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

7 February 2011

Interview with Kieran Gilbert

AM Agenda, Sky News

7 February 2011

SUBJECTS: Flood Levy; Cyclone Yasi; Welfare; Health Reform; Climate Change

JOURNALIST:

Treasurer Wayne Swan, thanks for your time. This poll today, the Newspoll, suggests that a majority, 55 per cent, support the flood levy. That must be encouraging for you.

TREASURER:

Well, I don't need an opinion poll to see that Australians are pulling together at this time of great need, particularly in Queensland. We've seen a fantastic community spirit. We've seen volunteers come from everywhere. We've seen Australians drive from Sydney and drive from Melbourne to go and help people they don't know to set up camp, to help whole communities. So I'm not surprised that there is so much strong support for the levy in the opinion polls. And the Government doesn't approach this question from the point of opinion polls. We do what we do because it is the right thing to do. The right thing to do by Queensland in particular and the right thing to do by keeping our economy strong and our public finances strong.

JOURNALIST:

The rest of the polling shows that the Government has got a fair bit to do though to restore a bit of trust in the electorate and the primary vote, 32 per cent, and the Prime Minister's approval rating down as well. It's got to be a bit of a worry.

TREASURER:

I think what Australians have seen is a prime minister with the courage and the conviction to do what's right. And that's what Julia Gillard has done over the past couple of months. She's responded, not worrying about opinion polls, not worrying about personal popularity, but by getting stuck in to the issue and I think that's what counts at the end of the day.

JOURNALIST:

It's going to be a bit of a slog, is it? To get those numbers back up, a bit of a hard slog?

TREASURER:

I don't get too focused on one-off opinion polls. I never have and I never will, but the most important thing to do is what is right, what's right by the people and what's right by the economy.

JOURNALIST:

Treasurer, you've said that the floods will wipe off half a per cent of GDP in 2010/11. With Cyclone Yasi, that's obviously going to be significantly more than that?

TREASURER:

Well, yes, it will certainly make it even worse but we should never forget that despite all of this damage - and it does require a very big rebuild - the fundamentals in our economy, the underlying fundamentals are very strong. The most important thing is to get our response to the rebuild right and the Government's working very hard on that in terms of the financing and as well as the administrative arrangements. We've got to get that right, but we've also got to get on with the job of reforming our economy to make it even stronger to put us in a better position to respond to the challenges of Mining Boom Mark II so we can maximise the opportunities that flow from strong growth in Asia.

JOURNALIST:

On that front, the May Budget, apparently the centrepiece of that Budget is going to be welfare reform. What specifically are you considering and will the Tax Forum address that?

TREASURER:

Well, of course there is and I don't speculate about what is going to be in the Budget. It's started a lot earlier this year than it normally does. The most important thing the Government is going to do is to make sure that we meet our objectives and bring the Budget back to surplus and that we put in place a very significant reform program. That includes health reform, it includes the National Broadband Network, which is so important to lifting productivity in our economy. It means working cooperatively with the community to put a price on carbon so that we can get the investment we need, particularly into our electricity sector. All of those things are pretty important but of course there are many other reforms as well.

JOURNALIST:

Workforce participation and welfare reform have been close to your heart for a long time. And so that, those reports are, you'll obviously be rejecting those reports they have been around for some time. Julia Gillard last week spoke about the need for workforce participation reforms as well.

TREASURER:

Well, she talked about a participation agenda, which is very important. We have very low unemployment in Australia, our economy will continue to strengthen, so we've got to have a set of public policy arrangements which encourage participation. The Government has already put in place over time some very substantial welfare reforms. The Prime Minister has made it very clear that we need a participation agenda. We've certainly got to remove some of those roadblocks that may be there that impede participation in the workforce.

JOURNALIST:

On the issue of paying for the flood reconstruction, if we go back to that area around the flood levy, the Shadow Cabinet today, Tony Abbott's Shadow Cabinet is considering $1.8 billion in cuts, according to reports in the West Australian newspaper. Andrew Probyn is reporting that $480 million will come from apparently cuts to the BER program, projects that haven't been completed, also deferring some of the water buybacks. Now why doesn't that make sense? I mean there is water everywhere at the moment.

TREASURER:

Well, Mr Abbott, Mr Hockey and Mr Robb have absolutely no credibility when it comes to making savings in the Budget. They are already blocking $5 billion worth of savings that the Government is putting forward. Secondly, during the election campaign, $11 billion of their savings were found to be fraudulent. They were ruled out by the Department of Finance and the Department of Treasury. When it comes to Building the Education Revolution, 99.9 per cent of those projects are either built or have commenced. So I don't know what Mr Abbott and Mr Hockey intend to do whether they want builders to pull up stumps half-way through the completion of a building. I'm sure they wouldn't find that very palatable in their own electorates. So the fact is that the BER is fully committed and it's been a very important program for Australia because it kept our construction industry going at a time when things were very soft. It kept tens of thousands of tradies and small businesses in work. They've run it down right through that period, irresponsibly, and now they're going to try and claim it as a saving, when in fact 99.9 per cent of that program is either finished or in construction.

JOURNALIST:

What about the water buybacks, that seems to make sense if there is so much water around at the moment? Why not at least defer some of those water buybacks to save a bit of money?

TREASURER:

Well, I'm not going to buy into speculation about what they're saying. I'll wait and see and I'll look at what they're proposing.

JOURNALIST:

Health reforms ahead of the COAG meeting have also generated some talk. Is the Government still committed to assuming 60 per cent responsibility for the health system?

TREASURER:

We're absolutely committed to health reform. We've got to sit down with the states at COAG and go through all of that detail again. We've got to work our way through with the Premiers but we are very much committed to health reforms. And we'll be talking to the Premiers about that at COAG.

JOURNALIST:

But that is 60 per cent of the bottom line, you want to be the majority funder, as a fundamental part of that reform?

TREASURER:

Well, I think funding health reform for the long term is absolutely critical to Australia. That's what the Intergenerational Report found. We've got to get value for money out of the health system and get quality outcomes as well. But we'll sit down and talk through all of those issues with the Premiers at COAG.

JOURNALIST:

So that 60 per cent figure is open to negotiation?

TREASURER:

No, no, I'm not saying that at all. I'm just not going to speculate about the outcomes of the COAG meeting that hasn't taken place yet.

JOURNALIST:

What about the issue of compensation for big emitters, this is another discussion point at the moment with the Greens particularly. Yesterday, the Prime Minister said she might not necessarily throw out all the work that was done with the CPRS in terms of the business compensation framework. Christine Milne says that simply that won't fly.

TREASURER:

Well, we will work our way through these issues through the Multi-Party Committee. That's the process we're committed to and it's a very important process. It's very important economically for Australia to put a price on carbon so we can get that investment pipeline really going, particularly with the electricity sector. That's all very important, and we'll work our way through all the associated issues through the Multi-Party Committee.

JOURNALIST:

Apparently Rio Tinto and other organisations have been encouraging the corporate sector to lobby and lobby hard and to ensure that they do get a generous compensation regime. Are you surprised by that at all?

TREASURER:

Well trade-exposed industries will put their case as will everybody else. There's always been a lot of lobbying going on around climate change – that will continue.

JOURNALIST:

And you're not fearful of that given the effect their campaigns had in terms of the mining tax?

TREASURER:

No, I'm not fearful about that. I'm pleased with the progress that is being made. We're serious about getting a community consensus in this critical area and that is also going to require all sectors to come together at the end of the day.

JOURNALIST:

Mr Swan, I appreciate your time.