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 August 2012

Joint press conference

Sydney

SUBJECTS: Sydney to host G20 Finance Ministers' and Central Bank Governors' Meeting, establishment of the G20 Studies Centre, protests in Melbourne, Mr Abbott 'supportive' of Mr Newman's secret hit list of cuts to jobs and services in Queensland, MYEFO, foreign investment

TREASURER:

It's great to be here with Frank Lowy and Dr Michael Fullilove today to make two very important announcements. Today it gives me great pleasure to announce Sydney will host a G20 Finance Ministers' and Central Bank Governors' meeting in 2014. Now this will be a meeting which is part of the G20 - Leaders Finance Ministers and Central Bank Governors who come together from major developed and developing economies to deal with the critical economic challenges in our global economy.

I think it's fitting that at the dawn of the Asian century the G20 will bring all these leaders together in Australia. Right here in Australia. It's a great opportunity for Australia to showcase to the world our outstanding economic performance, but also an opportunity to showcase to the world our commitment to reform the global economy which will drive growth and drive jobs.

The meeting in Sydney will be very important in the lead up to the G20 Leaders' meeting in Brisbane. I've been to a few of these G20 Finance Ministers' meetings and Leaders' meetings in my time, in excess of 20. I'm really proud to be able to announce that there will be a meeting in Sydney, prior to the Leaders' meeting in Brisbane as well as the meeting we will have in Cairns prior to the Leaders' meeting in Brisbane.

These meetings are a big deal. They do bring together 20 Finance Ministers from the G20, additional Finance Ministers from up to five other countries, 20 Central Bank Governors and also leaders of international financial institutions such as the IMF and the World Bank.

Something like 2,000 people will be coming to Sydney for this Finance Ministers' meeting. It's a great opportunity for both the Commonwealth Government and the State Government to work closely in hosting this important meeting. But it will also showcase Sydney, as well as Brisbane and Cairns, to the world in this important year for the G20.

This will be a red-letter event for Australia and I'm sure Sydney as well as Brisbane and Cairns will make the most of it.

I'm also here today to make another important announcement which is that there will be a G20 Studies Centre located within the Lowy Institute for International Policy. This is a very important institution. We know the Lowy Institute is a world-class institution. To have this G20 Studies Centre located here is going to be very important for our nation.

This Centre will focus in particular on research for the G20, not just in our region, but globally as well. I think many in the room would understand the major shift going on in the global economy from west to east. We are yet to fully understand the implications of that for our region, let alone the global economy.

The Studies Centre here at the Lowy Institute will flesh out all of the issues associated with that shift in the context of the G20. When Australia got a seat at the G20 back at the end of 2008 it was a really big deal for our country. It wasn't something that could have been assumed then and there were pressures to exclude countries like Australia. But what the G20 did was bring together for the first time the leaders of the major developed economies sitting alongside the leaders of the major developing economies.

That didn't happen with the G7, that didn't happen with the G8. For Australia to get a seat sitting in the middle of all of that, the leaders from the major advanced economies, the leaders of major developing economies and Australia sitting there as the world's 13th largest economy but 52nd when it comes to population was a big deal.

And that's why it is such an important event for Australia for us to sit here in 2014 and host not only a Leaders' Summit in Brisbane but Finance Ministers' meetings in Sydney and in Cairns, showcasing the best of Australia to the world.

I'll hand over to Frank.

FRANK LOWY:

Good morning ladies and gentlemen. I would like to thank the Treasurer for his announcement today regarding the new G20 Studies Centre at the Lowy Institute. This grant from the Australian Government will allow the Lowy Institute to create a world-class research program.

My family is very proud of our role in establishing and supporting the Lowy Institute. This new Centre will follow the Institution's tradition of publishing high-quality, independent and non-partisan research on global economic government, governance and the role of the G20. This is a critical time for the world economy following the Global Financial Crisis and the ongoing instability of the Eurozone.

The G20 is a vital response to these major trends. It is our first cut at forging a new model of international economic governance fit for the 21st century. Working with Australian officials, business leaders, academics and other international think-tanks and researchers from other G20 members, the G20 Studies Centre at the Lowy Institute will offer an Australian perspective of the pressing challenges facing today's global economy.

As a businessman I know how important it is to aim to be at the top table. With the membership of G20, Australia now sits at the top-table of the world economy. As a businessman who operates in many different countries I know how critical the global rules of the game are with our membership of the G20, Australia has the opportunity to influence the rules. The decision by the Government today to support this new research program here at the Institute is a key vote of confidence in the work that the Institute has done to date and its reputation as an important, independent voice of the policy debate.

I would therefore like to thank the Treasurer once again for helping the Institute to build on our existing work and analyse the big issues and challenges confronting our world. Thank you very much ladies and gentlemen.

DR FULLILOVE:

Thank you Frank. Let me just add my chairman's thanks to Mr Swan and to the Government for the grant of $4 million over the next four years to establish the G20 Studies Centre.

