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

27 June 2011

Interview with Kieran Gilbert

Sky News

27 June 2011

SUBJECTS: Carbon Price Assistance; Battlers' Buffer; Liberal Unfunded Tax Policies; European Debt Concerns; Global Economic Outlook

GILBERT:

Treasurer, thanks for your time.

TREASURER:

Good to be with you.

GILBERT:

The Government has confirmed a buffer for low-income earners in terms of the compensation for the carbon tax. Isn't all of this diminished though because we still don't know the starting price for that said tax?

TREASURER:

Well, we've been going through quite a methodical process. We've put the framework out there. We're talking about the principles on which we're going to operate. Household assistance is very important, particularly when it comes to low-income earners or households on low incomes. We think it is very important there is a 20 per cent buffer for those households because they don't have a lot of room to move when price increases occur. It can have a dramatic impact when you're on a low income. So we think a 20 per cent buffer is a pretty important thing to do.

GILBERT:

So what sort of dollar amount are you talking in that sense?

TREASURER:

Well, all of that will be available when we finalise the package. We just think it's really important to say to low-income households that there will be a 20 per cent buffer there just to ensure that if it's a particularly cold winter and they use a bit more power than they normally do, that they do have some room to move.

GILBERT:

But the more the compensation, the less the impact though in terms of the policy as a whole. Isn't that fair to say? It's not going to change people's behaviour.

TREASURER:

Well I think people's behaviour does change because relative prices change. Some people have less capacity to change their behaviour than others and that is generally true of people on lower incomes, but if people can change their behaviour then of course they can save some of the additional assistance. So it does change behaviour when relative prices change.

GILBERT:

The compensation though is a one-off. The tax, the way it's designed, and once it's an emissions trading scheme it's going to be moving all over the place.

TREASURER:

Well, I know that's the scare campaign that Mr Abbott is running at the moment but the fact is we are putting in additional assistance. That additional assistance will be ongoing. It will be delivered in a variety of ways either by tax cuts or by changes in family assistance or by changes in family assistance as well or some combination of all of those.

GILBERT:

So they will be flexible?

TREASURER:

Well, you'll have to see the final detail when it's published, but we understand that people will need ongoing assistance and of course that will be provided.

GILBERT:

Okay. The tax cuts that Mr Abbott has offered without a carbon tax. It sounds quite appealing in terms of the politics…

TREASURER:

Well, I don't think it does.

GILBERT:

You're offering the Treasury, but isn't offering the Treasury a political stunt in your own tent?

TREASURER:

I don't believe so. I'm going to write to Mr Abbott and Mr Hockey today offering the resources of Treasury because you can't be fair dinkum about tax cuts unless you say how you're going to fund them. Now we've already had a recent experience of Mr Hockey and Mr Abbott refusing to actually detail how they are going to fund their promises, and of course during the election campaign they refused to submit their costings to the Treasury. After the campaign we found out from the Department of Treasury and Finance there was an $11 billion hole.

The fact is that you can't promise tax cuts unless you say how you are going to fund them. They'll either be unfunded, in which case the Budget will be a sea of red ink, or if they're going to fund them by spending cuts they'll need to tell us where they're going to be because last time they were in health and they were in education particularly.

GILBERT:

Two last questions I want to ask you. Bob Brown says that it's going to be weeks before this deal is done. It sounds like there are a few hurdles to overcome and that the June 30 target that you've set for releasing the detail won't be honoured.

TREASURER:

I think we're getting there. The discussions are going well but they're complex. I'm pretty confident and happy with the progress of those discussions but we'll just have to wait a little while yet.

GILBERT:

Alright, and finally the Bank for International Settlements warning of another global financial crisis because of the high levels of debt and low interest rates that many countries, particularly in Europe, still have in place.

TREASURER:

There is no doubt that there are great challenges in Europe and there were great challenges in Europe this time last year as well, and of course the US economy has been a little softer, but fortunately we're in the right part of the world at the right time. The Asia Pacific is relatively strong. Our economy is strong and of course we are quite resilient here and also in the region.

GILBERT:

So you're confident regardless, even if there is a second GFC that Australia…

TREASURER:

I don't like that sort of talk about a second GFC. Yes, there are challenges in Europe. Yes, the economy is soft in the United States, but our region remains strong. There is strong growth and there are strong fundamentals here. People can be confident they're in the best place in the world here at the moment.

GILBERT:

Mr Swan, thanks for your time.

TREASURER:

Thank you.