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

23 December 2008

Interview
with
Ian Maurice

Radio 4BC, Brisbane

23 December 2008

SUBJECTS: Christmas Shopping, Economic Security Strategy, Global Financial Crisis, Aussie Home Loans/Wizard, Christmas Day and Holidays

MAURICE:

If you've been out shopping you will have seen thousands and thousands of people spending lots of money. And on the subject of spending money, we're going to catch up with the Federal Treasurer, Wayne Swan, who's on the line. Mr Swan, good morning.

TREASURER:

Good morning. How are you going? I've got to get out to the shops a bit later myself.

MAURICE:

That's one of the things I wanted to talk to you about. Do you actually go and do your own shopping?

TREASURER:

I certainly do, but I've been pretty busy and I'm just winding down today. I'm back in the electorate but home today so I'm going to get out to Chermside a bit later and pick up a few last minute gifts.

MAURICE:

When you're doing that sort of thing, you're really just doing your regular shopping and people see you, do they ever come up and talk to you about the economy?

TREASURER:

They certainly do. There's a lot of interest in what's happening economically, both locally, nationally and globally, I think there's a high degree of awareness that the impact the global financial crisis, what it's done to share markets, what it's doing to global growth and the consequences of that for the Australian economy. And people are talking about the Economic Security Strategy that we brought down and some people are out and about spending the additional payments that came through in the past week or so.

MAURICE:

Most people are (inaudible).

TREASURER:

The certainly are. I think people do understand what's occurred here, and what has occurred here is that there's been a dramatic impact on the global economy in terms of global growth through the global financial crisis which has really had a big impact on global share markets, including here, and that's all impacted on confidence. And I think people understand why the Government acted through the Economic Security Strategy to give a bit of additional money to pensioners and carers and to families in the lead-up to Christmas so we could strengthen demand. I think people do understand that when they're out there shopping what they're really doing is supporting Australian jobs and supporting Australian business.

MAURICE:

I saw the retailers are predicting a $7.7 billion cash register bonanza over this period. How much of your economic stimulus package is responsible for that, do you reckon?

TREASURER:

I'd be a bit wary about those figures at this stage. I certainly hope that demand is stronger at the moment than it has been in recent times. We certainly need that to support jobs, to support many businesses who are doing it pretty tough because of the dramatic drop in demand that's occurred internationally and is now flowing through to our economy. That's one of the reasons why we're encouraged if people are out there spending responsibly because they're supporting jobs, they're supporting businesses at this critical time in the international economy when many other countries are really seeing a very sharp slowdown.

The whole point of the Economic Security Strategy was to fill the gap, if you like, and encourage people to do a bit more in the lead-up to Christmas because there's plenty of people out there who have been be doing it tough this year, particularly people on low and fixed incomes and many families. So, if they're spending a bit more in the lead-up to Christmas, buying some of those items they couldn't buy throughout the year, that's all good for the economy and that's certainly encouraging. But the extent of that won't be clear until after Christmas.

MAURICE:

Sure. After Christmas and any Christmas, people come back and return goods (inaudible) unwanted and that might have some effect on this cash register bonanza (inaudible).

TREASURER:

Yes, well, the thing that I find, you know, you say do people come up and talk to you, and they certainly do and I certainly talk to a lot of people today I should think, there's a really strong community spirit out there and that's a good thing because there's been a lot of doom and gloom around and we are in a very serious situation. The most important thing is for people to think positively about the future. That's the other reason we acted not just with the Economic Security Strategy, we put in place a range of measures to further encourage business to bring forward investment.

For example, yesterday I was out at Incitec Pivot who manufacture urea and fertilisers and so on and they're going to take advantage of our 10 per cent investment allowance to bring forward the construction of a new compressor which goes to the heart of their production of urea. We need businesses and consumers to be out there with a positive frame of mind, and the Government's going to do everything it possibly can in the midst of the global financial crisis to encourage that.

MAURICE:

(inaudible) spending ourselves out of a possible recession?

