Interview with Steve Vizard
MTR - Melbourne Talk Radio
11 June 2010
SUBJECTS: Resource Super Profits Tax; Bank fees
VIZARD:
The Federal Treasurer Wayne Swan joins me this morning. Good to talk to you Wayne.
TREASURER:
Good morning. I'm back in friendly Brisbane.
VIZARD:
Good to get back to the east?
TREASURER:
The music is playing up here too.
VIZARD:
Have the Federal Government blinked first?
TREASURER:
Not at all. We're having the constructive consultations that we said we would have when we announced our response to the independent tax review, back in the beginning of May. The discussions are constructive and they're genuine. One of the challenges we've had over the past few weeks is that some of the bigger companies in the country didn't want to engage in those discussions. We're certainly now having constructive discussions across the board. Many companies have been engaged in that process, something like 80 companies have been through the consultation process and the committee, as well as many companies talking constructively to Ministers, particularly myself, Minister Ferguson and the Prime Minister. That is happening as we said it would.
VIZARD:
How did the discussions with Twiggy Forrest go?
TREASURER:
Well, Twiggy Forrest is an interesting guy, he put his point of view pretty forthrightly and the Prime Minister and I listened to what he had to say. But it's part of the engagement we said we would have, and that's what we're doing, we've done it in the west and we've done it around the country. There's nothing new about that, it's in fact what I called for on the day that we launched our response to the independent tax review, and many companies have been doing that for some time. Others decided that they wanted to wage a public campaign and they have and others are now engaging more broadly in that process.
VIZARD:
One side has got to move, a lot of listening going on, but there has to be some movement at the end of the day. Just to read what Mr Forrest says about movement - 'To be very clear, the Prime Minister and I have nothing to discuss, nor anything to negotiate while this tax stands because it will be debilitating to the mining industry and the negative impacts will be felt by the whole of the economy'. That doesn't sound like a man who is prepared to compromise.
TREASURER:
Well, there is a lot of bluster, there's a lot of brinkmanship, but this Government has proven that it has got the big economic calls right when it mattered, and we're approaching this issue in the same way because we're acting in the national interest here. We understand that we have to deal with the challenges of mining boom mark-II, we have to modernise the resource taxation system, but also we've got to make sure we get lower company taxes for companies right across the economy, we've go to invest in infrastructure and we've got to build up our pool of national savings. They're at the core of the agenda that we're taking forward.
VIZARD:
Wayne, you're acting in the national interest, but in a timetable of a forthcoming election. This compromise will need to be done and made pretty soon. What's your timetable for this?
TREASURER:
Well, we didn't choose the timing here in the sense that the independent review report came through at the end of last year, we've considered it thoroughly and we put forward our considered response. We're not acting in terms of the political timetable. We understand that we have to get the big economic decisions right. We did last year and we will this year, and the fact that there was going to be an election at the end of this year was not a factor in our thinking when we were presented with the compelling evidence.
You see, you've got the unemployment figure yesterday which shows once again that the Government has got the big economic calls right, because there is no other developed economy in the world, bar perhaps one, that could have an unemployment level as low as we've recorded in those figures yesterday. This is a very good performance from the Australian economy. It's a result of people working together over the past couple of years in response to the global recession. And what we want to do now is build on that with a further raft of economic reforms to guarantee prosperity as we go forward.
VIZARD:
Are you concerned that your initiative is in some way being compromised by the process, the faulty process that you're undertaking? That is, not having undertaken consultation in an appropriate way before you announced this fixed mining tax?
TREASURER:
I don't accept that at all. The independent committee itself has said that there was no industry that it consulted more widely with than the mining industry, and I think that somehow gets a bit lost in the debate. Direct consultation went ahead.
When we announced our response we said that we would have a consultation committee particularly to deal with the technical detail, but we've had ministers who had been engaged, talking to industry consistently in a calm and considered way, in contrast to, I guess, some of the more hysterical presentations that have been made by people standing on the backs of trucks in Perth for example.
VIZARD:
But Simon Crean would have a different view, and he says that the Government should have consulted business before announcing the scheme, and it was now acting in his words - to fix its error?
TREASURER:
Well, I don't know if that's quite what Simon has said. Simon was reflecting the fact that many business leaders have been critical of consultation, but they have ignored the fact - and perhaps it's convenient for those business leaders to ignore this - that the independent committee did engage in consultation. Indeed it was the mining industry itself that made a presentation to that committee calling for a profits based tax, and the committee consulted on that basis.
