Senator the Hon Simon Birmingham

Katharine Murphy: Hello, lovely people of pods and welcome to the last show of the year, I can't believe it. It's Katharine Murphy with you, the host and political editor of Guardian Australia. And I'm delighted that the Finance Minister, Simon Birmingham, has made time to be with us on the final show of the year, and we are talking just for clarity on Thursday. The government has just unveiled, made public, the latest Treasury forecasts - so it's a busy day and it's good to be able to pop in. So let's start there, Simon. It's pretty obvious, you know, we can see the government is sort of setting up an election contest, pivoting around economy and economic management, which are issues where the Coalition has been traditionally stronger than your opponents. But what the MYEFO sort of brings home is how uncertain the environment is. Obviously, it paints a rosy picture. You know, we're sort of crouched at the like. If it was a race you start, you crouched at the start, you're waiting for the gun, you're ready to go. But the fact of the matter is there's so much outside the government's control in terms of how this economy, this recovery pans out. Would you agree with that?

Simon Birmingham: Well, Katharine, I think to pick up on some of your metaphors.

Katharine Murphy: And possibly too many, but anyway.

Simon Birmingham: And I may well now mix them all up, too. So it's a race that is a marathon. And as John Howard used to say about the task of economic reform and economic management, it has an ever receding and moving finishing line that that had ever, always keeps moving away from you in that sense. And in this case, you know, we are further ahead in that marathon than we thought we'd be. Then we thought we'd be when he handed down the budget this year or when we handed down the budget last year, that the improvements are actually really quite profound in the sense that we've got far stronger growth, far more Australians in jobs and lower debt projections than we had anticipated earlier this year, which were lower than what we had anticipated last year. And so that's all a very good story in terms of the strength of the Australian economy and points to our resilience and that we're doing well particularly well relative to the rest of the world. But it is a very uncertain global environment now. There's lots of reasons for Australians to be brimming with confidence, and we can see that in consumer confidence indexes, business confidence, retail spending and all of that's flowing through into record jobs numbers, which is fantastic. However, there's no room for complacency either, given all of the uncertainties we face from COVID and from other international challenges and disruptions that can occur. And, of course, from a regional environment that we face.

Katharine Murphy: And look, obviously there's a way to, in political terms to swim across your uncertainty rip, God, there's more metaphors we'll calm down eventually. Look, what you'll do is say - here's the progress from the May budget where you know, we're ahead of where we thought we would be. But uncertainty abounds and in times of uncertainty, stick with the incumbents like you can see an election strategy writing itself. But at the heart of that is trust though, because of all of the uncertainty. You're going to have to say to Australian voters, we will manage this recovery better than our opponents, and you can trust us to do that. But you know, you're a government about to seek a fourth term in office. You know, trust community trust is not where it was 12 months ago. If we believe the published opinion polls, we've sort of come off the height of trust. So how do you manage all those crosscurrents? It's pretty difficult, isn't it?

Simon Birmingham: Election campaigns are always hard fought, difficult and come down more often than not in in modern Australian politics to the wire as well. So every vote will matter. Every part of the campaign will matter, and we'll fight very hard to win people's trust, to look after the core equities of Australians going forward. That is their personal safety, their personal security, their jobs, the opportunities for their families. And we'll do that having come through COVID with one of the lowest fatality rates in the developed world in managing COVID. Now having one of the highest vaccination rates of the developed world and with one of the strongest economic outcomes. And so that is a strong story in terms of the fact that Australians have seen some 40,000 lives saved compared with what international averages would have seen occur in Australia. We've seen many hundreds of thousands of jobs saved, and we're with today's unemployment figures, we've seen another 360,000 jobs rebound, but amazingly we've now got 180000 more jobs in the Australian economy than we had pre-COVID. We've had a recession. We've been hit by Delta and a subsequent downturn from that. And yet still, we've got employment back above those pre-COVID levels, which from all previous recessions would have taken six, seven, eight years to get that type of turnaround.