We at the Institute are very excited about the G20 Studies Centre for three reasons. The first is that we take the view that the G20 is profoundly important to Australia. By far the most important element of the G20 of course is its contribution to global economic governance. Membership of the G20 allows us to advocate the kind of open, transparent, rules-based international economic order that safeguards Australia's interests.

The G20 already has several significant achievements to its name - the London Summit in 2009 helped to restore confidence at the height of the GFC. The G20 has contributed much needed momentum to the movement to reform the IMF and international financial governance. So ensuring that the G20 continues to succeed with its core economic mandate is absolutely critical.

But I would argue as I was saying to the Deputy PM a little earlier that for Australia the G20 significance goes beyond economic governance. The single foreign policy theme in my opinion that has united all post-war Australian governments has been a desire to join and strengthen institutions through which we can influence global decisions, whether they be alliance institutions with the United States, the UN Security Council, APEC, the APEC Leaders' Meeting and now the G20.

The G20 as the Deputy PM was alluding to has substantial geopolitical heft. Its members represent 90 per cent of global outlook, 80 per cent of world trade and two-thirds of the world's population. They include the global leader, the United States, and the most important rising power, China, all members of the permanent five of the UN Security Council, several nuclear weapons states and our key partners in Asia.

In other words this is one of the most important clubs in the world and Australia is a member and we need to use our membership wisely. So that's the first reason we're so excited.

The second is that this grant will enable us to do the kind of work that the Institute was established to do. That is to inform the national debate on international issues, to influence national policy, but also to feed into international debates and to increase the volume and quality of Australian voices on the international scene.

I am confident that the G20 Studies Centre will not only deepen the discussion in this country on G20 matters, but that we will make a substantial contribution to Australia's own role as G20 Chair and Summit Host in 2014. On top of that that we can make a significant contribution to the international body of research on the G20.

Third and finally, as Frank Lowy said, this is another vote of confidence in the Lowy Institute as the countries pre-eminent international think-tank and an independent, non-partisan voice in the national debate. We are very proud of the Institute to attract support from a wide variety of funding sources, including private donations, the best philanthropic foundations in Australia and the world, grants from the Australian Government and other governments, memberships and sponsorships from Australia's leading corporates, and subscription and ticket sales. The diversity of income sources is very important to us.

So thank you again Deputy Prime Minister for this announcement, thank you for helping us to examine the big economic issues facing the world. We're looking forward to getting stuck into the work.

JOURNALIST:

What do you think the issues might be? We're a fair way out now, but if we wanted to know where we're headed now, where do you think (inaudible)?

TREASURER:

I think the key question facing the global economy is how we sustain growth in the global economy over time, and deal with challenges that are arising from contractions, particularly in Europe. How we do that in a way that generates the jobs of the future, particularly for young people right around the global economy. If you look at what's happening in Europe at the moment, there's a pretty bleak outlook, the hope of the side in terms of global growth lies here in the Asia Pacific, and a great proportion of global growth will come from our region in the years ahead if we can deal with the financial imbalances in the global economy.

That requires two things: a commitment by both developed and developing economies to growth policies domestically, and of course those policies will vary depending on whether you're a developed economy or developing economy. So a commitment to structural reform in both developed and developing economies to sustain growth for the future, so we can generate the jobs of the future for those people that are currently left unemployed in the global economy.

Whether you're in the developed world in Europe where unemployment rates are as high as 25 to 50 per cent among young people, or whether you're in the Middle East with high rates of unemployment, clearly global growth is not sufficient to generate the jobs that are required to sustain populations and lift them out of poverty.

Those are the central questions – sustain growth, get rid of the financial imbalances particularly through reform in the financial system, but most importantly sustain growth and structural reform inboth developed and developing economies.

JOURNALIST:

(Inaudible)

TREASURER:

No not at all. The Finance Minister Meeting is a very big deal. In terms of the (G20) Leaders' Meeting. That was a very close contest between Brisbane and Sydney, a very close contest. But a Finance Ministers' Meeting is quite substantial. There has been a desire in New South Wales for some time for example to host an IMF meeting. Hosting a Finance Ministers' Meeting, it's a very high profile meeting with up to 2,000 people attending and I think it's very important. There's a lot of interest in the Finance Ministers' Meeting as well. To showcase to the world Brisbane, Sydney and Cairns I think is a good outcome for Australia.

JOURNALIST:

(Inaudible)

TREASURER:

Well there's usually two Finance Ministers' Meetings in the lead-up to the Leaders' Meetings, and their agendas are yet to be developed, but they will encompass some of those issues that I spoke about in my previous answer.

JOURNALIST:

Scenes this morning in Melbourne. (Inaudible) is this appropriate behaviour and do the laws need to be looked at (inaudible)?

TREASURER:

Well there are no circumstances in which we will tolerate violence in any workplace. I'm not aware of the circumstances this morning, I haven't been briefed on them, but to the extent that there may have been violence on a particular worksite that is absolutely unacceptable and it's up to authorities to deal with that.

I just wanted to make some comments about a couple of other issues.

I just wanted to draw your attention to a statement that was made by the Queensland Premier on Lateline last night, and he had to say this:

‘He (Mr Abbott) understands exactly what we're trying to achieve because I've taken him through it and he's very understanding. Indeed he and people like Joe Hockey have been very supportive.'

