Summary
- Treasurer Josh Frydenberg unveiled a big-spending budget on Tuesday including $74.6 billion in new spending and tax breaks over five years in a bid to rebuild the economy.
- The budget pours money into social services ranging from aged care to mental health in an attempt to clear the ground for a federal election within a year.
- Among the key measures is $1.1 billion for women’s safety measures, including $261.4 million over two years in a new deal with the states to boost frontline family, domestic and sexual violence services.
- The Morrison government also announced a $17.7 billion five-year package in response to the Aged Care Royal Commission report on abuse and neglect in the system, but did not embrace all of its recommendations.
- A Victorian man in his 30s became the state’s first local coronavirus case in 73 days on Tuesday. The source of his infection is not yet clear but a South Australian medi-hotel is considered likely.
No surplus foreseeable in the next decade: PM
By Nick Bonyhady
Treasurer Josh Frydenberg is relentlessly on-message this morning as he sells the government’s big-spending budget, while critics including Queensland Senator Matt Canavan point to the high levels of debt.
Prime Minister Scott Morrison told Nine’s Today earlier on Wednesday that there was no surplus “scheduled and foreseeable within the next decade because of the significant investments we’ve had to take” in the wake of the COVID-19 pandemic.
Relentlessly upbeat: Treasurer Josh Frydenberg.Credit:Dominic Lorrimer
The ABC’s Fran Kelly pointed out that the Coalition mocked Labor for years for not running a surplus and asked whether Mr Frydenberg would be around to see the budget return to that state.
“I’m not going anywhere,” Mr Frydenberg says. “But I can tell you that my number one goal has been to prevent a generation of Australians going into long term unemployment.”
One political upside for the government in all that spending, in addition to its own merits, is that it provides a war chest for promises to the electorate in an election that could be held this year.
Commonwealth Bank profits surge to $2.4 billion
As Scott Morrison warns the effects of the COVID-19 pandemic are “30 times worse” than the Global Financial Crisis, Commonwealth Bank’s third-quarter profits doubled compared with last year to $2.4 billion.
The banking giant has cut provisions for bad debts in response to the improving economy.
Commonwealth Bank chief executive Matt Comyn at a parliamentary hearing in April.Credit:Alex Ellinghausen
In an unaudited trading update on Wednesday, CBA reported a cash profit of $2.4 billion for the March quarter, up from $1.2 billion in the same period last year. CBA said profits increased by 24 per cent compared with its quarterly average during the six months to December.
Read the full story from Clancy Yeates here.
PM defends hotel quarantine as new case recorded in Victoria
By Rachael Dexter
As Victoria scrambles to stamp out local cases of coronavirus following a new case detected yesterday in a 30-year-old man, questions have been raised again about the adequacy of hotel quarantine.
The man, who arrived in Victoria on May 4, had already completed 14 days’ quarantine in South Australia, and the medi-hotel where he was staying is considered the most likely source of his infection.
Victorian Health Minister Martin Foley has demanded the federal government agree to the state’s plan for cabin-style quarantine to avoid further outbreaks.
But there is no money set aside in last night’s budget for any other cabin-style quarantine facilities to mitigate COVID-19 entering the country, with Prime Minister Scott Morrison maintaining that hotel quarantine is still an overall success.
Mr Morrison pointed to the half a billion dollars already announced to upgrade the Howard Springs quarantine facility in the Northern Territory as evidence of the government’s commitment to secure measures for stamping out the virus.
“This month [Howard Springs] goes from 850 to 2,000 people, which will enable us to be particularly bringing those commercial repatriation flights for people coming back from India,” he told ABC News Breakfast on Wednesday morning.
He pushed back on a suggestion that Howard Springs could be expanded even further to accommodate 3000 people.
“My point is about workforce. A quarantine facility isn’t just beds. It’s actually about the workforce you have to bring to support that and the facilities that need to be supported through infection control and support services of police and others,” he said.
Mr Morrison repeated his statements that the federal government was considering a proposal from the Victorian government to build a quarantine facility in Melbourne’s northern fringe, but also talked up the “success” rate of hotel quarantine.
“If there is any other country that has a more secure system, I would like you to tell me who it is,” he said.
“Beyond [hotel quarantine] it is the ring of containment, of contact tracing. The Victorian second wave was not just a quarantine failure, but the product of not being able to contain it once it got out.
“All the other states and territories - and Victoria - [have] done the work to ensure that even when the things happen - and they will - that we can move quickly to ensure that that is contained.”
Pandemic is ‘thirty times worse’ than global financial crisis: PM
By Sarah McPhee
Prime Minister Scott Morrison has defended the government’s $74.6 billion spending package, including pre-election tax cuts, and described the COVID-19 pandemic as “30 times worse” than the Global Financial Crisis.
