Interview on ABC Radio Adelaide, Mornings with David Bevan
David Bevan: Good morning, Minister Birmingham.
Simon Birmingham: Good morning David, and the listeners on this wonderful blue skied, sunny Friday in Adelaide, ahead of a long weekend.
David Bevan: Now, can we begin with the renovation grants and building grants which the Government announced yesterday? Some of our listeners were pretty keen on this, some though were not. They said this is a missed opportunity, you should have been putting the money into social housing instead of helping people who are reasonably well-off because you’ve got to have a reasonable income and be able to raise a serious amount of money on your own to be eligible for these things.
Simon Birmingham: David, you’ve got to understand the motivations behind this, and it is firmly and squarely about stopping a difficult unemployment situation in Australia as a result of COVID from becoming a really bad one — that our projections show some 30,000 new dwelling commencements that were expected to happen in the second half of 2020 won’t occur. And so what we’ve got to do here is make sure that we incentivise those 30,000 to actually happen and to go ahead, or to bring others into the market. And these have got to be things that can happen quickly to make sure that the jobs of tradies and all of the jobs that flow through from the construction sector aren’t lost and jeopardised on the way, on the way through there.
So, we’ve complemented- we spend around $6 billion a year in housing assistance and where we can push that through the system to have more activity happen, we’ll absolutely do that. But this is about getting quick action, and the fastest way to have those jobs protected is to make sure we get those dwellings and building activities happening on the ground through the second half of this year. And that means really saving those that people might have been pulling out of and getting some brought forward that people might have been thinking about doing down the track.
David Bevan: Are you disappointed the South Australian Government hasn’t joined WA and Tasmania in matching the grant dollar for dollar?
Simon Birmingham: Not necessarily. I think each state has to make its own decisions around what it’s projecting and seeing around its local economy as supplementary activities. South Australian Government’s provided some significant grants to small businesses across the state through the COVID period and acted in a way that has given support for different projects. And I’ve got no doubt there will be others parts of stimulus and so on that SA does, and I’m sure and trust that the State Government’s talking to the Master Builders Association and others to keep a watching brief on circumstances here in SA.
David Bevan: Do you have a handle on what’s already begun to happen with internal tourism that’s with the individual states?
Simon Birmingham: I think within states there’s a real sense of enthusiasm from people quickly to book and move where they can. I think we saw that right back a few weeks ago when South Australia said people could go camp again and the National Parks website had its record-ever day that very day as people rushed to make bookings for camp grounds, and caravan parks I think had positive experiences out of that. That has flowed through where I gather, you know bookings to KI for the next lot of school holidays are looking encouraging. And I think that’s showing that people are willing to get out and make bookings and travel. Obviously there are still limits on that in terms of the things that they can book and there are still those hard borders that most states have got in place.
We did see yesterday, Qantas made the announcement of putting some additional flights and connections across the country, and I had a conversation with Alan Joyce earlier this week where he said that they are seeing an up-tick in interest in activity on bookings on their website, and obviously those extra flights are a response to that.
David Bevan: Alright. We’ll come back to tourism in a moment. But Alex has called from Lobethal. Good morning, Alex.
Caller Alex: Good morning.
Simon Birmingham: Hello Alex.
Caller Alex: Hello, how are you?
Simon Birmingham: Very well thank you.
Caller Alex: Good. What I’m wondering about is bushfire people that signed their contracts to re-build before the date you’ve got — I think you’ve got 4 June or 6 June. Are they going to be affected by this? Or can they still apply for it?
Simon Birmingham: Alex, so I’d have to look at some of the details there. There’s obviously some assistance separate to this sort of program that has been delivered to those impacted by bushfires, and that’s been a range of different programs and some of those are still being rolled out in terms of the economic recovery plans for each of the bushfire regions that I trust will be settled over the next weeks in consultation with local councils, and state governments, and regional development authorities and the like.
If you’ve signed your contracts and you’ve got your works settled and away, then the short answer is likely to be, no. And if it’s an insurance covered rebuild, then the answer is likely to be, no. But if it’s a new dwelling to come or the like, well then it will be a different story, so.
David Bevan: Well, as tough as it might sound for Alex and the people who’ve suffered during the bushfires, if they’ve already signed contracts, then that economic activity is already underway — it’s in the pipeline. And you’ve said this, it isn’t about helping people in terms of social housing or, you know, sad causes — this is about economic activity.
Simon Birmingham: It’s about jobs.
