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RUBY:

From Schwartz Media, I’m Ruby Jones. This is 7am.

The Labor government have been making promises.

The latest is that it hopes to end domestic and family violence within a generation.

But ahead of the budget, the Labor leadership are in a tricky position. Promising no tax hikes, no excessive borrowing, but fixing funding to services.

Today, columnist for The Saturday Paper Paul Bongiorno, on the storm clouds gathering as we go into budget week.

It’s Friday, October 21.

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RUBY:

Paul, Good morning! How are you, how did you go while I was away?

PAUL:

Good morning, Ruby. I'd like to report that I worked extremely well. And Kara and I got on pretty well. We were a very professional duo, but after all, we were just following the example that you set every day, every week.

RUBY:

How are things in Canberra for this morning?

PAUL:

Well, they're pretty good, really. We're expecting big things in a few days' time, although I must say this government's gone out of its way to tell us a hell of a lot more about the budget coming up on Tuesday night than usual. Could be that the real event might be a bit boring, Ruby. Not just for your sake.

RUBY:

So Paul, next week, on Tuesday, the Labour Government will deliver its first budget and this is really going to be our first look at how Labor plans to back up what they've said, and our chance to see which election promises that they choose to fund, isn't it?

PAUL:

Well, that's right. Maybe to some, probably most budgets might look like they're all economics and finances and numbers, but they're primarily political exercises. Budgets are when we find out how serious the government is implementing its political agenda, you know, putting its money where its mouth is, if you like. And there's plenty of gravitas and ritual embellishing the whole event, like the press gallery going into a secret lockup to study the secret documents before they're revealed with huge fanfare at 7:30 p.m. Eastern summer time, when the Treasurer gets up to reveal all in Parliament.

You know, all of this is in itself a vestige of the old days when it was thought safer to make major economic statements after the markets had closed. But I have to say, these days it's got more to do with marketing to the nation in primetime.

RUBY:

So, Paul, what is it that we're going to hear when it is released? Because we keep hearing from the Treasurer, from Jim Chalmers and other ministers that there are these tough decisions to make and it doesn't sound like Labor's going to be able to spend in all of the areas that they might have wanted to when they won the election five months ago now.

PAUL:

Well we're being told what will be marketed on budget night will be a reconciliation, that's the buzzword they're all using, of Labor's promises with the state of the books. That's after the Expenditure Review Committee had gone through every commitment of the previous government, line by line, with a view to weed out what labour calls rorts and waste.

Archival Tape -- Treasurer Jim Chalmers:

“Every dollar rorted, whether it's Medicare or the NDIS, is a dollar thieved from people who need and deserve good health care…”

PAUL:

Treasurer Jim Chalmers says this is the kind of bread and butter exercise a sensible government should be doing.

Archival Tape -- Treasurer Jim Chalmers:

“We do need to do more work here to make sure that our defences against people who want to rort and thieve from government programmes are cracked down on…”

PAUL:

And apparently there will be no shocks or spectacular reforms. The Government's been focussed on just scouring through the ledgers to help fund already announced headline policies like the $5.4 billion a year childcare policy.
Labour's promise to increase the subsidy rate up to 90% of the childcare cost for the first child, in a move it says will benefit 96 per cent of Australian families. And another policy announced earlier this week is the ambitious plan to end family and domestic violence within a generation.

Archival Tape -- House Member Amanda Rishworth:

“Ending violence against women and children within a generation; that is the ambitious goal of a new national plan to stop family violence through better prevention and intervention strategies…”

PAUL:

The new national plan to end violence against women and children, as it's called, includes proposals to reform the media, schools, justice systems, the health sector and technology companies.

Archival Tape -- House Member Amanda Rishworth:

“We want to be driving change, but I think the key message here is we don't want our children and our children's children to be still dealing with this in the future…”

PAUL:

What's been released so far, doesn't contain specific funding commitments, just a very broad vision. However, the fact that the government is talking about it in the shadow of the budget is surely a sign some dollars and cents will be stumped up.

RUBY:

Okay. So, Paul, we can expect, I suppose, more detail on what it is that the government has already promised. But at the same time, should we also be expecting some funding disappointments? Because the Government have ruled out tax measures. So, unless they intend on borrowing more money, which seems unlikely, there won't be a lot to go around, will there?

PAUL:

Well… no.

Archival Tape -- Treasurer Jim Chalmers:

“Our best defences against uncertainty around the world is a responsible budget at home. And that's what I'll be handing down next week…”

PAUL:

And Jim Chalmers is promising to begin paying down the trillion dollars of debt he's inherited.

