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

30 June 2008

Interview with Lyndal Curtis

AM Program, ABC Radio

30 June 2008

SUBJECT: Tax Cuts, Child Care Rebate, Computers in Schools, Emissions Trading Scheme

EASTLEY:

Forty year old Darren Chester is the new pinup boy for the federal Coalition. After all, it was the former journalist and marketing consultant, a father of four, who delivered a slap to the Rudd Government at the weekend. The National's candidate gave a long-needed boost to the Coalition as he ran away with the Gippsland by-election. But the Government is promoting its man, Wayne Swan, as the man of the moment today. He's the fellow handing out the Budget goodies in the form of tax cuts and childcare and education rebates. The breaks, which come into effect tomorrow, may go some way to ease the rising petrol and grocery costs which are on peoples' minds in Gippsland and in Mackay in North Queensland where the Cabinet is meeting today.

Meanwhile, a leaked staff note from the Treasurer Wayne Swan's office shows that New South Wales demanded an extra $245m to implement the Commonwealth's promise to give a computer to each high school student. The Treasurer spoke to our Chief Political Correspondent, Lyndal Curtis, a short time ago and told her the Government was determined to deliver the tax cuts and other payments because of the pressure on household budgets.

TREASURER:

We do understand that cost of living pressures are serious for many people on modest incomes, but these tax cuts do tip the scales in favour of working families on modest incomes, but particularly the additional childcare assistance and also the education tax rebate.

CURTIS:

The childcare fees in some centres are going up by around 11 per cent, that's quite significant and it will cost the Budget more as well, won't it?

TREASURER:

Well it will, but we've also increased the maximum rate of which you can receive the rebate as well. This is a very important measure for those working families that are struggling with the world of work and the world of childcare. So, increasing the rebate to 50 per cent of out-of-pocket expenses, plus paying it quarterly is a very important measure which recognises the pressure on their family budgets, and that's why we've been so determined to deliver it. You see, we received a lot of advice that we shouldn't proceed with the tax cuts and that all these other measures were perhaps unnecessary. They are critical measures, not only to take the cost of living pressures off families, but also recognising how important workforce participation is in the environment we're in at the moment because of the 16-year [inflation] high, and we do need to encourage labour force participation.

CURTIS:

Are they critical measures, too, to stop the pain obviously being felt in Gippsland at the weekend from spreading around the rest of the country and leading to an electoral backlash for you in a couple of years' time?

TREASURER:

Lyndal, what we're most concerned about is getting policy set for the long-term, not necessarily the short-term political pain of by-elections or really, the short-term pain of opinion polls. What we have to do is get the economic settings right, we have to take the tough decisions to tackle inflation which was left to us by the Liberals at a 16-year high. That has meant that we've had to rein in spending, and we've reined in spending and that has given us the capacity to deliver these very substantial benefits to working families who are under cost of living pressure.

CURTIS:

New South Wales isn't happy with your Budget handout and wants more to pay for putting extra computers in schools. Did you err by not factoring into your promise the money it will cost to install those computers?

TREASURER:

No we didn't err, because we are engaged in a discussion with the States about what additional assistance we can provide to assist them with the on-costs that go with the computers. Computers in schools is a very big program and a very important program which goes to the core of our Education Revolution, and the first tranche of computers in schools is providing computers to something like 896 schools and we've spent something like $116 million, $56 million of that will go to New South Wales. We recognise that there are on costs, so we decided at the last COAG meeting to engage in a discussion with all of the States about an additional contribution which would recognise that expense.

CURTIS:

Do you believe it will cost you $245 million for New South Wales alone?

TREASURER:

Well, these are matters that we are discussing with all of the States, including New South Wales.

CURTIS:

Is that an ambit claim then from New South Wales?

TREASURER:

I'm not going to debate this in public. We'll reach an agreement with all of the States, including New South Wales, in the interests of the students and the families of Australia.

CURTIS:

Going back to the voters in Gippsland, they could have even more concerns under an emissions trading scheme, given the industries in that seat include oil, gas and a power station. Have you given yourselves enough time to sell the reforms, to explain them to the public?

TREASURER:

Well, this is very hard and difficult but necessary policy – putting in place an emissions trading scheme is the economically responsible thing to do. The fact that the previous government delayed and did nothing has meant that the cost of inaction has simply grown year after year after year.

CURTIS:

Are you concerned at all as Treasurer that the emissions trading scheme may be inflationary?

TREASURER:

There's no doubt that it does has an impact on the cost of living, and that is something that we will take into account. I have made it very, very clear that every dollar of revenue that comes from the sale of permits will be spent assisting either households or industry in alleviating the impact of an emissions trading scheme.

EASTLEY:

The Federal Treasurer, Wayne Swan.