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

12 February 2009

Interview with Fran Kelly

ABC Radio National Breakfast

12 February 2009

SUBJECTS: Victorian Bushfires; Nation Building and Jobs Plan; Jobs; Rio Tinto/Chinalco

KELLY:

Treasurer, welcome to ABC Radio National Breakfast.

TREASURER:

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

KELLY:

Wayne Swan, you've been in Canberra this week obviously, and like most of the nation, you've been following the Victorian bushfire disaster on television - pictures, the stories, the loss. It's absolutely startling, isn't it.

TREASURER:

Well, we've not just been following it on television. The Government has been deeply engaged in the response, working cooperatively with the Victorian Government. We've had senior Ministers on the ground all of the time, and we are working around the clock in terms of both the recovery, but also beginning the planning for the reconstruction, because it's on such a massive scale that we have to act on all fronts at once. This has been taking a lot of time for senior Ministers, and most particularly the Prime Minister, in recent days. You consider the scale of the destruction, the scale and loss of human life; we've been focussing pretty much singularly on this event over the past week.

KELLY:

And the scale of the loss has clearly had an emotional impact on some of the members of the Government and on the Opposition.

TREASURER:

I don't think we're concerned about the impact on the Government or Members of Parliament. We're most concerned that we can actually get services to those on the ground at every level, and that's where all of our efforts are going.

KELLY:

Treasurer, the work of government goes on, albeit having to be distracted by getting the response to the Victorian fires absolutely right. But all week you and other members of the Government have been negotiating on the $42 billion stimulus package. I understand you've just come from a meeting with Greens leader, Bob Brown. Do you have a deal?

TREASURER:

I'm talking to all of the minor parties at the moment. We are particularly interested in having a constructive discussion, because there will be a vote on this bill later in the day in the Senate. The Government is absolutely focussed on supporting jobs. The Liberal Party has made it very clear that they have a "sit and wait and see" approach. I hope that we can draw the support of the minor parties in the Senate for this essential package.

Fran, we've seen a couple of events in the last week or so which really point to the depth of this global recession. We saw on the weekend the US employment figures - the worst in 35 years. Overnight we've seen new trade data out of China which shows a dramatic drop in Chinese exports and imports. All of these things are testament to the depth of the global recession and the extent to which it's accelerated through the months of December and January, which is why the Government moved last week so quickly with this Nation Building and Jobs Plan, because what is occurring internationally demands an immediate response to support jobs, to support domestic demands. So, we are very intent on passing this bill through the Parliament and we are looking for support from the minor parties in the Senate, because this legislation is absolutely in the national interest.

KELLY:

The minor parties in the Senate are all on the record as saying they want to give that support but they want to make the package as good and as effective as it can be. We know that Bob Brown, for instance, and the Greens are looking for more help for the unemployed. They want a greening up of this package, solar power for every house in Australia, training for mining industry workers to take jobs in the renewable energy sector, things like that. Have you agreed, or are you prepared to amend your package at all to include these kinds of ideas?

TREASURER:

We've clearly said that we'll have a constructive discussion with the Greens and the independent Senators, and we're doing that. But you can't conduct that in public, and I certainly don't intend to do that this morning. But let's really go back to basics here. What is this Nation Building and Jobs Plan all about? It's all about stimulating our economy as quickly as we possibly can by providing some additional assistance to families and individuals via a tax bonus and other payments, particularly to those who are unemployed. That is absolutely critical to stimulate domestic demand given this very sharp drop in demand globally. We are putting in place essential nation building programs which will mean direct government investment in the biggest school modernisation program in Australian history. Direct government investment when it comes to insulation in homes; it's a very green package already. And a massive commitment to social housing which will also support jobs in the construction industry.

And by the way, Fran, we had some very interesting figures yesterday on first home owners - a very significant increase in finance flowing to them and applications flowing for new homes from them. This is proof positive that we can have a direct impact on the economy if we act quickly, and that first home owners boost that we put in last year is now really producing some results. That's why this is so urgent. You've got to try and stay ahead of the game. The way things are changing globally with such force demands a forceful response and a quick response from that national government.

KELLY:

Treasurer, I think everybody understands that but for instance…

TREASURER:

Well, I'm not sure that, Fran, that everybody does understand that.