David Bevan: — and if Alex has already signed up, well those jobs are already in the pipeline — so move on.
Simon Birmingham: There is an element of that, David. Now, it depends a bit on, obviously, what each person is doing in their circumstances there, and so there may be some opportunities for people in bushfire settings. But in the main, if it’s an insurance covered rebuild, and particularly one that’s already contracted, then no, there’s not going to be opportunities there under this program. This is about stimulating those things that weren’t about to happen and trying to make sure that yes, as I say, we preserve jobs there because there’s a big flow-through that happens. You know, we’ve already got massive job losses in retail, and in hospitality, and in tourism — in all of those sectors at present. If we also were to see, in the second half of this year, because people didn’t go ahead with extensions or home builds, further job losses in construction — well, that’s only going to compound the job losses in all of those other sectors.
David Bevan: Alex, do you accept that? Alex has left us. Alright. Well if Alex would like to call back we’re more than happy to take her call. Lots of texts coming in. Somebody says: look, the renovation grant is just a grab to show that the Government is doing something when they’re actually not. Who, earning less than $150,000, can afford to spend $150,000 for a renovation just to get the benefit of a $25,000 grant?
Simon Birmingham: Well David, many people who are on average wages — and the average, median wage is less than $150,000 — buy homes, renovate homes. Now they do it through a process of saving over a number of years for deposits and for support, and they do it of course by borrowing money from banks and paying it back over a number of years. Nobody expects that people have a lazy $150,000 sitting in their back pocket that they're just going to spend in spare cash. But- and this is how Australians do buy their homes and do build or extend their homes. And the fact that there is this grant of up to $25,000 now available to them will make a marginal difference to people's thinking in terms of saying well, I wasn't quite sure that I could justify it right now, but I will- we will save that little bit harder. We will stretch the budget a bit harder to make it happen, knowing that this is going to save us 25 grand that we otherwise would have been spending in a couple of years’ time.
David Bevan: Now in the past, these first home owners grants — and John Howard loved them — all they did was bump up the price of the property, so it didn't actually help the young person who wanted to get in. They had to grab it because that- that's what- because of the effect it was having on the market. But it didn't actually help them because the price just went up by the value of the First Home Owners Grant. But in this case, is the Government arguing that's not going to happen? Because we're in an economic slump and this is generating activity that would not otherwise happen, and as soon as we get back on track, you'll stop the grant.
Simon Birmingham: We did see a bit of that, David, previously, but those grants also tended to be structured around buying a property too. So it kind of did mean that people going along to an auction or making an offer to a real estate agent had an extra seven or 10 grand or whatever it was in their pocket at the time. This is not the case there; this is not about buying a property. It's purely about construction cost ...
David Bevan: Well in some cases- well, it’s buying a new place.
Simon Birmingham: It can be buying a new place, but even then, this is a grant specific to the construction costs. So yes, you might get a house and land package, and this will help with the housing components of that. It's not about the purchase of the land and it's certainly not going to feed into people buying existing properties or the like. Now if it were done at a time when everything was rolling along tickety boo, it clearly could have an inflationary impact in terms of pressures on the construction sector. But as I said in the first question on this, our understanding is that there were around 170,000 dwelling commencements forecast for the second half of this year pre-COVID, and that's dropped now to around 110,000 dwelling commencements, a significant shortfall. And so that's a gap that would see loss of work, loss of business. Yes, it would probably see massive discounting occur at that stage, but what we don't want to see is that apprentices get laid off, subbies get put out of work, and the flow on impacts of that across the rest of the economy will just make recovery so much harder.
David Bevan: Okay. Ben has called from the Master Painters Association of South Australia. Good morning, Ben
Caller Ben: Good morning, fellas. Look, we probably, like a lot of associations, have gone over our members and worked out where they're at. A lot of them are- their workers are on JobKeeper, that's helping them out. We're hoping that this will have an effect on continual work. And the reason for that continual work is a lot of the work that was booked in has probably slowed on and now it's running out — you mentioned earlier, the pipeline, David. I'm really disappointed with a lot of listeners out there. They seem to think this is all about I’m missing out. I'm really disappointed. If they could understand the knock-on effect this will have, it's all we've got at this stage. We're hoping that the economy of Australia will recover. If we don't do this sort of thing, those little white vans that pass you in the morning, they’ll be empty. Those tradies will be out of work because we work in a subcontracting environment. I just hope that the rhetoric and this narrative that's happening with a lot of listeners out there can please understand that we could sink very quickly in the trades, and we employ a lot of people, and those suppliers and everyone else out there that are part of that supply chain will hurt, and that'll hurt families directly.
