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

5 August 2008

Interview with Samantha Hawley

ABC Radio AM Program

5 August 2008

SUBJECT: Interest Rates, Economy, Peter Costello

INTRO:

Wayne Swan says the Government is facing the most difficult global conditions in over 25 years, but he argues Labor’s May Budget struck the right balance in fighting inflation and creating investment.

The Treasurer has been speaking to our reporter in Canberra, Samantha Hawley.  She began by asking him whether the Reserve Bank should cut official interest rates when it meets today.

TREASURER:

Well Sam, I don’t speculate on future movements in rates or decisions by the Reserve Bank of Australia.  I never have and I never will.

HAWLEY:

Well, I’m not asking you to tell the Reserve Bank what to do.  I’m asking you, do Australian homeowners now deserve a break, given the dramatic slow down in the economy?’

TREASURER:

I certainly think Australian homeowners would welcome some relief, but that is entirely a matter for the independent Reserve Bank.

HAWLEY:

Wayne Swan, is the slowing economy now out of your control?  Is your Government in control of the economy?

TREASURER:

The Government has built a very strong surplus to take pressure off inflation and off interest rates.  We have put in place a very big relief package for families – a $55 billion working families relief package.  We have tax cuts in the system for people who are impacted on by rising prices and on top of that, there are positives in the Australian economy. We should keep these things in perspective.

HAWLEY:

Well, the Australian Chamber of Commerce and Industry has found that business confidence is now at its lowest level since 1994.  There are warnings of a decline in sales, profits and job growth.  Interest rates are up, housing prices are falling, retail sales have plunged.  Can you honestly say that your May Budget had nothing to do with this?

TREASURER:

I can certainly say that our May Budget struck the right balance between fighting inflation on the one hand and investing in the future on the other.

HAWLEY:

Did it slow the economy too much?

TREASURER:

….and building a very strong surplus to act as a buffer against international uncertainty.  But Sam, we have perhaps the most difficult global conditions in over 25 years.  You can see that on stock markets around the world.  Confidence in terms of business confidence and consumer confidence around the world have taken a hit on the back of the global financial market turbulence and the oil shock.  All of those factors are impacting on Australia, and we’re not immune from that.

HAWLEY:

Are we heading for a recession?

TREASURER:

I think that sort of talk is absolutely unhelpful.

HAWLEY:

Well, is it a possibility?

TREASURER:

I think it is utterly irresponsible to speculate about that and I certainly won’t be doing that.

HAWLEY:

Well, does the thought keep you awake at night?

TREASURER:

Sam, I’m not speculating in that way.  I said I regard it as particularly unhelpful.

HAWLEY:

Well, given the stark economic reality the Government is facing just eight months into the job, does Peter Costello, the former Treasurer pose a political risk to you and your Government if he was potentially to take over as the nation’s Opposition Leader?

TREASURER:

Sam, let me assure you, the last person I’m thinking about at the moment in these circumstances is Peter Costello.