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 Ray Hadley

Radio 2GB,
Sydney

30 June 2008

SUBJECT: Gippsland By-Election; Cost of Living Pressures; Luxury Car Tax; Computers in Schools; Belinda Neal; Cabinet; State of Origin

HADLEY:

What do you make of the result in Gippsland?

TREASURER:

Well, it was a difficult result, I think. It wasn’t surprising. It’s not a seat we’ve ever held but I think it basically does (inaudible) that there are cost of living pressures out there which, of course, is why the tax cuts start on 1st July, the increased assistance for out of pocket childcare expenses, and of course, the Education Tax Refund are so important to many families that have been hit by the price of fuel and the fact that inflation is at a 16-year high over the last few years.

HADLEY:

I guess, when you and your colleagues, including the Prime Minister, were pounding the beat in Opposition and talking about trying to rein in costs, you couldn’t have foreseen, and I don’t want to sound like I’m soft-soaping you, you couldn’t have foreseen what was going to happen to world oil prices, but it does present a problem. You said you’d rein it in, you can’t rein it in.

TREASURER:

Well, Ray, we recognise that inflation was a big problem all through last year and of course when the figures came out after we were elected it showed that during last year inflation had hit a 16-year high. Now, of course, on top of that we’ve got the world oil shock going on, I mean the price of a litre of fuel this year alone has increased by about 30 cents. So, we understand that that has a very big impact on the daily expenses of families and people on low and fixed incomes. That’s why we’ve been so determined to provide the additional seniors’ bonus of $500, to increase the Utilities Allowance to those on benefits, but also to deliver these tax cuts, because you might recall it’s only a few months ago the Government was being belted around the head for delivering the tax cuts in the first place.

HADLEY:

Now, in relation to the increase in fuel and food costs, does that, in some perverse way, stop interest rates from going up because those are keeping the economy where it should be without the rising interest rates?

TREASURER:

Well, Ray, at the end of the day, that’s a matter for the Reserve Bank, but certainly it does have a very substantial impact on consumption out there. I’m sure that’s something the Reserve Bank may well take into account. But the most important thing that we could have done was what we did in the Budget, which was to rein in a lot of the reckless spending and also to put in place some long-term policy to invest in the productive capacity of the economy through road, rail and port and investment funds we put in place so that we could put long-term downward pressure on inflation. See two things are happening here. Inflationary pressures at a 16- year high were caused by a lot of reckless spending over the last few years. Now, on top of that at a time where it’s at it’s record highs, we’ve copped this very big fallout in terms of global food and oil prices. That just makes it much more important that we run a disciplined Budget, which is what we’ve been doing, so we can take the pressure off the Reserve Bank when it comes to interest rates.

HADLEY:

I’m not being provocative, but is there a line in the sand you draw when you stop referring back to the tendencies of the previous government and you take responsibility along with your Prime Minister for what’s happening into the future?

TREASURER:

We took responsibility from day one. We absolutely do take responsibility for dealing with the inflation challenge. I just make the point that because it developed over a long period of time, you can’t just snap your fingers and suddenly think that inflation’s going to fall next month because there’s been one Budget. It will take a couple of Budgets with a lot of discipline to put downward pressure there, and it’s going to take a long time to put in place those settings which increase the supply capacity of the economy. You can’t build the sort of road networks, you can’t unclog the ports and all those sorts of issues in a relatively short period of time.

HADLEY:

I don’t know how many luxury cars are going to be sold on the 1st and 2nd of July but there does appear to be some confusion about that referred to Committee – the luxury car tax. Now the ATO are saying they will impose it retrospectively. Car manufacturers, actually I think Audi was the last one to come out and say, no that won’t happen…

TREASURER:

It is happening and it’s not retrospective. You see, the industry is trying to have a lend of a few people at the moment. I mean, essentially this legislation will be dated from 1 July even though, because of the obstruction of the Liberals in the Senate, it hasn’t passed. There is absolutely nothing unusual about that. It happens all the time with tax legislation. The announcements are made, but frankly, the legislation doesn’t pass until after the operative date. But the Tax Commissioner has advised the industry that they should prepare for a 1 July start date. The industry is now trying to fight a rearguard action to blow a hole in the Budget and to blow a hole in the measure by running the line that somehow we’re doing retrospective legislation which we’re not.

HADLEY:

So, in fact, if you don’t pay the 33 per cent from tomorrow, who’s responsible? The dealer, the manufacturer or the purchaser?

