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Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

28 January 2011

Interview with Steve Vizard

Melbourne Talk Radio

28 January 2011

SUBJECTS: Flood Rebuild

VIZARD:

The Treasurer, Wayne Swan, joins me now. Treasurer, thanks for your time.

TREASURER:

Good morning Steve, it's good to be with you.

VIZARD:

Terrific to be with you. A strong and mixed response Wayne. I want to start with the name of it. The Prime Minister yesterday avoided the use of the word tax. It is a tax, isn't it?

TREASURER:

Yeah, it's a temporary tax – it's a temporary levy. The previous government had something like six temporary levies at various stages of their 12 years in office and indeed the Leader of the Opposition ran around in the election campaign with what he called a levy, which want temporary but was going on top of company tax. But it is a temporary levy, or a temporary tax, I don't really want to split hairs about it because it's too important for that.

You before referred to the fact that many people have already made donations and Australians have been very generous and that's been required, and that all goes to the Premier's relief fund to deal with the personal distress of many people. What we're dealing with here is something entirely separate, which is rebuilding communities, rebuilding the roads, rebuilding the railway lines, rebuilding the schools. Of course for that, the Commonwealth – if this happened in Victoria, or in Queensland, or anywhere else in Australia – is responsible for about 75 per cent of the bill.

So here we've decided that we've got to fund this as we go because our economy is strong and one of the ways we can do that is with a very modest temporary levy or tax as you've called it. Because 60 per cent of taxpayers will pay less than $1.

VIZARD:

Just on the question of those charities, many people have donated. Large funds have been set up including the Red Cross – Ron Walker heading it down here. Do you expect a further dollar to go into any of those funds now that a levy has been imposed?

TREASURER:

I certainly do. We're working with the corporate community and they have been magnificent because they understand that many things have to be done. We've got to help the individuals rebuild their homes. We've got to help them re-establish their lives. But for all of that to work, it has got to be beyond the front gate, we've got to rebuild the community as well.

And this event has been unprecedented. I think when all the numbers are in, we'll see in economic terms that this has been the biggest natural disaster in our history and a responsible government has to do something about that, we have to act quickly to give people the certainty about rebuilding their lives and rebuilding their communities, which is why we made the announcement yesterday.

VIZARD:

It didn't get much support from Reserve Bank Board member, Warwick McKibbin, who hoed into you basically saying your refusal to budge on your commitment to return the budget to surplus by 2012-13 has forced you in a sense, quite apart from cut backs, to look at an impost. He says you could have adjusted that target. He said the worst thing you could do is to stick to a fiscal deficit target for no reason except that it's a political target. Your response to that?

TREASURER:

A very political statement from Mr McKibbin because he's been making statements right through last year which have been exactly t he opposite of what he is saying now, but I don't want to get too fixated on Mr McKibbin. He doesn't speak for the Reserve Bank Board at all and that's been made very clear in recent times. But we've got a responsibility to make sure that when our economy is strong that we keep our public finances strong. And as the Prime Minister said yesterday, we should pay as we go. Of course as we go forward we've got the capacity to create jobs. We've got a mining boom, we've got to deal with all of those things and the responsible thing to do in this environment was to change priorities in our Budget and also put in place a modest levy so we can get cracking in fixing up Queensland.

VIZARD:

And there is no political consideration about a forthcoming election 2012-2013 and just wanting to meet that political commitment?

TREASURER:

Well, I've never noticed that putting a levy on is terribly popular. So we haven't been driven here by the politics, we've been driven here by the need and also by the economics to do the responsible thing to respond to the Queensland community and indeed the national community which affects us all. So we've been driven by dealing with a situation - that's what people elect governments to do, and sometimes you do things that aren't popular but they're right. They're right for the short term and they're right for the long term.

VIZARD:

At this extraordinary time Treasurer, did you consider looking at one of the most extraordinary pieces of infrastructure and extraordinary pots of dough within your budget – that's the NBN – and either cutting or substantially deferring that as a potential source of funding?

TREASURER:

Any responsible person who wanders around the country and claims to understand budgeting and says that by scrapping the NBN we would have billions of dollars to spend on flood relief doesn't know what they're talking about. It's simply not there and it's one of the great furphies that is being pedalled particularly by the Opposition because they won't front up to the very hard task of finding the savings and the means to fund relief in Queensland. The fact is, if it was cancelled tomorrow we wouldn't have billions of dollars to spend on flood relief. And on top of that, what we would do is weaken our economy for the long term. And I can tell you this, that up in regional Queensland they want that NBN because it's like having a road for the future.

VIZARD:

On the expenditure side Treasurer, the delivery side of this money as it's collected, some criticism based on the government's track record, particularly looking at school halls program, $16 billion spend there and the like. Give the public some assurance about the delivery of this new infrastructure build based on their view of prior track record.

TREASURER:

Well, first of all I would say Australia has great value out of the Building the Education Revolution program. Go out to all of the halls around the country – yes, you'll find one or two projects where there's been problems – but overwhelmingly Australians have got great value for money. I just reject that all together. I've been to so many of these projects around Australia. Yes, there's been a campaign, opportunistically run by the Opposition on this issue, but that was great value for Australia and we do need to make sure there's great value in what we do up here and that's one of the reasons that as part of this program we're changing our priorities in terms of building times of other infrastructure because we've got to be able to do it all.

I understand people like transparency and we've set up the Reconstruction Authority in Queensland, the Queensland Government set that up. There's Commonwealth representation in that. There's a first class Major General running that organisation and there will be all the transparency that people want in that organisation with its money spending.

VIZARD:

And finally Treasurer, yesterday's speech, I thought it was a statesman like speech by the Prime Minister but from a Victorian point of view, she didn't mention Victoria once in –

TREASURER:

Well, she's been talking about it all the time. She is there today and I've been talking about it right through yesterday and today. We haven't in any way forgotten Victoria and there's money in here for Victoria.

VIZARD:

Thanks for your time. Appreciate it, Treasurer Wayne Swan. Look forward to talking to you again.

TREASURER:

Good on you.