KELLY:

They understand the urgency but they don't necessarily think that the Government has all the best ideas. Let's hear from a very frustrated independent Senator Stephen Fielding in the Senate last night.

(excerpt of Senator Fielding)

KELLY:

Steve Fielding's major claim was the Government just isn't negotiating. He's accusing the Government of sheer arrogance. Nick Xenophon said that his door is open, but he's frustrated too. Do these people have ideas that the Government is going to consider amending its package for, particularly in the spending of the $12 billion cash handout element?

TREASURER:

Well, Fran, we are being constructive in our discussions, but we have put together a package on the best advice from our advisers in the Treasury and we are absolutely committed, and believe that we have a package which delivers the objectives that Senator Fielding has, Senator Xenophon and those in the Greens. But we have to work in the practical world of delivery. We have to make sure that this package delivers the outcomes on the ground in the timeframe that is required. And we have taken the best advice on board in constructing the package. If we can make it better in our discussions with the minor parties we'll do that, and we've entered those discussions in a constructive way. But this wouldn't be a matter of substantive debate in the way it is if the Liberal Party hadn't decided to oppose the package completely, which of course they did on day one. They have a "wait and see" attitude. It's not something that this country can afford and it's not in our national interest.

KELLY:

And just on that, have there been any talks since that initial position from Malcolm Turnbull, any talks between the Government and the Opposition, because Malcolm Turnbull has said he does want to sit down and work out the best solution too?

TREASURER:

No. Malcolm Turnbull said the day after we brought down the package that he rejected it in total, and that was reaffirmed earlier this week after their party room meeting. The Liberal Party attitude is "wait and see". The country can't afford that. It's not in our national interest. We need this package in place for all of the reasons I outlined before and we need to do it in a speedy way. This is a timely package, it's a temporary package, and it is a targeted package. It is exactly what this country needs to cope with this dramatic change in the international environment and if we don't move more jobs will be lost. It's that simple.

KELLY:

And do the Victorian fires put more pressure on this package? Because it's unclear, I think, to people generally about whether some of this money will go directly to helping ameliorate the impact of the fires? Should the people in Victoria, for instance, who have been affected by the fires get more of these direct payments, more infrastructure funding from this package?

TREASURER:

Fran, we've made it very clear that our commitment to the recovery and reconstruction in Victoria is uncapped and we will work with the Victorian Government and local authorities and the community to reconstruct that community. So, that exists entirely separately from our Nation Building and Jobs package. But what we have said - and it's simply common sense - is that in implementing this package, should it pass, we would obviously give priority to the provision of facilities in those areas as we implement that package. It's a common sense thing that I think the Australian people would expect from the Australian Government.

But our commitment is uncapped, working with the Victorian Government under the normal intergovernmental arrangements to reconstruct those communities and anything that can also come on top of that through the Nation Building and Jobs Plan will be prioritised in those areas.

KELLY:

Treasurer, the job figures are released today. Do you expect some more bad news, given falling job ads and everyday news of more and more redundancies?

TREASURER:

Well Fran, any job lost is a tragedy for the individual involved and there's no doubt, given what's happening in the global economy and what we're seeing internationally, that unemployment is moving upwards in the rest of the world, and we're not immune from that. The whole point of our Nation Building and Jobs Plan is to cushion the impact of those external events on the Australian economy so we can bolster employment, or support employment in the Australian economy, and that's why this Nation Building and Jobs Plan is so urgently required.

KELLY:

How bad do you expect the news to be in terms of unemployment today?

TREASURER:

I don't speculate about the figures today, but we can see what's occurring internationally. We can see the drop in global demand. We can see that being transmitted to this country. We can see the impact of the international recession on the stock market. We can see its impact on the traded good sector. We can see its impact internationally when it comes to credit flows. All of those things demand a very substantial response from the Australian Government through our Nation Building and Jobs Plan so we can cushion the Australian economy from the effect of these external events.

KELLY:

And Treasurer, just before I let you go, can I ask you a question about Rio Tinto and reports Chinalco is trying to acquire a pivotal stake? Is it in the national interest for Australia's top iron ore projects to be partially owned, effectively, by the Chinese Government?

TREASURER:

Fran, I don't speculate about possible applications under legislation that I'm responsible for. They will be examined in the normal way within the guidelines that we put out at the beginning of last year.

KELLY:

Treasurer, thank you very much for joining us.

TREASURER:

Thank you.