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(generated from captions) who will no doubt say more

about the surplus. Lyndal, we

have to leave it there. I think the Treasurer, Wayne

Swan, has now taken the podium. With him is Finance Minister

Penny Wollongong. They'll no

-- Wong, they'll no doubt start

speaking to the media now. We'll listen in. Good

afternoon. As we release this

pretty clear that storm clouds

are gathering and this time the

darkest shadows are cast over

Europe. It's against backdrop that Treasury has Europe. It's against this


revised down its forecasts for

We've global growth by 1% in 2012.

We've also seen some forecasts

from the OECD overnight and of

course the doup side forecasts course the doup side

can show

things were to take a turn things were to take a turn for the worse. Despite the storm clouds on the global horizon,

we remain on track to deliver a surplus as planned in 2012/13.

We've been talking about this

for some time. I've been

making the point, Penny has been making the point, the

Prime Minister has been making

the point, that no economy or

no budget is immune from what's

happening in the global economy, including our own. That's why our growth forecasts

have beenry advised down here

to trend. As you would expect, this has made the return to

surplus more difficult with

this global turmoil hitting

revenues to the tune of $20

billion. So revenues have been

hit, budget revenues have been

hit to the tune of $20 billion.

At a time of At a time of heightened global

discipline instability, our fiscal

discipline here needs to send discipline here needs to send a message to the world, and that is precisely what we are is precisely what we are doing by bringing the budget back to surplus in 2012/13. We showkaszing to the world surplus in 2012/13. We are

strong economic fundamentals of the Australian economy. Our

fiscal position is right for fiscal position is right

our economic circumstances here

in Australia. balanced approach to ensure that

that our public finances remain

strong. In fact, the strength

of our public finances have

been recognised again today by

the ratings from Fitch. This is the first time in Australian

history that we have received

the gold-plated triple A rating

from all three global rating from all three global rating

agencies. , the first time in

history. At the end of the day, strong public finances day, strong public finances and

strong economic fundamentals

are the best protection that we

can provide for working people

in our country. Because of the

choices that we have made choices that we have made over

the past four years in terms of

the budget management and managing

the economy more generally, we

have the best set of economic fundamentals in the developed

world. Most countries could

only dream of having growth at

trend levels, but that's what Australia, despite all of the

storm clouds that are on the

horizon. I want to spend a bit

the detail, because we are of time going through some of

experiencing the worst bout of global instability since the

global financial crisis. We've

seen the sovereign debt crisis

intensify in Europe in recent

weeks. We've seen its impact upon global markets, particularly market volatility, and of course we and

impact on global confidence. This chart here shows that This

we've substantially down growth forecasts we've substantially revised

advanced down growth forecasts for shows that we expect to see

Europe head into recession.

But most importantly, it shows that two of the big economic

drivers in the global economy -

notably the US and the Euro

area - are both misfiring at the same time, and that

challenge in terms of global challenge in terms of

growth. So global growth has

been revised down by been revised down by 1 percentage

percentage point in 2012, from

4.5% to 3.5%. As I said, what

that largely reflects is

developments in both the United States, but, most particularly,

developments in Europe. Of

course, these are transmitted

through to our economy through

a number of channel s: firstly, global turbulence affects

affects the stock market, the share market. I think share market. I think our

share market is down something

like 15% since May this year. It's created some volatility - for example, in It's

for example, in commodity

prices. We'll talk a bit about prices. We'll talk a bit about

that later on. But what it

does most fundamentally is that

it does unsettle consumers and

it does un settle businesses. it does un settle businesses.

We've seen households become a So we've seen confidence fall.

little more cautious, and of

course we have seen business be

hesitant in terms of their hiring decisions. Of

then flow s through to global

trade, and we've seen a dampening of global trade

outside of mining. Of outside of mining. Of course,

what that does is exacerbate

the pressures which we already

have in our domestic

which flow from a continuing

high dollar, although down a

little now, and of course

intensified cautious consumer

behaviour. So it tends to its way through the system behaviour. So it tends to work

develop a feedback loop. What

that this means for our forecast is

that growth is expected to be 3.25% in both 2011/12 and 2012/13, important figures