“It’s about a pandemic, that’s what it’s about,” he told Nine’s Today show on Wednesday.
Scott Morrison defended the government’s second pandemic budget.Credit:Alex Ellinghausen
“That’s the enemy here, that’s the opposition I’m focused on ... because that’s what will rob Australians of their health, of their jobs and livelihoods.”
He said if Australia had the average COVID-19 fatality rate experienced in other OECD member countries, more than 30,000 Australians would have died during the pandemic.
Host Karl Stefanovic noted the Coalition had previously accused Labor “of spending like drunken sailors” during the Global Financial Crisis.
“It is hard to imagine a budget further from Coalition heartland,” he opined.
The Prime Minister replied: “I just don’t think the situations are comparable. In a pandemic, there’s no politics, there’s just a virus looking to take your health and to take your livelihood.
“This pandemic is 30 times worse globally, economically, than the globally, economically, than the global financial crisis. That is how serious it is and it is still raging now.
“Just because we can put 100,000 people at the [MC]G in Melbourne for a football game does not mean this is over. This budget shows we’re not being complacent.”
Mr Morrison reiterated his position that the next federal election will not be called until 2022.“The election is next year,” he said.
Economic recovery hampered by ‘third-rate vaccine rollout’, Labor says
By Rachael Dexter
Shadow Treasurer Jim Chalmers said last night’s budget was overall hampered by the government “getting [the COVID-19] vaccine rollout so horribly wrong”.
“They’ve missed every [vaccination] target that they’ve announced,” he told ABC Radio National on Wednesday morning.
Shadow Treasurer Jim Chalmers took aim at the slow pace of Australia’s vaccination rollout.Credit:Dominic Lorrimer
“[The budget] doesn’t have the economy opening up again until well into the next year and I think that’s one of the issues here, you can’t have a first rate economic recovery with a third-rate vaccine rollout.”
The Morrison government’s initial plan was to have 4 million people vaccinated by March. As at mid-May, the total number of doses administered so far is more like 2.7 million.
Mr Chalmers also criticised the federal government for investing in social services for “political not economic reasons”.
“Last night [the federal government] racked up a trillion dollars in debt, and yet still we’ve got real wages going backwards, we’ve still got the aged care funding falling short of what the Royal Commission recommended. They still haven’t undone all of the damage they’ve done over the last eight long years of their government,” he said.
“If they really cared about those areas they would have done something at some other point in the last eight years.”
Mr Chalmers also levelled the same claim of politicisation at the personal income tax breaks included in the budget.
“If you’re going to rack up this much debt, you’re going to spend this much money [then] let’s leave a lasting legacy. Let’s transform the economy in the interests of the Australian people,” he said.
“Instead, the government’s got a short-term view about getting through an election. The tax cuts are a good example of that, the tax cuts have only been extended to the other side of the election - I think that’s an illustration of what their priorities are.”
Treasurer ‘very conscious’ of increased spending
By Sarah McPhee
Treasurer Josh Frydenberg says wages growth will come from a tighter labour market, with Treasury expecting unemployment to fall below 5 per cent by the end of 2022.
Appearing on Nine’s Today show on Wednesday morning, Mr Frydenberg said Treasury and the Reserve Bank of Australia agreed that was the way to see an acceleration in wages.
Treasurer Josh Frydenberg is congratulated by Prime Minister Scott Morrison and other colleagues after delivering the budget.Credit:Alex Ellinghausen
“We printed a number in the budget last night which suggests that Treasury is expecting unemployment to get below five per cent by the end of next year,” he said. The unemployment rate is now 5.6 per cent.
“We have said we want to get it down to where it was pre- pandemic at 5.1 per cent and even lower, under 5 per cent, if we can. That will start to generate improvements in wages. It is that competition for labour, a tighter labour market, which will actually be good news for wages.”
The 2021-22 budget forecasts the unemployment rate to dip to 4.75 per cent in 2022-23.
Mr Frydenberg was also asked whether he was “worried” about the size of the debt, after Queensland Nationals Senator Matt Cavavan raised concerns about the big-spending budget earlier on Wednesday.
(Net debt is now expected to peak at $980.6 billion in 2024-25, or 40.9 per cent of GDP. That’s a revision down of debt reaching 44 per cent of GDP, projected in last year’s budget).
“I’m very conscious of the increased spending that’s been required as part of our plan to stabilise the economy,” Mr Frydenberg said.
“We need to lock in and secure the recovery. We’re still in the middle of the pandemic.“He said the economic impact from COVID-19 “has been more than 30 times what we saw during the GFC” and the biggest economic shock since the Great Depression.
Mr Frydenberg would not confirm whether there would be another budget delivered before the next federal election.
“The PM has indicated it’s his intention to hold the election next year,” he said. “This was very much a pandemic budget.”