TREASURER:

Well, the Tax Commissioner has actually provided advice to all of the car dealerships on that and I don’t intend to interpret his advice on your program. But they would be wise to make provision for paying the tax from 1 July.

HADLEY:

You know, you’ve joined a long list of people in New South Wales having a stink with Michael Costa? Don’t feel left out. Feel included.

TREASURER:

Well, on this occasion, this was a staff note that wasn’t actioned or even discussed. It, for one reason or another, fell of the back of a truck somewhere close to Channel 9.

HADLEY:

There’s been a few falling off the back of trucks near Channel 9 recently.

TREASURER:

Yeah, but in any case we’re having a discussion with Michael about some of the on-costs that flow through from the provision of computers in schools and New South Wales is doing very well out of this program. They’re getting $56 million out of the $116 million in the first tranche. We understand, however, that there are on-costs and we’re having a discussion with both New South Wales and all of the other States about sorting out some allocation that…

HADLEY:

You couldn’t help but see the irony in, even though it was just a note, that if you were to pay $245 million, even allowing for the fact that they probably deserve it in New South Wales, you would have a problem with Queensland, Victoria, South Australia, Western Australia and Tasmania?

TREASURER:

Which is why the suggestion in the note would never have ever, ever have been put in place.

HADLEY:

I’m not disbelieving you, but now that it’s in the public forum, we certainly can’t have it happening.

TREASURER:

Well, it wasn’t going to happen anyway because that’s not the way I do business, and Michael Costa knows that, the New South Wales Government knows that. But you get these bits and pieces that come through from time to time. That’s simply part and parcel of looking at a wide range of alternatives. It’s not one that I would ever have contemplated or was contemplating.

HADLEY:

You’re one of the two most important politicians in the country. Belinda Neal, your colleague, I know there’s a police investigation, it’s done enormous damage to the Labor Party here in the State of New South Wales and there will be a presentation, regretfully, on Channel 9 for you again tonight.

TREASURER:

Is that right?

HADLEY:

Yes, in relation to that with more staff talking about what happened on that night. Now, if I leave that aside and say well, that’s a court matter, that’s a matter for police investigating, what about Belinda Neal’s behaviour in the House in relation to the comments about the unborn baby of Sophie Mirabella?

TREASURER:

Well, she apologised for that in the House and there were other things that occurred in the House around that time which have received less publicity but were just as damaging. I don’t intend to comment on something in which there is a police investigation because I do actually believe in a bit of procedural fairness in this. So, sure, there’s political fallout from it, but the point is that she is absolutely entitled to go through that investigation without Parliamentary interference in it, and I don’t intend to add to it.

HADLEY:

Okay, well let’s go back to what happened in Parliament. The next day she denied – and I have audio tape of that which I’ve played many times – saying what she said. Now, I know that we can’t have people thrown out of Parliament, as it would appear at the moment, for misleading Parliament, but what’s a politician’s word worth? If Belinda Neal will stand in the House and say, no I did not say those words to you?

TREASURER:

Well, for what’s it’s worth, after that she apologised. I mean, sometimes people don’t necessarily recognise when they sort of say things under their breath or get all excited or so on that they actually did it. I don’t know, but what I do know is that she went into the Parliament, apologised for that, and that’s the end of it as far as I’m concerned.

HADLEY:

The Cabinet meetings you are taking around the country. Successful? Is it hard logistically to relocate?

TREASURER:

Well, it’s pretty hard getting a Federal Cabinet around the country. You know, logistically it is. But I tell you what, it’s really worthwhile. I mean, we’ve done four or five of these now. We started in Perth. We’ve been through Penrith and of course now we’re up here in Mackay. The next one we’ve got is actually up in the Northern Territory. So, we are moving around the country. I think it is an important part of staying in touch. I mean, you come to a community like this and you see some of the problems that you’d expect sometimes in a very large city like Sydney. It does keep you in touch.

HADLEY:

Are you coming back to Sydney for Wednesday night?

TREASURER:

I’m coming back to Sydney tonight and I might just have a passing conversation with our State of Origin team on the way through. I tell you what, I’m looking forward to it. I was away for the second game. I got to the first game, but I’m really looking forward to this one.

HADLEY:

Oh, it will be a cracker, a real cracker. Okay, thank you for your time, Treasurer.

TREASURER:

Good to talk to you.