David Bevan: Ben, thank you for your call. Ben from the Master Painters Association of South Australia. Chris is called from Heathfield. Hello, Chris.
Caller Chris: Hi David. Look, I'd like Simon — the priority, and we recognise the need for more housing to be done. For those that are waiting to get a roof over their head, low cost housing for the thousands that are on waiting lists for the Housing Trust here and there and the other organisations in the other states. Why couldn't the emphasis have been done to build houses? I used to be involved in supplying Housing Trust builders and I've talked about this before. All they did was Housing Trust — good quality, affordable, housing and they were building- they had tenders for 100, 120, 80 homes, and this went on for a long time. And I used to supply gear for the houses, and we all can recognise how many trades are involved, apprenticeships and all that. But I just think the priority could have been for those waiting for a roof rather than those that are going to have a roof. What about those that just are waiting to get into the housing situation, to have a roof over their head?
David Bevan: Simon Birmingham?
Simon Birmingham: Look, I think obviously Ben from Master Painters put it better than- than I possibly can in terms of the real on the ground impacts around this. I understand the calls that generally speaking, we don't want to be in this sort of space of simply providing financial support, taxpayer support to stimulate in areas like this. That when we spend in housing it is that $6 billion we invest each year in different forms of housing assistance, including support through organisations like Anglicare, who nowadays are quite active in terms of the social housing provision and not just emergency relief but also helping to build and provide pathways into affordable housing for people.
And we've quite transformed the way we do that. But this is about getting contracts signed and work happening over the course of the next six months in terms of those contracts and 12 months in terms of that work. And so a massive public housing program like is being described there is not going to be stood up in that sort of timeframe and deliver the type of broad flow-through benefits that something like this will, just in terms of saving jobs and getting the activity continuing, not really even talking about new activity, but continuing activity so that we don't suffer compounding losses across the economy.
David Bevan: That's the voice of Senator Simon Birmingham, the Federal Minister for Trade, Tourism and investment. Suzie has called from Dulwich. Hello, Suzie.
Caller Suzie: Good morning and good morning, Simon.
Simon Birmingham: Hello Suzie.
Caller Suzie: My question is I've got a daughter who's having a baby in a few weeks’ time in the UK and it’s her first baby and she has no- very little support over there and yet I'm not allowed to leave the country to go and visit her and support her. I'm finding this incredibly heartbreaking. I was a midwife for 46 years and now I can't support my own daughter because my Government is saying I'm not allowed to leave the country. I want to know why I can’t leave. If I sign a declaration saying I don't want to be repatriated back or I'll pay for my own isolation when I come back. But please let me go.
Simon Birmingham: Suzie, I understand entirely and I can only imagine the desire to be there and I've had a number of similar conversations. There are provisions where we can provide approvals under exceptional circumstances.
Now, the approach to those it will probably change over time as well as circumstances here have improved dramatically, and even in the UK there is- is an improve, still challenging times there and they are a reminder of the type of crisis that we are very fortunate to have avoided.
I'm happy Suzie for you to contact my office offline and we'll see — I'm not sure around supporting a child following the birth of a grandchild as to how that's being treated in the exceptional circumstances categories. But I'm sure that we can make those inquiries on your behalf and see if there's a way that we can help you to the UK, appreciating the assurances you've given. And that also, compared with other parts of the world, the UK is not such a challenging one for people to travel back to Australia from- unlike those where we've had to coordinate with many others the emergency repatriation of individuals.
David Bevan: Well Suzie, you get in touch with Simon Birmingham's office and please let us know how you get on and all the best with you and your grandchild.
Caller Suzie: Thank you very much.
David Bevan: Good on you, Suzie. Thanks for calling. Simon Birmingham, I think it was yesterday the Prime Minister warned the states that don't open up their borders that they might see people travelling to New Zealand instead. What does that mean?
Simon Birmingham: Well it is possible, David, that if the New Zealand Government decides that they're happy to open up to Australia, Australia's indicated that we're happy to have those talks with New Zealand and whilst we're not there yet, certainly, New Zealand's management of COVID has achieved results quite similar to Australia's.
