most of the EU – sliding into recession, you can’t have China with all the constraints they’re having on their markets, a big source of revenue for us here in Australia and our supply chains interrupted and it not impact on us. We’re not hermetically sealed. It is going to impact us. We think, to use the language of the Reserve Bank, there is a narrow path through, but it does rely on us having tight fiscal policy and ensuring fiscal and monetary policy are working hand in hand. We don’t want to make inflation worse. And we’ve got to deal where we can with some of these supply-side constraints. And that’s what this budget is going to be all about. Looking at where we can put some relief in the skills area, where we can help families in a very targeted sort of way without doing what the Brits did essentially and blow their economy up by ill-disciplined fiscal policy.
GILBERT:
Was it also factored in when making the commitments on infrastructure? You know a lot of the detail this week on the infrastructure projects were election commitments. But still at a time when the RBA is trying to cool things down, the government needs to be careful, surely, in terms of injecting funds? And demand on those resources, you spoke about, they’re finite – workers and other capacity – in the economy right now.
JONES:
Yeah, good point, Kieran. And I guess that’s why infrastructure spending is a little bit different to just about every other sort of spending in the budget. What matters in the infrastructure area is that the participants in that industry, whether it’s the large contractors, the workforce, have continuity and certainty of contracts so they can see a pipeline down the track of projects that they’re going to be able to work on once they’re concluding the stuff that they’re currently working on, which is why there’s got to be some certainty. And what Catherine and the Prime Minister – what the Infrastructure Minister and the Prime Minister have outlined already – and there’ll be further detail in the budget – provides some certainty. Because we know – we’re certain that we’re going to be able to turn this stuff around. And we want to ensure that as we emerge from the supply constraints that we’re experiencing at the moment we have a pipeline of infrastructure projects, shovel-ready, ready to go to soak up the labour and the demand that will be there. And that’s what budgeting into the forwards is all about – ensuring there’s a pipeline there.
GILBERT:
Sure. The Association of Superannuation Funds says that the $5 million amount in superannuation accounts should be a limit that those with more than $5 million should either have to remove those funds or not receive concessional tax treatment on anything above 5 million. What do you say to that?
JONES:
Look, the issue of high-balance superannuation funds has been kicking around for a while now. And, you know, we’ll look at submissions that have been put by ASFA and others, the SMSF Association had something to say about this about 12 months ago now as well. So, you know, the issue is being raised by unusual quarters – people who are not normally on that side of the debate.
What I can say, Kieran, is, you know, this budget is going to be about us implementing our election commitments. We have no plans for this budget to be dealing with that issue. We want to work through all of these issues in an orderly fashion. We have been upfront with the Australian people. We have real revenue constraints –
GILBERT:
Are you open to that sort of idea, though?
JONES:
I don’t want to go rule in, rule out or anything like that. We’re taking – we’re looking at all of the issues in superannuation and across the board and seeing, you know, where we’ve got distortions in the system or not. I think we need to look at superannuation as a whole. I guess I’m going to approach it from this point of view: the objective of superannuation is to provide for retirement income. If you’ve got massive retirement balances in a superannuation fund, it’s pretty hard to argue that that’s for retirement income. It might be, you know, cleverly managing your superannuation affairs. But it would be hard to argue that that’s for retirement income. So I think let’s get a proper order. The Treasurer, Jim Chalmers, has already announced that he wants to look at an objective of super, and I think that’s the conversation that has to come first before we start looking at some of these other issues.
GILBERT:
You earlier in the day were with Westpac for the opening of its fraud prevention centre, quite timely given the events around Optus in recent times. I understand there are several hundred cyber experts being involved in this Westpac initiative. Important for the financial sector to be some of the leaders in this space.
JONES:
Yeah, important piece of work going on out there at Westpac and, in fact, across all the major banks, to detect and seek to prevent fraud. Sadly, and we saw some real live examples of that today, despite the intervention of the banks – Westpac themselves have 500 staff on the job – they’re personally intervening in about 19 and a half thousand transactions a week. Nineteen and a half thousand transactions a week where they suspect something dodgy might have gone on there. So despite their efforts, a whole heap of that stuff is still going through. Around $2 billion a year being lost to scams according to the ACCC which means we’ve got to do more than just have great work going on inside one bank or another bank. We’ve got to get the banks, the telcos, the social media platforms and the government working together on that. And that’s what our scam-busting policy is about. We’ll have more to say about that in the context of the budget next week and in May next year as well. But too many Australians are losing too much money because previous governments haven’t done enough about scams.