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

3 April 2013

Press Conference

Canberra

SUBJECTS: Reserve Bank and APRA Appointments, Superannuation

TREASURER:

Today, it's going to give me a lot of pleasure to announce some key appointments at the Reserve Bank and also at APRA. Because these two organisations, these two institutions did so much to help Australia avoid recession during the Global Financial Crisis and the Global Recession. Today, I'm pleased to announce that Glenn Stevens will continue as Governor of the Reserve Bank for a further three year term, as he requested. There's no doubt that Glenn has made an enormous contribution to Australia's economic performance and financial stability since his appointment seven years ago. He is in particular recognised around the world as a key policy-maker and one of the best. I personally have enormous respect for Governor Stevens and the role that he plays in our financial system. That's why I certainly congratulate Glenn on his reappointment.

Secondly, I have recommended to the Acting Governor-General that Mr Wayne Byers be appointed as Chair of APRA. Mr Byres is currently serving in the highly distinguished position of Secretary General to the Basel Committee on Banking Supervision. He was previously at APRA for 13 years, where he was central to Australia's response to the Global Financial Crisis as he was the lead supervisor of the four major banks during that period.

His appointment as APRA Chair has been strongly recommended to me by Dr John Laker who has led APRA for a decade, as well as Governor Stevens and Martin Parkinson, who is the Secretary of the Treasury. Dr Laker has overseen APRA during a very important time, one of the most tumultuous times in Australia's financial history. His tough supervision has helped to ensure our financial system remains one of the strongest financial systems in the world. To ensure a smooth transition at APRA, Dr Laker has agreed to serve as APRA Chair until Wayne Byers returns from his international role next year. It's in Australia's national interests that he complete his term in that position and starts at APRA on 1 July next year. As a courtesy, I have informed the Shadow Treasurer of my intention to recommend to the Acting Governor-General Wayne Byers' appointment, as well as the reappointment of Governor Stevens. Today I'm also pleased to appoint Ms Kathryn Fagg to the RBA Board, as well as Mr Paul Costello and Ms Gina Cass-Gottlieb to the Payments System Board. Together these key appointments will help to ensure that our financial system and our economy remain among the strongest in the world.

Now I've seen some very interesting comments today from the Shadow Finance Minister, Mr Robb, where he claimed that our efforts in protecting Australia from recession during the GFC are a myth. Well of course nothing, nothing could be further from the truth. I don't know how Mr Robb could say that to the hundreds of thousands of people whose jobs were saved through the very swift action of the RBA, APRA and the Government. Putting in place firstly the bank guarantees and then of course the Government putting in place the fiscal stimulus that supported our economy. The proof is in the pudding. During the five years of this Government, 900,000 jobs have been created whilst around the world, tens of millions of people have lost their jobs. I think it just indicates how out of their depth the Opposition are when it comes to these critical financial and economic judgments.

I've also just chaired a meeting of State Treasurers here in Canberra this morning. It was a pretty good and constructive conversation , not just about the economic outlook but a good discussion about Federal-State financial relations as well. One of the points I made to State Treasurers was the very substantial support that the Commonwealth is providing to the States to ensure that service delivery, particularly in health and education meets the expectations and the needs of the Australian people.

In the areas of health, education, disability services, skills and housing, we are delivering $4 billion more in 2012-13 than the States would have received under the previous funding arrangements of the previous government. $4 billion is a lot more hospital beds and a lot more teachers in our classrooms and so on. This is money that is much more generous than the States received previously under the Liberals. Why is this relevant? Because Mr Abbott has made very clear, particularly when it comes to indexation in both health and education agreements that he intends to go back to the old formulas of the past, rather than to keep in place the very important arrangements we've got to cope with growth in health and in education. So if he were to take the reins then there would be massive cuts across those areas of service delivery which are so important to the peace of mind of people right around Australia. Now I've got time to take a few questions, but I do have another meeting to go to, I'll attempt to answer as many as I can.

JOURNALIST:

On superannuation, it's been reported that I think in some cases CEO of banks having talks with yourself or Bill Shorten or Penny Wong tomorrow about their concerns about what you may or may not be planning in the Budget. What would be your message to them?

TREASURER:

My message is a general message – let's have this discussion framed by the facts. The facts are these: this Government supports the superannuation system strongly, it is the reason why we have put in place an increase in the Superannuation Guarantee from 9 per cent to 12 per cent. We want to build the system up, not like Mr Abbott who wants to tear it down. He has got a proposal to increase the tax on the superannuation of over 3 million Australian workers on the table right now, hacking into the support that is provided to superannuation for the lowest paid Australians. The Government will go through its normal budget process through this period, we'll go about putting together reforms methodically and in a very clear minded way. I'm not going to engage in all of the speculation that is around at the moment, most of it is inaccurate.

JOURNALIST:

Treasurer, because there is obviously a lot of speculation and inaccuracy, have you given any consideration to making some sort of a general statement on principle or detail on superannuation ahead of the Budget to stop the concerns?

