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

21 September 2011

Interview with Alexandra Kirk

ABC Radio, AM Program

21 September 2011

SUBJECTS: Finance Minister of the Year; Australia's economy; Government's reform agenda; global economic outlook; Washington meetings

EASTLEY:

The Federal Treasurer, Wayne Swan, has been named the world's best Finance Minister for 2011.  The banking and finance publication Euromoney named him as the Euromoney Finance Minister of the Year for his stewardship of Australia's finances and economic performance during and since the global financial crisis.  Euromoney says Australia not only avoided falling into recession but has been the best performing of the world's developed market economies. 

Mr Swan will receive his award in Washington on Sunday.  And despite the IMF's gloomy world growth forecasts, the Treasurer remains optimistic about Australia's future economic prospects.  The Treasurer, Wayne Swan, is speaking here to Alexandra Kirk.

KIRK:

How much is the award about you and how much is it about the rivers of gold that keep flowing into the Government's coffers and the rest of the economy from the resources boom?

TREASURER:

Well, I think what it's about is the response of Australians and the Australian Government to the circumstances of the global financial crisis and the global recession.  We were almost alone amongst developed economies in avoiding recession, and the reason that that occurred is that the Government, working with the community and the Reserve Bank, put in place a range of policies which produced an outcome which was simply stunning.

KIRK:

Are you happy to give Kevin Rudd a pat on the back because he oversaw the response to the global financial crisis?

TREASURER:

Oh, most certainly happy to give a number of people a pat on the back and in particular Kevin who I worked very closely with in terms of our response first of all to the global financial crisis and what then became the global recession.  It's just pleasing to see that what Australia has done here has been recognised by this global institution.

KIRK:

You're happy to give the former Prime Minister a pat on the back now but the party didn't give him a pat on the back, did it?  It dispatched him.

TREASURER:

Well, I think the most important thing today is to acknowledge what this award is all about, and what it's about is all of those Australians who stayed in work because of what Australia did during the global financial crisis, all those small businesses that kept their doors open. That's what it's about.  It's not about individuals; it's all about what we did together.  The role of the Government has been very important in that, but the role of the community has also been very important.

KIRK:

Euromoney notes that you inherited a sound economy and a resources boom. So should some of the award go to the Howard Government and your predecessor Peter Costello?

TREASURER:

Well, I think what this award demonstrates is that we've not seen an award like this in Australia for 27 years. And I think the award underscores the importance of long-term fundamental economic reform starting 27 years ago with those great reforms of the Hawke and Keating era and of course there were reforms during the period of the Howard Government as well.

What this award really underscores is the need for continuing reform, the tough reforms that set the country up for the future.  That's why we need to put in place the NBN.  That's why we need to price carbon.  So all governments have played a role in that from both sides of politics over 25 to 30 years.

KIRK:

Euromoney has put you on par with Paul Keating, but he oversaw big economic reforms like floating the dollar, for example.  Your opposite number Joe Hockey says that your award is essentially for spending up big and running up big deficits.

TREASURER:

Look, I think now is the time to pay tribute to the hard work of Australians in this award, not necessarily to talk the country down.  I don't intend to engage in that sort of a debate.  I think Australians should take great confidence from the underlying strength of our economy and great pride in the fact that this award has been given to all Australians.

KIRK:

You're off to Washington soon for meetings of the World Bank and the International Monetary Fund where you'll be presented with your award.  Now the IMF has slashed its global growth forecasts and is warning that the world has entered a precarious new phase.  What preparations have you made for the possibility of the US and Eurozone falling back into recession because this time around you don't have the buffer left to you by the Howard Government?

TREASURER:

Well, first of all I think the IMF has itself made the point only recently that when it comes to the capacity of the Australian Government to respond to unforeseen circumstances, there's certainly a great degree of policy flexibility in terms of what the Australian Government could do if circumstances were to change dramatically.  But these IMF figures do not show that. They do show a weakening in global growth.  They show global growth coming down to 4 per cent. They do say the risk is on the downside.

But what they also say and point to is the rock-solid fundamental strength of the Australian economy.  They also point to the fact that growth in our region is strong.  We're not immune from what happens in Europe or the United States, but neither should we underestimate the fundamental strength of our economy and the fundamental strength of the regional economy here in the Asia Pacific.

KIRK:

So you say there's no need for a plan B?

TREASURER:

Well, what I'm saying is that we have handled global instability successfully before.  That's what this award from Euromoney Magazine is all about.  We have the capacity to act in the future should we need to, but I don't speculate about that.

KIRK:

Why not?

TREASURER:

And I don't necessarily see what is occurring in 2011 through the prism of 2008.  The fact is circumstances are different this time than they were during the global financial crisis and the global recession.  We should not underestimate the underlying strength of our economy or the underlying strength of our region.

KIRK:

And you say that's going to get Australia through the next difficult period?

TREASURER:

What I am saying is that we are very well-placed to handle the worst that the world could throw at us.

KIRK:

But spending to stimulate the economy is now no longer an option for the Government if things turn bad worldwide, is it?

TREASURER:

Well, I'm not going to answer hypothetical questions.  What I've also said is that the IMF itself has observed that the Government has plenty of flexibility, should it need to do so, to respond to adverse international circumstances.  But the fact is we are starting from a position of strength when we're looking at these circumstances in the global economy.

I will have an opportunity when I travel to Washington later in the week to assess what's going on, to take the pulse of the global economy, but I'm very confident that in terms of Australia's position we are in the best position of just about any country in the world to deal with adverse international circumstances.