because they are growth figures

around our traditional trend

level, an exption al degree of of the circumstances that we

are facing. So growth is now

down in terms of this mid-year

review by three-quarters of

percentage point and half a

percent below our forecast in

12/13. The really good thing,

and a thing that I'm so pleased about and I ne the about and I ne the Government

is so pleased about, is that

unemployment is expected to

stay low, because at the end of

the day employment is the key

key to peace of mind and it's the

key to living standards. We do expect to see the unemployment

rate just tick up a little to

be at 5.5% over the forecast

period. Compare this and think about it this way to what about it this way to what is

going on in other countries

around the world - 9 to 10% around the world - 9 to 10% in

the United States and Europe,

and much higher in many

individual economies individual economies throughout Europe. Spanish

unemployment, for example, is

50%. So a very good outcome in

terms of employment growth here

news is the price news is the price pressures have eased since the budget, with headline with headline and underlying

inflation expected to sit well

within the RBA's target band,

excluding the one-off impact of

carbon price in 2012/13. Our

forecasts are very much in line with the forecasts of forecasts

Reserve Bank, which prepares

its forecast separately from

us, very much in line with the forecast international organisations

like the OECD and the International Monetary Fund International Monetary

very much in line with any of

the highly qualified market forecasters putting forward. I

just want to spend a bit of

time talking about the fiscal

out look. As I said before,

the worsening outlook for the

global economy has impacted

upon revenues and ripped more

than $20 billion from revenues. Let me just put that

into context. $20 billion is

the equivalent of the entire

schools and higher education budget all gone in

That's how big it is across the

forward estimates. About

one-third of this loss is due

to declines in asset prices,

with some $7 billion being

written down in terms of

capital gains revenue. Revenue

has also been hit by softer

employment growth flowing from softer global and the turmoil in Europe in

particular. All of this has

meant that the deficit for this year is higher at $37.1

billion, or 2.5% of GDP. We

then expect it to return to a

modest surplus of $1.5 billion

in 2012/13. The increase in the budget deficit in 2011/12

is not due to new discretionary

spending, as some people might have spend a little bit of time going

going through what is occurring

in 2011/12. $11 billion of that increase is either

essential or unavoidable, and

what does it reflect? It

reflects a writedown of $5

billion in tax revenues flowing

from the events that I've

talked about before from the

turmoil in Europe. It turmoil in Europe. It reflects

a $2.3 billion increase in

payments flowing from the most

costly natural disasters in our

history, and I make a point about that. In terms of that

$2.3 billion, some of that is a

prepayment and some are costs

not just for the floods and

cyclones of this year, but for

floods and cyclones of floods and cyclones of previous

years as well, because I think

people tend to forget just people tend to forget just how

big the natural disasters have

been in Australia in the past

couple of years, culminating in

what occurred in qulgd this year, but there is much more expense throwing through to budget bottom line to others as

well. It's in that context

that there is $2.3 billion that there is $2.3 billion in

2011/12. It also reflects 1.4 billion in accelerated infrastructure expenditure

because we have found because we have found ourselves

in the position to in the position to bring forward a number of critical infrastructure projects, and

that's pretty important given

what is still a weakness in the non-residential non-residential construction

sector. On top of that, there's upfront assistance to

businesses and households which upfront

we are putting in place to

assist them to adjust to assist them to adjust to the

carbon price. So I want to

make the point that nothing particularly

discretionary about the

discretionary about the increase in the deficit in

2011/12. Because there has

been such a substantial hit to

revenues, the Government has

had to find substantial savings

in the Budget. What we've

tried really hard to do is to appropriate mix of savings which

which deals with the near-term

global uncertainty whilst at

the same time strengthening our budget position in the medium

term and in the long term.

This mid-year update delivers a

further 11.5 billion dollars in

new savings through spending cuts, deferring the start date

of some initiatives and of some initiatives and further

reforms to taxation. I make

the point that these build over time and they do strengthen

strengthen the structural

position of the budget. position of the budget. After taking into account new spinding, taking into account the up front assistance which

is provided as part of the clean energy future package,

the net improvement to the budget bottom line budget bottom line is 6.8

billion dollars. This is the

third consecutive mid-year

update which will deliver net

savings to the budget. That's

a record of fiscal which has been unmatched by any

previous government. There's

no other government in our

history that has delivered that

sort of discipline over time.

