Senator the Hon Simon Birmingham

Patricia Karvelas: Australia has escalated its battle with Russia over the downing of Malaysian Airlines flight MH17, which killed almost 300 people, including 38 Australians. The Australian and Dutch governments have launched legal action in the International Civil Aviation Organisation, seeking millions of dollars in reparations for the missile strike over Ukraine in July 2014. The families of passengers have welcomed the move, despite doubts over what it might achieve. Simon Birmingham is the Finance Minister and the Leader of the Government in the Senate. Good morning, Minister.

Simon Birmingham: Good morning, Patricia. Good to be with you again.

Patricia Karvelas: You are launching this legal action. What are you hoping to achieve for the families of MH17 victims?

Simon Birmingham: We would hope to bring Russia back to the table for negotiations and for those negotiations to have Russia admit and accept its responsibility, and in doing so to provide compensation to the victims of the downing of MH17. Now, of course, we have been seeking in terms of negotiations with Russia for several years. They chose to walk away from negotiations that had been launched following the comprehensive investigations that we had undertaken with the Dutch government to demonstrate that Russia was complicit in the downing of MH17. And so this next step is a logical next step to take to seek to expose the truth and to hold Russia to account for its horrific action.

Patricia Karvelas: What would be suitable reparations?

Simon Birmingham: Well, clearly, the families have suffered enormous grievous loss and nothing will ever bring back their loved ones. I suspect for many, an admission of guilt and an apology would perhaps be the most important thing. But of course, financial reparations for those who have lost income earners or for those who have faced enormous suffering. These are not unreasonable expectations to.

Patricia Karvelas: The International Civil Aviation Organisation can't order reparations, but even if it could. Do you really expect a country that's just launched a bloody invasion of Ukraine would willingly compensate the families of 298 people who were killed on MH17?

Simon Birmingham: So this process is not without consequences, potentially for Russia, that if they do not cooperate with the proceedings and the findings of the International Civil Aviation Organisation, they could face suspension of their rights in relation to that. And this is an important rule setting body for the operation of international airlines. And that would essentially take Russia out of its ability to influence those types of rules and much as Russia is clearly thumbing its nose at so much of the international community right now. We do know that as we see them exercise their veto powers at the UN Security Council or elsewhere, that they treasure their ability to shape and influence global affairs too. So this is the logical step of what we should do and it's the right thing to do. And we also think that it has at least some avenues of which to be able to hold Russia to account.

Patricia Karvelas: The government has also announced a fresh round of sanctions over the invasion of Ukraine. 33 Russian oligarchs close to Vladimir Putin are targeted. Is this aimed at stopping them parking their money in Australia, given all the sanctions they're facing in other countries?

Simon Birmingham: This is about continuing to operate in sync with the rest of the world in terms of the many nations, not just the US or the UK, but those across Europe and many others who have been applying sanctions to Russian individuals and to Russian entities, starting with Vladimir Putin, Dmitry Medvedev and the many different oligarchs members of their inner circle and members of the Russian Duma. This is about ensuring all of them feel maximum restraint and maximum pain, where it can be applied. Now, very few have significant exposure to Australia, but nor would we want to leave Australia open as a gateway for them to be able to move assets into Australia or to be able to potentially travel to Australia. And so all of these sorts of restrictions are about making sure that we're acting as strongly as we can with the rest of the world. And I think when we've seen the huge hit Russian financial markets have taken, the huge disruption to the Russian economy, that these measures are having a bigger impact than I suspect people thought they would at the outset. And Australia led amongst the nations calling for further actions such as the suspension of Russia from the Swift, the financial transaction system. These sorts of things are flowing through into the Russian economy and ensuring that a price is being paid for the horrific atrocities that Vladimir Putin and Russia are committing on the people of Ukraine.

Patricia Karvelas: If you're just joining us, this is ABC RN Breakfast and it's 20 minutes to 8:00. My guest is Simon Birmingham, the Minister for Finance and the Senate Leader for the Government. Minister, the Russian war in Ukraine has pushed up petrol prices here at home, well above $2 a litre. The prime minister says he's very aware of the cost of living strain on household budgets. What then are you going to do about it?

Simon Birmingham: Patricia, we will frame a budget and our framing of budget very carefully that will be handed down two weeks today. And so the budget is imminent. We are always conscious of the cost of living for Australians, and it's why we instituted energy market reforms that over the last two years have driven down electricity prices by eight per cent. It's why we instituted tax reforms that that have lowered income tax for Australians and will continue to lower income tax over the next couple of years and-

Patricia Karvelas: Sure, but I want to bring you to the current position people are in because there's even- no, but there's new figures out today showing that the cost of living is outstripping wage increases, leaving the average worker more than $800 worse off in 2021. That's ACTU figures that have been published today. Is that a fair assessment of how tough it is at the moment that it's the worst in 20 years?

