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

28 March 2012

Doorstop interview

Melbourne

SUBJECTS: Australia's engagement with Asia; Huawei; Queensland election; addressing the patchwork economy; Budget

TREASURER:

I very much enjoyed my discussion with the Australia China Business Council this morning. There could be no topic more important than the future of our engagement in this region. There's a lot of talk about the Asian Century but what we've got to do is make this the Australian century in Asia which is what the address was about this morning. This is the 40th anniversary of the establishment of diplomatic relations with China. It's a very important year this year.

So what I wanted to do this morning was to talk about the opportunities and the challenges that come Australia's way. The opportunities are many and of course there are challenges. This morning I focused just not on the investment here in resources but the possibility of there being many more opportunities for Australian business, particularly in the services sector, as well as in manufacturing because it's not just about a resources boom. As the middle classes grow in Asia, and across the region, they will demand a whole range of sophisticated services and products, and Australia remains in a very good position to supply a proportion of that demand. So that's good news for Australia and it's great this year in this 40th anniversary year in the establishment of diplomatic relations that we had a very extended discussion about that, which is why the Government has got the White Paper in preparation by Dr Henry and his committee.

JOURNALIST:

If you're so concerned about the Asian Century, why has the Government locked out a company like Huawei from the National Broadband Network?

TREASURER:

Well, I don't comment, and neither have previous governments, commented on intelligence matters and I don't propose to do anything other than not comment on intelligence matters.

JOURNALIST:

(Inaudible)?

TREASURER:

No I think we've got a very broad relationship with the Chinese when it comes to investment. There's very strong inward investment coming into Australia. I think we've got a very settled foreign investment framework for that investment, and of course there's investment from Australia going to China as well. I think we've got a broad relationship and I don't accept the characterisation of it damaging that relationship.

JOURNALIST:

What happened in Queensland on the weekend?

TREASURER:

Well, in Queensland on the weekend, there was a state election which saw a very substantial reverse for the state Labor party.

JOURNALIST:

It was a disaster though, wasn't it?

TREASURER:

It was a very, very big swing against the state Labor party, fought largely on state issues or almost exclusively on state issues, but that doesn't mean to say that there's not a lot to think about. When you look at a result like that it's the responsible thing to do and we'll sit down and have a look at it. But I've been active in Queensland politics for a long time but I make this point to you: in Queensland the tide goes out a long way and it comes in a long way. The result on Saturday that was achieved by the LNP was exactly the result that Peter Beattie received in 2001: with 49 per cent of the primary vote.

And indeed, what we know about Queensland is it tends to swing, and it tends to swing both ways and it tends to swing both ways in different ways when different parties are in different tiers of government. So we'll have a good hard look at the result as we should. We'll sit down and study it and look at all of its implications but in terms of the Federal Parliamentary Labor Party what we're doing is getting on with the job of putting in place the long term policies which will maximise the opportunities for this country in terms of jobs and opportunities for our kids and that's what people will be voting on in the next Federal election.

JOURNALIST:

(Inaudible) drones being used on Cocos Islands and the US Defence facility. Is it going to be a further test of Australia's relations with China?

TREASURER:

Well, look these are matters of which the Defence Minister has spoken this morning and he's made the point there have been no discussions about those matters with the United States but I'll leave further commentary on this to the Defence Minister.

JOURNALIST:

(Inaudible)

TREASURER:

Look I don't know all of the detail. I'll pass on that until we see it. I've seen the story. I don't know how accurate it is. Obviously it's concerning but we'll see how it plays out.

JOURNALIST:

Treasurer, on the budget, the Bureau of Statistics says we've only had 10,000 jobs created in the last year (inaudible). Getting the budget back into surplus would take 2.5 to 3 per cent of GDP out of the economy in 2012-13.

TREASURER:

We've had 700,000 jobs created in the time the Government has been in office so we've got a very strong record of job creation. Yes, it's been slower over the past year, there's no question of that, but we've got an overall unemployment rate nationally of 5.2 per cent, here in Victoria it's 5.4 [per cent]. Now that's low historically but it doesn't mean to say that there aren't regions and or particular sectors in Australia that are doing it tough at the moment and many in the manufacturing sector are doing it tough.

It's why the Government has been talking about the patchwork economy. Not everybody in our economy is in the fast lane of resources and that's why we've been fighting so hard in the Federal Parliament to get through a series of reforms which will spread the benefits of the mining boom more broadly across our economy and industrial sectors. Like giving a tax cut to businesses that aren't in the fast lane, and particularly the small businesses, and that's what a lot of struggling business in this country want. So it's just incredible that that would be opposed by the Federal Liberal Party in the circumstances in which we find ourselves.

JOURNALIST:

(Inaudible) would be doing it even tougher if you take 2.5 per cent of GDP out (inaudible).

TREASURER:

Well, let's just methodically go through the Government's desire to return the budget to surplus and why we're doing that. We're returning the budget to surplus in 2012-13 because growth will be around trend in 2012-13 and that is the appropriate setting for an economy that's growing around trend. Now I can't give you all of the detailed forecast for the budget which comes down in a couple of weeks but we will be growing in 2012-13 at around trend and in those circumstances, it's entirely the responsible thing to do to bring the budget back to surplus, to send a message about the very sturdy state of our public finances. That's very important given financial instability around the word. It's also important that we provide maximum room for monetary policy to deploy itself should the Reserve Bank want to do that. So that's why we're returning the budget to surplus and I think it's a very worthy objective.

JOURNALIST:

(Inaudible)

TREASURER:

You would have to give me some more detail on what you've just said. I'm not aware of that.

JOURNALIST:

Will the budget tackle the problem (inaudible)?

TREASURER:

Well, of course the budget – our whole approach has been to make sure we get in place a series of policy settings which not only maximise the opportunities of the resources sector but spread them around our country to Victoria, to New South Wales, and indeed to those patchwork parts of the West Australian and Queensland economies that aren't in the fast lane.

There are parts or our economy that are growing more slowly than others and they're not confined exclusively to Victoria or New South Wales. There are also parts of Queensland in the same circumstances. That's why the Government outlined a couple of years ago our desire to put in place a range of policies which spread the benefits of the mining boom to every corner of our country and to every postcode.

JOURNALIST:

Why do you think Labor was so comprehensively rejected in Queensland? Do you think Labor is failing to sell its message there? What do you think went wrong?

TREASURER:

Well, that's for the analysts to go through, but anyone who was in Queensland would know that it was an 'it's time' election. They've been there continuously for 20 odd years, and that's what the Queensland election was about, but nevertheless it was a terrible outcome for the party as a whole and we'll sit down and look at the implications but that state election was fought on state issues. Thanks.