Katharine Murphy: The problem you've got, though, and I'm certain your opponents would tell you a compelling story about that, voters don't tend to necessarily bank what you've saved them from. Labor discovered this in the global financial crisis. They thought they would be able to campaign on a record of having kept Australia out of recession. As it turns out, voters shrug their shoulders and said, So what? And here you are in not exactly analogous circumstances, but in similar circumstances. You obviously rescued the vaccine roll out from the bin fire it was heading towards. We've now got some of the highest vaccination rates in the world as you've said. The economy's looking good, but voters don't necessarily mark you up for an alternative that they haven't lived through and they can't see. So again, how much of a problem is that heading into an election year?

Simon Birmingham: Well, it's where the election will come down to being a choice. And of course, we will fight to frame the choice. There's no doubt the opposition will fight to frame the choice. But from our perspective, will be framing it against the values of a government that has not only delivered those outcomes I spoke about before, but has done so consistent with our principles of keeping taxes as low as possible, of delivering income tax cuts, small business tax cuts, investment incentives that have seen a huge wave in in private sector non-mining investment across the Australian economy. And to put that in terms, people care about it's plant, it's machinery, it's equipment. That, yes, is stimulating our economy right now because small and medium businesses across the country are buying all of that gear. But what it will do is make them more competitive and more productive into the years to come, which helps to further stimulate economic growth and job security there. And of course, we've got further tax cuts to come as part of the plans that we've outlined for our economic recovery. And we'll pitch that against a Labor Party who are already racking up what looked like quite large spending promises some months away from the election. And of course, they're not saying how they'll pay for those spending promises when they talk about close to free childcare or close to free TAFE. Australians, I think, hear that and wonder, well, where does the money come from? And it either comes from higher debts. And we know there's already enough challenge in meeting the ongoing costs of the NDIS of responding to COVID, of aged care reform of national security, and that you can't start writing blank cheques elsewhere and without either jeopardising our AAA credit rating or ultimately looking at higher taxes.

Katharine Murphy: But again, it's sort of it's harder to paint that contrast. You said a couple of times in the press conference today, I said in the press conference without, you know, without waiting for my turn, which was kind of ridiculous. You referred to the fiscal strategy a couple of times, right? What is the fiscal strategy? I mean, you guys are basically saying we are not going to enter normal budgetary conditions, i.e. where all expenditures are offset until such time as the economy is sorry, the recovery is absolutely baked in, right? I understand exactly what you're saying about blank cheques, but I don't know how you whether the point of contrast is as sharp as you think it is in an environment where your own fiscal discipline for all the right reasons, I should say, is not where fiscal discipline would generally be in a Coalition government. You still think you can win that penalty shoot-out when basically you're on the same field? I don't know.

Simon Birmingham: I've heard Australians kind of say that that they if they need to see excess spending in achieving an emergency outcome, emergency spending sort of provisions that rather the people who perhaps didn't want to spend that money were the ones doing it than the people who were eager to spend. They know there's at least some checks and balances in there. And I think that is where, yes, the guard rails against which you would usually set the old fiscal policy debates in Australia of, are you going to achieve a surplus or not? Have shifted and changed because we are now in a situation where in responding to COVID, the country has carried the biggest deficits in our peacetime history. So these are very, very significant and you don't come back from them in just a year or two. You can't say there'll be a budget balance in surplus in a couple of years’ time without having all sorts of other negative consequences that would undermine the economic recovery. So what we outlined in the budget last year and again this year was a fiscal strategy that said we would transition when we saw confidence and stability in the economic recovery to focus on fiscal repair that firstly looks at ensuring economic growth is faster than the growth in our debt. And pleasingly, we are somewhat well advanced in relation to that fiscal strategy, that in last year's budget, the 2020 budget, we expected net debt to peak at forty three point eight per cent of GDP. That's now projected to be 37.4 per cent. So that level of debt as a share of our economy is now forecast to be significantly lower this year. And each of the forward years, and that is really the strategy that we're pursuing.

