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

11 September 2008

Interview with Murray Olds

Radio 2UE, Sydney

11 September 2008

SUBJECTS: Jobs Figures, New South Wales, Interest Rates, Liberal Party Leadership, Pensioners

OLDS:

Good afternoon to you Mr Swan.

TREASURER:

Good afternoon Murray. That’s quite an introduction.

OLDS:

Yes. Well what do think about MPs drinking on the job?

TREASURER:

I don’t have time to drink on the job and most MPs that I see don’t drink on the job. They’ll have a drink from time to time, but from what I see in Canberra people are too busy these days to have parties.

OLDS:

Absolutely and I’ll tell you what, they’re also busy employing people. National unemployment down to 4.1 per cent. That’s the best figure I think in six months. But the jobless rate down in all States and Territories except New South Wales.

TREASURER:

It’s certainly a solid figure and it tends to reinforce the solid figures we got in the National Accounts. But of course you can’t make too much of one month’s figures. We do know that growth is slowing. It’s also slowing in New South Wales and I think you can see that in the figures today, because in New South Wales higher interest rates for longer have certainly had a bigger impact there because people carry more debt. But nevertheless, a very solid figure and one to be a bit optimistic about.

OLDS:

Wayne Swan, is New South Wales an economic handbrake on the rest of the country right now?

TREASURER:

No, I don’t see it like that at all. I think New South Wales has suffered ten interest rate rises in a row under the previous government. Now we’ve got the impact of the international credit crunch, which also is felt disproportionately in New South Wales because it tends to have much more of the finance sector particularly located in Sydney. Those things have certainly impacted in New South Wales. What you can see in the figures is solid job growth over the past three months nationally as well. So there are some strengths in the economy we ought to acknowledge, but at the same time I’ve got to say the economy is slowing on the back of slowing world growth and nowhere is immune from that.

OLDS:

I think we’d all like to see New South Wales doing a bit better though, wouldn’t we?

TREASURER:

We certainly would. We’d like to see New South Wales doing a bit better, and certainly that’s one of the reasons why we’ve put so much effort into tackling inflation, doing something about taking the pressure off interest rates. And that interest rate cut from the Reserve Bank the other week is certainly welcome. Those are the sort of things we need to do. Plus we’re willing to work with the New South Wales Government when it comes to critical issues like economic infrastructure, because New South Wales suffers from the fact, like many other states, that the national government has not seen itself in the past as a partner working with state and local government in that area.

OLDS:

You’re in a unique position to be able to help the brand new Premier down here. In the next two and a half years you’re going to have to pull many rabbits out of the hat, and you could certainly help by donating some money in terms of infrastructure spend. You’ve got a great big bucket of it there.

TREASURER:

What we will be doing is in the national interest. It won’t be to help any particular premier given their political circumstances. We’ve made it pretty clear through our arrangements for Infrastructure Australia that for the first time in a long time the decisions that will be taken on infrastructure will be taken in the national interest, and they’ll come from an objective economic evaluation of the case.  That’s where they’ll come from.

OLDS:

Premier Rees you just heard that. Sorry about that sir. Look the Reserve Bank, Wayne Swan, also warning, and you’d be well aware of this, that the jobless rate likely to push back towards that 5 per cent mark over the next 12 months or so. I remember a figure, I think what 100,000 people could be out of work in the next 12 months. It’s a pretty gloomy assessment. Is that one you share?

TREASURER:

Well certainly we’ve forecast in the Budget for a slowing economy for the reasons I was talking about before. All those interest rate rises over the last three years or so. On top of that we’ve now got the impact of global events which are pushing up borrowing costs and slowing world growth. So we are forecasting slowing employment growth, which will mean there’ll be a slight increase in unemployment over the next 12 months or so. But the most important thing to do is to get the fundamentals here right, because we can’t control what’s going on internationally but we can control what we do here.

OLDS:

This little fall – any impact do you think on the likelihood of further reductions in interest rates?

