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

3 November 2009

Interview with Lyndal Curtis

ABC Radio AM Program

3 November 2009

SUBJECTS: Mid-Year Economic and Fiscal Outlook; Newspoll

JOURNALIST:

Treasurer welcome to AM.

TREASURER:

It's good to be with you Lyndal.

JOURNALIST:

You've got good economic figures to trumpet, but isn't the reality for people that they won't feel much like celebrating because they're facing higher interest rates - likely to get even higher today - at a time when their working hours are still lower than they'd like.

TREASURER:

Well, Lyndal I don't speculate about interest rates; they're matters for the independent Reserve Bank board. But the Governor has made the very obvious point that interest rates cannot continue to stay at 50-year lows forever. But I think Australians can be proud of what they've achieved through this global recession, and what we have achieved is the fastest growth of any advanced economy, lower unemployment - bar one - of any advanced economy, with lower deficit and lower debt. So I think Australians have had a pretty good bang for their buck in terms of economic stimulus.

JOURNALIST:

But higher interest rates are a side-effect of that success - aren't they? And business too will have to cope with them, and a rising dollar. Is the prospect that, unlike previous downturns where the struggle afterwards was to get jobs back, that in this one the struggle will be to get those working hours back?

TREASURER:

Well Lyndal interest rates are something like 350 basis points below their peak under the Liberals. So interest rates are low by historical standards. The Reserve Bank Governor has made the very obvious point that as the economy recovers, then of course interest rates will begin to rise. But they are still very low by historic standards, and many Australians are benefiting from those very low rates. But, of course as the economy begins to grow, fiscal stimulus is gradually withdrawn and, of course, the Reserve Bank independently takes its decisions about the future course of monetary policy.

JOURNALIST:

You decided to give your stimulus spending a trim yesterday but not a big cut. Is the decision to cut back on the stimulus in the wake of better economic prospects still too hard of a decision to make?

TREASURER:

We've taken the hard decisions and, of course, in this Budget we've offset all new spending.  But the stimulus is still very, very important, because if you have a look at all of the data contained in the update, you'll see that the investment outlook, private investment outlook, is still weak. You see the very big hit to national income that comes from the cut in prices that we are receiving for our commodities.

Unemployment is still expected to rise, and as you have correctly identified, there are many people out there that are working less hours. If you look at the reduced hours that Australians are working and you add them all up, that's something like 200,000 full-time positions. So the economy is still operating substantially below capacity, and because of that, we decided it was appropriate to continue with our stimulus, albeit withdrawn, as we go through next year, to make sure that we can keep the doors of small business open and do the maximum amount we possibly can responsibly to support jobs in the Australian community.

JOURNALIST:

Did you consider though a bigger cut to the stimulus?

TREASURER:

We certainly had a look at the outlook. We had a good hard look at where the economy was going internationally, we had a good hard look at what was happening domestically and it was our judgement that we've struck the right balance by maintaining our stimulus which of course is gradually withdrawn as we go through next year.

JOURNALIST:

Your Government has suffered a slump in the latest Newspoll – the first time the parties are level pegging on primary votes since 2006. Is that because people don't like your asylum seeker policy, or don't think you're handing it well?

TREASURER:

Well, I don't have to worry on a daily or weekly basis about opinion polls because what I'm concerned about is the national economic interest. I've been concerned in the last 24 hours with putting out our Budget update and, of course, I'm going to the G20 Finance Ministers' Meeting in Scotland at the end of the week – they're the matters …

JOURNALIST:

But don't you have to take heed of the sharp public reaction to a policy?

TREASURER:

The polls come, and polls go. They go up, and they go down. I don't take a great deal of notice of them when they're on the upside, and I don't take a great deal of notice when they go down. The most important thing here is to focus on the national interest, whether it's the national economic interest, whether it's dealing with dangerous climate change, or whether it's dealing with border protection.

JOURNALIST:

So you don't see any need to change any element of your border protection or asylum seeker policy?

TREASURER:

Well, certainly we won't be changing our policies in response to weekly opinion polls. That's not the way we govern. We govern in the national interest.