We offset all of the in the last election in the last election campaign,

we did it again in the we did it again in the Budget and we've done it again here,

I'd like to pay tribute to the

very good work of Penny Wong in

that regard. The point I want

to make is that we've continued

our record of fiscal

discipline, a record which has

been endorsed by the international today by the ratings agencies, and all of that is important

because it sends a very important message, a important message, a very important message, about the strong fundamentals in the Australian economy. Given what's occurring elsewhere in

the world, there couldn't be a

more important time to send

that very clear message. What

all that means is that when you

look around the world look around the world at developed economies, ours is

among the strongest. So we expect to be back ahead of major advance s and

our debt is a small fraction of

our peers'. You can see our peers'. You can see that

reflected very much in those

charts in terms of budget balance and also in terms of government net debt. But I

would commend to you would

of the analysis today from Fitch, which reinforces the

point about what good shape

Australia's public finances are

in and about how low our debt

is relative to other major economies can see in that chart,

Australia's net debt - we have

a cloud there. Australia's net

debt at 8.9% of GDP in 2011/12

peaks at less than a 10th of

major advanced economies, less

than a 10th at peak of major

advanced economies. So advanced economies. So despite

all of that turbulence, despite

all of the events of recent

years, what this demonstrates is just how strong our budget position is, just how strong

our public finances are and how

that is clearly understood now by international

by international agencies, including including private-sector

agencies. What we've also seen

is the extenth to which our

outlook can be tempered by global developments and it is the case that there

of the Australian economy that

are not doing as well as others, but nevertheless when

it comes down to the fundamentals, that's what really counts getting people assessing our

economy and they are unrivalled

compared to all of our pears. They look at Australia and see unemployment, contained inflation, and the pipeline of

investment that is gearing up.

Of course I draw your attention to the latest assessment today to of the resource pipeline in Australia, which has been

upgraded from 430 billion to

450 plus billion in the assessment of ABAREs assessment of ABAREs and

whatever its new name is, which has just come our economy is growing solidly

around trend pace. We have unemployment

unemployment with a 5 in front

of it, almost half that seen in the United States. We have contained inflation and a

record investment pipeline. So

we can see just how far ahead

our economy of many other advanced economies. You can

see it in terms of GDP levels

and you can see it in terms of

employment levels. If you were

looking really for a measure of

how well Australia has done in

recent years compared to other developed see it over there on the far

side. GDP in Australia is now

almost 6% greater than it was

prior to the global financial crisis. There's developed economy in the world

who can say that that is a

situation for them, that they

are ahead. There are some, one

or two, but they are ahead of

where they were prior to the global financial crisis. Of

course, all of that is

important because ultimately it flows through to jobs and job

security for the Australian

work force. I make that point

because what today's update because what today's update is

about is not just the numbers, it's much, much more

numbers that are on a page. I think they are think they are evidence today of the good decisions of the good decisions that

we've taken to secure our economy and to secure the jobs

of millions of Australians who

get up every day and go to work

and provide for their families. Today's figures are also evidence of the threats that do

lie abroad and how wez have to

be acutely aware

those. But I think what we've done

done here today is that we've

provided a map which charts the

course through all of these

dangers as we return to surplus. It's very important

to continue to do that to

maintain confidence in our

economy. It's more now economy. It's more important

now at a time of heightened

global instability. I just

want to finish by reflecting on

a few things, because I've now

been Treasurer of Australia for

four years and in those years we've seen some of the

most difficult and turbulent

times in the global economy in

our lifetimes. I think it's

probably pretty fair to say some of the most difficult

turbulent times in the global economy since the Great

Depression. During that time

our government has responded in

a careful way. Our government

has responded in a calm way.

We have sat down and We have sat down and assessed conditions and responded

appropriately. We've had to

balance, if you

for savings to maintain strong

public finances on the one hand against the prospect of instability taking place in the global economy on the global economy on the other.

We face that prospect again.

So what we are doing here is

sticking to our record of

fiscal discipline and I believe

that with the numbers that we

have put forward today, we have

put forward I think a prudent

and appropriate set of numbers. If you like, middle path between those who

say we don't need a surplus and

those who say that we should

take a really big axe to

spending. We've taken the middle path because committed to getting the balance right and I think

that's what Australians have

come to expect from their

government at a time of global

uncertainty. We've got the big

calls right in the past and

we'll keep getting them right

as the global economic storm

clouds gather yet again. What has driven all of has driven all of us, particularly in the is that we do what's right, we

also do what is fair and we do

what is equitable, and that's appropriate for a Labor

Government. Thank you. is

Government. Thank you. Penny

is going to say a couple of

words, then I'll take

questions. Thanks very much,

Wayne. Obviously in this

mid-year review we have had to

strike a balance between the uncertainty we see abroad as

against the imperative of

supporting jobs and growth here

in Australia. I did want to make brief comments about make brief comments about the efficiency dividend. context of this decision is global economic turbulence

wiping some $20 billion out of government revenues, and this

is of course on top of the is of course on top of the $130 billion writedown since billion writedown since the global financial

global financial crisis. We are in tight are in tight fiscal circumstances and it's circumstances and it's the Government's judgment that

government has to play and the

public service has to make a

driks to delivering savings.