Archival Tape -- Treasurer Jim Chalmers:

“And it will begin to unwind the legacy of wasteful spending, which has given us a trillion dollars in debt and deficits as far as the eye can see…”

PAUL:

Well, that has to mean he plans to borrow less money and no doubt ditch some of the former government's bigger spending commitments. We did get a pretty firm indication Chalmers is on the hunt ahead of the May budget next year for significant savings. The NDIS Minister, Bill Shorten, went out and revealed this week that the budget will forecast the scheme could cost more than $50 billion a year by 2025. And he's brought forward an independent enquiry, he says, not to slash funding, but to have better cost effectiveness.

Archival Tape -- Treasurer Jim Chalmers:

“So I think we are a good chance of a really important and productive national conversation about how we spend and invest on the things that our society values most…”

PAUL:

Chalmers says in the lead up to May 2023, he'll continue the conversation he's been having with Australians.

Archival Tape -- Treasurer Jim Chalmers:

“This is about implementing our election commitments. It's about giving a more realistic picture of the fiscal situation. Not just the size of the challenge that we confront, but the shape of the challenge that we confront over the next four years, and over the next ten years…”

PAUL:

We can safely assume that would mean a painful adjustment to revenue and spending won't be in Tuesday night's budget, but will be in the next one, and probably the next one after that.

And Ruby, there's also of course another uncapped, huge cost the Treasurer is bracing for, and that's the one caused by the catastrophic weather events we're seeing with climate change induced storms and flooding wreaking devastation.

RUBY:

We'll be back after this.

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RUBY:

Paul, one of the big challenges for this government, as you've just mentioned, in handing down this budget, is how they're going to factor in the environmental crisis that we're facing right now. The east coast, it's being battered by flooding. So, what will the federal government need to spend to repair that damage as well as to be better prepared for the next climate event?

Archival Tape -- Prime Minister Anthony Albanese:

“We're working across federal, state, and local government in a seamless way to make sure that every support is being provided to these communities that are under such enormous pressure…”

PAUL:

And while Albanese on the weekend, Ruby, couldn't put a figure on the cost of the floods, which are likely to continue for weeks, or in fact if not months, the Prime Minister says it's open ended.

Archival Tape -- Prime Minister Anthony Albanese:

“And so it is a very difficult period ahead. In particular, more rain is expected later this week and Wednesday, Thursday, and beyond in western Victoria and the area around the Murray…”

PAUL:

The Treasurer concedes it will be billions and his department is struggling to quantify it.

Archival Tape -- Prime Minister Anthony Albanese:

“It will have an impact on infrastructure, including local roads. It will have an impact as well on the farming community. This is a great agricultural region and one of the tragedies confirmed yesterday when I was in Victoria is that we're expecting bumper crops and many of those of course have been devastated and ruined…”

PAUL:

There is a clue we have though, and that's by looking at the floods earlier in the year in south east Queensland. There's a report by Deloitte Access Economics, it was released in June, and confirms the worst fears of any keeper of the public purse. It found the estimated total cost of the Queensland floods was $7.7 billion.

This flooding event hit 23 local government areas and impacted half a million people. The estimated human and social cost, according to Deloitte, was $4.5 billion. And we are seeing a repetition of this kind of disaster on the nightly news as the catastrophe has moved to southern New South Wales, Victoria and Tasmania.

Archival Tape -- News Host:

“Thousands of people across Victoria, New South Wales and Tasmania are under evacuation orders this morning after days of heavy rain with rivers swollen and communities on edge…”

PAUL:

The damage to residential, commercial and public infrastructure is compounded by the fact that many of the areas now being hit are an essential part of the nation's food bowl.

Archival Tape -- Treasurer Jim Chalmers:

“We're talking here about some of the best farmland in the world going underwater, and that means crops and livestock damaged…”

PAUL:

The budget will no doubt have a revised-up estimate of inflation with fruit, vegetables, grains and meat already hitting hard at supermarket checkouts.

Archival Tape -- News Reporter:

“And with prime farmland submerged and entire crops wiped out, the cost of basic groceries are set to soar. Now we're talking about everything from fruit and vegetables to grain, even dairy products…”

PAUL:

The cost of these climate change driven disasters is, of course, not only repairing the damage, but reducing dangerous emissions and adapting our energy production and distribution to renewables as quickly as possible in a real way. The cost of not doing enough already is what we're seeing at the moment, and it's enormous.

RUBY:

And Paul, this week, the government has faced some other challenges, hasn't it? We've had the Foreign Minister, Penny Wong, seeming slightly wrong footed, I would say, in the rollout of the Government's decision to restore Australia's position to not recognising Israel's capital as West Jerusalem. And that was something that the Morrison government had changed.

PAUL:

That's right. And we got a stark reminder that the best laid plans can go awry, even when Penny Wong, one of the government's more assured ministers, stumbled.

Archival Tape -- Minister for Foreign Affairs Penny Wong:

“We are committed to international efforts in the responsible progress- responsible pursuit of progress towards a just and enduring two state solution…”

PAUL:

It was over the implementation of Labour's long held policy to reverse the Morrison Government's lonely imitation of Donald Trump's ditching of the international consensus over not recognising West Jerusalem as the capital of Israel.

