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 Madonna King

ABC Radio 612, Brisbane

21 September 2011

SUBJECTS: Finance Minister of the Year; IMF World Economic Update; Australia's economy; Minerals Resource Rent Tax; ABC TV program.

KING:

As you've heard the Treasurer Wayne Swan has just been named the world's best Finance Minister.  So what's he think of the latest move by the IMF which has slashed its economic forecasts for Australia, warned of a new global recession that will hit commodity prices, and force unemployment up at a staggering rate. Wayne Swan, good morning.

TREASURER:

Good morning Madonna.

KING:

And I guess I should say congratulations.

TREASURER:

Well thanks very much Madonna, but I think it's congratulations to basically millions of Australians who work very hard to make our economy pretty strong - the strongest in the advanced world.

KING:

Well the last Australian to get this gong was Paul Keating in 1984.  How do you rate yourself alongside him in history?

TREASURER:

Well I've leave that to everybody else, but that is 27 years ago and what the award is for is the Australian response to the Global Financial Crisis because, as you know, we're one of the few advanced economies that avoided recession, and since that time there's been something like 750,000 jobs created in Australia and that's what counts for me.

KING:

But also what counts for you, I suspect, are, I've found you're only as good as your last decision so, you and me -

TREASURER:

Well I certainly don't rest on my laurels Madonna, and what I know, what I've learnt in this job over four years, what it is all about is securing the foundations for the future.  You're absolutely right.

KING:

Well let me put to you what we're now facing, the IMF is saying Australia will grow 1.8 per cent this year, not the forecast three per cent.  How could that forecast be so far out?

TREASURER:

Well first of all, you're comparing IMF forecasts; you're not necessarily comparing our Budget forecasts.  In terms of the IMF forecast of 1.8, it's a bit below our Budget forecast of 2.25 [per cent].  The reason it is down a bit for Australia is very simple - the floods earlier this year and the cyclones earlier this year had a dramatic impact on our economy, but if you go further into the IMF report they say that we're going to grow faster than any major advanced economy and they give a ringing endorsement to the underlying strengths of the Australian economy. 

So I think we ought to be just a little bit clear here, the Australian economy is in good nick.  There are challenges, particularly in the global economy and there are certainly challenges domestically, but when it comes to Australia vis-a-vis the rest of the world, we're in pretty good shape.

KING:

All right, but let's talk about Australia.  That forecast has it ramifications here?  Are you still going to be able to deliver your 2012/13 Budget surplus?

TREASURER:

Well there's no doubt that growth has slowed a bit in the global economy.  That has a flow on effect for our economy, it has an impact on our Budget.  It certainly makes the surplus harder to get to, but we're determined to get to surplus in 2012-13, but the conditions have just got a bit more difficult.

KING:

Okay, you say you're still determined, is that a softening of the rhetoric?  Are you still sure you can do it?

TREASURER:

No, it's not a softening of rhetoric at all – we're determined to get the surplus in 2012-13 - just acknowledging that growth is going to be softer, it's harder to do because it does impact upon our Budget.  But we've outlined a very clear and consistent fiscal policy.  It's only common sense to acknowledge that circumstances around the place are a bit different than they were at the Budget, but we're determined to come back to surplus in 2012-13 for very good reasons.

KING:

The Reserve Bank also released its own statement saying it held concerns about the global outlook.  What as Treasurer, are you most worried about?  What part of the economy is keeping you awake at night?

TREASURER:

Well what kept me awake during the Global Financial Crisis was when it became very clear that global demand had fallen off a cliff. And over time what happened during that period was I think something like seven out of our top ten trading partners went into recession. Now I don't necessarily think we're facing circumstances like that at all. I don't think 2011 is like it was at the end of 2008 and 2009, but certainly if you look at Europe they've really got to get their act together.  We do need some pretty strong decision-making happening in Europe to deal with their challenges, and also in the United States.

KING:

Is it really the time to be introducing a carbon tax and mining tax here in Australia in this environment?

TREASURER:

Well, absolutely. Let me take you through the Resource Rent Tax. We have a pipeline of investment in resources in Australia of $430 billion.  Our resources companies are very, very profitable and it is only fair that we put in place a Resource Rent Tax that gives Australians their fair share, and use that revenue Madonna - and this is what is really important - use those revenues to cut tax for many of those businesses, particularly the 2.7 million small business in this country that aren't necessarily in the fast lane of the mining boom.

KING:

Alright, you mention the 2.7 million small businesses. We keep hearing how good we are in Australia and how we escaped the Global Financial Crisis.  Are we whingers or is the two-speed economy such now that, yes part of it is going gangbusters, but there's  a whole lot of people that are just managing to tread water?

TREASURER:

Well there's no doubt it's a patchwork economy Madonna and I've been talking about this, including with you on this program, for well over 18 months. There's a couple of things - it's time really to believe in our strengths, not to talk our economy down, but to be realistic about the challenges in our economy. And of course, there are effects in our economy still flowing from the Global Financial Crisis, we live with those. There are effects which flow on to confidence and share markets and so on from what is going on in the global financial system, as well in term of Europe and the United States. So all of those things do mean that there are many people that aren't in the fast lane of the resources boom.

KING:

Okay, just before I let you go, some MPs I know are unhappy with this ABC show At Home with Julia, featuring a sex scene with the Prime Minister wrapped in the Australian flag. Genuine satire or do you think it is a bit disrespectful?

TREASURER:

Oh look I don't mind programs taking the mickey out of politicians, programs like the Chaser, but frankly I think this one is a bit low rent.

KING:

I appreciate your time and congratulations again

TREASURER:

Thank you.