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

10 October 2008

Interview with Ali Moore

ABC Radio 774
Melbourne

10 October 2008

SUBJECTS: Global Financial Crisis, G20 Finance Ministers' Meeting, Dow, Australian Economy

MOORE:

Treasurer, what can the G20 Finance Ministers agree to that will help restore confidence?

TREASURER:

Good morning, Ali.  I think it’s very important that this G20 Finance Ministers’ meeting takes place, because up until now, there hadn’t been a meeting of the G20.  Called this weekend, there’s a meeting of the IMF and the World Bank.  I’m presently on a train travelling from New York to Washington to attend those meetings. 

The Government has been lobbying internationally for well over six months for a meeting of the G20 to concentrate on all of the issues involved in the global financial crisis.  Up until now, it’s been in the hands of the G7 and, frankly, there hasn’t been enough action from the G7.  So, it’s good to see the G20 meeting and having that meeting occur with the IMF.  They are two bodies that can, over time, make substantial progress in this area.

MOORE:

The Prime Minister has called on this meeting to strike a global deal to restore confidence.  I just wonder what sort of deal that could be.

TREASURER:

Well, we haven’t had the meeting yet, Ali, but the important thing is that as a result of representations from Australia and other countries, the G20 is now going to focus on this problem.  Up until now, it’s been a handful of advanced economies who’ve been handling it.  What we need is the advanced and developing economies coming together because, as the IMF report out in the last 24 hours shows, this is not only impacting on developed economies – it is also now impacting on developing economies and slowing world growth.  Now, Australia’s not immune from that and, of course, it will have an impact locally.

MOORE:

Treasurer, we’ve already seen one coordinated rate cut between the US and the UK and Europe and Canada.  Do you think we’re likely to get another?

TREASURER:

Well, I think it is important that there is coordination and decisive action across a range of areas.  There’s a big agenda out there, Ali.  There’s already the agenda of the Financial Stability Forum which has been developed, elements of which are being implemented but others are not.  And of course, there is the agenda that the Prime Minster put forward only in the last couple of weeks at the United Nations.  We will need to make progress in terms of the transparency and operation of international investment banks.  We need far better disclosure, and of course, we need far better supervision.  But on top of that, we will need a body which has got some political clout to supervise the reform process.  Those things have not been happening up until now and that’s why it’s such a good thing that the G20 Finance Ministers are meeting in Washington on Saturday.

MOORE:

Treasurer, the Dow was down massively again overnight.  What was the mood in New York?

TREASURER:

I’d describe the mood in New York as being sombre, as it is I think throughout the world at the moment.  There is a lack of confidence in the international financial system.  A lack of confidence is also making it very difficult for anybody to borrow money and, of course, credit is the lifeblood of the economy.  And if you can’t borrow money, then it makes operations in the day to day economy really difficult, and of course, that’s when it begins to impact most decidedly upon households and also upon businesses.

MOORE:

People here are watching it.  They’re not just watching their super, they’re watching people talk about warnings about how easy or not easy it is to get credit for businesses in this country.  Should we be anxious?  Should we be, even scared is a word that I’ve heard a lot and that people text to the program and say, I’m scared.

TREASURER:

Well, Ali, there’s a world of difference between our banking system in Australia and our financial system and the rest of the world.  We’ve seen that ticked off by the IMF and many other authorities.  So, if there’s any country in the world you would want to be in at the moment in these circumstances, it is Australia, but we are not immune from that.

MOORE:

And at that point the Federal Treasurer, Wayne Swan, on his train on his way to Washington, the phone line went dead.  I think the train made it a little bit difficult to talk to him there, but I suppose the point remains.  He said, any country in the world that you’d want to be in right now, it is Australia.