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

5 May 2011

Interview with Kieran Gilbert

Sky News

5 May 2011

SUBJECTS: Budget 2011; Skilled migration; Carbon price

GILBERT:

Treasurer Swan, thank you very much for your time. What's the aim of this, your fourth Budget, in general terms?

TREASURER:

To get the Budget back in the black, to get more Australians in work and to spread the opportunities of the mining boom. As you know, we will bring the Budget back to surplus in 2012-13. We know that unemployment can drop to 4.5 per cent. We can create something like 500,000 additional jobs in the next couple of years, and of course we've got a mining boom – and we've got to make sure that all Australians participate in the benefits of that boom, and that's why it's very important to build a better and bigger workforce.

GILBERT:

There are reports today that the Government's looking at 30,000 Indian trained graduates as part of that, to deal with the skills (inaudible) Mining Boom Mark II. Is that something the Government's looking at?

TREASURER:

Well, what the Government is going to do is train Australians, that's what we're going to do, we're going to make sure that Australians can participate in the benefits of the boom and that many Australians who are currently excluded from the workforce have the opportunity to participate, to get the skills, to build that bridge between being out of the workforce and going into the workforce, to get the training opportunities. All of those things are very central to the Budget.

GILBERT:

The Australian Industry Group and others are saying that the Government needs to look beyond just training, it needs to look at migration increases and so on. Is the Government going to do that?

TREASURER:

Well, certainly - first and foremost we'll train Australians but of course there are workforce shortages and we do use temporary migration and permanent migration to fill those gaps. But our first objective and our first responsibility is to train Australians. And there are too many Australians who could participate who are not participating in our workforce at the moment and in particular there are some concentrations of intergenerational welfare dependence in parts of the country that we need to deal with. We need to help those people back into the work force, and that's a key objective of the Government.

GILBERT:

But on that issue, the Prime Minister is announcing a trial crack down on welfare parenting payments for teenage mums who don't go back to school. They'll be punished by having their parenting payments removed if they don't do some sort of training or schooling. Aren't you punishing the children in these cases? How are they going to feed their kids?

TREASURER:

It's not a question of punishment, it's a question of providing opportunity. I've written a book called Postcodes, about the concentration in parts of Australia of whole groups of people, not just teenage parents, but people who have been out of the workforce, the long-term unemployed and other groups of people who need the opportunity to participate, because a lifetime on welfare is not the life that we wish for many people in our community. They need the opportunity to participate, to earn a wage, to get into the workforce, and to demonstrate the world of work to their children.

GILBERT:

If you take away the parenting payments to teenage mums, how do they feed their kids?

TREASURER:

Well they have an obligation in the first instance to participate in the workforce, and of course for their children a lifetime of dependence upon welfare is not the future that we would wish for them, and I'm sure their parents wish for them.

GILBERT:

Reports today, or last night, and again today, that HECS, the discount for early payment will be halved from $20,000 to a $10,000 discharge. Isn't that contradicting your overall message about wanting to boost training to get people into skills, training and education?

TREASURER:

Not at all, but I'm not going to speculate about the accuracy or otherwise of stories like that. There will be plenty of them between now and the Budget. The Government's central objective has been to build the best educated and trained workforce in the world, and of course you can see now there's been a very significant increase in university enrolments as a result of us uncapping places, something like a 10 per cent increase in the past year or so. We're absolutely determined to make sure that real Australians have the opportunity to participate in tertiary education and to get the career and the salary and the security that comes from a high level of educational qualification.

GILBERT:

The Opposition says that this reflects a mixed message, in fact that there are a number of muddled messages that you're articulating in the lead up to this Budget. That you're saying it's going to be a tough Budget on the one hand and yet you're saying you're saying you're handing out cash to teachers, for parents to keep children in schools on the other hand. So you're (inaudible) out the cheques but you're saying it's a tough Budget?

TREASURER:

The only muddled messages here are from Mr Hockey who said, I think yesterday, that he was going to bring the Budget back to surplus next year. Mr Hockey is going to be in deficit for every year of the forward estimates. So Mr Hockey's got a very big task when the Budget comes through next week, to demonstrate where he's going to make the savings because, as you know, he failed that test during the recent election campaign, an $11 billion hole in the Opposition's savings program, and of course they've been out there making more spending commitments.

So Mr Hockey has said that he can bring the Budget back to surplus. Well, he ought to demonstrate how he can do it and how he can do it by next year, because there's not an economist in the country that believes that Mr Hockey can do that. What we are going to do is to bring the Budget back to surplus in 2012-13. We're going to do it through strict fiscal discipline, we're going to do it through our expenditure cap and it's a tough task, particularly given the fact that there have been very substantial revenue write downs as a result of the Global Financial Crisis, and now the natural disasters and the patchwork economy.

GILBERT:

And particularly given the fact that that you're still handing out cash, you're handing out cash to teachers, to parents?

TREASURER:

No what we are going to do is fully fund all of those commitments. We've got a very strict fiscal discipline in place, a 2 per cent expenditure cap –

GILBERT:

But are they mixed messages?

TREASURER:

No they're not mixed messages at all –

GILBERT:

You're saying, okay we're going to continue the payments on that side –

TREASURER:

It's a question of priorities, and for every expenditure commitment we make, we make space elsewhere in the Budget to make room for those priorities. For example, the additional payments to parents with teenagers at school – absolutely critical to our message that teenagers ought to learn or earn. And keeping kids at school and giving parents a hand a hand to do that goes to the core of what we need to do for this country to make the best educated and trained workforce in the world. That's our priority and we will make changes elsewhere in the Budget to make room for that.

GILBERT:

Deloitte Access Economics says that the Budget is based on fragile, sound foundations, on the mining boom and that that's not going to last forever. If there's another down turn that would blow your surplus out of the water.

TREASURER:

I've read the Deloitte Report and it doesn't say that the economy is fragile. Our economy has strong fundamentals and the strong fundamentals came about because we avoided a recession because we moved to support employment and to support small business during the global recession. So we start the mining boom from a position of strength. And yes, they like to point to the fact that India and China and high resource prices are important, but what we've got in place is a very strict fiscal discipline, and that expenditure cap is what brings us back to surplus and puts us in a stronger position. That's not something the Opposition can say they can do.

GILBERT:

Two questions just to finish. On the carbon price, the Prime Minister met with business and industry leaders last night and again today. Westpac Chief , Gail Kelly, says uncertainty isn't helping and in fact it's hurting some of her customers. What do you say to that?

TREASURER:

Well, I see Gail Kelly does support an emissions trading system. She has been personally, a strong supporter. Her company has been a strong supporter of an emissions trading system for some time. That's precisely why the Government is moving to put in place an Emissions Trading Scheme as quickly as we can, because business does need certainty.

GILBERT:

But they don't have it at the moment, do they?

TREASURER:

They are going to get certainty because we are moving to put an emissions trading system in place as quickly as we responsibly can. We need to do that so investors have the certainty to invest particularly in renewable energy.

GILBERT:

One last question, is the Budget, is everything finalised? Or are you still crunching the numbers?

TREASURER:

We're down to putting the finishing touches to the Budget, but yes it's largely finalised.

GILBERT:

Treasurer Swan, thanks for your time.

TREASURER:

Good to be with you.