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

4 November 2011

Doorstop

Sydney

4 November 2011

SUBJECTS: RBA Statement on Monetary Policy; Alan Joyce appearance at Senate Committee; Joe Hockey knowledge of QANTAS lock-out; European debt crisis

TREASURER:

The Reserve Bank statement on monetary policy has confirmed that global economic instability is having an impact on global growth and therefore impacting on Australian growth. This will certainly have an impact on our Budget revenues. What we are seeing in the global economy is instability. We've got two of the very big economic engines misfiring in the global economy in terms of Europe and also in terms of the United States. Australia is not immune from these developments. It certainly has an impact on confidence. It certainly affects the hiring intentions of employers and of course a higher dollar impacts on trade exposed sectors. So we can expect to see an impact on Budget revenues but the Government is determined to bring the Budget back to surplus in 2012-13 as planned.

Now having said all that, the RBA forecasts of 3.25 per cent growth in 2011-12 are still much better than just about any other developed economy in the world. So our fundamentals are strong but we're not immune from these events in the global economy. But it pays to remember that unemployment is low, we have strong public finances, we have a very big investment pipeline and our financial institutions are strong. That means Australia is in better nick than just about any other developed economy.

JOURNALIST:

So unemployment is likely to rise?

TREASURER:

No what we are seeing here is the slowing of growth but at the moment hiring intentions from employers are somewhat less than we would have expected six months ago. But at the moment unemployment remains low and of course we have a very strong investment pipeline. We're going to grow, according to this forecast, at 3.25 per cent, not four per cent. That's still very healthy growth for Australia but it is less than we expected six months ago.

JOURNALIST:

Mr Swan, Alan Joyce, the QANTAS boss, before a committee this morning has said that he didn't - I think he said - in terms of the possibility of a lockout he actually took last Saturday, he didn't mention that to any politicians. Does that seem to contradict what Joe Hockey's been saying?

TREASURER:

Well, he certainly never mentioned to any of the Ministers in our Government that he was contemplating an extreme action of locking out the whole of the QANTAS workforce. That was never raised with any of our senior Ministers which is why we took such swift and decisive action to deal with the challenges that were presented to us by QANTAS. Deciding to lock out their entire workforce as well as inconveniencing something like 70,000 passengers.

JOURNALIST:

I think Joe Hockey had been saying on the 730 Report, hadn't he, that's there's been lots of talk about the possibility of this.

TREASURER:

I think there's a lot of evidence around that the Coalition had some inkling of what's was going on.

JOURNALIST:

(Inaudible)

TREASURER:

Well, what it means is we will have less revenue than we expected when we did our Budget forecast back in May. We're simply not immune from the fallout of what's occurring in the global economy. For example: we've seen a very significant hit that has occurred on our share market - that affects revenues. We've seen it impact on confidence - that affects revenues. There's no doubt that as a consequence of this global instability, growth in Australia will be lower than we expected at the time of the Budget. The Reserve Bank forecast today say 3.25 per cent for 2011-12 instead of four per cent. We haven't upgraded our forecast as yet. We will do that towards the end of the year. There's no doubt that growth will be somewhat lower than was expected six months ago as a consequence of these events in the global economy, but what we can take heart from is the fact that we are still growing strongly, but not as strongly as we had expected six months ago.

JOURNALIST:

The last 48 hours in Cannes was very up and down for the Greek Cabinet and it's obviously (inaudible) market. How is that problem with the Greek (inaudible). How is that affecting Australian markets?

TREASURER:

Well, first of all, the failure of the Europeans to sort out the sovereign debt crisis we've seen in Greece, and associated problems, has been impacting on the global economy for some time now, which is why the Australian Government has been calling for swift and decisive action. It's why the European leaders then reached a plan about last week or so which is now in doubt as a consequence of what is happening in Greece. We need these matters sorted out as quickly as possible.

JOURNALIST:

What's your view of the Greek Prime Minister's decision, I think, to call off the referendum?

TREASURER:

Well, it's a matter for European leaders to deal with the Greece situation. What the global economy demands is certainty from European leaders. Greece is a member of the European Union and it needs to be dealt with within the European Union and dealt with very quickly.