The decision the Government has made is that from 1 July an

additional 2.5% efficiency

dividend will apply to

agencies. This is on top of

the existing 1.5% that has

previously been put in place. This results in savings of

about 1.5 billion over the forward

forward estimates. Obviously

when we're looking to ensure

that the Government continues

to show its fiscal discipline

for the reasons Wayne has outlined and continues to

deliver good labour reforms,

such as carbon and the pay

increase for the community sector, we look at savings across the Budget

Budget and government has to

contribute. Our expectation is

that agencies will find savings

in a range of areas to meet this one-off including reductions, for

example, in the use of travel, consultants, hospitality,

advertising, and I would advertising, and I would remind people that we have delivered

some $10 billion worth of

reforms in government

efficiency since we came to government. The Government's

strong expectation is that

agencies will continue to meet the efficiency dividend without resorting to redundancies. Obviously this

is just one of the measures is just one of the savings measures in this measures in this mid-year

review, some $11.5 billion worth

worth of savings measures,

savings which have

to fund our substantial policy

reforms announced since the Budget as well as keeping the budget on track to return to

surplus, a very significant achievement given global conditions. Mid-year review

reflects the cost of the reflects the cost of the clean

energy review reforms to put energy review reforms to put a

price on carbon, makes a provision for the Government's contribution

contribution to low-paid

workers in the vast community services sector, the

vast majority of whom are

women. As the Treasurer said, this has been a challenge because of the economic

circumstances we face and in particular

circumstances. That's circumstances. That's made

delivering these historic

policy reforms even more

significant. But we have

funded these reforms and other

new spending in the mid-year

review in the responsible way

just as we have done in the past

past and just as we will

continue to do so in the

future. The savings in the

mid-year review are a mix of spending cuts, deferrals of commitments and measures to

improve the integrity and fairness of

fairness of the tax system. As the Treasurer said, a mix

appropriate to the current

economic circumstances reflecting global in the near term, but solid

medium-term prospects for medium-term prospects for the

Australian economy and some of

these savings continue to these savings continue to build

over time and deliver an

enduring benefit to the Budget.

Just in closing, I say this:

this is a complex economic

environment to put a mid-year review together, an review together, an environment where we've had to chart the

right course between making the fiscal discipline that is so important, but so important, but supporting

jobs and growth in the

Australian economy, just as the Government did during Government did during the

global financial crisis. On

the subject of jobs, you have a

forecast it will go up to 5.5%, still an increase of 3.3%,

there are human stories there.

What do you say to the argument

that you are willing to

sacrifice jobs or allow increase in that unemployment number to achieve a vanity project of achieving a project of achieving a surplus

on your date Nothing could be more important to our creation in our economy than for the long and short-term

than getting the fiscal

decisions right. We have got

them right. We're putting in place the appropriate degree of

fiscal discipline to ensure our

economy keeps growing. Our economy grows at trend.

Unfortunately it's not growing

substantially above trend, as we

we forecast at the

because of events in the global

economy. done here is to trike the right

balance between supporting jobs

and growth on the one hand and

making sure that our public

finances are in the position

that we will be judged to having sustainable growth having sustainable growth over

time. If adverse judgments

were made, then we would be a were made, then we would be in a much more difficult situation. It is regrettable, absolutely, that unemployment

will tick up a little, but

will still have a record of job

creation which will be very

strong by any standards.

300,000 additional jobs as you

go through to the middle of 12/13, but the unemployment rate is one consequence of

where we are at the moment.

