SUBJECTS: Federal Budget 2021; economic reform; quarantine; international travel; vaccine rollout; skills shortages; child care; next Federal election.

FRAN KELLY, HOST: Securing Australia’s recovery, that is the theme of tonight’s Federal Budget, which will be buttressed by a red hot economic rebound from the COVID recession. Record high iron ore prices and a post-pandemic jobs boom is expected to slash more than $50 billion from the Budget deficit this year, giving the Government more stimulus spending to splash ahead of the next election. There will be support to help train the unemployed announced tonight, along with significant investments in aged care and mental health, while low-income earners, many of them women, will receive compulsory superannuation for the first time in their lives. Labor Leader, Anthony Albanese, joins me in the Parliament House studios. Anthony Albanese, welcome back to Breakfast.

ANTHONY ALBANESE, LEADER OF THE AUSTRALIAN LABOR PARTY: Good morning, Fran. Great to be here.

KELLY: More money for jobs training, mental health, aged care, women's health and financial security. Is this a Budget you'd be proud to deliver? 

ALBANESE: Well, we would deliver a budget which was focused on strengthening the economy in the long term, not just on political management. The fact is that a range of the measures that have been announced so far have been measures that Labor has called for either at the last election or before. Measures like superannuation for women, measures like child care, where they've announced a package which is one quarter of the package that we announced. Their package is worth $1.7 billion over four years. They say that it will benefit the economy by $1.5 billion every year. And that stands in stark contrast to their rhetoric just a year ago when they dismissed our child care reform, that's serious reform, structural reform, that recognises that it's about economic growth and productivity and participation in the workforce, rather than a welfare measure. Why does it take an absolute crisis for this Government to act on anything like aged care? 

KELLY: Is that going to be your pitch tonight, though, that you do all this and more? That you would spend bigger? That's the issue? 

ALBANESE: Well, we would have done things much earlier. They had an Aged Care Royal Commission interim report in 2019 that was titled ‘Neglect’. 

KELLY: Sure, but voters aren’t going to notice that they didn't do it two years ago, they're going to think they've done it now. Is that much of a pitch if we go to an election, you're going to say, ‘Well, we would have done it earlier’? 

ALBANESE: No, where's the structural reform tonight, Fran? Tonight's Budget will produce the largest deficit in Australia's history since Federation. Where are the lasting reforms? Where are the legacies from this massive spend? There was $98 billion spent in last year's Budget, Fran. 

KELLY: Well, we haven't seen the Budget yet. But we certainly know there is structural spending in this because there's more money for aged care that will be built in long-term, more money for child care built in long-term, more money for mental health the same. We haven't seen the structural reform yet, but the Government says they're going to respond to the 148 recommendations from the aged care commission. And the mental health spending, as we know it so far, looks like structural reform, with more money spent in the primary health care system, which is what mental health advocates have been calling for a long time. So you've already pre-judged it as a 'show bag' Budget, which looks flashy but only lasts a few days or weeks. But there is structural spending in there.

ALBANESE: Well, there's additional mental health spending, according to today's papers, and that's a good thing. That's something that Labor has been calling for. The child care policy doesn't start until July 2022. They're the Government now. If it's a good idea in a year's time, it's a good idea now. And we'll also address the gap that's always there between announcement and delivery. For Scott Morrison and this Government, once you make an announcement, it’s job done, you don't worry about whether things are actually achieved. So on infrastructure, for example, they had another $10 billion announcement for over 10 years. I'll bet you it'll all be in the out years. Most of that is just making up for budget measures. There are no big new infrastructure announcements that were announced on yesterday morning. And they've underspent each and every year that they've been in Government. For eight long years they have underspent $1.2 billion on average, every single year. That gap between announcement and delivery.

KELLY: Does that go to the fact that if we keep announcing more spending on infrastructure but we've actually hit a ceiling of what we have the capacity to do in this country in terms of construction capabilities, so to speak?

ALBANESE: No, we could do much more, Fran. We could do much more, for example, in our public transport networks. A good example too, in terms of roads spending, is that they announced money for the M1 upgrade north of Sydney, around about Taree, whereas everyone knows that the major pinch point occurs at Hexham where you go over the bridge just north of Newcastle. That was announced years ago. They haven't dug a hole yet, Fran. Why don't they actually get on with doing what they've announced in previous budgets and then people will take their future commitments more seriously.

KELLY: You will obviously have more to say once you see the detail. But back to aged care, you have laid that down as a test for this Budget. The Finance Minister, Simon Birmingham, told us yesterday there would be 'generational change for the sector', real reform that he is talking about. What has to be in this Budget on aged care to pass the test that you're setting for the Government?

ALBANESE: Better regulation for a start, Fran. Better regulation, better transparency of how money is spent that goes into the sector. But at the heart of the issues are workforce. We need to make sure we have a better paid, more secure workforce. If your mum or dad or grandad or grandmum is an aged care resident, you want to know that when they press a buzzer, there'll be a nurse or a carer, whoever is appropriate at the time, to care for your loved one. And that's a big crisis which is there at the moment.

KELLY: So what's the test on that? Because we are led to believe that much of the $18 billion over the next four years that will be announced tonight will be spent towards building a better trained, better paid aged care workforce. Should the Government meet the staff to resident ratio, for instance, the ratios that are in the Royal Commission report? Will Labor commit to that?

