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

6 June 2008

Doorstop Interview

London

6 June 2008

SUBJECT: Global Financial Challenges; Rising Food and Oil Prices; Financial Market Stability; Emissions Trading; Car Industry; Asia-Pacific Community

TREASURER:

It’s good to be in London to talk to a business audience about the strength and resilience of the Australian economy.  I’ve also been talking to the Chancellor this morning in Edinburgh about many of the big challenges that the world faces when it comes to the economy.  We were talking about the challenge of climate change. We were talking about the challenge of food and oil prices, and particularly, talking about the challenge of international financial stability. Of course, it’s very clear that particularly when you look at oil and food prices, countries around the world are really feeling the challenge of rising petrol prices, the challenge of rising food prices. This is a very big international issue as well as being a national issue. It certainly requires global action as well as local action. So engaging with senior business leaders and engaging with foreign leaders, from the OECD to the G8, is absolutely critical if we are to make some impact on these problems in the months ahead.

JOURNALIST:

The third world is being affected much worse than countries like Australia when it comes to food shortages and price rises. What are you looking to do in terms of foreign aid contribution? Will there be an increase?

TREASURER:

Well, we already announced last week an additional amount of money - I think $30 million when it came to support for countries that are immediately challenged when it comes to food. But we stand ready to work through all the international forums on these very big international challenges. I’m heading to the G8 Finance Ministers meeting in Japan next week. The Prime Minister will be at the G8 a few weeks after that. We want to engage internationally as well as nationally on these questions when it comes to something like petrol prices. This is the big international challenge. The price of oil is determined globally and it will require some global action and it will require leadership from world leaders. So, talking to people like the Chancellor and taking these questions to international forums is very important.

JOURNALIST:

Your Climate Change Minister wants as broad a base as possible for the emissions trading scheme and the Opposition doesn’t want to include fuel. You’re going to have to have fuel as part of the emissions trading scheme, aren’t you.

TREASURER:

Well, Mr Turnbull is on the record arguing for the inclusion of fuel in an emissions trading scheme. Mr Howard, the former Prime Minister, is also on the record acknowledging the impact of climate change on petrol prices. So, I don’t know whether they have done a sudden backflip.  But when it comes to the design of our emissions trading scheme, we’ve said it should be as broad as possible. We will be publishing a Green Paper next month which will open the discussion about this question but I don’t intend to canvas it in any more detail now because that’s what the purpose of the Green Paper is.

JOURNALIST:

But an emissions trading scheme without the inclusion of fuel is farcical isn’t it, given the (inaudible)?

TREASURER:

Well, as I said, that’s why we’re having a Green Paper - to talk about all the issues involved with emissions trading.  But we’ve said generally, like the previous Liberal Government said, it should be as broad as possible.

JOURNALIST:

On a related topic, the Productivity Commission has really dumped all over the idea of giving money to Australian car companies to develop alternative fuel cars. Is that the right way to go, make sure Australian car companies stand up on their own?

TREASURER:

Well, the Productivity Commission is an independent body. It makes its decisions and does its analytical work independently. We’ve got a way to go in terms of the review of this area by Mr Bracks. We’ll have a look at all of those issues when Mr Bracks’ report comes down.

JOURNALIST:

But are they right that by giving the money to Australian car companies, is it true that it won’t help in any way towards reducing emissions?

TREASURER:

Well certainly the Productivity Commission has produced an important piece of work.  The Government asked it to produce some work in this area, but there will be a variety of views and there will be a lot more analysis in this area. The Government will take its decisions in due course.

JOURNALIST:

The Productivity Commission described making an Australian green car as economically distorting. Does that mean on a purely economic basis they think the Australian car industry really should shut down?

TREASURER:

Well, as I said, we’ve got a review of the industry going on. It’s a very important industry in Australia. It’s a very big employer. It’s a valued industry but we’ll look at all the evidence when it comes in.

JOURNALIST:

Are you disappointed that Holden decided to close an engine line before the Bracks Report.

TREASURER:

I haven’t seen those reports so I couldn’t comment on that.

JOURNALIST:

500 jobs to go with Holden in Melbourne though. Do you think there is anything that the Australian Government could or should be doing?

TREASURER:

What the Australian Government is doing is what we said we would do, which is we’re having the review.  That is happening at the moment. It will come down in the not too distant future and we will respond then.

JOURNALIST:

Holden obviously didn’t consult you before making that announcement.

TREASURER:

I’ve been away for the last couple of days.

JOURNALIST:

The Government?

TREASURER:

Well, I haven’t spoken to my colleagues. I’m sure there would have been some discussions in that area.

JOURNALIST:

What are the potential economic benefits of an Asia Pacific Community, or union?

TREASURER:

Well, there’s no doubt that in the globalised world, effective global organisation are very important. You can see the need for them when we’re talking about what’s happening in commodity markets at the moment – oil and food – so we’re going to pursue that form of engagement, as the Prime Minister has indicated in his speech the other night.

JOURNALIST:

Is an EU-type model in the Asia Pacific really viable?

TREASURER:

The Prime Minister has made his statement about these matters. We are happy to engage, and are engaging, with leaders around the world on these questions and we’re going to pursue these issues.

JOURNALIST:

You’ve been to London before many times, does it feel any different coming now that you finally have your hands on the levers of power?

TREASURER:

What felt different was that I was sitting on the tarmac at Edinburgh Airport for about half an hour then we were circling London and apparently there has been some problem at City Airport with a World War II ordinance and a gas main.  So that felt a bit different.

JOURNALIST:

 (inaudible)

TREASURER:

That’s been the extent of my engagement so far apart from lunch.

JOURNALIST:

Paul Keating was the first and most vociferous critic of this Asia Pacific Union idea. Has he got the wrong idea?

TREASURER:

We welcome all contributions in this very important area. The one thing we know, particularly when we look at the problem of petrol prices, is that we need to act globally as well as acting locally. Now what the Prime Minister is talking about is an important part of the architecture of getting those global decision making processes working. 

Thanks.