Katharine Murphy: But that's a consequence of a growth dividend rather than you running around rampantly with a razor gang. I'm not suggesting you should in the current environment, by the way. I mean, there is a reason why we've had an expansionary fiscal policy. It's not just because everyone woke up one day and, you know, thought, why not?

Simon Birmingham: It was to save jobs and to and to strengthen hospitals and all of those things.

Katharine Murphy: I'm not intending to beat you over it, but I'm just making a point that a clear point of contrast in in previous elections, I just don't think is the clear point of contrast that you evidently still think it is. Anyway, one of us is going to be right. I just want to ask you one more question. I'm barrelling Simon through slightly here because we're on the clock. He needs to have another conversation before he leaves Canberra. So just in the economic space, before I change the subject to the Jenkins review, I just want to bring you back to trust again and the fact that you occupy the finance portfolio so you are the Doctor No of the government, basically. We've seen a growing controversy about grants. If you look at the expenditures that have been racked up between the Budget and now that we've documented in the MYEFO today, for example, you see a lot of infrastructure projects in regional New South Wales, marginal seats. You've got, you know, the sort of discretionary grants programmes have been plagued by controversy for the entire life of this government. What responsibility do you have as Finance Minister back to that trust point, which I'm not raising gratuitously, I think it's actually really important. What responsibility do you bear to bring more discipline into spending decisions, to have spending decisions that are more obviously in the national interest rather than in immediate electoral interests?

Simon Birmingham: Katharine, I think on the big picture of that, there is a huge need to ensure in the years ahead that there is a real sense of discipline around spending that if we are to meet all of those priorities I outlined before in the NDIS and aged care and national security that we've got to have a sense of prioritisation and there's not room, particularly for other big structural spending programmes. But we also have to take care of the pennies on the way through to and be careful about that. That's it. Australians do also expect governments to step up and support local and community activities in in different ways. Some of the types of commentary you talk about, it's not necessarily new and we can go back, and Anthony Albanese himself was subject to Auditor General Reports about grants allocation.

Katharine Murphy: Ros Kelly resigned over her own sports rorts affair, but the point is she did actually resign. Now people stand up and say people get more in their electorates because they're a good local member. I mean, this is again, I'm sort of harking on this theme, but it's viewed...

Simon Birmingham: And there is a tension point there where Australians do want their local MP to strongly advocate for things in their local community and to try to secure outcomes in that regard. Now in today's budget update, there's $15 million for the Port Adelaide Footy Club in terms of additional sports infrastructure there. I'm a Crows fan, not a power fan, but I was lobbied by Labor MPs as well as well as Liberal MPs in favour of that. It's in a seat the Liberal Party has never held in the Labor heartland. Now it is one of many such things. It's ultimately a recognition that there's a piece of significant community and social infrastructure in terms of supporting women's sport, in terms of supporting community organisations and so on that can be upgraded and provide a widespread community benefit. Now, if people want governments to check out of those decisions or to leave them entirely to some sort of bureaucratic process, well I think there's a point there where it potentially weakens the representative for all of our democracy, too. So there's a there's a balancing act to have

Katharine Murphy: But would you say that the balancing act has been right in recent times?

Simon Birmingham: I think there's certainly from my portfolio where we don't administer hardly any grants programmes, but we have some roles in terms of the setting of the grant guidelines and particularly ensuring that departments respond to the auditor general's reports. We don't need to be diligent in responding to those. I said before, for any government going forward, there also will need to be that sense of restraint, first and foremost, about not creating new ongoing long term structural spends, but making sure we look after everything else too.

Katharine Murphy: Ok, let's talk about the Jenkins review, which I know you've worked very hard on. And if you're not across this, I imagine most listeners are. But the Sex Discrimination Commissioner handed down her long anticipated report into parliamentary culture, and sadly, it was about as bad as you would have thought it was. Anyway, big clean up job to do. Where is all that up to?

