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

20 November 2008

Doorstop Interview

Parliament House, Canberra

20 November 2008

SUBJECTS: Storms in South East Queensland; Governor Stevens' Speech; Global Financial Crisis; Julie Bishop Fails to Support Family Payments in ESS; Car Industry Finance; David Hicks

TREASURER:

Our hearts go out to families in South East Queensland. It's a cruel blow - two very significant storms in a matter of days, a fair bit of damage again in Brisbane, including in parts of the area that I represent. So, the Commonwealth will certainly be extending further support to families, as we did to the victims of the storms on Sunday night. So, our support is there for all of those people that have been so dramatically affected by these events.

Over to you.

JOURNALIST:

Are you as confident as Glenn Stevens about the Australian economy?

TREASURER:

There's no doubt that there are great challenges out there for the Australian economy, but I think Glenn Stevens gave a really balanced speech. He outlined very clearly the opportunities and the challenges for Australia. There are underlying strengths in the Australian economy, but of course great impacts from the global financial crisis - as we saw in MYEFO - a $40 billion reduction in surpluses across the Forward Estimates. And of course, as we watch what's going on around the world it gets tougher and tougher, no doubt about that. I think a very balanced speech from Governor Stevens. We shouldn't lose sight of the fact that there are underlying strengths and that we have to meet the challenges that are out there that come from the global financial crisis, which of course is why the Government acted so decisively with our Economic Security Strategy some month ago.

JOURNALIST:

Do you agree that it's okay to go into deficit?

TREASURER:

As I said before, MYEFO showed a reduction of $40 billion in forward surpluses, but we are projecting modest surpluses and modest growth. We don't believe it is necessary in the current circumstances to borrow to invest in the strength of the Australian economy. I'll be very clear about that.

JOURNALIST:

Would it be acceptable to go into deficit?

TREASURER:

I'm not speculating. We simply do not agree or think it's necessary, in our current circumstances, to borrow to invest.

JOURNALIST:

So, you'd agree with your opposite number, Julie Bishop, who says there is absolutely no need to go into deficit?

TREASURER:

I absolutely don't agree with Julie bishop where this morning she failed to support the additional support that we're providing to families - $1000 per child - for those that receive Family Tax Benefit Part A. How cruel and insensitive could Julie Bishop be to refuse to support such a sensible measure which will give additional money to families just before Christmas?

JOURNALIST:

But on the question of not needing to go into deficit which the Governor of the Reserve Bank said might be needed, you say that she's right?

TREASURER:

I'm not agreeing or disagreeing because I haven't read what Julie Bishop had to say this morning. All I've been told is she failed to support the Economic Security Strategy which the Opposition said only four or five weeks ago they would support, and I think that's particularly cruel. But it fails to understand the importance of the Economic Security Strategy which we have put in place to strengthen growth in the Australian economy in the face of the global financial crisis. She simply doesn't get it.

JOURNALIST:

Mr Swan, can you just put aside your own budgetary position for a minute, though, and just talk about the principle. Most economists say, whether it's a state budget or any other budget, that in the event that there was an economic downturn, there are sometimes good reasons to go into deficit to fund infrastructure spending because it keeps the economy ticking over.

TREASURER:

Well, the principle that we support, and we support strongly, is that we believe in surpluses over the cycle. We have been absolutely consistent in that. And the second point that I'm making is that we don't believe in the current circumstances it is necessary to borrow to invest. I simply couldn't be any clearer than that.

JOURNALIST:

Mr Swan, does the government intend to come to the rescue of car dealers who can't get finance to stock their showrooms?

TREASURER:

We're working with David Murray, who is working with the industry and the Treasury, to see what can be done about financing in the industry. As you're aware, the decision by some providers of finance to withdraw from the market goes back some time. There are difficulties here, but we are working with the industry on a solution. And I'll keep you up to date as that work progresses.

JOURNALIST:

The Reserve Bank Governor also said it's important not to talk down the economy.

TREASURER:

I think that's absolutely correct.

JOURNALIST:

(inaudible)

TREASURER:

No, not at all.

JOURNALIST:

(inaudible)

TREASURER:

I think we've got to be upfront and honest with the Australian people. And I believe the Governor was precisely that, in his speech today. He gave a balanced assessment of the challenges facing the Australian economy, and we agree with that balanced assessment of the challenges facing the Australian economy. It's really important that people understand where we are, what the challenges are, because what we need to do is, appreciating all of those things, put in place responsible policies to strengthen our economy in the face of this event which is having such a dramatic impact on both developed and developing economies right around the world.

JOURNALIST:

On David Hicks (inaudible).

TREASURER:

That's a matter for the Federal Police.

JOURNALIST:

But nonetheless, do you have sympathy for David Hicks when he says that if it is not lifted he will not be able to get on with his life?

TREASURER:

These are entirely matters for the Federal Police. It's not appropriate for me to make any further comment.