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Treasurer says unemployment below 5 per cent will be a challenge
By Nick Bonyhady
Josh Frydenberg is delivering his post-budget address to the National Press Club in Parliament House (he is without his four-year-old son, who told Mr Frydenberg that last night’s budget speech was the “most boring thing he’s ever done”).
He lays out the challenge that the government has set for itself in getting unemployment below 5 per cent.
Treasurer Josh Frydenberg during a post budget interview at Parliament House in Canberra.Credit:Dominic Lorrimer
“Ladies and gentlemen, we know that getting the unemployment rate below 5 per cent will not be easy. The last time Australia sustained unemployment below 5 per cent was between 2006 and 2008. Before that you need to go all the way back to the 1970s.”
How does Treasurer plan to get us there? 163,000 places for JobTrainer, to let people take courses for in-demand skills; tax relief for businesses that invest in capital expenses like factories as they expand; $1.7 billion for childcare to help women enter the workforce (and that number is already at a record high).
“A lower unemployment rate will also put upward pressure on wages. As the labour market tightens, wages will begin to lift.”
Qantas pushes back international flights after budget blow
By Broede Carmody
While many in the business world would be happy with last night’s budget, thanks to targeted support and the extension of the popular instant asset write-off, some are having to adjust their forward planning.
Take Qantas for example. The national carrier has had to cancel most of its international flights scheduled from late October through to December. This is because the federal budget has indicated that international borders won’t re-open until mid-2022.
Tourism will likely be restricted to domestic destinations or countries with travel bubbles until well into next year.Credit:Craig Platt
It’s worth noting, though, that flights to and from New Zealand remain unchanged thanks to the trans-Tasman bubble.
For more on this story, here’s the latest from aviation reporter Patrick Hatch.
Labor takes aim at wages growth
By Nick Bonyhady
Labor’s attack lines on the budget are pretty clear today ahead of opposition leader Anthony Albanese’s formal budget reply tomorrow night.
Here’s shadow treasurer Jim Chalmers emphasising the party’s key argument earlier on Wednesday:
“I mean the real wages cut in the budget is an admission of failure. Even after spending $100 billion racking up a trillion dollars in debt, Australian working people still go backwards in the government’s budget which is a pretty extraordinary admission of failure. If you think about everything Australian workers have been through together, the thanks they get from the Morrison government is a cut to their real wages and I think that is a stunning outcome from the budget.”
Labor’s Jim Chalmers addressing the media at Parliament House in Canberaa. Credit:Alex Ellinghausen
That attack isn’t based on a Morrison government policy but instead budget forecasts showing that in some of the next few years, Australian workers’ real wages will increase by less than inflation and in others, increase in line with it.
Overall, that means no real wage rise. Though the Treasurer is hoping that by bringing unemployment down there will be more competition for workers and therefore companies offer higher pay to attract staff.
For more on the juggling act that is supply, demand and wages growth here’s a great primer from economics editor Ross Gittins.
What to expect this afternoon
By Broede Carmody
Hello and thanks for tuning in to our live coverage of the budget wash-up. I’m Broede Carmody and I’ll be taking the reins from Michaela Whitbourn.
It’s set to be a busy afternoon with plenty of budget reactions to come. In case you’re just joining us, here’s what you need to know:
- Prime Minister Scott Morrison has defended the $74.6 billion in new spending unveiled in last night’s federal budget. The Prime Minister says the spending is necessary because the COVID-19 pandemic is “30 times worse” than the Global Financial Crisis.
- The Government has conceded there won’t be a budget surplus for years to come. Shadow Treasurer Jim Chalmers says if the federal government is going to accumulate this level of debt it should “leave a lasting legacy” and do more to “transform the economy”. Expect Labor to sharpen its critiques ahead of Anthony Albanese’s budget reply speech Thursday night.
- NSW Premier Gladys Berejiklian says she would like to see international borders re-open earlier than mid-2022 (the date set out in the budget papers).