ALBANESE: There certainly needs to be appropriate staffing levels for nurses, for carers and other people working in aged care. There needs to be a clearing out of the queue that's there of around about 100,000 people who've had their aged care packages to stay at home approved but haven't been able to actually get them delivered. There were 12,000 people, Fran, who died in the last financial year who'd had their packages approved but didn't get it delivered.

KELLY: Labor had dire warnings about the end of JobKeeper. They haven't come to pass. You said that removing the wage subsidy in March would have, quote, ‘a devastating impact on jobs’. You jumped all over the Treasury estimate of up to 150,000 people hitting the dole queue. That hasn't happened. Things seem to have gone the other way, 105,000 people dropped off income support in April, presumably absorbed into the labour market. There are more people in jobs now than there were at the start of the pandemic, we're told. Does it look like the Government made the right call to end JobKeeper when they did?

ALBANESE: Fran, there's still two million Australians who are either unemployed or underemployed, who want more work, who are in insecure work. And the fact is that Treasury estimated that 150,000 people would lose their jobs. We don't know what the final figure is, Fran. 

KELLY: We know people are coming off the job subsidy and the labour market is stronger than it was before the pandemic.

ALBANESE: We don't know that, Fran. Because we don't know what the nature of that employment is. If you work for one hour a week, you don't show up in the figures. And what we don't know is how many businesses have folded and will fold as a result of the reduction in the removal of JobKeeper. And remember this, Fran, that it was Labor that argued for wage subsidies at the beginning. Scott Morrison derided it and called it a dangerous idea. It's been absolutely critical in keeping that relationship between employers and employees. And there are whole sectors of the economy like international education and tourism in particular that are really struggling. And we make no apologies for arguing for targeted assistance. 

KELLY: You will give your Budget Reply on Thursday. Last week, you set the scene with a speech in which you said, 'When it comes to thinking about government spending, I'm cautious', which sounded a little like you are channelling Kevin Rudd's economic conservative mantra that worked so well for him in 2007. But is this a climate for caution when the economy needs appropriate stimulus? Are you in danger of fighting the last election campaign, as they say, repudiating Labor's failed approach with its raft of big promises?

ALBANESE: No, Fran. The big difference now in economic policy, the Government is saying that it's adopted Labor's position, historically, which has always been that job creation has to be the priority and that when economies are struggling, you stimulate the economy. That's what we would have done. That's what we did during the GFC. But it's the quality of the spend. It's whether you leave a legacy. It's whether there's reform, it's whether there's productivity-boosting economic reform. And the two differences are there in the child care policies. Ours, which is structural reform, moving towards universal provision of affordable child care. And theirs, playing catch-up, giving some money to some people, but not having serious structural reform, not recognising that it's an economic issue, not a welfare issue.

KELLY: In this Goldilocks economic environment, which is how some are describing it, Chris Richardson described it as a spectacular, do you think this is pointing to an election this year?

ALBANESE: Well, I think if Scott Morrison is a political opportunist, if he thinks he can win, then he will go early, but it will only be because he thinks it's going to get worse in 2022. And a range of these measures, when you look at the detail, it is a matter of when they come in. I go back to child care. Why on earth is that coming in on 1 July 2022, rather than 2021? 

KELLY: The Budget will include an assumption, or underlying it really, an assumption that the international borders won't reopen until next year. And again, Simon Birmingham told us yesterday, not early next year, either.

ALBANESE: Have someone else on today, they'll give you a different answer, Fran.

KELLY: Do you think it will open before the election? Do you suspect that’s part of the calculation here?

ALBANESE: This Government gives different answers every day. And that is creating massive uncertainty for the tourism sector, for those who are reliant upon our economy opening up.

KELLY: It is an imprecise science, isn’t it? Do you think the Government should be able to give a date?

ALBANESE: Well, imprecise science. The problem is, Fran, is that they give declarations like 'four million Australians would be vaccinated by March', like 'all Australians will be home from overseas by Christmas', and then they move on. They just hit different deadlines that they miss. And then they pretend that everyone has a memory like a goldfish.

KELLY: One of the business groups is preparing a four-stage plan to reopen the country. One step allowing vaccinated people to travel to medium-risk countries once at least 80 per cent of the most vulnerable in Australia are vaccinated. Is a staggered approach the right way to go about reopening the border and should the Government be spelling that out more clearly?

ALBANESE: The Government needs to do its day job, which it had two this year. Vaccinations and quarantine. They are the two tasks that it had. And why are they more important than anything else? Because they're critical for health but they're also essential for opening up our economy. Unless we get that right, then you will have the continued and ongoing restrictions on our economy, you will have continued breakouts. And the Government, frankly, has failed on both of those fundamental commitments. And it's failed on its own deadlines. No one makes Scott Morrison make the declarations that we are at the front of the queue, for example, for the vaccine.

KELLY: Anthony Albanese, thank you very much for joining us on this day, which will be a busy one but not half as busy as tomorrow. Thank you. 

ALBANESE: Thanks very much, Fran.

KELLY: We look forward to your Budget Reply on Thursday. Labor Leader, Anthony Albanese.

ENDS