Simon Birmingham: So since receiving Kate's report, and Kate Jenkins did a great job, and we established the report with a high level of cross-party support in terms of the terms of reference, in terms of having Kate Jenkins as the reviewer, I've met with the opposition or I shouldn't say I, Marise Payne, the Minister for Women, Ben Morton, the Special Minister, and I have together in different ways, met with the Opposition, the Greens, the cross benchers, Coalition staff, to make sure that we receive their feedback as we step out an action plan. Our action plan is to take action across all of Kate's different recommendations.

Katharine Murphy: So you'll do the lot?

Simon Birmingham: Our intention is absolutely to make sure that we're pursuing them all. Some of them are recommendations for the Parliament, so we have to put in place the processes for the Parliament to develop a code of conduct and those sorts of things. But Kate has stepped out what she recommends by way of a joint select committee to develop and establish that code of conduct in again, a multi-party way so we will pursue those processes to deliver on that. My expectation is that we will by the time we bring the parliament back next year, be in a position where the leadership taskforce she has recommended is up and running. The type of statement she's recommended be made by the Parliament is able to be delivered upon

Katharine Murphy: Do you think you'll do that before the election?

Simon Birmingham: Absolutely. That is definitely the government's intention. Now we need and want to take everybody else across the parliament with us on that journey. So there's further talk to be had about the content, nature and structure of that statement. But everyone has said to me they want us to get on with it, so get on with it we intend to do. That was always our ambition and we want to be able to bring that back as early as we possibly can. Some of the legislative changes that have been recommended, we want to be able to act on early putting in place the processes to establish some new mechanisms that build on the things we've already done this year. New complaints processes we put in place, new training we put in place. Kate has recommended some evolution of those so we're going to start the work around how we do that. She didn't think they could be done in the space of a short period of time, and if anything, she said the priority was to make sure we got what we're doing now there right and then evolve them into different structures through the course of next year. But in the background, we'll start teasing out what the legislative changes for those different structures look like while crucially knowing we have an election next year. Also, make sure that things like the training that we've expected to be done become an embedded part of the induction process for new MPs and new officers that that will be established following that so that we don't waste any time in terms of the life and culture of the next Parliament.

Katharine Murphy: That's the important point. What about the structures? There's the two bodies that in essence create a more normalised human resources function for parliamentary staff. So you can get the statement of, let's just call it, a statement of atonement. I can't remember what her words were, but Kate's words were that the statement done, you know that the task force up and running, what legislatively do you think you will be able to do? Because I mean, there's precious little sitting days scheduled.

Simon Birmingham: This is where Kate was quite thoughtful I think in terms of her report too, that she did spell out some different timelines for different recommendations, that there are some specific changes to the Parliamentary Staff Act that she identified, and our ambition will be to bring that specific legislation forward before an election assuming parliament comes back before an election.

Katharine Murphy: Yes.

Simon Birmingham: And that we get that done as quickly as possible. In terms of those new structures, the Office of Parliamentary Staff and Culture, for example, which she sees as picking up a number of the different functions from the Department of Finance potentially absorbing some of the those new training elements, those sorts of things, as well as where the independent complaints process that we've set up this year needs to sit in the future. There's an expectation there that that is more in a six to 12 month horizon. We're not going to waste any time, though our intention is to meet with the Opposition, The Greens, the independents, agree on the shape of that new organisation where it sits within the parliamentary departments and architecture, how it needs to be legislated so that we can get those drafting instructions underway for the legislation and have that ready for introduction as early as I would expect into the new parliament as humanly possible.

Katharine Murphy: And just one more I gather the Labor Party is going to survey their staff about the recommendations? Or at least that's the current planning, poor Don Farrell has...

Simon Birmingham: Has got COVID?

Katharine Murphy: Has got COVID.

Simon Birmingham: Wedding related COVID. It seems to be commonplace.

Katharine Murphy: I believe so. Anyway, if you're listening Don, get well soon.

Simon Birmingham: Hear, hear.

