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

13 October 2012

Doorstop Interview

Tokyo

SUBJECTS: IMF and World Bank Annual Meetings in Tokyo; IMF World Economic Update; Global economic instability

TREASURER:

The first thing I'd say is that these meetings are always very good opportunity to catch up with colleagues from both the developed and developing world and take the temperature of the global economy. As we're aware, the World Economic Outlook that was published by the IMF has shown a downgrade in growth. So it's a very good opportunity to listen to colleagues about how they saw the challenges in the global economy and what we must do about them as we go forward.

We had a comprehensive update from the Europeans today as to what they are doing to deal with the recession in Europe and what the prospects for those reforms are. In some ways it was reassuring that our European colleagues outlined a program of reform. But I think from my perspective we need to see that happen as quickly as possible because the recession in Europe as well as very tepid growth in the United States is putting the pressure on growth elsewhere in the global economy, including in my region of Asia. Of course, the Asian region has carried the great bulk of global growth for a very long period of time and Asia can't do it all on its own. So we've all got an interest in ensuring, and that it's seen, that Europe is dealing comprehensively with their economic challenges and also we see a situation with stronger growth in the United States.

JOURNALIST:

Can I ask a question about the slowdown and the emerging economies and the effect that will have on countries like Australia?

TREASURER:

Well certainly there is concern and it's reflected in the World Economic Outlook that the recession in Europe and relatively modest growth in the United States is having knock-on effects elsewhere in the global economy. It is certainly had knock-on effects when it comes to the 'BRIC' economies as well as all economies in the Asian region. Over the last four or five years strong growth in Asia in particular has masked the weakness of growth in Europe and the United States. I think that reinforces the need for policies to promote growth, particularly in Europe and the United States.

JOURNALIST:

(inaudible)

TREASURER:

I don't think anyone underestimates the challenges that we've got in the global economy. I think what's most important is that people are reassured that the steps that are being taken in Europe as well as in the United States will lead to a strengthening of growth elsewhere in the global economy. But we can't take that for granted. What we must do collectively and individually is everything we can to ensure that growth is strengthened. In our region which has been supplying a greater proportion of global growth over the last four or five years, we're very hopeful to see that the policies that are being put in place in Europe and the United States will contribute a greater amount of growth.

JOURNALIST:

How much of a shadow could the dispute between China and Japan cast over the meeting in your opinion?

TREASURER:

Look I don't believe it cast a shadow over the meeting. There was participation in the debate here from representatives from China.

JOURNALLIST:

(inaudible)

TREASURER:

In emerging markets they have already been taking a range of measures to deal with some of the challenges in their economies. The challenges in the emerging market are quite different to the challenges in the developed economy, particularly those that are struggling with growth. The emerging economies (inaudible) are urging both the Europeans and the Americans to deal with some of the challenges in their economies and get that done as quickly as possible in the interest of securing stronger global growth, which is what the emerging economies really need.

JOURNALIST:

(inaudible)

TREASURER:

Developed and developing economies all have a big job ahead of them in putting in place important structured reforms for the long-term. But in the short-term what emerging economies really need is a strengthening of global growth and that can only come from a strengthening of global growth in both Europe and the United States.