The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

17 October 2008

NO.040

Opening Remarks to the
Australian Industry Group Forum

Sydney

17 October 2008

Thank you, Prime Minister, and thank you to the AiG for hosting us today, because from the very beginning we have given the highest priority to working with, and consulting with, the business community who are wealth creators and job creators in our economy. If we are to strengthen our economy in the face of these global challenges, then we need to work with the business community very closely in the period ahead.

I'm looking forward today to hearing from you about what you're finding at the coalface and how we can work together to meet these challenges of the future. It's been very important for the economy and for the Government to be able to have a close liaison with groups like the AiG. It's been important particularly in the framing of our May Budget.

As the Prime Minister indicated before, there were some that said perhaps we should not have delivered the tax cuts, or we should have delayed the important parts of our productivity agenda, but we didn't. We didn't because we were ahead of the game, and part of the reason at that stage, even in May, that we were ahead of the game was that we have been consulting closely with the business community about conditions out there in the economy, both domestically and internationally.

We were acutely aware from early this year, particularly around March/April, as the Prime Minister indicated, that events on the global financial markets were not reaching their conclusion, but they were only the beginning. And that was one of the reasons also why we decided to build a strong surplus as a buffer against tough times and uncertain times. And of course, those tough times have now arrived.

I guess what was most important in my own personal thinking about this was what occurred at the IMF and World Bank meetings over the weekend in Washington. I've got to say it was an eye-opener. It was a real eye-opener because meetings around that room basically said that we were facing a very significant global slowdown and that the risk was high. And in dealing with this, the lesson was stay ahead of the game, act early, act decisively and act in a coordinated way. The thing I'm pleased to say was that since the weekend there has been coordinated action across the globe.

What was also said very strongly was that governments needed to use every arm of policy – fiscal policy, monetary policy – and to do it with the force to combat what was coming down the road, to do it quite decisively. Fiscal policy is something that is very important in this environment. We can act immediately through fiscal policy and the announcements that we made on Tuesday to strengthen our economy will then work in tandem with the easing of monetary policy which we've seen from the Reserve Bank, and other actions that may be necessary in the days and months ahead.

But as the Prime Minister said, the underlying strengths of this economy are ones that we can be proud of. But what we must do is accurately assess the scale of what is occurring globally and continue to move to strengthen our economy through all arms of policy. And part and parcel of that is working with the business community in the months ahead.

We look forward to doing that, and I look forward to your questions. Thank you.