SUBJECTS: Australian Economy; Gillard Government Achievements
In terms of the general economy there's been a fall-off in confidence, you've got some trouble in employment, outside of mining things are going quietly. How much of this can be sheeted home to the ineptitude of the Government to explain what it's on about and the negativity of the Opposition?
Well, I don't accept the premise of that question in the first instance at all, but there's no doubt that the Opposition has been talking our economy down day after day, week after week. In fact, year after year.
Now, let's just go through where we are economically. We have short-term softness. The principle reason for that short-term softness is the natural disasters earlier this year, principally in Queensland, but elsewhere as well. And as we saw in the National Accounts they had a greater than expected impact on economic growth in the March quarter. That was there for all to see. On top of that we do have continuing uncertainty globally and we are still living with the hangover affects or the aftershocks of the global financial crisis and the global recession. So those are all factors which are impacting on sentiment in the economy.
But on the other side of the ledger, we still have very strong employment growth – something like 250,000 jobs in the past year. We have a very, very strong investment pipeline. Record investment in resources particularly, and something like $80 billion in the year ahead in resources alone and we saw yesterday the data from ABARES. So we have medium-term strength as well.
But as you are aware the Government is doing what we said we would do in the Budget, we are bringing the Budget back to surplus in 2012-13. We are engaging in a very substantial fiscal consolidation, that is, a very large return to surplus over a relatively short period of time. We are doing that because we understand that the impact of the investment boom will be such that we cannot add to price pressures when that investment boom is in full swing and that's why we're coming back to surplus in 2012-13. So short-term softness and medium-term strength.
So you're not taking any responsibility for the softness at the moment?
Well, I certainly believe that things are softer at the moment because consumers are more cautious than they have been in the past as you will understand. The savings rate in this country at the moment is very high, but the principle cause of softness at the moment is a combination of consumer caution on the one hand and the causes of that are the ones I talked about before. The impact particularly of the natural disasters earlier this year and the uncertainty that flows from the international events and of course international uncertainty we see coming out of Europe and the United States. What I'd say to all Australians is that our prospects are strong. At the moment people are cautious and things are a little softer than many would like, but our prospects are bright.
Treasurer, tomorrow will be a year since you replaced Julia Gillard as Deputy Prime Minister. How do you think the Government has performed over that 12 months and what will you be doing tomorrow to mark the occasion?
Well, first of all we've got the economic fundamentals right and I just talked a little bit about that. You know, the thing that I'm most proud of over the past 12 months is the 250,000 jobs that were created. That's very strong employment growth and as you know in the Budget we're forecasting jobs growth in the order of half a million jobs over two years and a bit. I'm pretty proud of that, but I'm also proud of what the Government has been able to do in areas such as the NBN.
Standing here today announcing these deals between Optus and also between Telstra demonstrates how worthwhile long-term reform is, and it demonstrates in the short term it can be difficult to achieve. It demonstrates that in the short term that if you're committed to structural reforms then you lose a bit of paint along the way, but when you get them in place they've been big economic dividends and when they bring those economic dividends, they bring the political dividends with them as well.
But the other things that I'm proud of is what we've done in terms of putting in place a banking sector reform package, making our banking system more competitive, getting rid of huge unfair mortgage exit fees. That's a very big reform as well because it's part of a wider set of reforms, not just to assist consumers, but also to deal with some of the funding pressures in the banking system and the financing of our economy for the longer term. Putting in place the framework, for example for covered bonds, giving some of the mutuals the opportunities to become banks. They're very important reforms. The reforms in the Budget, for example, dealing with workforce and participation issues, huge reforms for Australia to help us maximise the opportunities that are coming from the investment boom but also to spread the opportunities around our country to every postcode.
So I think there's a pretty strong record of achievement across a wide range of areas, and on top of that, working as we are to put a price on carbon. I think that's a pretty substantial bunch of policy reforms that are important to the future of our country. And what will I be doing tomorrow? Working hard as I do every day.
Mr Swan given the legacy issue you were associated with last year consistently overwhelms the Government's achievements in terms of, in the national discussion. Have you had any moment of regret at any stage over the last 12 months about the decision you made to get behind Julia Gillard as leader and oust Kevin Rudd last year? Have you ever regretted that decision?
Can I tell you I value every day the privilege of not only being a Member of Parliament but especially being the Treasurer of Australia. And no matter how difficult or daunting the policy outlook may be from time to time, what gives me the greatest fulfilment and satisfaction is knowing that we can put in place fundamental reforms that make a difference for Australians, and we've been talking about one today and I've just been through a number of the others that we're working on at the moment. That's what being in political life is about for me and sure, personally, there are different days; some days are good and some days are not so good, but we should never forget why we are here in Parliament.
And do you know what? It's not about ourselves. It's about the people who elect us and the future of our country and I approach every day from the point of view of doing everything that I can honestly do to make a difference for our country for the better. That's how I approach it. Thanks a lot.