TREASURER:

I can tell you a number of principles that we are following to build the system up, to ensure that more Australians have dignity in their retirement. That is why we've put in place the increase from 9 per cent to 12 per cent. Everybody understands that the system must be sustainable for the long-term, that tax concessions for those at the very top are excessively generous and to make it sustainable over time the concessions need to be sustainable over time. So we will build the system up, we want to see more Australians having access to a decent retirement with a decent level of support from their superannuation, that's the spirit that we bring to this discussion.

JOURNALIST:

You talked about misreporting, is the reporting that only the top 2 per cent of income earners will be affected, is that incorrect?

TREASURER:

I'm not responding to all of the speculation that's in the papers at the moment.

JOURNALIST:

[inaudible]

TREASURER:

Let me make a couple of points. We will bring to this discussion and to reform in this area the spirit of reform that we saw during the period of the Hawke and Keating Governments. During that period they made a series of additions and they strengthened the system and the same principles that apply then, apply now. It is also the case that concessions at the top are very, very generous and they do need to be made sustainable over time.

JOURNALIST:

Why not calm 98 per cent of income earners and tell them they're not affected?

TREASURER:

I made it very clear. I made a couple of other points very clear as well. We do not approach this task of making superannuation sustainable as a savings task in itself for the Budget. The fact is that we have a substantial savings task in this Budget and whatever changes are made in super will not be making a significant contribution to that savings task. I can make that point very clear because it leads into my second point. Our objective is to build the system up, to make it better for an ageing population and to make sure most people in this community get a decent level of support in their retirement.

JOURNALIST:

You accuse the media of being inaccurate in its speculation, yet it's being briefed out that it's 1-2 per cent of taxpayers that are going to be targeted and yet you're not answering Richard's question -

TREASURER:

Can I just strip that back a bit? There's a lot of loaded language in there and I don't accept any of it. I made the point that we want a strong system for superannuation in Australia. It's important not just for individuals and their dignity in retirement, it's also important for our national economy. I've been talking today about what occurred during the Global Financial Crisis and the Global Recession, one of the assets that got us through that period was our substantial pool of superannuation savings – up around $1.5 trillion.   Our objective is to build that pool, and build it we will, for the future and to get more people…

JOURNALIST:

You're inviting speculation, some of it which will be accurate?

TREASURER:

I was asked by a number of people what are the guidelines, the principles and I'm giving them to you. I've made it very clear what we intend to do and we'll do it in a methodical way and I'm not going to get engaged with a lot of the speculation that's around.

JOURNALIST:

Treasurer, much of this debate was actually framed by Simon Crean and the message is that you're planning to build your budget surplus by robbing the budget surplus of individuals?

TREASURER:

Can I be really clear about one of the principles that we're following. Past Labor Governments have built up the superannuation system and our intention is to build it up even further and to make it stronger and to make it better for the great bulk of the hard-working Australians that make our country strong and to do that, the spirit we bring to it, the approach that we bring to it is the approach that was brought to it by the Hawke and Keating Governments when they created it in the first place. We would not take the type of action that I see speculated by people on various occasions. I'm not going to be in the position of responding to individual propositions.

JOURNALIST:

Treasurer, you've made it very clear that it's not part of the budget savings, or not a substantial part of the budget savings…

TREASURER:

I said not a substantial (part).

JOURNALIST:

Yes, and Minister Shorten has said the same thing.

TREASURER:

That's right.

JOURNALIST:

The Budget is not driving the changes to superannuation. Why is it then not possible to produce superannuation reforms separate to the Budget?

TREASURER:

I'm not going to respond to that either. We're going through a policy-making process, we'll continue to go through that in a methodical way and when we've completed that we'll make our announcements.

JOURNALIST:

Treasurer, do you acknowledge that your language today in saying that the concessions at the top are very, very generous and do need to be made more sustainable will be leaving a lot of higher income earners feeling nervous?

TREASURER:

We had a change in the Budget last year which is currently being implemented and I think most people saw that as a very reasonable proposition and which dealt partly with this challenge that I am talking about. And that's the way it should be viewed.

JOURNALIST:

Treasurer, yesterday Bill Shorten said, well indicated that people should be confident about not having changes to their super if they were earning something like four times average earnings. Do you think that's a reasonable piece of guidance to give people about confidence in the system?

TREASURER:

When we talk about making the system stronger, when we talk about making the system better, we are talking about the great bulk of people in it and that goes up a long way.

JOURNALIST:

On the question of principles and guidelines. Do you accept retrospectivity as one of the principles and are you looking at redistributing some of the wealth from higher income earners to lower income earners?

TREASURER:

I think I've already answered that question in an earlier remark and what I said was we will apply the same principles that earlier Governments – the Hawke and Keating Governments - applied when they made changes which built and strengthened the system, we will do it the same way again.