Interview with Matthew Abraham
ABC 891, Adelaide
20 January 2010
SUBJECTS: Community Cabinet in Adelaide; the ageing population; lifting productivity; superannuation reform
ABRAHAM:
Good morning Wayne Swan
TREASURER:
How's it going?
ABRAHAM:
Very well, Wayne Swan. Mr Swan, why bring the Cabinet to South Australia?
TREASURER:
Well, we've been moving around the country and it's not the first time that we've brought the Cabinet to South Australia, there have been numerous visits. There have been a number of Community Cabinets here already. But we make sure we move around the country and we have a Community Cabinet something like every five to six weeks, and we've been doing that from day one. I tend to find that it's a very good way of talking to the community. We're out and about a lot as Ministers, but going to a local area and listening to what people have got to say is pretty important.
ABRAHAM:
And the Prime Minister will be down at Port Adelaide tomorrow for the opening of the new ship building facilities down there, so there's plenty to do.
Do you bring an announcement of your own for South Australia?
TREASURER:
No I don't bring an announcement of my own, but I am certainly intensely interested in the South Australian economy. Things are going pretty well here. You've got a relatively low rate of unemployment. It's certainly been the case that South Australia has done reasonably well in what has been a very difficult period over the past twelve to 18 months in the Australian economy. So it's good to get a chance to talk to people about that, about what's happening on the ground. To talk to small business – particularly those small businesses that have been taking advantage of our economic stimulus projects, which have certainly been supporting demand at the local level in many communities.
ABRAHAM:
Treasurer, the Prime Minister when he arrives, I think one of his first duties is to rub shoulders at the Tour Down Under. Does that reflect priorities?
TREASURER:
Look I was down here for the Tour Down Under last year because I spoke at a number of events about cancer awareness with Premier Rann and Lance Armstrong. This is a pretty important event for South Australia. You can't miss it as you move around the streets. I was in the hotel this morning and in the lift there was a lady in lycra with her bike. It's something that has generated enormous community excitement and involvement. I think it's terrific.
ABRAHAM:
Now the Prime Minister in a series of speeches has been telling Australians that they need to be a lot more productive. He's also in the last 24 hours said that the Federal Government will have to make some very tough decisions. He's saying that we can't continue to spend as much as we have been. This of course follows record spending by your Government to get us out of the global financial crisis.
TREASURER:
Well, certainly the Prime Minister has been talking about the ageing of the population, and of course, the way to deal with that is to grow the economy. And the best way to grow the economy is to lift productivity, and lifting productivity is about working smarter. It's about investing in skills, in education, in infrastructure. It's about regulatory reform.
ABRAHAM:
It's usually also about working - you know, for wage earners - about trading off existing conditions, working harder and working longer. That's the bottom line.
TREASURER:
No it's not the bottom line.
ABRAHAM:
And you know that as someone who has been immersed in the Labor movement, and I've been covering Labor politics and industrial affairs for some 30 years. Most wage agreements these days with a productivity component involve trading off conditions in return for some money, but also working harder and longer.
TREASURER:
Well, that's what Workchoices was all about - stripping away basic conditions. What productivity is all about is how we work together, how we educate and skill our workforce, how we ensure that our people and our workers are not caught in traffic jams, how we get our transportation lines working more efficiently. That's what productivity is about; it's about making our economy more competitive.
You see, productivity hasn't been flash in recent years in Australia. And from day one this Government has put in place a productivity agenda. And what we're talking about - in terms of the forthcoming Intergenerational Report - is how we as a nation work together to lift our productivity because we do have an issue coming down the track. I mean, at the moment there are five people of working age for every single person aged 65 and over, and in 2050 that will be 2.7. So there is going to be fewer workers supporting an older population. And of course, we want to support that older population. So the most important thing we've got to do is to lift our productivity, but part of that also means that we've got to show some Budget restraint.
