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Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

21 December 2011

Interview with John Scott, Radio 4BC

Brisbane

21 December 2011

SUBJECTS: National Broadband Network; European economic outlook; Australia's economic strength; Tony Abbott saying no to discussions on off-shore processing

SCOTT:

Mr Swan, welcome to the program.

TREASURER:

Good afternoon John.

SCOTT:

Thanks for taking the time to have a chat to us.  Well, a big day for you yesterday – flicking the NBN on, or the first part of it.

TREASURER:

Yes it was a terrific day.  This cable is 3800 kilometres long and runs from Toowoomba all the way up to Darwin and through so many Queensland centres - about 32 places like Roma, Emerald, Cloncurry, Mt Isa and so on.

SCOTT:

So does that mean all those people in those centres now can connect to the NBN and get fast internet access.

TREASURER:

Well, eventually it will.  I mean they will have some form of internet access at the moment but it won't be very reliable and in some cases there's just a complete blackspot and there's no service at all.  What this will mean is we've put in place the backbone, one of the key backbones of the NBN.  You'll have all sorts of service providers providing new products for people to access.  It's going to be fantastic for the expanding mining industry but also the delivery of fundamental services like health and educational services.  So it's going to be far more reliable, we're going to have much quicker downloads and it's going to be cheaper because there will be more competition.  So it's one of those great nation-building projects the likes of which the railroads were in the past and even the overland telegraph which I think went to Darwin in 1870. 

SCOTT:

Yes.  In terms of the economic benefit to folk, is it going to be much cheaper than their internet connection is now or is it going to cost a little more but the service will be better?

TREASURER:

Well, it depends upon what product they're getting.  The basic product certainly won't be dearer, it may be a little cheaper but people will be able to get all types of new product that they couldn't get before and they're going to be able to get it from a variety of service providers as well.  So it's really going to open it up in terms of the product that people can get and because of the fact that there will be more competition, people will be getting it cheaper. 

SCOTT:

From here on where does it go and what's the expansion plan in terms of the customer base now?

TREASURER:

Well, this program that I talked about yesterday was a $250 million program; about $115 million on this particular piece of spine.  But elsewhere in the country this has going to be rolled out in those areas where there's been blackspots and of course the NBN is being rolled out in other areas as well gradually.  I mean, there's a couple of sites in Brisbane - I was out at one in Aspley in my own electorate the other day - and also in a number of cities like up in Townsville which I've visited in the past.  It's going to be rolled out over a number of years and of course we've got this linkage with Telstra now and also a linkage with Optus.  So what this means is that over time we're going to get this fundamental wholesale network rolled out.  There's going to be a lot of retail providers which will use that wholesale network and be able to provide bigger and better services.

SCOTT:

One of our callers has given us a call and wants to know how deep the cable will be buried and will they have markers similar to the markers used for high pressure gas lines.  I guess they're concerned about, you know, sometimes you lose the fibre optic cable from Sydney….

TREASURER:

That's true and you know you frequently can see this happening with our infrastructure now because  this is a new piece of kit everybody will clearly know where it is.  Interestingly, I was up at Berrimah outside of Darwin where we went to one of the sheds.  Every 100 kilometres there is a shed which contains a lot of electronic equipment which is powered by solar power.  It operates 24 hours a day.  So this has been very clearly marked.  It will be there for everybody to see because it's a new piece of kit but it's going to be very visible as well.

SCOTT:

You know, this NBN, I don't think I've got my head quite around it.  Is it going to be…

TREASURER:

I think a lot of people are going to spend a lot of time getting their head around it, because the possibilities of the speed of the downloads are just so exciting for the future and the new products which will come from it.  I've seen some tele-health services for example.  People looking at x-rays over the internet.  All of these sorts of applications are just fantastic.

SCOTT:

Is it going to be available in the suburbs of Brisbane?  I know you mentioned your electorate.

TREASURER:

Yes it's starting to be rolled out and eventually the NBN will go to every house across this city but it's going to take a long time to do.  At the moment people are linked up generally to Telstra or maybe some other service provider but over time it will go right to the home.  This is really a big nation building project which is the equivalent of what we've put in, not just with the railroads, but all the transport services that hung off it.

SCOTT:

Yes, it sounds pretty good particularly for those folk in the bush because they have struggled from time to time and there are some that just don't have it as you say.

TREASURER:

Yes, well you see for regional Australia - where there are big black spots where they don't get any real service at all or they might be relying upon maybe some satellite services or some intermittent wireless services - this is just fantastic.  And in the case of Darwin this has been very enthusiastically received because Darwin and its surrounds has been identified for a long time as a blackspot but even here in the city in parts of my electorate the service hasn't been real great because the copper network that Telstra operates is also degrading.  So what we're going to get is largely that partly replaced where it's completely degraded.  We're going to get all of the passages where the current copper network is, we're going to get some fibre optic in those.  What this is going to do is gradually that will be all replaced with this modern fibre optic technology.