More money in tax cuts than social services, critics warn
By Rachael Dexter
The Morrison government’s second pandemic budget has poured money into social services, ranging from aged care to mental health, in an attempt to prime voters for a federal election within a year.
The budget includes $17.7 billion over five years in response to the Aged Care Royal Commission report on abuse and neglect in the system, including $6.5 billion to help more people live in their homes for longer.
But Cassandra Goldie, chief executive of the Australian Council of Social Service, said on Wednesday that last night’s budget fell short.
ACOSS chief executive Cassandra Goldie.Credit:Alex Ellinghausen
She welcomed what she called “modest” investments in social services like aged care, mental health, childcare and domestic violence but said much more money was being spent on personal and business income tax cuts.
“Then we’ve got many people who have just been left behind. People on the lowest incomes. So tax cuts don’t help the bottom 30 per cent of households - that’s the reality,” she told ABC News Breakfast.
“People don’t earn enough to even qualify for a tax cut.”
Dr Goldie said “we did some extraordinary things in the last year. We doubled the rate of JobSeeker.
“We effectively protected millions of people from falling into poverty virtually overnight, and we also housed almost everybody. And so, we showed what we could do when we wanted to.”
Ms Goldie said the single most effective thing the federal government could have done to lift people out of poverty was to increase the current rate of social security payments of $44 a day, as it was during the pandemic.
“So JobSeeker - it needs to be fixed. It needs to be increased to at least $65 per day. That’s not in this budget.”
Where is the $3.4 billion in spending for women going?
By Michaela Whitbourn
The Morrison government has trumpeted measures in this budget aimed at women, including policies designed to ensure their safety, economic security and workforce participation.
The total package is valued at $3.4 billion but includes $1.7 billion in childcare subsidies - a policy that benefits parents irrespective of gender, but is a driver of women’s workforce participation.
Treasurer Josh Frydenberg and Finance Minister Simon Birmingham with the 2021 budget papers at Parliament House on Tuesday.Credit:Dominic Lorrimer
Some of the other measures include:
- $1.1 billion in funding for women’s safety, including frontline domestic violence programs and cash support for women fleeing violence.
- $1.9 billion to support the economic security of women.
- $351.6 million for women’s health and wellbeing measures.
Single mother Margaret Ambrose, 51, from the Melbourne suburb of Newport, was enthusiastic about the Family Home Guarantee that will let eligible single parent families put down a deposit of 2 per cent to build or buy a home.
“It’s great because it will enable single mothers in a position to do so to buy a house, but it remains to be seen if it’s setting women up to get a mortgage they can’t service,” she says.
But she was disappointed only 10,000 people were eligible for the guarantee, saying it was a “drop in the ocean”.
“Many single mothers are living in poverty,” she says.
As chief political correspondent David Crowe has explained, the 10,000 new places for the home guarantee will only be available for individuals with taxable incomes of less than $125,000, and they cannot have owned a property before seeking the new help.
‘Pandemic budget’ racks up historic debt: Nationals Senator
By Michaela Whitbourn
Queensland Nationals Senator Matt Canavan is out of the blocks early on Nine’s Today program on Wednesday and isn’t entirely complimentary about Treasurer Josh Frydenberg’s plan to rebuild the nation’s economy with $74.6 billion in spending promises.
If you are looking for a handy primer of those promises, political correspondent James Massola has prepared a five-minute rundown.
Hey big spender: Matt Canavan takes aim at the high level of debt.Credit:Dominic Lorrimer
“It is still a pandemic budget,” Senator Canavan says. “It is a response to what has been a once-in-a-century global pandemic and so you can understand that. But ... we do have to be mindful of how much debt we have racked up as a country. It is about $40,000 per Australian now and we are not in the same position we were 15 years ago to withstand future shocks.”
As Massola reports, net debt is now expected to peak at $980.6 billion in 2024-25, or 40.9 per cent of GDP. That’s a revision down of debt reaching 44 per cent of GDP, which was projected in last year’s budget. But it’s still a big number.
Prudent spending, or shameless politics? Budget reactions at a glance
By Michaela Whitbourn
What to make of the Morrison government’s second pandemic budget? Some of the early reactions are in.
Shadow Treasurer and Labor MP Jim Chalmers has panned the $74.6 billion big-spending package as a “shameless political fix, rather than the genuine reform needed to make Australia’s economy stronger, broader and more sustainable”.
Shadow Treasurer Jim Chalmers criticising the federal budget.Credit:Dominic Lorrimer
But Jennifer Westacott, chief executive of the Business Council of Australia, says the budget “strikes a prudent balance between growth and fiscal discipline by making sensible investments in the levers of growth”.
You can read more from Canberra reporter Nick Bonyhady here.
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2021-05-11 22:49:54Z
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