Doorstop Interview
Parliament House, Canberra
6 April 2009
SUBJECTS: Tax Bonus Payments; Interest Rates; ANZ Job Ads; UN Security Council; Hockey Budget Comments.
TREASURER:
Today's an important day because the Tax Bonus component of our economic stimulus package begins to flow today, and these payments are all about supporting jobs, particularly in the retail sector and particularly until the direct investment in schools, homes and housing kicks in. From my perspective, I believe that Australians will spend this money responsibly, and that's a good thing in a global recession.
Over to you.
JOURNALIST:
How would you define responsible spending?
TREASURER:
Well, that's entirely up to Australians, but I think what we saw particularly through the economic security package over Christmas and through January was a lot of responsible spending, particularly from Australians who were buying the basics of life.
JOURNALIST:
Do you have any sympathy for banks who say that even if the interest rates are cut further that they have no more room to pass on those cuts to homeowners?
TREASURER:
Well, most certainly we'd like to see any official rate cuts passed on as soon as possible, there's no doubt about that. We do acknowledge there's a complex set of factors out there and that funding costs have been bouncing around. But we'd certainly like to see any official rate cuts passed on as soon as possible.
JOURNALIST:
Do you have any great fear about inflation returning at all?
TREASURER:
Well, certainly the balance of risk in the global economy has changed dramatically in a very short period of time. The reason why we've had a second economic stimulus package is obvious: there has been a savage contraction in the global economy in the last three months – a more savage contraction than anybody ever imagined at the end of last year. That is why we put in place our Nation Building and Jobs Plan in February. And given the global data, that's why it's so important that these Tax Bonus payments are flowing now, and they can boost demand in the Australian economy, support employment in the retail sector which employs over one million Australians, and can do that until the direct investment that we've put in place in terms of schools, housing and energy efficiency can kick in. You see, the Nation Building and Jobs Plan is an economic stimulus package which will flow through this year and next year, and all of the global data shows why that package is so important to support employment in the Australian economy.
JOURNALIST:
Mr Swan, do you (inaudible) third stimulus package is now inevitable, and should it be (inaudible)?
TREASURER:
Well, the Nation Building and Jobs Plan flows through this year and next year. But as you can see from the IMF forecasts, the most recent OECD forecast, there has been a sharper contraction in global demand. So, we'll look at all of these factors as we put together the Budget which will be brought down in May, and if further measures are required they will be taken responsibly.
JOURNALIST:
Treasurer, on that though, is it a statement of the bleeding obvious that the next stimulus package will have at its core infrastructure spending, given that you have got the Infrastructure Australia stuff still in the pipeline?
TREASURER:
Well, the first thing you must acknowledge is that we are investing in infrastructure of a lasting benefit to this country right now, and that goes to the core of our Nation Building and Jobs Plan. Over two-thirds of the investment in that economic stimulus package goes to schools, goes to housing, goes to energy efficiency, and you are correct to identify that there may be in the future further announcements when it comes to the recommendations of Infrastructure Australia. But I'm not going to speculate about those today.
JOURNALIST:
…gymnasiums, all sorts of facilities, still get the benefits of these packages?
TREASURER:
Well, the first thing you have to acknowledge is that this is the biggest modernisation program in our history which flows to every primary school in the country and it flows on also in a different way to secondary schools. And what it's about is boosting employment in every local community in the country, and the people that may be even going to those schools to build facilities will be the tradies and others involved in the construction industry who will benefit through that. So, let's not just take that particular view. We don't apologise for this program being universal. It's an important economic stimulus which will bring lasting benefit to every community, group of people, in every part of the country. So, we don't apologise for that for one minute – the fact that it goes to every school in terms of primary schools. We don't apologise for that at all.
JOURNALIST:
Treasurer, with regards to your banking package, can there be any measures to help people who lose their jobs but who don't have mortgages with one of the Big Four banks?
TREASURER:
We'll, we are talking to the credit unions and other mid-tier banks about what they may do as well. We want to see everybody come together, including all of the banks and all of the financial institutions. We made good progress working with the four major banks and we are trying to make progress working with the others, and I'm optimistic about that. It's important that we get as many financial institutions involved as is possible.
JOURNALIST:
Treasurer, jobs ads have plunged today. Is the labour market deteriorating faster than you had expected?
TREASURER:
Well, certainly the global economy is deteriorating much faster than anybody expected. I've just come from the G20, and sitting around the table with G20 Finance Ministers, what you can tell from them is that there is a very substantial impact on their economies in terms of employment, budget bottom lines and so on. But there's one thing about those Ministers – they would all swap places with me and come here if they could because things aren't as bad here as they are elsewhere in the world. But as I've said before, because of the change in the global economy, the sharper contraction, that will have an impact on employment here and that tends to be reflected in the figures that are out today. That's why we have put in place our economic stimulus programs to cushion the impact of this sharp global contraction.
JOURNALIST:
Treasurer, what's the Government's view on the UN Security Council's divisions over Korea?
TREASURER:
Well, certainly we condemn the action of North Korea and we would certainly like to see action from the UN Security Council.
JOURNALIST:
How will you know whether this week's cash payments have done their job to help the economy, and what do you think of the option of using further cash payments like that in the future, given Joe Hockey's position?
TREASURER:
Well, Joe Hockey's position is just irresponsible and reckless. His 'sit and wait and see' approach will condemn more people to unemployment and leave unemployment in this country much higher if he were in a responsible position, which thankfully, he is not. What we have seen from the first economic stimulus package is a significant impact on consumption, a significant impact on employment, particularly in the retail sector. Retail sales, and turnover if you like, in February was higher than in November in this country. There's no other country in the world that could say that was happening. We have had a fundamental impact here through economic stimulus and those figures demonstrate why it's so important to put in place. That's why we are doing better than many other countries in the developed world.
Thanks.