So we think that we can with confidence, given the complementarity and similarities of our countries and the type of restrictions we have on other international travel, facilitate an opening up the borders between Australia and New Zealand and a bit of a normalisation there. But if some states have kept the restrictions in place, well I guess that does mean that Australians, rather than choosing to holiday interstate, might choose to holiday in New Zealand.
Now, that's just a statement of fact. We want to see these things get back to normal. As I've said on air before, fully appreciate that states should take the approach of getting their internal economies back to normal first. But- but we do- we do need to see progress after that in terms of opening up those interstate borders, noting that every Australian state has had remarkable success in suppressing the spread of COVID.
David Bevan: Alright. How close do you think we are in seeing routes opened up between South Australia, Tasmania, the ACT and WA?
Simon Birmingham: I hear lots of- lots of chatter and I think that Steven Marshall and the State Government are clearly working through different options in regards to how they- they reopen SA and that's good to know. How close they are is really a matter of discussion though, between those different state and territory governments.
David Bevan: So, do you think it’s going to happen soon? And by soon, in the next couple of weeks?
Simon Birmingham: I hope that we will see, at least some announcements soon that can give tourism operators time to plan, time to think about how they market to those destinations. And ensure that, just as at the outset, when we talked about how South Australians have responded by making bookings and planning ahead and getting out there. That we can also then try to leverage those from other states, to think about doing the same in SA.
David Bevan: Can you explain — your government wants new powers to prevent or overturn the sale of critical infrastructure to foreign companies. What's all that about?
Simon Birmingham: So this has been a piece of work, quite some time in the making. Looking at our foreign investment laws and just making sure they're fit for purpose in the modern age. That critical infrastructure is an infrastructure that is sensitive to national security or other factors, that we've got clear powers as to how we assess that. At present, for many investments in Australia, if they operate below a certain threshold dollar level, depending on which country they're coming from, they don't need approval. They don't have to go through that assessment by the Foreign Investment Review Board and the Treasurer, to check that they are in Australia's national interests for that investment to occur. What the PM and Treasurer will be announcing today, are some steps that basically say well: there are some categories of activity, particularly sensitive national security businesses, that ought to be subject to that national interest test, regardless of the value of the purchase that's being undertaken.
David Bevan: Well how does that affect the Victorian Government's Belt and Road Initiative with China?
Simon Birmingham: It doesn't and shouldn't necessarily. I mean, whilst I don't think that Victoria should have entered into that agreement, that’s, so far as I understand, more about areas of infrastructure cooperation and so on that occur, not necessarily about investment. But in the end, the Australian Government sets the rules, in relation to foreign investment in Australia, not the Victorian or other state governments. And so our approach is one here, in making sure we've got the right checks and balances. Foreign investment has been critical to this country's development right throughout our history, we would not enjoy the standard of living we have today, without foreign investment in this country. And it's important that we remain open to it, just as our super funds and others increasingly invest elsewhere around the world. But, it's also important that the right type of foreign investment and that we have confidence that it is not jeopardising our national security or leaving parts of our critical infrastructure exposed to undue influence.
David Bevan: Okay. Now you've going to leave us. But David- sorry, Andrew from South Plympton has been waiting. Hello Andrew.
Caller Andrew: Hi, how are you?
Simon Birmingham: Hi Andrew.
Caller Andrew: I work with a lot of people who live in housing trust homes and one of the biggest complaints is the amount of time it takes to get something fixed, to get painted, or to get doors fixed or to have sinks that are leaking or toilets that are leaking. They can wait weeks and weeks to have simple little jobs like that done. Surely, that would be the place to start plonking traders and tradies into getting work done?
Simon Birmingham: David, I think you raise an interesting point there and David Bevan, you asked me earlier about the state governments and what other state governments are doing. And I think in terms of stimulating particularly small works activities, that's an area that the State Government could help to provide extra impetus in the local economy and in the building and construction sectors. We've kept this stimulus to investments that have to be at least $150,000 in construction activity. Because we want it to flow right across a whole lot of different trades and because from a federal government level, you've got to make sure that you don't have rorting in these things as well. And so, that requires us to have significant enough works and contracts, that we're not trying to oversee a program. It’s small; a paint job here and a little fix up there. But I think through it through Housing Trust works and so on, the State Government is able to more directly do those small jobs and could scale that up.
David Bevan: Andrew, thanks for your call. Minister, thank you for your time.
Simon Birmingham: Thank you very much, David.
David Bevan: Senator Simon Birmingham, Minister for Trade, Tourism and Investment.
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