- All eyes are on Victoria as authorities scramble to confirm if yesterday’s positive case originated in South Australia. We can expect an update mid-afternoon.
The day’s developments at a glance
By Michaela Whitbourn
Reactions to last night’s big-spending federal budget are so far proving relatively predictable. The Coalition says the eye-watering debt, peaking at $980.6 billion or 41 per cent of GDP in 2025, is unavoidable as it maps out a recovery plan for a post-pandemic nation.
But Labor says the government has no real plan, other than for its own re-election in 2022.
On the coronavirus front, there were the following developments this morning:
- Victoria and NSW recorded no new locally-acquired cases of COVID-19. On Tuesday Victoria recorded one new case, in a man in his 30s who had recently returned from quarantine in South Australia, but no further infections to date. Urgent testing, the results of which are expected this afternoon, will confirm whether he did acquire the virus in quarantine.
- The Victorian government says the likely source of the infection is the South Australian quarantine facility, and it makes the case for alternatives to hotel quarantine to be funded as a matter of urgency.
- NSW Premier Gladys Berejklian has said she is “more ambitious” about the timetable for re-opening borders, after the federal government indicated a likely timeframe of mid-2022.
And in business, the Commonwealth Bank’s third-quarter profits rebounded sharply to $2.4 billion, as the banking giant cut provisions for bad debts in response to the improving economy.
I’m signing off on the blog and leaving you in the capable hands of my colleague Broede Carmody.
NSW more ambitious on border re-opening, says Berejiklian
By Tom Rabe
NSW Premier Gladys Berejiklian says she’s more ambitious than her federal counterparts as to when international borders should re-open.
Ms Berejiklian congratulated the federal government for handing down a “very strong budget under very difficult circumstances,” but added she would like to see borders reopen earlier than mid-2022.
NSW Premier Gladys Berejiklian addresses the media on Wednesday.Credit:James Alcock
“I’m always very ambitious. I’m probably more ambitious than what was there,” Ms Berejiklian said.
“I would like to see us really work as fast as we can to get our population vaccinated and that’s why the NSW government was the first to step up and say ‘let the states help’ which we’re doing.”
The Premier added she was buoyed by the budget revenue forecasts.
“In NSW it really gives us a bit of a spring in our step because we were concerned where revenues might go over the next few years but obviously the federal government’s budget gives us a strong indication that consumer sentiment, business confidence in NSW is very strong and that will hopefully be reflected in greater GST revenue,” she said.
“All in all I think NSW has done well and I think the federal government should be congratulated in handing down a very strong budget in difficult circumstances.”
Alternatives to hotel quarantine ‘need to be fast-tracked’, says Victorian Health Minister
By Roy Ward and Michaela Whitbourn
Victorian Health Minister Martin Foley says alternatives to hotel quarantine “need to be fast-tracked” and there are “better alternatives” to the current model.
“Hotels weren’t designed to be quarantine facilities,” Mr Foley said. “We’ve seen [coronavirus] leak out.”
Health Minister Martin Foley says the government has not ruled out other sources for the infection than quarantine, but it is the main suspect.Credit:Simon Schluter
He urged the Commonwealth government to fund the Victorian government’s proposal for a medical quarantine facility at Mickleham in Melbourne’s west.
Mr Foley pointed to a similar facility at Howard Springs in the Northern Territory as an example of why Mickleham should also be funded.
“We are disappointed that the Commonwealth didn’t take the opportunity to fund a medical facility,” Mr Foley said.
“I did note that the treasurer didn’t rule it out in some of his public comments this morning. That’s positive, and will continue to engage constructively with the Commonwealth.
“Victoria has put forward a costed, sensible, scalable option in Mickleham. It’s the Commonwealth’s own assessment is that we are not opening our borders in any meaningful way, at least, until the end of 2022, if not beyond.
