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

8 December 2008

Joint Press Conference
with
The Hon Jenny Macklin
Minister for Families, Housing,
Community Services and Indigenous Affairs

Parliament House
Canberra

8 December 2008

SUBJECTS: Economic Security Strategy Payments; China Trip; Kerryn McCann

MACKLIN:

As you’d all be aware, families, pensioners, carers, veterans, people on a Disability Support Pension will all be receiving the Government’s Economic Security Strategy payments.  They’ll start today but ramp up, and by Wednesday and Thursday this week we expect to have about $4 billion out into people’s bank accounts.  That will mean for a single pensioner or carer, somebody on a carer payment, $1400 for singles, $2100 for a couple combined.  For families who are receiving Family Tax Benefit A, they will receive $1000 for each child in their care.  And for carers who are receiving the Carer Allowance, they’ll receive $1000 for each person in their care.

The money will be arriving in people’s bank accounts over the next fortnight.  People do not have to apply for this money.  It will arrive in the normal way from Centrelink.  I would just say, though, that if people are concerned they should wait until the 19th of December and then contact Centrelink.  But we’re trying to get the money out to people as close to their regular payment day as possible to make sure that they can get this money, that they can buy the things that they need, and to also indicate that this really is about making sure we get the money in before Christmas.

TREASURER:

Thanks, Jenny.  I’ll just say a couple of words and then we’ll take questions.  But look, this is a win for families and pensioners doing it tough, and it’s certainly a win for the economy and jobs that need a boost during this global financial crisis.  This is a package which is required because of events that have occurred internationally.  We moved early with strong, decisive action, and this money will begin to flow this week, flowing this week to support Australian jobs and Australian business.

Over to you.

JOURNALIST:

How much modelling was done on how much of this money will actually be spent rather than being saved?

TREASURER:

The work that we’ve done shows it will boost GDP by between a half and one per cent and can create up to 75,000 jobs.

JOURNALIST:

Is that on the basis of modelling or just…

TREASURER:

It’s the work that the Treasury has done.  As you are aware, there’s a fair bit of speculation about the extent to which the money will be spent or the money is saved or used for other purposes.  The most important thing here is that when families or pensioners spend this money they can do so knowing they’re supporting Australian industry and supporting Australian jobs.

JOURNALIST:

There’s another group that is destined, I think, to (inaudible) the unemployed.  Why did you decide not to include the unemployed in this package?

TREASURER:

Well, because the most direct thing that we can do is to strengthen the economy right now with a very significant boost.  This is the most significant thing that can be done immediately to support Australian jobs.  The Australian Government moved early, well before many other countries moved, with a significant fiscal stimulus, and we did it because we were acutely aware of the potential scale of the global financial crisis which, sadly, since the time we even announced this package, has got considerably worse.  It’s recognised around the world that the Australian package is one that was certainly very timely and one that is very targeted, because being timely and targeted in a time of global financial turmoil is absolutely critical.  And of course since then, many other countries around the world have moved.  I’ve just come back from China.  China has, in the last week, put in place a very significant fiscal stimulus for the same reasons that the Australian Government has done as well.

JOURNALIST:

But if you’re already unemployed, I mean you’re obviously (inaudible) in that group that’s already being left behind.  Wouldn’t you rightly feel that you have been left out this package and that it’s a pretty grim Christmas?

MACKLIN:

The most important thing that we can do for any Australian who’s unemployed is to help them get a job, and that’s exactly what we’re on about with this package.  It’s about making sure that we protect the jobs that people have already, putting a major stimulus into the economy – $10.4 billion – of course working in concert with the Reserve Bank, having significantly reduced interest rates.  All of these measures are about protecting jobs and creating jobs where possible.  Part of the package – we also had 56,000 additional training places – we think that’s the way to help people who are unemployed now and to prevent other people from becoming unemployed.

TREASURER:

And certainly we are saying to those critics out there that are not supportive of these payments and the spending that comes with it, that they’re not supporting Australian jobs.  These payments are directly related to the urgent task of supporting employment in our economy because of events which have occurred internationally.

JOURNALIST:

Treasurer, how long will this last, though, because you’re giving people all this money to spend before Christmas and it will boost the economy, but why not in February, March, April?  What will be happening then?  The tax cuts don’t come in until July.

TREASURER:

We have other tax cuts that commenced on the 1st of July as well.  But I would make this point, and it’s the point I made before: this is temporary and it is targeted and that’s why the Prime Minister and I have said repeatedly that if further action is required then all options are on the table and they will be under consideration.  It is the case that the deterioration in the global economy is even more significant than anticipated only a few months ago and that’s why we’ve said all options are on the table and further action, if it’s required, will be put in place.

JOURNALIST:

Mr Swan, Standard and Poors have said that Australia’s AAA credit rating is under a lot of pressure at the moment and…

TREASURER:

I’m sorry, David.  That is a comment that’s reflected in an article you’ve written.  I’ve not seen that comment from Standard and Poors anywhere else.

JOURNALIST:

Ah well, it’s quoted directly from Standard and Poors…

TREASURER:

I’m sorry, David, but I’ve had the Treasury talk to Standard and Poors and they’ve not reached the same conclusion that you reached in your article.

JOURNALIST:

The quote is that Australia’s credit rating is under a lot of pressure…

TREASURER:

I’m sorry, David, but I have to say to you that the discussions that Treasury has had with the person you quoted in that story don’t reflect your assessment of what they’re saying.  End of story.

And the second point I’ll make is speculating, as you have done, I believe, is completely irresponsible.

JOURNALIST:

Treasurer, are you confident (inaudible)?

TREASURER:

I am certainly confident that the Australian Government’s fundamentals are sound and they are reflected in credit rating assessments of this country and the state of its books.

