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

4 June 2009

Interview with Mike Carlton and Sandy Aloisi

Radio 2UE, Sydney

4 June 2009

SUBJECTS: State of Origin, National Accounts

MIKE:

Joining us from Canberra, the Treasurer, Wayne Swan. Good morning.

TREASURER:

Good morning, Mike. How are you going?

MIKE:

I'm alright. I suppose you and the Prime Minister are puffing out your chest, slapping each other on the back and carrying on like a pair of pork chops, are you?

TREASURER:

No, no. It's a welcome result.

MIKE:

No, I'm talking about the State of Origin.

TREASURER:

Well, let's talk about the State of Origin.

MIKE:

I thought you would.

TREASURER:

Wasn't that a terrific game from our old fellas up the front in the forward pack. We have the best back line, but what I was really pleased to see was the way those front rowers got stuck into it.

SANDY:

Clearly no match for those rookies with the younger legs, Treasurer?

TREASURER:

Well, they came on in the second half pretty well, didn't they? I mean, I think it was a great game of Rugby League. People thought it was all over at half time but it never is in State of Origin.

MIKE:

This is the informed comment from the captain of the Nambour High Rugby League team circa 1972.

TREASURER:

Something like that.

SANDY:

Well, let us talk about the real reason that we're speaking to you this morning. Technically, as we said, we're not in recession, but I suppose, Treasurer, for me and a lot of other people, the real litmus test is how many people are out of work, and there are a lot of them, and you've said yourself we'll have more. Isn't that the real test of a recession in this country?

TREASURER:

Well, we have some really big challenges. I mean, we can welcome the result yesterday. We can acknowledge that we are the strongest major advanced economy in the world. All other major advanced economies are technically in recession. Most of our major trading partners are contracting pretty severely. And what that will pose is ongoing challenges for this country through the rest of this year and into next year, which is why we put in place our battle plan. The first stage of the battle plan was those cash payments you were talking about before to families and to pensioners, to carers and to veterans, and they've certainly impacted on this growth figure. There's no doubt about that. They have been very successful. But we're not out of the woods, which is why we have put in place stage two and stage three of economic stimulus. Stage two are those 35,000 construction projects that are going to go on around the country over the next year or so in schools and housing and so on. And of course, stage three and the projects we announced in the Budget – the major economic infrastructure, road, rail, port and clean energy.

MIKE:

Okay. All good, but if you've just lost your job, with not much prospect of getting another one, or if you're in small business and you're watching your orders and your customers dwindle, you're in a recession, aren't you?

TREASURER:

Most certainly you'll be feeling the effects of this global recession, and that's why stimulus is so important. I mean, there's the view of business out there today, it's very clear they support economic stimulus because they know the importance of customers. And when you have such a sharp contraction in global demand, a sharp drop in business investment, what government has to do is to move in. And in the first instance we moved in to make sure they had some customers – and you can see that in the retail trade figures that it's just not the people that work in retail, it goes all the way through to the farm gate. Small business understands the importance of that stimulus and I think they also understand what it will mean in terms of all those construction projects that will be going on around the country. They will really boost demand for a lot of people in small business. So, there's no doubt we've got an absolutely huge employment challenge ahead of us. That's why we put these plans in place.

SANDY:

Yeah, and it's going to get worse as you say, so although the figures showed a slight growth yesterday, you would admit that we really are in recession.

TREASURER:

Well…

MIKE:

Go on, be brave.

TREASURER:

I'll leave it to others to make those judgements. Technically…

MIKE:

Go on, you're the Treasurer.

TREASURER:

Technically, it's not the case. But the reality is a very, very big challenge for Australia.

SANDY:

So, technically and the reality are two different things really, here, isn't it?

TREASURER:

That's what I'm saying. The reality is there's a big challenge for Australia as we move forward. Business investment is drying up. It's being reduced dramatically because of what's going on in the global economy. That means that government has to move in. What is also happening is the price the rest of the world is paying for our commodities is dropping significantly. That is a big and sharp contraction in national income. All of those things give us a very big employment challenge, and that's why we have moved to put in place these three stages of economic stimulus.

MIKE:

Alright. Now, big picture stuff, global picture, is there any light at the end of the tunnel? There are flickering signs of life here and there. Is China still going to grow, that sort of thing?

TREASURER:

There are some encouraging signs out there, Mike. There's no doubt that the United States financial system is stabilising. That's certainly welcome. There's no doubt that there are signs of growth in China because of their domestic economic stimulus that they've put in place – and it is quite significant. But what we have to understand is that this is a very big global event and it will certainly take some time for it to play out. What we have to do is to put in place domestic policy settings which support our people, which support employment, but also take those actions to maximise the opportunities that will come our way when global growth returns.

SANDY:

Treasurer, just a simple question from the ordinary man or woman in the street, is it going to get tougher before it gets better for us?

TREASURER:

We are certainly in for tough times, there's no doubt about that. We've clearly laid that out in our Budget. We've been frank with people about the nature of the challenge but we've also worked with the Australian people to put in place this economic stimulus. The figure yesterday was a great tribute to the hard work of a lot of people in Australia – both employers and employees.

MIKE:

And it is going to get tougher. People want to know that, level with them, be honest. It's going to get tougher, right?

TREASURER:

I've been saying that repeatedly, indeed on your program. We've got really big challenges ahead. That's why unemployment is forecast to go up in the Budget. And the nature of that challenge, and that is certainly tougher, Mike, no doubt about that. We have to be realistic about the circumstances. We can welcome this figure yesterday because we can see that economic stimulus has had an impact on growth, and that's good, and what we have to do is put in place the plans to deal with this international challenge – and that's what we're doing.

MIKE:

Alright.

SANDY:

Thank you, Treasurer, for your time.

MIKE:

Are you sleeping better at night now?

TREASURER:

I am sleeping a little better, and particularly last night.

MIKE:

Yeah, alright. Thanks for that. See you later.