Archival Tape -- Minister for Foreign Affairs Penny Wong:

“I would say that Mr. Morrison's decision to play politics, and it was no more than that because of course we all know where the embassy remained, resulted in Australia's shifting position. I know that this has caused conflict and distress and concern in parts of the Australian community…”

PAUL:

Labor was always going to enact this policy but had not given it early priority, and Penny Wong was wrong-footed when her department altered its website to reflect Labor's policy before the policy was formally announced and changed.

Archival Tape -- Minister for Foreign Affairs Penny Wong:

“Obviously the updating of the website occurred ahead of government processes. That happens sometimes. There was no - I'm not going to sort of blame anybody for it so that that happens. That's why I'm also here today making sure we are clear about our position…”

PAUL:

Wong scrambled to fix the mess by getting Cabinet on Tuesday to formally implement the reversal of Morrison's contentious move. But she forgot to give Israel any forewarning.

Archival Tape -- News Reporter 2:

“The Palestinian foreign minister Riyad al-Maliki, the Palestinian Authority's Foreign Minister. He's called this a correction of a mistake made by a previous government, and he now also wants Australia to go on and recognise the Palestinian state…”

PAUL:

Well, Palestinian groups, well, they welcomed the change, saying Australia must not pre-empt the final status of Jerusalem in the peace process. But in a strong statement, Israel's Prime Minister, Yair Lapid, condemned the way the situation was handled.

Archival Tape -- News Reporter 3:

“Well, Israel's government, unsurprisingly, is obviously disappointed by the decision. Its Prime Minister has put out a statement saying that Israel's capital remains Jerusalem and nothing that any other country does will change that…”

PAUL:

He said, quote, ‘We can only hope the Australian Government manages other matters more seriously and professionally’.

RUBY:

Hmm. Well, Paul, next week certainly puts that to the test. It's going to be a lot of eyes on Jim Chalmers as he hands down this budget. And we kind of learn, I suppose, how the government plans to approach the challenge of both trying to properly fund services and pay down the deficit that we have. It's going to be a big week.

PAUL:

It certainly is. And while Peter Dutton is struggling to make an impression at the moment with his approval ratings in the basement, you can be sure he'll exploit any failures of the government to deliver.

Archival Tape -- Opposition Leader Peter Dutton:

“If the Treasurer keeps talking down the Australian economy, then that’s the outcome he will achieve…”

PAUL:

He's already accused the Treasurer of talking down the economy and not paying enough heed to the very strong fundamentals that are the legacy of the former Government.

Archival Tape -- Opposition Leader Peter Dutton:

“They'll say how terrible it is that they've been with this terrible situation from a coalition government, whereas the reality is quite different. Over the last nine years. We've taken decisions to keep our economy strong. Without COVID, we would have gone back into surplus without any question…”

PAUL:

And he's taken out some pre-emptive political insurance, saying he doesn't think Jim Chalmers will cut it on budget night.

But you know, Ruby, Albanese is proving no political novice and his Government has been performing above expectations. One of his senior colleagues involved in the budget preparations told me this week Albo has 360 degrees vision.

I guess what he means is Albanese has rounded vision, he knows where he wants to be by the time of the next election, which is due in 2025, and what the sort of issues are that he's likely to confront. Now I can say that this minister doesn't think the Prime Minister is infallible. But what he was conveying to me at least, is that Albanese understands that shit happens and it's how you deal with it that counts. And when you think about it, that's the challenge we're all facing at the moment.

RUBY:

Paul, thank you so much for your time.

PAUL:

Thank you, Ruby. Good to see you again. Bye.

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RUBY:

Also in the news today…

Greens Senator Lidia Thorpe has resigned as deputy leader of the Greens, after Leader Adam Bandt asked her to step down.

Her resignation comes after revelations she was dating a former leader of the Victorian branch of the Rebels outlaw motorcycle gang, while sitting on a parliamentary law enforcement committee. She failed to disclose the relationship and the risks it posed at the time.

And...

The CEO of health insurance company Medibank has apologised to customers after about 200 gigabytes of personal data was hacked from the company.

In a statement, chief executive David Koczkar said: “I unreservedly apologise for this crime".

7am is a daily show from The Monthly and The Saturday Paper.

It’s produced by Kara Jensen-Mackinnon, Alex Tighe, Zoltan Fecso, and Cheyne Anderson.

Our technical producer is Atticus Bastow.

Brian Campeau mixes the show, our editor is Scott Mitchell.

Erik Jensen is our editor-in-chief.

Our theme music is by Ned Beckley and Josh Hogan of Envelope Audio.

I’m Ruby Jones, see you next week.

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