But the first priority of this

Government from day one has

been jobs and good budget management. place during the place during the global financial crisis and the financial crisis and the global recession. recession. As we go forward,

jobs and good budget management

is still our number one

priority as we set about dealing on the one hand with

the challenges of what's going

on in Europe and on the other

with making sure we spread the opportunities of the mining boom boom to every corner of our country. With regards to the

increased deficit - Phil increased deficit - Phil is

next. Then we'll come to

you. It's it's a very slim surplus, nonetheless a surplus. How confident are you of being able to maintain outlook is firmly

firmly on the downside, there's

a potential for the global

outlook deteriorating outlook deteriorating quickly, trade could decline more

sharply than forecast here. Is it

it going to come the stage you have have to raise the white

flag It's a modest but achievable surplus achievable surplus given the

growth forecast we have.

Expecting very considerable job growth

growth over the next couple of years, something like 300,000

additional jobs, less than we

expected at the time of budget. The new figures out today The new figures out today that I pointed to in my introduction, the resources

pipeline is now strengthened

yet again and gone from 430 to

450 billion dollars.

why the range of policies we've

spent a loorj amount of our

time in the past 12 months working on and which were working on and which were the centre piece of our budget in

May this year are so important, spreading

spreading the opportunities of that that strong growth that strong growth in the resources sector to other parts

of the economy is what we have

to be about. That's what labour force participation labour force participation was front and centre at the budget,

skills and training and

education were front and education

at the Budget. So we have to

do our best to keep this

economy growing sustainably, despite despite the head winds seeing. despite the head winds we're

seeing. We've got a lot of

things going for us here. should be confident in our own

strength s, as we've said on a number of occasions, ware number of occasions, ware not

immune from what's going on in

the global economy, but we can deal with those things that we

can control and do our best

with each and every one of them that's why once again fitch has recognised the strength of

Australia. For the first time

in history we have the three

global rating agencies giving

us their gold-plated rating for performance of our economy

what's going in Europe is just a reminer to us that we have a reminer to us that we have to strive harder to strive harder to do better. Treasurer, with regard

to the 11/12 deficit picking up

by 15 billion, you say there

was no discretionary spending

and said there was some

spending by the carbon deal and a

a few other bits and a few other bits and pieces,

but you have brought forward some spending, including that

1.4 billion in infrastructure.

How is that not a counting

fiddle, given it fiddle, given it equates roughly to the surplus for the

following year, given that some

of those projects will be

jointly funded with states and

won't start until July next

year? Well, we're trying to

bring them forward as fast as

we can, for the we can, for the reasons I outlined before, that is there

is still a weakness is still a weakness in non-residential construction

and the timing of many projects

and the assessment of when they

can be done changes over can be done changes over time.

I'm familiar with a couple of those projects in my in a position to go ahead more

quickly than we anticipated

back at the budget. So we back at the budget. So we are

accelerating these investments for very good reasons,

we know how important

infrastructure is to the

performance of our economy.

1.4 billion in terms 1.4 billion in terms of infrastructure, no apologies

for that, entirely legitimate. These

These sorts of things are done

all of the time. Secondly, as

I said before in my

introductory remarks, the 2.3 I think billion it is for Queensland

Queensland is very important.

Queensland is this year expending over 3 billion in

flood recovery, for example.

We're not just dealing with an

upfront payment, we're also

dealing with a whole lot of

payments that weren't expected at bunget which now forward from previous cyclones,

before the ones that occurred this year. before the ones that occurred this year. 2.3 billion there,

when you bring them together

and the revenue right down to

five, you get to 11. Let me take you to some of the others which you call discretionary,

the others are something like because the parliament didn't pass

pass the PHI legislation.

That's another part of it.

Also increased expenditure in

child care, aged care and

dental. So if you dental. So if a urge you all to go and do it, have a look at the increase and

add all those things up and add all those things up and I

think you would think you would in agree with me they are entirely legitimate

and appropriate and not unusual in anybody's circumstances for

those in anyone's history to

move around. Is it a moderate

surplus? Yes, it is a surplus? Yes, it is a moderate surplus, but surplus, but what really counts

is the trend over time. We are engaged in a very substantial

fiscal consolidation and we're

bringing our spending

down. Just to make the point

that the surpluses do build steadily over time and that's

in the context of very significant writedown and

revenue across the forward

estimates. REPORTER: Mr Swan,

is right and fair and equitable

and showing discipline. Can you

explain why new parents explain why new parents will

face a $437 cut to face a $437 cut to the baby

bonus and you've just paid

$16,000 for a former MP who has

been out of Parliament for 36

years to have free travel and $15,000 thr a former millionaire minister to visit his holiday home in Broome

quite frequently, can you

explain what sort of message this sends, why you haven't

abolished the gold pass and why the public should be annoyed

when talking about belt-tightening when pollie's perks seem to be off limit. Let

me say this, firstly crime a strong payment of the family

payment sis team and a very

strong supporter of the baby

bonus as well, but these

payments must be sustainable

over time. We've done a lot of

work to make the family payment

sustainable as you would be

aware over major budgets and

made changes made changes to the payment for

teenagers. When the baby bonus

came in, there has been a an

increase of something like 70%

in the level of the bonus.