But from day one, when I stood up and announced the Government's response in early May, I said we would be consulting extensively with business. But the truth is some companies decided that they wanted to not have this tax at all, that they didn't want to pay anymore tax and they were going to wage a political campaign against the Government's reforms. This has happened in the past when other big reforms have been put forward, but what we've continued to do despite that political campaign is to consult extensively with industry in a calm and considered way because we're perusing the national economic interest.
VIZARD:
Do you think Treasurer the mining industry's bite over this tax has been weakened by the announcement today that the superannuation funds say they will only mildly affected by the introduction of the tax you propose?
TREASURER:
I think that many in the mining industry have hysterically exaggerated many claims about the tax, and I think the superannuation industry has shot down one of those claims today in their commentary. And you've got companies like Xstrata that have drastically exaggerated the impact on their operations and those claims have been shown to be false.
I think even today there is an article in the Financial Review that, that company is out purchasing land in the area where it said that it had put a project on hold. I think that sort of blows it away. You've got Rio making extreme statements, Clive Palmer, and others.
Look, in the past when Government's have put forward significant economic reforms there has been this sort of reaction in the community, and our job is to deal with that and to move forward in a considered way, and that is what we are doing.
VIZARD:
We just got news through that Gerry Harvey yesterday criticised the Prime Minister, saying he was a bit of a dill, has now retracted, denied the comments.
TREASURER:
Well, I'm told that after he made those criticisms of the Prime Minister, and myself, he walked outside and said, and I quote - 'I think that what I said inside was just bloody rubbish'. That's fairly typical Gerry. I have got to say I have had a few engagements with Gerry over the years. At one stage in the early part of last year he was criticizing stimulus, but after it was so effective he gave us very significant praise. Gerry can be a pretty colourful character, and I think that anyone who knows him knows that he is prone to letting it fly from time to time.
We don't let that deflect us. I mean, it was very important what we did last year. Stimulus supported the retail sector in this country. It's a very important factor in that really strong jobs figure that we had only yesterday - retail, supporting small businesses, keeping small businesses open, that has all been very important and, of course, on top of that what Gerry ignored is the fact that we have got a big agenda to reform company tax to bring down the company tax rate.
VIZARD:
A lot of TV sets and fridges sold during the stimulus package.
TREASURER:
Well, there is no doubt about that, and Gerry would have been a very substantial beneficiary of all of that. But not just Gerry, all of his employees, all of those people that depend on companies like his for a job. Gerry has acknowledged that in the past, he has acknowledge that personally to me, which is why I guess I was a little surprised to see the commentary yesterday. Because his view of the Government last year was one that was very supportive and understood the importance of stimulus in supporting employment and, of course, the importance of what we are doing now to support employment in changes to company tax, in building up national superannuation, and investing in infrastructure.
VIZARD:
Treasurer, can I just turn to the banks. Headlines around the country - 'The banks gorged during the crisis', '$12.7 billion fees bonanza' - reads some of the papers. Are the banks getting the message?
TREASURER:
Well, we have done a number of things in this area, and I wouldn't mind just a minute or two to run through them because we're putting in ...
VIZARD:
You can make it a minute, we're heading towards the news.
TREASURER:
We have put place pretty strong protections for banking customers through new consumer protection laws, and that will basically mean that for customers from the 1st of July will be able to complain to ASIC if they think the fee changed is unfair, that is a very big change. But secondly, a broad range of measures to support competition more generally, and give a hand up to the smaller companies that can keep the bigger companies honest.
VIZARD:
Good on ya. That is the Treasurer Wayne Swan. Wayne just finally, the question I asked you before - this compromise with the mining tax, election coming up. When do you need to compromise by? When do you need a final resolution on this mining tax by?
TREASURER:
Well, the most important thing is to get the final detail right. We have said that we we're consulting, and we are, and we have outlined the terms of that consultation. But the most important thing is to get it right.
VIZARD:
Next year won't do, will it?
TREASURER:
We will take our time to get it right, that is what we have said, and we are consulting genuinely and that is were I will leave it.
VIZARD:
Alright. Thanks Treasurer, for your time.
TREASURER:
Thank you.