JOURNALIST:

How did your visit to China go, Treasurer?  Did you talk to any sovereign wealth funds?  Did the subject of iron ore prices come up at all?

TREASURER:

No.  I didn’t talk to any sovereign wealth funds.  The subject of iron ore prices did not come up.  We’ve been having a strategic dialogue with the NDRC, and you might recall that only a couple of months go I had a press conference in this room with the head of the NDRC.  There have been discussions between the Prime Minister and the Chinese authorities, namely President Hu, recently in Washington, and the meeting we had was a follow-up and part and parcel of a discussion about that strategic dialogue.  It was timely and occurred now because there are also discussions on the one hand about an FTA between Mr Crean and his opposite number, and on the other hand the restarting, perhaps, of talks for the Doha Round.  So, it made sense for Minister Crean and myself both to go to China now that Parliament was up.  It was on a weekend only because that was the only time that both parties could find to fit their busy diaries before Christmas.

JOURNALIST:

Can I just clarify on Mark Kenny’s question about the unemployed?  If you did you lose your job in the last few weeks since you’ve announced this package, do you not get money?  When is the cut off?

TREASURER:

Well, if they’re eligible for the payments.

MACKLIN:

It really depends whether an unemployed person has a child or not.  If an unemployed person has a child and they’re eligible for Family Tax Benefit A, and they were eligible on the 14th of October, then they will receive the $1000 per eligible child.  They don’t get a payment if they’re single but they do if they have children.

JOURNALIST:

Minister, could this have been done any sooner?  It was announced, as you said in October, and as the Treasurer said, things have got worse since then.  Administratively, could Centrelink have sent these payments out sooner?

MACKLIN:

This is one of the reasons that we made the announcement when we did.  We knew that we wanted to get this out as quickly as possible.  As you can imagine, getting payments out to two million families and six million pensioners and carers and veterans is a huge IT task.   Centrelink have done so.  It’s been rolled out now.   This is the timing that we were given by Centrelink that they needed to get this done.

JOURNALIST:

Treasurer, (inaudible), China’s had a lot of problems with (inaudible) contamination in their (inaudible).  Did you see any sign that they are getting (inaudible)?

TREASURER:

No, I didn’t have any discussions about that issue.

JOURNALIST:

Treasurer, you’ve linked this to jobs and protecting and creating jobs.  If unemployment continues to rise has the stimulus package failed?

TREASURER:

Well, what I’ve said in my answer to Matthew before is that if further action is required then all options are on the table.  We’ve made that point absolutely clear, because this Government is resolute in its assessment of what is required and we will take whatever action is required given the circumstances that we face.  But this package is a substantial boost to our economy, a substantial boost to jobs – up to 75,000 – a substantial boost to GDP, and we will assess that as we go through the early part of next year.

JOURNALIST:

Mr Swan, what do you think of Mr Turnbull’s comments about this package?

TREASURER:

Well, Mr Turnbull has revoked his support for the Economic Security Package and if he doesn’t support the spending and the payments then he doesn’t support Australian jobs.  It’s that simple.

And of course, you’ve also had the comments today from Senator Fifield, who says that the global financial crisis has had no impact on the economy.  This echoes Mr Turnbull’s comments of some weeks before where he said the global financial crisis was over-hyped.   I don’t know what parallel universe Mr Fifield and Mr Turnbull live in.  It’s certainly not the one that Australians are living in right now.

JOURNALIST:

But why is this package better than tax cuts, for example?

TREASURER:

Because it’s targeted, very targeted.  These payments are targeted at those that require them the most and are most likely to consume.  Tax cuts are spread more thinly over a longer period of time.  These payments are all targeted in a defined period at a particular group of people who have been doing it tough over the last couple of years, high inflation, particularly high petrol prices, and of course, sadly through most of that period, high interest rates inherited from the previous government.  So, these people need a bit of help, a helping hand if you like, to make ends meet, and it comes at a time just before Christmas where I think it will provide a bit extra for them and their families.

MACKLIN:

If I can just add to that answer.  There are two other reasons.  One is that we were determined to provide assistance to pensioners, many of whom would pay little or no tax, and so if we didn’t use this approach we would not be able to provide the down-payment on long-term pension reform that we’ve done.  So, that’s been a very important consideration for us.  We wanted to give pensioners and carers some relief.  We’ve done so, and we’ve done so in a way that demonstrates to them that we’re serious about long-term pension reform.

The second reason why this is far more effective than a week-to-week payment is that this is a lump sum, a large amount of money to be delivered in a fortnight to really try and give the economy a boost.

JOURNALIST:

Mr Swan, in China did you have any discussions about how the Chinese are feeling about their own economy?   Is it going to hold up (inaudible) modest demand for our commodities?

TREASURER:

It’s an economic dialogue, and we certainly had a discussion about the global financial crisis, what it meant internationally.  We’ve worked closely with the Chinese, for example, in the G20 and indeed both the Prime Minister and myself have been in regular contact with our counterparts in China during that period.  But it was good opportunity to talk about the overall economic environment, and in particular, to talk about its impact on China.  What the Chinese have said publicly is the situation.  It is impacting there.  Growth is going to be a little slower in China and that has knock-on effects for a country such as ours in the region, and of course we are a very significant trading partner with China.  But China has moved very strongly with its fiscal stimulus package, and it is a package which is directed on the one hand at both consumption, and on the other hand at critical infrastructure.

JOURNALIST:

Minister Macklin, what’s your reaction to the passing of the Australian athlete, Kerryn McCann?

MACKLIN:

If I can personally, and also on behalf on the Government, pass on my incredibly sincere condolences particularly to her family.   I think every single Australian was just so proud of what she achieved and to see her life cut short in this way is something I think every single Australian is going to feel tonight, but not so much as her family.  So, our very sincere condolences to her.