The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
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Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

21 June 2011

Interview with David Speers

Sky News Channel

21 June 2011

SUBJECTS: Carbon pricing; RBA board minuteson government's fiscal policy; Coalition's attempt to block mortgage exit fee ban; jobs; economic reform; polls

SPEERS:

Can I start with these calls for a plebiscite on the carbon tax. Why don't you want the Australian people to have their say on this?

TREASURER:

Well first of all I think Tony Abbott has made a complete mess of this. First of all he says he wants a plebiscite, then he says he won't abide by the result. The fact is we've put forward a policy, we're going to put it in place, we'll be judged on this at the next election. That's how it should be.

SPEERS:

It's too late then, the thing would have been introduced?

TREASURER:

Pricing carbon is something the Government is committed to. We've had a long-term commitment to it. Both sides of politics have a long-term commitment to it -

SPEERS:

You said there wouldn't a carbon tax - you've said there would only be a price on carbon if there was deep and lasting community consensus?

TREASURER:

Well, we've put in place through the Multi-Party Committee that consensus, that's what we said we'd do and that's what we've been doing.

SPEERS:

That's political consensus?

TREASURER:

Well what we've got on the other side of politics is a complete change of mind. So they've gone feral. I mean, they used to believe in emissions trading, they used to believe in the science of climate change. They don't believe in it anymore (inaudible) -

SPEERS:

You used to believe in community consensus, that's what you told us. Wouldn't a plebiscite allow you to honour that promise?

TREASURER:

I don't believe that's a constructive way to go. And we've seen from the behaviour of the Leader of the Opposition it is not the way to go. He himself has said he wouldn't value a result if it was against his opinion. I mean that is just bizarre. And I think it just demonstrates just how out of control the Liberal Party has become under the leadership of Tony Abbott

SPEERS:

But back onto you, how do you get this community consensus?

TREASURER:

Well we've got to get out there and argue our case. We've been through the Multi Party Committee. What we've got to do is get a final proposition then we go out and argue it street by street, stump by stump. That's what we'll do.

SPEERS:

And you'll get that after you've put the carbon price in place?

TREASURER:

Well of course we've got to get a detailed proposal out there. We've put in place a framework. We've got to put the flesh on the bones if you like. We're working as hard as we possibly can to do that. When we've got agreement we'll be able to announce a process. We'll be able to put all the detail out there and we'll be delighted to get out there on the stump and have this discussion.

SPEERS:

Just on the negotiations, they're in the final stages. There are a number of key sticking points with the Greens. One of them is compensation for coal mines. Will any coal mines close as a result of the carbon tax?

TREASURER:

Well first of all I'm not going to get into the detail of negotiations. I'm not going to go into what is being discussed in the Multi Party Committee, that would be a breach of faith. I don't intend to do that. But the detail will be out there soon enough -

SPEERS:

But can you tell coal miners whether any jobs are going to be at risk?

TREASURER:

Well what I can say is that there's going to be very strong growth in coal mining employment in Australia in the next few years.

SPEERS:

Does that mean mines close?

TREASURER:

Well we've got the ABARES data out there today which proves this yet again, there is data, investment data which all indicates a very strong future for our coal industry. In fact, if we don't get a price on carbon there are implications for the growth of our coal industry. We could face trade sanctions if we don't actually put in place a price on carbon. We're strong supporters of the coal industry, it's very important to get the investment in the clean coal technology, a price on carbon will drive that as well.

SPEERS:

Can I turn to the bank exit fees - you want a ban on these exit fees, well, it's due to kick in, in fact from July 1 -

TREASURER:

Well, the Opposition is seeking to overturn the ban on exit fees that we announced when we put forward our banking reform package at the end of last year.

SPEERS:

They're worried about the smaller lenders, how this is going to hit them, and so is Nick Xenophon. The key here is going to be Steve Fielding, the Family First senator. Do you know which way he's going to go?

TREASURER:

No I don't, but some of the smaller lenders are the worst offenders. You see, some of the smaller lenders are running very high mortgage exit fees. If they've got a business model that relies on that fee structure, then it's not a business model which delivers fair value.

SPEERS:

So if this does hit them very hard, what's that going to do to competition in the industry?

TREASURER:

Well, you can't have competition if there are large unfair mortgage exit fees stopping people from moving down the road to get a better deal because they're locked into uncompetitive arrangements which cost them a lot of money.

SPEERS:

Can I ask you about the Reserve Bank board minutes, they were out today looking at their last meeting. They seem to indicate that rates will stay on hold for a while yet. Do you welcome that news?

TREASURER:

Well, certainly I read them and I always read these with great interest because they particularly highlight the fact that fiscal policy or Government Budget policy is really doing the heavy lifting that is required given the size of the investment pipeline that we are anticipating. So we've got this very large fiscal consolidation in place over two years, that is recognised in the minutes that being very significant.

SPEERS:

Does that mean that rates will stay on hold?

TREASURER:

These are decisions for the Reserve Bank, they take these decisions independently, but what they have confirmed in these minutes is that fiscal policy, Government Budget policy, is playing a pretty important role.

SPEERS:

They also say that conditions are quite subdued in the non-resources sector. How worried are you about retail, housing, manufacturing? There are some tough times there.

TREASURER:

Well, we saw in the recent National Accounts that we've got short-term softness, but we've got medium-term strength. Consumption I think in the recent National Accounts surprised some people. They were a bit stronger than they thought. But there's no doubt that it is soft in retail at the moment because Australians are saving a lot more, and we're also living with the impact of a higher dollar. So it's that patchwork economy that we talked about in the Budget. What we've got to do is prepare the country for this investment pipeline, but we've also got to recognise that not everybody is in the fast lane.

SPEERS:

Final question; it's the anniversary this week of course, of Julia Gillard replacing Kevin Rudd and also your ascension to the position of Deputy Prime Minister. The three issues that Julia Gillard nominated when she took over which needed to be fixed - the carbon tax, the mining tax and asylum seekers - still haven't really been settled. Are you surprised that Labor's primary vote is now lower than it was 12 months ago?

TREASURER:

We're getting on with the job of fundamental reform. We're taking the significant decisions and we are doing that as quickly as we responsibly can.

SPEERS:

Has it taken longer than you thought?

TREASURER:

No I'm not surprised by carbon pricing. I mean this is a very, very big structural change in our economy. But what we're doing in other areas is very important. I mean, the most recent Budget was absolutely critical to everything that we aspire to. And what we've seen in strong job creation over the past year up to 250,000 jobs in the past year, 740,000 – 750,000 jobs in the period that the Government has been in office. These are all important outcomes, and record investment pipelines. So I think we've got a pretty good record when it comes to the economy. We're working hard to get the regional solution in place -

SPEERS:

The polls keep falling though. How low can they go?

TREASURER:

Well, I don't concern myself with polls on a week to week or month to month basis.

SPEERS:

The trend is not good?

TREASURER:

Well, but the most important thing is to get the decisions right for the country. That's what is motivating the Prime Minister, myself and the whole Government, and sometimes you will go through periods where you'll see polling like this, but the most important thing is for us to put in place the framework for future prosperity and to spread the opportunity. And compare that and contrast that with the vacuum that lies at the core of the modern Liberal Party. There is a lot of negative politics being played at the moment but at the end of the day the public will pay on results.

SPEERS:

Treasurer Wayne Swan, thank you.