TREASURER:

Well, I don't like talking about the future in that way. There's no doubt that the global economy is heading that way. Most of Europe, Japan, the United States are all in recession and the Government was acutely aware of this prospect some time ago which is why we moved early to strengthen our economy, to protect jobs and to do something about lifting demand in the economy, to strengthen our economy in the face of all of this. And I think people understand why we acted and why we all need to play a part. It's not just a question of government, it's all of us. Because we're all in it together and if we keep a positive frame of mind in this environment we'll certainly come out of it in better shape than many other countries.

MAURICE:

I know you don't like using the 'R' word, but if most major countries around the world are in recession, is it inevitable that it will happen here?

TREASURER:

I don't think anything's inevitable. What we have to do is everything we possibly can in the face of this very big dramatic change in the global economic outlook and what it has done to demand in our goods and services. For example, you've seen what it's done in recent times in terms of prices for our commodities and the flow-on consequences of that for workers and businesses in the mining industry. The way I look at it, I think it's a positive way to look at it, is that we should do everything we possibly can that's responsible, that's within our power and the things we control to strengthen our economy in the face of that. And that's basically what the Government is doing – working with business and households – to see that we can do our best to strengthen the community in the face of all of that.

MAURICE:

I'm sure that you're across the news that's breaking this morning that Aussie Home Loans has purchased, or is about to purchase, Wizard Home Loans for some amount of money. (inaudible)

TREASURER:

I think it's a positive development because Wizard has been dramatically impacted upon by the global financial crisis and the cost of funds for it has been, I guess, much higher for that organisation than many others. So, I think this change that has been announced this morning holds out the prospect of some lower rates for many of the Wizard customers as this takeover moves through and certainly provides a much more solid foundation for that business. And I think it will make the mortgage market more competitive than it has been in recent times.

MAURICE:

(inaudible)…more money do you think?

TREASURER:

Certainly I think it will mean that the new organisation will have access to funding which may be somewhat cheaper than the funding that Wizard has had in recent times. And I think that for those customers of Wizard this will hold out the prospect of a better deal in time in terms of what they're paying.

MARUICE:

What are you doing for Christmas?

TREASURER:

What I'm doing for Christmas is we're getting the family together, we're going to be on the back deck having Christmas lunch and then heading up to the coast, as we normally do. As you know, I come from the Sunshine Coast and I've got all my brothers and sisters up there. So, I'm going to try and catch a few waves, throw a few balls down to my son, who's a keen cricketer, and spend a bit of time with my family. But I'll still be getting those daily briefings from the Treasury about what's going on because at a time like this you do still need to stay in touch.

MARUICE:

So, you're virtually on call 24/7 even though it is Christmas?

TREASURER:

I'll be on call, but it's my hope that I get a bit of surfing time in and a bit of family time in during the time we're at the beach.

MARUICE:

The Prime Minister's not coming back to Brisbane for Christmas.

TREASURER:

I'm not sure entirely of his movements but he's back here pretty regularly.

MARUICE:

I think he's having Christmas at Kirribilli.

TREASURER:

Yes, I'm sure at some stage he'll be through Brisbane.

MARUICE:

I wish you well shopping this afternoon. It's going to be nice and busy.

TREASURER:

I'm looking forward to it. It's a good time to be out and about talking to people. It's also, you know, you know what it's like if you don't actually finally complete that shopping and you don't feel that good after the shops have closed if you're short of a gift or two. So, I'd better get out there and get it done.

MARUICE:

Are you a big spender at Christmas time?

TREASURER:

No, I'm not but Christmas is really for the kids and it's an opportunity to buy one or two of those items that they don't get during the year.

MAURICE:

Well, all I can say is have a very happy Christmas, spend some quality time with the family and get ready for another big year.

TREASURER:

It certainly will be a big year but you know what, the thing about it is that the sort of feeling that I get from talking to people is that Australians are going to stick together in the New Year and we'll make things as positive as we possibly can.

MAURICE:

Merry Christmas, Treasurer.

TREASURER:

All the best.

MAURICE:

And to you, too.