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

6 September 2012

Interview with Naomi Woodley

ABC Radio, AM Program

SUBJECTS: National Accounts, record investment pipeline, contract for closure, Carbon price

TREASURER:

In terms of the March quarter we had a stellar result. This is a very, very solid result for the June quarter. If you just look at it - solid growth, we've also got very good income growth, we've got a solid investment pipeline, almost half a trillion dollars in resources, we've got contained inflation, and we've got lower interest rates and low unemployment.

WOODLEY:

You are urging people to look on the positive side of these results but there are negative indicators primarily around commodity prices which your Resources Minister Martin Ferguson has said, you know, the commodity price boom is over. So people are right to be concerned as they go into the future aren't they?

TREASURER:

Well I think we should have a look at the investment pipeline in resources - half a trillion dollars and $260 billion of that at an advanced stage. So I think that's a very strong investment pipeline. And of course some projects won't necessarily always go ahead or they may be delayed. But that's a very big pipeline, much of it being spent right now, producing exports for Australia well into the future.

WOODLEY:

But the fall particularly in the iron ore price is having an impact on your federal budget. And we're not just talking about one off spot prices here, there has been a sustained fall and it is having an impact. You have to concede that.

TREASURER:

Well certainly if it is sustained at the levels that it is at now then that will have an impact on our budget. But I'd just make the point that in terms of 2012/13, we've forecast the terms of trade to come down by 5.75 per cent. But if this is sustained it will impact on the budget, I've made that point. And of course I've made the point that we are committed to coming back to surplus in 2012/13.

WOODLEY:

But you have made billions of dollars of promises in recent weeks, some in the out years and beyond the budget but it will have an impact in this year's mid-year fiscal update. When will you start saying how you are going to pay for those sorts of promises?

TREASURER:

Well we always provide a full accounting under the charter of budget honesty in the mid-year update, which must be produced by the end of this year, and then again in the budget.

WOODLEY:

The decision to dump the contract for closure for the dirtiest brown coal power stations will help your budget. Was that a key factor in the decision?

TREASURER:

No it wasn't a key factor in the decision at all and there was no provision made over the forward estimates. But the fact is, as the Minister has explained yesterday, we couldn't get what we regarded as good value, value for money, so we didn't proceed.

WOODLEY:

It was though a key part of the clean energy package. Don't you run the risk of looking like you're breaking another promise and changing this carbon pricing package yet again, you know, barely months after it's been introduced?

TREASURER:

Hardly, I mean we've fought tooth and nail to put in place a carbon price in the Australian economy. There was entrenched opposition at every level, particularly from our political opponents. We've put that in place. This is a very, very significant reform for Australia to lift our energy efficiency, to make sure we reduce our carbon pollution and to make this country much more energy efficient.

WOODLEY:

You've said that Australia will still be able to meet its emissions reduction targets even though these dirty brown coal power stations will continue to pollute. If it's not cost effective and if you think you still can meet the targets, what was the point of trying to close them down?

TREASURER:

Well because we were having a broader discussion about a range of means to put in place as part of a broader carbon price. Now that carbon price is operating. We've also got the Clean Energy Finance Corporation up and running. We had a variety of approaches. This one didn't give value for money, so we didn't proceed with it. But we've got the carbon price in operation and it will deliver the outcomes for Australia.