“If we want to have a safe system that protects us from this raging pandemic, as the Prime Minister described last night, it is going to be by having the best possible quarantine system in place that requires a partnership between the states and the Commonwealth. The Mickleham proposal is the best partnership model going around.”
On Tuesday, Victoria recorded a new case of COVID-19 in a man in his 30s. The man had recently returned from quarantine in South Australia, but Mr Foley said the government had not ruled out that the virus was acquired elsewhere, including on the flight from Adelaide.
You can check the exposure sites online here.
Health officials are still waiting on results from genomic testing but Mr Foley hopes to have results back later this afternoon.
He said the government wouldn’t be “putting all its eggs” in one basket, and was asking people who travelled on the same flight between Adelaide and Melbourne to get tested in case the man may have contracted the virus on the plane between the states.
“As both chief health officers of both states have indicated the working hypothesis is that this was acquired in hotel quarantine in Adelaide, the genomic sequencing should establish that will beyond doubt,” Mr Foley said.
“And as chief health officers have indicated that out an abundance of caution, a range of other hypotheses are being entertained.
“You can’t rule anything in or out until such time as you’ve got the evidence. Every indication points to have been acquired in hotel quarantine.”
NSW records no new cases of COVID-19
By Michaela Whitbourn
NSW recorded no new cases of locally-acquired COVID-19 overnight. Four new cases were detected in returned travellers in hotel quarantine.
The state announced a suite of social restrictions last week after a couple in their 50s tested positive for the virus on Tuesday. Genomic testing has linked the man’s infection to a returned traveller in hotel quarantine, but the “missing link” between the traveller and the man has not been found.
The man and his wife are the first known locally acquired cases of the Indian B.1.617 variant of the virus in NSW.
AFL clubs helping Victorian contact tracers reach potential contacts
By Roy Ward
Victorian Health Minister Martin Foley says contact tracers are working with the AFL to reach out to fans who attended the clash between Richmond and Geelong last Friday and then travelled on the same train as a Wollert man who has tested positive to COVID-19.
On Tuesday Victorian health authorities revealed that a man in his 30s had tested positive to the virus after returning to the state from South Australia, where he was in quarantine for 14 days.
Victorian Health Minister Martin Foley says the likely source of the infection is South Australian quarantine, but this is not the only possibility being considered.Credit:Penny Stephens
Mr Foley said the government expected that the man acquired the virus in quarantine in Adelaide, and “the genomic sequencing should establish that beyond doubt”.
But out of an abundance of caution other hypotheses were being considered and “we want to chase every rabbit down every burrow and make sure we leave nothing to chance”. The government was not ruling out that the man became infected with the virus on his flight from Adelaide.
Mr Foley said the two clubs were helping contact members and supporters who travelled to or from the game on the same train as the man.
Anyone who travelled on the Flinders St to Craigieburn line departing at 10.20pm on Friday has been asked to get tested urgently and isolate until receiving a negative test result.
It’s considered a tier-2 exposure site, meaning people who were present at the same time should urgently get a test and isolate until they receive a negative result.
“We are working with AFL clubs to reach their members in what we expect to be many hundreds of people on that train,” Mr Foley said.
Surveying the post-budget front pages
By Nick Bonyhady
The move to digital media means there are many ways to consume federal budget coverage, but examining the front pages of major mastheads after a budget lockup is always a treat.
The Age and The Sydney Morning Herald both highlighted the big-spending from the government, especially on areas that have caused it political grief in the last year such as social services. The plan to drive employment got top billing at the The Financial Review.
Sydney tabloid the Daily Telegraph emphasised the politics of the spending with an election in the offing, especially on tax breaks for businesses, such as those run by tradespeople.
Melbourne’s Herald Sun took a similarly political angle and both emphasised the spending upside in the headlines.
It was a “super spender event”, The Australian told its readers, pointing to everything from the tax cuts to money for the National Disability Insurance Scheme.
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2021-05-12 02:58:15Z
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