Simon Birmingham: Well, look, I don't necessarily accept ACTU figures per say, but if I in terms of income tax cuts that we have delivered as a government, if you're somebody earning $90,000, that equates to about $50 a week. So that's $2500 a year that is additional disposable income-

Patricia Karvelas: Minister, its being eaten up by the cost of living. It's being eaten up by the cost of living.

Simon Birmingham: It is additional disposable income with- And Patricia, we are not obviously blind to the fact that there are inflationary pressures right around the world. As you acknowledged, the pressure on fuel prices is something that I think most people recognise as being driven by Australian government policies. It's been driven by world events and what's been happening, particularly in relation to Russia and Ukraine. So it's not something we can wave a magic wand over, but when we frame this budget, as we have with all our previous budgets, we will be looking as carefully as we can at how we can help Australians as we've done before, whether it's through tax cuts, whether it's through other measures that can help them-

Patricia Karvelas: What other measures might there be?

Simon Birmingham: Patricia that would that would be me entertaining budget speculation that I'm not going to do.

Patricia Karvelas: Okay, let me help, let me put something to you-

Simon Birmingham: It's a very complex environment that we frame this budget in. If we do it against the backdrop of a war in Europe. We do it against the backdrop of the ongoing challenge of economic recovery from COVID-19. We do it with significant inflationary pressures around the globe. Here in Australia, inflation's running at about half the rate of, say, in the United States. But we don't want to do anything that would add, for example, to interest rate pressures in Australia any further. So there's a lot of careful things that we have to weigh in terms of the framing of this budget, and we'll be taking the best economic analysis and advice to help do so.

Patricia Karvelas: The Newspoll has asked voters about the attributes of both Scott Morrison and Anthony Albanese. Only 40 per cent say the prime minister is trustworthy. Scott Morrison is also viewed as less caring, more arrogant and significantly more out of touch than his rival. Why do you think this has become such an issue for the prime minister?

Simon Birmingham: Well, Patricia, look, I'll let others try to cast an analysis piece over those sorts of polls. It doesn't show much for Anthony Albanese either in terms of questions of trust and-

Patricia Karvelas: But the Prime Minister they've seen more than anyone, right? He's the prime minister. You must be worried that people don't see your leader as trustworthy.

Simon Birmingham: Well, they will see much more of Anthony Albanese in the run up to the election as people move beyond the period in which we are governing and come to an election campaign in which there is a clear choice. And I'd encourage people to take a look, for example, at the front page of the Sydney Morning Herald today. Which does bring into doubt Anthony Albanese's truthfulness. On your programs on many different ABC and other programs. Anthony Albanese and the Labor Party has spent the last three years railing against the idea that grants would be doled out on the basis of whether or not it was a marginal seat. And yet what we've got is an exposé on the front page of the SMH showing more than $750 million of grants most of them rolled out in the last couple of months, almost exclusively in marginal seats by the Labor Party-

Patricia Karvelas: Absolutely. People can go read that story, but can you? Can you seriously come on this program after the sports rorts, after the park, the car parking debacle, all of this and really have the higher moral ground on this issue, Minister?

Simon Birmingham: I can, Patricia.

Patricia Karvelas: How?

Simon Birmingham: Because I have defended. I have defended the fact that we took promises to the last election for grants and we delivered upon those promises. The Labor Party has come on your program and criticised those grants and those promises, and yet now they are exposed for doing exactly the same. Their excessive spending is only succeeded by the rank hypocrisy-

Patricia Karvelas: So they're doing exactly the same- Sorry, I'm going to politely say this. 'And now they're exposed for doing exactly the same.' I heard your words. Does that mean you know that you were pork barrelling? That's what you're saying.

Simon Birmingham: It's the hypocrisy that I am calling out here.

Patricia Karvelas: But that means, you know, you did the wrong thing. Is that right?

Simon Birmingham: The rank hypocrisy. No. What it means is that Anthony Albanese has been lying to you and to everybody else when he said he would take a different approach. He's been lying when he said Labor would not carve up grants in relation to any different ways. He's been lying in terms of those sorts of issues, and it's a hypocritical approach that they've now been exposed for. And what I see this morning is they're saying all these grants would be subject to some review. Well, that's not what they've been saying when they've been announcing them to local communities.

Patricia Karvelas: Okay, that's an interesting point. And we'll put that to Labor next time we speak to them. Thank you, Minister.

Simon Birmingham: Thanks, Patricia. My pleasure.