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

24 November 2008

Interview with Fran Kelly

ABC Radio National Breakfast

24 November 2008

SUBJECTS: First Anniversary of the Labor Government; Global Financial Crisis; Computers in Schools; Broadband; COAG; Timothy Geithner

KELLY:

Treasurer, thanks very much for joining us again.

TREASURER:

Good morning, Fran. It's really good to be with you.

KELLY:

Wayne Swan, how would you sum up the first 12 months for the Rudd Labor Government?

TREASURER:

Fran, it's been a lot of hard work and it's been immensely satisfying, particularly to deliver all of our election commitments. To make a difference, I think, is probably the most important thing in political life and in terms of the Budget, particularly building that strong surplus to act as a buffer against international uncertainty, putting in place all of our election commitments – the tax cuts for low and middle income earners, the additional childcare assistance, all of the measures in education, the investment funds, all that we've done in terms of climate change and much more. So, it's been a very busy year and of course now the full blast, if you like, or full impact, of the global financial crisis and the need to strengthen the economy in the face of the fallout from those international events.

KELLY:

Busy is one word for sure. Personally, for you as Treasurer, what other words might you use to describe it?

TREASURER:

Well, I think it's been a lot of hard work, but as I've said, rewarding. I mean, in public life the most important thing is to make a difference, and I believe that we have made a difference. I believe the way in which we've put in place our Economic Security Strategy – we did that very quickly. We did it before the rest of the world. We were ahead of the curve there and we do absolutely understand the need to strengthen the economy, particularly to protect jobs given the way international events are unfolding.

KELLY:

Twelve months ago you were managing a $22 billion surplus and Peter Costello, the former Treasurer, was calling you the luckiest man alive. Now you're struggling to maintain that surplus in any significant form. Are you worried this dramatic turnaround will affect the Government's capacity and its popularity?

TREASURER:

I'm not worried about opinion polling. I'm worried about doing the right thing for the country in these dramatically changed international circumstances. That's why we moved so swiftly with our targeted strategy to put in place a fiscal stimulus to boost the economy in the face of this global slowdown, and at the same time, to do something to support pensioners and carers and particularly families with children. What I'm absolutely concerned to do is to strengthen this economy and to protect households and businesses in this environment.

For example, I note this morning the Access Economics report which very strongly supports our Economic Security Strategy because it understands the need for a fiscal stimulus, given how big the global slowdown has become.

KELLY:

Indeed it does. That same Economics report predicts that your next year's Budget is running a deficit of over $1 billion already – and it's not criticising that. It's saying that certain spending, the right kind of spending, is necessary and is required. Do you accept that your next Budget is already looking in deficit?

TREASURER:

Our forecasts are different from the Access forecasts, particularly when it comes to revenue. We're projecting modest growth. So is Access. But we are projecting a modest surplus. Access is not. There is simply a difference in the forecasts when it comes to revenue. That's not surprising. I've said time and time again that there could be an impact if things were to change dramatically on the international scene which would flow through to our Budget. But our Mid-Year Economic and Fiscal Outlook does forecast modest growth and modest surpluses.

KELLY:

Is Access wrong then when it says there's a dramatic decrease in company receipts?

TREASURER:

We stick by our forecasts. There are many forecasts out there but the official forecasts of the Commonwealth are for modest growth and modest surpluses. But there are always differences when there are private sector forecasters out there. They will simply take a different view.

KELLY:

Treasurer, just staying with this notion of debt for a moment, you mention opinion polls, and there is one out today that shows that although Australians love debt – we seem to love debt ourselves – if you look at Newspoll it shows the majority of us – 56 per cent – would be concerned if the economy went into deficit. Do you think you need to better explain why the budget might need to go into the red for a while to get us through this?

TREASURER:

The official approach, the approach of this Government, the approach of the previous government, is to keep the budget in surplus over the cycle. And we are forecasting modest growth and modest surpluses. But I've made it very clear, the Prime Minister has made it very clear, that when it comes to this international financial crisis, that we will take every responsible step that we should take to strengthen the economy, to protect households, to protect businesses, and to protect jobs. But what I'm not going to do is to speculate about possible outcomes in the future. What I can deal with now is the here and now. That's what the Government's been doing. That's why we made such a significant commitment to our Economic Security Strategy four or five weeks ago because we knew that we must act, given what was occurring internationally.

KELLY:

Treasurer, Opposition criticism is about of your first year – F for failure is the mark given to you.

TREASURER:

Well, you would expect them to say that, wouldn't you, Fran.

KELLY:

But they make the point that the Government hasn't delivered on two key election promises – a laptop on the desk of every senior secondary student and high-speed broadband. Fair enough?

TREASURER:

No, it's not fair enough, Fran. We are delivering our computers in schools. That is being rolled out in this (inaudible).

KELLY:

We're a long way from having one on the desk of every senior secondary student.

TREASURER:

I don't think there was ever a commitment to do that in our first 12 months, Fran. We are rolling out these programs, just as we are rolling out our Trade Training Centres in schools. These are things that the Coalition could never even think of. And of course, their record in education was truly pathetic.

When it comes to broadband, let's get into broadband, because this is a very complex process. The bids will be lodged, I think it is by this Wednesday. We are moving through this in a methodical and responsible way and we don't make any apologies for that. We understand that there are commercial pressures out there and various commercial organisations will be jockeying, and so on. But we put in place a responsible bid process and that's well on track.

KELLY:

Well, just staying with the Education Revolution, the COAG meeting this Saturday, the States are going to be asking for money to help deliver on that laptop promise, because they say they don't have the funds to back up those computer systems, but also in August at the National Press Club, the Prime Minister promised $500,000 for the average school to improve the quality of teaching. It was called the National Policy Partnership. Will that money be on the table at COAG on Saturday?

TREASURER:

We've got a very important COAG process in train and this is a significant reform of Federal-State relations. There's been numerous COAG meetings this year where we've been working our way through all the issues, and this weekend there will be decisions taken about the shape and financial architecture of the Federation for the years ahead. But, Fran, I can't make any announcements on this program this morning because these are matters which will be discussed this coming weekend.

KELLY:

Alright. Just finally, Treasurer, Barack Obama has named his economic team. The President of the New York Federal Reserve, Timothy Geithner, is to be nominated as Treasury Secretary in the new US Administration. What's your response to those appointments?

TREASURER:

I think they're welcome. I met with Robert Rubin, who's a member of the transition team, when I was in the United States a week or so ago. I think it's very important that this team is out there and engaged in a discussion with the American public and the outgoing Administration. I'm sure they've been doing that. But to have the full announcement of the full team I believe will be an important step in terms of building confidence within the United States itself.

KELLY:

Wayne Swan, thank you very much for joining us.

TREASURER:

Good to be with you.