That's what the Premier of Queensland said last night about Mr Abbott. So it is very clear that Mr Abbott is now conspiring with the Premier of Queensland to cut jobs and services, particularly in health and education in Queensland.

Why is this all relevant now? Because the Premier of Queensland had a secret plan before he went to the last election to slash jobs in health and education, and what we're learning now is Tony Abbott has a secret plan nationally, because he's got a $70 billion budget crater in his budget bottom line and he's got to fill it.

Well he's been consulted by Campbell Newman on what's going on in Queensland, he's quite happy with what Campbell Newman is doing, Campbell Newman has said that and included Mr Hockey. So I think what this does is blow the whistle on Mr Abbott's secret agenda to cut jobs in health and education, not just in Queensland but nationally as well.

JOURNALIST:

Mr Newman says he has a mandate (inaudible), he's following official audit recommendations. What do you make of that?

TREASURER:

Well the Commission of Audit isn't about finding the truth. It's actually about hiding the truth. If you look in detail at the Commission of Audit in Queensland which was headed by the former Treasurer Mr Costello, it found that the budget estimates in Queensland had not changed, and there was no budget hole in Queensland at all. The estimates were the same after the Commission of Audit as they were before the Commission of Audit.

What actually happened in Queensland is that Campbell Newman made commitments, unfunded commitments of $4 billion and what we've seen after the election is his secret plan to find that $4 billion by cutting jobs in the public sector, up to 25,000 jobs, and slashing health and education.

This is precisely what Tony Abbott's going to do nationally because as Joe Hockey said on morning television, he said there is a $70 billion crater in their budget bottom line, and the only way that can be filled is by big cuts to health and education, similar to the cuts that are taking place in Queensland.

And Mr Newman, overnight, has publicly told the Australian people that Mr Abbott is happy with what he is doing, he's approving of what he is doing, and I think you can only conclude that they're both going down the same road. That is, Queenslanders are getting a taste of what an Abbott Government would do when it comes to jobs, and in particular, when it comes to jobs in health and education.

JOURNALIST:

(Inaudible)

TREASURER:

Our budget will be returning to surplus as promised. We will update our budget by the end of the year in what is known as MYEFO, or the mid-year budget update. Our budget will return to surplus as forecast, on time, as promised.

JOURNALIST:

(Inaudible)

TREASURER:

Well spot prices are down at the moment, there's no secret about that. But you can't take a particular spot price from a particular day or night and then do some sort of calculation as if it will impact that way on a yearly basis. It's just not possible to do that. It's not correct methodology. But yes iron ore prices are down and they're down more than people expected, but you can't then draw a conclusion that that's where they're going to stay for the next three months, six months or nine months.

JOURNALIST:

(Inaudible)

TREASURER:

I don't forecast prices in the iron ore market. The Treasury makes assumptions on which it bases its forecasts. We've got a long way to go through to next year's budget. We update our budget in the usual way at the end of the year, and then we bring down our budget next year. We will bring our budget back to surplus as promised, on time.

JOURNALIST:

(Inaudible)

TREASURER:

Well I think I've just answered that question. Yes commodity prices are down, in our budget we forecast for them to come down. If you take the spot market at the moment, they're down more than we have forecast, but I think it's inaccurate to take a spot market forecast and then draw a conclusion from that on a yearly or six-monthly basis, that's just not appropriate methodology.

JOURNALIST:

(Inaudible)

TREASURER:

I don't think we can draw any conclusions from what's happened this morning in terms of future public policy until we see the full detail. I haven't seen that as yet. I made my point as strongly as I possibly could, that violence in the workplace is never acceptable, ever.

JOURNALIST:

(Inaudible)

TREASURER:

I haven't been briefed on that and I'm not going to comment on it.

JOURNALIST:

(Inaudible)

TREASURER:

Well my take on that is if there's anything going on nationally is that people are seeing the dramatic impact of the traditional Liberal agenda, which is to bring back WorkChoices and to slash health and education services.

JOURNALIST:

(Inaudible)

TREASURER:

I think any observer on the debate about foreign investment will conclude at the moment that the Liberal Party's policy is a shambles, it's a dog's breakfast, and it's also dangerous. The comment that Mr Abbott made in China about foreign investment is particularly damaging to our country, because the comments he made were interpreted by many as Mr Abbott having a foreign investment policy which was deliberately aimed at China. Australia never distinguishes in any of our decisions between one country over another. What we do is put in place a national interest principle and make our judgments based on that.

But when Mr Abbott when to China and outlined a policy which aimed particularly at the Chinese, there was a severe backlash in the Liberal Party against that. It was widely recognised that the Liberal Party's foreign investment policy was the being written by Barnaby Joyce.

Following that we saw a slight change from Mr Abbott; he came back and he changed tack a little, he put out a discussion paper walking himself back from his previous position.

All of that demonstrates that the Liberal Party foreign investment policy is a shambles, and it is damaging to our national interest and many people in the Liberal Party think so, as does the former Prime Minister Mr Howard.