SCOTT:

Well, that's pretty exciting stuff.  No doubt you're probably the most excited about it along with the folk that are going to get the benefit of that as we speak.  Where is the next area that you'll be flicking the switch on?

TREASURER:

Well, I haven't been signed up for one yet but hopefully the next time I go to flick the switch it might be somewhere in the northern suburbs of Brisbane.  I can tell you business is really excited about this, particularly small business, not just in the cities but also in regional areas, it really gives them a far greater capacity.  You might recall, there was a good article in the Courier Mail [today] where they were talking to a guy operating buses up in Toowoomba and the difficulty he had of getting a reliable service.  So over time the service will upgraded.  The power of it will increase and the possibility for new services and new products is great.

SCOTT:

Treasurer this is more to do with your portfolio.  This European situation, Mr Swan, we've heard a lot about it and there's all sorts of talk and I don't want to talk about Greece defaulting and things like that but there's all sorts of negativity coming out of there.  If the whole thing goes to hell in a hand basket how is it going to affect this country, do you believe?

TREASURER:

Well, Australia is in probably the best position of just about any developed economy in the world to handle the fallout but we're not immune from that.  To begin with, we came through the global financial crisis in great shape and in fact we now have a AAA credit rating from the three major credit rating agencies which basically says our public finances are in very good nick.  We've got low public debt.  We've also got relatively strong economic growth.  Now the fact is that if Europe continues to go badly, that will have an impact on global growth which will flow through to our region, but the good thing about being where we are is that our region - the Asia Pacific - is still much stronger than any other region in the world and still has good growth prospects.  One of the worries has been what's happening in the US economy and we're also starting to see some encouraging signs there.  So if the US were to grow and our region stays in relatively good nick, then we can perhaps ride out the worst of the impacts of what's happening in Europe.

SCOTT:

Well, as I understand overnight there's been information out of America suggesting that their house prices have probably bottomed.  I hope that that's the case because then it would appear that maybe their economy is possibly going to be on the rise.

TREASURER:

Yes they've had a really big problem with their housing market.  A lot of bad loans were made.  We've never had that challenge in this country and it's good news to see that that may be the case, because that has been one of the drags on growth in the United States.

SCOTT:

Have they put in place measures to combat any further problems with those loans?

TREASURER:

Yes they have.  They've cleaned up their financial system in the United States in a much better way than the Europeans did following the global financial crisis and in some ways what they're living with in Europe is their failure to clean up, if you like, their banking system and also the associated problems of pretty loose fiscal policy from a lot of nations within the European Union.

SCOTT:

I've got a caller who wants to ask you about Australia and its debt.  Chris from Bribey Island, the Acting Prime Minister and Treasurer is on the line – Mr Swan – go ahead.

CALLER:

G'day Mr Swan, thanks for taking my call.  I understand that Australia is about a quarter of a trillion dollars in debt and borrowing a billion dollars a week.  I'm just wondering when this debt will be eliminated?

TREASURER:

Well, a lot of that is just not true.  We have very low, very low public debt in this country - one of the lowest in the developed world.  This is acknowledged by all the credit rating agencies.  I know our political opponents go around talking the economy down all the time but we have very low public debt.   That's what the IMF says.  That's what the credit rating agencies say.  That's what all my fellow Finance Ministers say when I meet with them.  We're in good shape and Australians can be confident that we're in better shape than just about any other developed economy.

SCOTT:

Okay Mr Swan, one last question for you.  Look the asylum seeker issue refuses to go away and the boats are still coming.  What would you like to see there?  Would you like to try and get the Malaysian solution up and running again?  Do you have any answers?

TREASURER:

Well, we need to break the people smugglers' business model and the only way to do that and to avoid the tragedies that we have seen off the Indonesian coast is for people not to get on the boats in the first place and they won't get on the boats in the first place if they understand if they arrive here they're going to go back to Malaysia.  So really we do need to get that solution in place.  What we've said to the Opposition is that instead of saying no all the time, what about sitting down with the Government and having a talk about some constructive solution such as that one, and we've said we're prepared to consider others as well.  No one wants to go through a period in the next few weeks where we see what has happened in the past couple of days.  So we're very genuine in our desire to sit down and talk constructively because the Liberal Party say they believe in offshore processing.  Well, we need them to sit down with the Government and to work our way through these things.  Mr Abbott just to say no to a meeting is just playing politics at a time when lives are being lost. 

SCOTT:

Are you positive in the fact that you might get them to sit down at the table with you in the New Year or do you think there's not much likelihood of that happening given what's gone down in the past 12 months?

TREASURER:

Well, I hope that we see an outbreak of common sense from the Opposition and their spokesman would sit down with ours and have a constructive discussion about this issue.

SCOTT:

Well, Mr Swan, all the best to you and your family For Christmas and the new year.  Thanks for coming onto the program and we appreciate your time.  Have a good New Year and let's hope that common sense does prevail there.

TREASURER:

And to you and all your listeners, a merry Christmas and a happy new year.