TREASURER:

Look that’s entirely a matter for the Reserve Bank, but I think the Reserve Bank has made itself fairly clear that it sees a slight loosening in monetary policy in the time ahead. But that’s a matter for them. I certainly hope there is, because people particularly in New South Wales will benefit significantly from that.

OLDS:

And it’s good to see people in work because people in work, they generate other jobs and pay tax and so on and you feel better with a job. Speaking of jobs, what about confirmation today that Peter Costello won’t be looking at the leadership of the Liberal Party. Any surprise for you?

TREASURER:

Well not really. But I mean what really has stunned me is the audacity of him to be trying to sell a book, if you like, on the back of the misfortunes of his own party. But you should contrast that with the front page of the Financial Review today, which shows that both the Treasury and the International Monetary Fund warned him that his actions in his past two Budgets were going to put upward pressure on inflation and upward pressure on interest rates.

OLDS:

I saw that today in the Fin. What do you reckon there’ll be any chapters in his book on that?

TREASURER:

No, I think those are the chapters that will be missing and that’s why it won’t be worth $55.

OLDS:

He’ll also be missing the ticker. I think a lot of people will look at Peter Costello, maybe buy the book, and look for any evidence of a political ticker in there that would have allowed him to tap the Prime Minister of the day on the shoulder. Never happened, did it?

TREASURER:

Well it’s a harsh judgement, but I think the average punter in the street would say if he couldn’t fight for himself, how would they expect him to fight for his country.

OLDS:

Will Brendan Nelson fight for his job do you think, or is Malcolm Turnbull just about installed? And does it matter to your side who you face across the dispatch box?

TREASURER:

No it doesn’t really. I mean they all stood for WorkChoices. They were all involved in the reckless spending that put upward pressure on inflation and interest rates. I mean same teapot, different cosy.

OLDS:

I haven’t seen one of those since my grandmother made me a cup of tea years ago.

TREASURER:

Well the Liberal Party is stuck in the past.

OLDS:

Boom-tish! You should be a stand-up comic. Look Malcolm Turnbull would be a more formidable opponent surely. I mean he’s got a very successful business career behind him. He’s a good parliamentary performer.

TREASURER:

This is the guy that earlier in the year said that inflation was a fairy story, precisely at the time that people were getting belted at the supermarket and at the petrol bowsers. I mean I just think he’s terminally out of touch with the average Australian and I think it shows.

OLDS:

So a quick one if I may. Brendan Nelson. Next week he’s going to move the single rate pension be increased by $30 a week immediately. You’ll be forced to vote against that. It’ll be I suppose a little bit embarrassing. A political hit for you?

TREASURER:

No not at all. He’s left something like 2.2 million pensioners out of his equation. We said in the Budget when we increased the utilities allowance and we put up an additional bonus that we had to come to grips with the single rate of pension, that we’d go through that in a methodical way and make sure we got it right for the long term. That’s precisely what we’re doing and we’re not going to be diverted from that by Brendan Nelson, whose put this together on the run and left behind in this proposal 2.2 million pensioners.

OLDS:

Do you regret getting this ball rolling last weekend?

TREASURER:

No not at all. I didn’t get it rolling. There’s nothing I said last weekend, Murray, that I haven’t said time and time again. All of my life in politics I’ve stood up for people on low and fixed incomes. I’ve stood up for them when it’s come to tax cuts. I’ve stood up for pensioners time and time again. Some of the people talking about this issue have been missing in action on issues to do with pensioners for a long period of time. The Government is determined to get this issue right for the long term. The previous government had money rolling through the door at the height of the mining boom, was giving predominately tax cuts to those at the top end, never did a thing about the single rate of pension or its adequacy. We intend to do it and we’re going to do it properly because we believe in it.

OLDS:

Nice to talk to you. Thank you very much indeed for your time.

TREASURER:

Good to talk to you.