Interview with Marius Benson
ABC NewsRadio
18 March 2009
SUBJECTS: ABIP; Global Recession; G20 Finance Ministers' Meeting
BENSON:
You call it ABIP, or the Australian Business Investment Partnership, the Opposition calls it Rudd Bank, and what it involves is $2 billion from the Government, $2 billion from the Big Four banks and $26 billion in credit, and the Opposition says it adds up to a blank cheque where you would have this money and not be answerable to Parliament.
TREASURER:
Well, that's simply untrue. There are very many safeguards built into the legislation. The real problem here is the Opposition doesn't understand the threat to the Australian economy from the global recession. And part of the impact of the global recession is the possible withdrawal of foreign banks from property syndication in the Australian market, and what that could cause is very substantial unemployment in the commercial property sector. Because when those banks withdraw and funding is not available, that will have a dramatic impact upon commercial property values and a flow-on impact to employment in the sector which employs something like 150,000 Australians. And I think the attitude of the Opposition is simply opportunist. They'd rather see the commercial property sector fail than see this Government's plans succeed.
BENSON:
Now, the Opposition is saying you're just propping up commercial property prices. I imagine you wouldn't describe it as just doing that but that's exactly what the objective is, isn't it, as stated by the Prime Minister and yourself?
TREASURER:
Well, the objective here is to support the commercial property sector which is threatened by a withdrawal of funding from foreign banks because of the global recession. Perfectly viable property projects with good income streams are now threatened for no other reason other than foreign bank withdrawal, and in this situation a responsible government must act. But the Opposition is so intent on playing politics and taking opportunistic stances that they'd rather play politics with the lives of tens of thousands of Australians than support a very responsible measure which is supported almost universally by most business groups because it is simply practical common sense.
BENSON:
Mr Swan, you're finding billions, or $2 billion at least, in government funds for this task at the moment at a time when spending is being scaled back, or the prospect is that budget spending in May will be scaled back. There are new reports this morning of the Prime Minister warning Ministers not to come up with shopping lists for the May Budget.
TREASURER:
Well, when global demand contracts as sharply as it has, government has a responsibility to act, if you like, to support growth and to support employment, and that's what we're doing. That's the responsible course of action. The irresponsible course of action is not to act. And that is of course the approach of the Opposition. And what that results in is higher unemployment, higher budget deficits and higher debt.
BENSON:
Mr Swan, you were also warning in Parliament yesterday of the deepening severity of the economic crisis. Things are still getting worse. And you made it clear that we haven't bottomed out yet.
TREASURER:
Well, certainly the intelligence I received at the G20 Finance Ministers' meeting on the weekend is that growth contracted very substantially in developed economies in the December quarter - much greater than anybody thought. That is of course why the Government moved so decisively back in October and of course in February to put in place very substantial economic stimulus, because that needs to go in place to support growth and therefore to support employment and to support business. That's the responsible course of action adopted by the 20 largest economies in the world from governments of all political persuasions. But of course very few people in the world oppose these actions except the Liberal and National parties in Australia, they are that far out of touch.
BENSON:
And that economic rockslide is still gathering pace. We're not at the bottom of the slope yet?
TREASURER:
It doesn't appear so. It is very hard to predict what will happen in the future. That's why the G20 was so important on the weekend - so important for the 20 largest economies to put in place an agreement to support growth, to deal with problems in the financial system and to deal with the regulation of the international financial system. That can help put a floor in the system and support confidence.
BENSON:
It's clear from all the reports that there will be constraints on spending in the Budget but some things are guaranteed. Pensions are guaranteed. Is maternity leave, as outlined in support in that regard, or parental leave, still safe?
TREASURER:
Marius, I'm not speculating about what may be or not be in the forthcoming Budget. Nice try.
BENSON:
Okay. And the Prime Minister told Caucus, he warned them that in terms of general thinking, you're half way to an election. That suggests no early poll is in the Federal Government's thinking.
TREASURER:
The only matters in our thinking is how we can use every tool of public policy to support growth and employment and to cushion the impact of this global recession on the Australian economy.
BENSON:
Mr Swan, thank you very much.
TREASURER:
Good to be with you.