Now, of course the stimulus we put in place over the past 12 months has meant that Australia did avoid a recession. If it hadn't been for that stimulus, growth would have contracted by something like 2 per cent in the year through to September, and unemployment in places like South Australia would have been dramatically higher, and small business closures certainly would have been dramatically higher. But what we are doing…
ABRAHAM:
Barnaby Joyce the Finance Spokesman for the Federal Opposition was on the AM program this morning, and he says that Kevin Rudd and Wayne Swan have forgotten that under the former Howard government the size of the economy doubled. But he also was very, very cynical about your ability to rein in spending.
JOYCE: Fiscal restraint is a language that Mr Rudd just doesn't speak. It's like the town drunk saying – after one of the biggest binges in the history of the alley I'm now going to revert back to the temperance league. This is the man who formulated one of the greatest spending sprees in the history of our nation. We are heading towards 256 – better than quarter of a trillion dollars gross debt. He's not even through his first term. And he started with 22 billion dollars cash in the bank. He is absolutely incredible in the true sense of the word.
KIRK: Do you think Government spending growth should be capped at 2 per cent a year?
JOYCE: Well, we're heading to a point where we won't have to worry about spending growth, where every spare dollar will be paying back debt. It's all gone because of Mr Rudd.
ABRAHAM:
Wayne Swan, what's your response to that?
TREASURER:
Well, I think that shows why Barnaby Joyce is such a risk to our national economy. He's just saying we don't have to worry about spending growth. He's also saying that we should…
ABRAHAM:
No, that's not what he's saying at all. What he's saying is that you spent so much that we'll be paying – every spare dollar will go to pay off the debt.
TREASURER:
No, he has said that we don't need that 2 per cent real spending cap that we have put in place once growth returns to trend.
ABRAHAM:
He didn't say that at all.
TREASURER:
Well, I've got the quote in front of me – "We are heading to the point where we don't have to worry about spending growth"
ABRAHAM:
Because he's saying you've got a much bigger problem.
TREASURER:
No, when we put in place the stimulus we also put in place the medium-term fiscal strategy to bring the Budget back to surplus, and a critical part of that is our 2 per cent spending cap. Now Barnaby Joyce somehow thinks you can go on spending, because he is out there opposing our means testing of the Private Health Insurance Rebate. He's got Mr Abbott and others putting forward all of these spending proposals. What we've got is a responsible medium-term fiscal strategy to bring the Budget back to surplus.
But if Mr Joyce had been in charge last year, what would have occurred is that big revenue write down of $210 billion one year ago would have either resulted in them jacking up taxes massively or cutting services massively if they weren't going to support the economy. You see what we would have had with Mr Joyce is a recession. That's been avoided because we've responsibly stimulated the economy and supported the economy because of the revenue downturn, but also put in place a medium-term fiscal strategy to bring the Budget back to surplus which he's now repudiating.
ABRAHAM:
Now, Wayne Swan, I know - and we respect this - you have to be gone very shortly, so we don't want to test the friendship here, or the relationship. But Greg from Port Adelaide has a – are you happy to take his question? That should wrap us up.
Greg, from Port Adelaide.
GREG:
Yes, thanks. Yes, Wayne I was just wondering if the Federal Government has considered directing a significant percentage of Australian workers' super into environmentally sustainable infrastructure builds, and the training of the new generation. So in the short, the medium and the long-term the retiring workers have, say the same 5 per cent return on that investment?
ABRAHAM:
Wayne Swan.
TREASURER:
Well, the whole issue of reform of superannuation, which is absolutely critical is part of the consideration of the Henry Review which is before the Government at the moment. I can't speculate about what is in that review, but what I can say is that the Government takes the issue of the superannuation savings of our workforce very seriously. And, of course it is the pool of superannuation savings that we've had that has helped us so much during this global recession. We think it's important that average workers get support from the Government and encouragement to save, and I think you'll see that reflected in policy responses as we go through the years ahead.
ABRAHAM:
Treasurer thank you for talking to 891 mornings.
TREASURER:
Great to be with you.
