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

29 January 2011

Interview with Andrew O'Keefe

Chanel Seven, Weekend Sunrise

29 January 2011

SUBJECTS: Floods Rebuild

O'KEEFE:

The Treasurer joins me now. Good morning, Treasurer, and thanks very much for joining us.

TREASURER:

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

O'KEEFE:

Good to hear. Every major economist, we are led to believe, thinks that this levy is unnecessary. The public from what we're gathering also seem to be quite firmly against it at this stage. Why are you going against the grain, Treasurer?

TREASURER:

Well, we are having a vigorous debate about it, but I wouldn't agree with your conclusion that everybody is opposed to it. I think Australians do understand the need not just to rebuild households but also to rebuild communities, and what the levy is for is to rebuild the essential community infrastructure that has been destroyed, not just in Queensland, but also in parts of Victoria and parts of northern New South Wales. The Commonwealth meets 75 per cent of that bill. That bill is in the billions.

So, it's a very modest levy, 6 in 10 taxpayers will pay less than $1, but I do acknowledge that there is some community misunderstanding about the amounts of money involved here. Someone yesterday was telling me that they were at the supermarket and the lady at the checkout said she would be paying $10 a week. That lady at the checkout would probably pay nothing. She'd certainly pay less than $1, and if you earn $80,000, it's $2.88, which is less than the cost of a cup of coffee.

O'KEEFE:

Well according to the scales that we have, the average earner will pay about 96 cents a week, which does sound like a very modest contribution, Treasurer. So you've got a huge job on your hands by the sounds of it, to sell this package.

TREASURER:

Well, we've got a responsibility to do the right thing by households, by the people of Queensland, but also the right thing by the economy in the long term. The economy is relatively strong at the moment. The right thing to do is to keep our public finances strong so that if we have future events, we can actually deal with those effectively.

So we are doing the right thing by households – a modest levy. We're also finding savings elsewhere in the budget because this is a big bill – $5.6 billion. But what we do by putting in place a modest levy, making savings in the budget, is that we rebuild our community infrastructure which is what makes communities work.

This morning I'm going out to see the people at Goodna, 600 houses there were flooded. The voluntary work that's going on out there, the in-kind business donations, all of that is still required. We've also, on top of that, got to rebuild the community infrastructure.

O'KEEFE:

Alright. Now, Treasurer, just on a couple of those points. Firstly, there have been many natural disasters in the past in Australia. The question we're being asked most often on our email is what separates this from the others? Why this levy now?

TREASURER:

Because in economic terms it's far bigger than all of the others. Some people compare it to 1974 in Brisbane, this is much bigger than 1974 in Brisbane because Queensland is twice as big and Brisbane is twice as big. So the impact is bigger. The impact here has been very significant in agriculture, very significant in mining, and very significant because a very large area has had all of its community infrastructure destroyed, or parts of it.

O'KEEFE:

Indeed. Now, I'm just reading from an email here, it says "the government seems to be slightly out of touch with the people that they are taxing. Middle and higher income earners are generally asset rich – cash poor, and being stung by the levy at the same as increasing interest rates and general living costs is going to hurt much more than the government imagines". How do you respond to that?

TREASURER:

Well, first of all, it's a very modest levy and it is based on the capacity to pay. There have been three lots of tax cuts over the last three years and people who are on middle and higher incomes have had larger tax cuts than people on low incomes. This levy is a very, very small proportion of the tax cuts that have been delivered over the last 3 years and indeed over the last year.

O'KEEFE:

Just quickly before we go Treasurer, two points. Number one, you mentioned that there will be savings elsewhere in the budget. I notice some of these savings are coming out of green initiatives. Is this a hood or is it a handy way of junking some policies which haven't been popular for you?

TREASURER:

No, it recognises that the situation has changed. Since the election we have sat down with the Independents and the minor parties, and the wider community. We're going to work our way through a carbon price. That's a more efficient way of dealing with carbon reduction than some of these schemes and that's why we've moved on these schemes right now.

O'KEEFE:

Okay, and the final question I want to ask is this; in the wake of the Victorian bushfires there was an outpouring of giving by Australians and that was wonderful to see, however it didn't come without costs. Other charities which were not bushfire related suffered enormously because people moved their charity dollar to that one event. Are you concerned that that is going to happen here? As people are levied for the floods, they will stop giving to other causes.

TREASURER:

I am not necessarily concerned that this very modest levy will have that impact. But I am concerned that there will be some charities out there that may experience a reduction in giving because everybody turns all of their attention to the floods. The fact is we need to give more to assist people with the floods, to assist those households that have been shattered, but we also need to be mindful of the traditional charities who do such fantastic work in our community and keep up our effort there as well.

O'KEEFE:

Well, Treasurer, unfortunately that's all we have time for. I'd love to keep chatting with about this but thank you very much for joining us this morning and explaining your position.

TREASURER:

Good to be with you.