Katharine Murphy: But obviously he's not the only actor who you're dealing with, but they're planning on some sort of all staff survey just to make sure that the that the staff are broadly happy with the Jenkins recommendations. Are you doing that or are you doing it sort of more informally in terms of gauging sentiment? Both. You know, they're pretty important stakeholders now. Obviously, people who have made complaints in the past who you know, who have been campaigning for these changes, but also current parliamentary staff as well.

Simon Birmingham: So, the Prime Minister convened a meeting of parliamentary staff soon after we received and published the Jenkins review, which Marise Payne and I both spoke at and emphasised the real importance of staff engagement there. We have some mechanisms that we can use to engage with representative groups of staff as well and are pursuing that. We're not planning a sort of formal survey at this point, in a sense, because the message almost universally has been, don't waste time, just get on with acting on these recommendations and implementing them. So it'll probably more be a case that as we go through that implementation, there'll be plenty of need to check back in with the different staff representative groups to say, does this way of implementing it appear consistent with the way you want to see it happen, consistent with how you interpret the Jenkins review? Ultimately, Kate's provided recommendations, but there's interpretation within those recommendations, and we want to make sure the goodwill is maintained with staff and across parties because it is ultimately a parliamentary exercise that is at the heart of it, not for one party or the party of government. We are the party of government today and we have to show leadership in delivering upon the recommendations. But it's got to be something that transcends just party and delivers effectively for everyone.

Katharine Murphy: Yeah, of course. Last question because we are totally on the clock. Last time you and I caught up on the podcast, I did ask you what you'd learnt as an employer or you were starting to think of yourself as an employer as a consequence of this journey that we have all been on in our various spheres about culture in the building. What do you detect with your colleagues and our people? I know there's a span of views because obviously I talk to them as well, right? But I actually think it's been that people are thinking about themselves as employers of staff in a different way than I've seen in the past. I don't know. Maybe this is rash optimism. What do you think?

Simon Birmingham: When Kate Jenkins and I first sat down to start talking about what the parliamentary staff environment was in its structure and so on, I likened it with Kate to say, Well, we have a members of Parliament Staff Act that through the Department of Finance employees, ultimately thousands of individuals. But then we have 227 different franchise operations with each member of parliament and each senator who is there as a franchisee not chosen by the Department of Finance or the Minister, but chosen by the people to set up an office and to suddenly be entitled to have staff and other functions that go with that office. And that is challenging because at the next election, a bunch of new people will be elected of different political persuasions, many of whom have never been employers before and don't have any of the staff or human resource management skills or practises to take on. And that's where I think the embedding of all of the training elements in the induction processes will be so important. I think for existing MPs, it has been an awakening in terms of their role and responsibilities, which rightly, they have always seen first and foremost to the people who put them there. You've got a community to serve, an electorate to serve. That's what their job is and their staff are there to help them do that and then to bring those issues and views to Canberra. But I think they do recognise more broadly now that they have a responsibility to those around them and as most of members have, and senators have now done the safe and respectful workplace training programme, many have said to me they found it surprisingly good or surprisingly useful. And I think again in terms of that concept of awakening about how you manage issues in the office, how you establish the appropriate culture, how you ensure people understand where and how they go and get help or address difficult issues. It perhaps shows that that in the hurly-burly of representing your community or representing your state, not everyone had had the chance to think about these issues before and when actually forced to sit down and just go through how to be that better employer. It was a bit of an awakening.

Katharine Murphy: Oh, it's a nice note to end on entirely unplanned, but a nice, a nice, optimistic note to end on at the end of a year, which I just really don't have words for this year. In all honesty. So thank you, Simon. Thanks for making the time to drop by. Thank you to Melanie Tait, who's the EP of the show while Miles Martignoni is off on parental leave. Thank you to Karishma Luthria, who cuts the show for us. Thank you to you guys for listening. You've been a marvel through this gruelling political year. Obviously, we'll be back in the New Year and election year. God, help us all.

Simon Birmingham: Thank you, Katharine, and thank you - all the best to all of your listeners and everyone. Thank you.