Committed as we are to the

bonus, we decided we needed to

make it sustainable over time

which is why we're resetting it

at $5,000, only from 1st

September next year - I September next year - I make that point, so people clearly know know what it will be in nine

months' time. So $5,000 is, we think, an appropriate level - think, an appropriate level - I think it's a significant think it's a significant amount of support. of support. On the second part of your question, there is a review of all these entitlements by the

remuneration body at the moment, the independent body,

and the Government will deal with its recommendations at the

appropriate time. Can I just

make one point on the baby

bonus issue? This is also paid parental leave, and the Government that has Government that has increased assistance to families through

the childcare rebate both in

terms of the percentage and the

total amount payable. addition to the family tax improvements that the Treasurer

has already referenced. It's

very clear the priority we have given to supporting families with new babies.

REPORTER: Treasurer, do you

think it's justified to keep

the gold pass? Well, it's very

controversial, been reviewed by

the ibd pend tribunal at the ibd pend tribunal at the

moment and I will save any comment until we hear have to say about it.

REPORTER:... $1.2 billion for

the Epping to Parramatta rail line, how long will that offer

remain on the table? Isn't that

an easy save at this teems? Those matters are subject to discussions with the

New South Wales Government and

their attitude to that project

and other projects is not

unclear at the moment. We are

committed to very significant infrastructure projects right

around the country, including in New South Wales, and in New South Wales, and no-one

is keen tore see progress on infrastructure in New South Wales our Transport Minister Mr Albanese. REPORTER: Treasurer you're hanging quite a lot on the importance the importance of your fiscal

guidelines, if you like, to

sell to the world. The mid-year

review shows that real spending

is increasing by 3.7% this year compared to your commitment compared to your commitment to

keep it under 2%, so I wanted

to ask you about to ask you about that OK.

And also if I could just ask you on page 35 of

payments line, it shows pretty clearly that while wour'

hitting 11, 12, 13, 14 and 15 really hard,, it really looks

like you've had to the a lot of effort in

effort in just getting that

surplus number for '12/13 at the cost of the other the cost of the other years'

bottom lines. Why not just

smooth is out, given that you

now have a huge fiscal turnaround between this year

and next year which must have look at the spending look at the spending increase

for that year, 1.5% of that 3.7 is entirely is entirely due to floods and infrastructure. So, you know,

it's getting close to 2. It is

inevitable, with a 2% cap, that sometimes

sometimes you will go over and sometimes you will go

substantially under. One of the things

things you missed in the table

is that spending growth the

year before that was year before that was negative.

The first time, I think, we've had negative any year in a long time. So

that, if you like, exaggerates

the 3.7 figure as well. But as

we go forward, as you

fiscal rule is for a 2% cap on average after we return to surplus. That's what surplus. That's what we're

doing, but I know Penny has a

couple of points. Just to make the point, if you look over

forward Estimates period it's

an average of 1.5% per year in real spending real spending growth, so under the 2%. It is true in the outlines for years outlines for years 11/12, there is additional expenditure associated primarily as the Treasurer said with the

Queensland rebuild and also the historic reform on carbon.

Those of these things negotiable from a Labor

Government's perspective. The point of the rules you've outlined is to deliver fiscal discipline and when we've delivered all new spending and delivered 1.5% growth on average over the forward

estimates, we are delivering that discipline. REPORTER:

Treasurer, back in '09 when you

laid out the plan to get into surplus, it was predicated

on growth well above over an

extended period of time. You

haven't got that. You've had to

push out net debt, push out net debt, coming back

to zero net debt by at least a

year and that's predicated by very large surpluses in the outer years. Haven't you

outer years. Haven't you sewn

the seeds for really big

problems for whatever has to

get up in that chair in coming

years? Not at all. This is

years? Not at all. This is a general question about

forecasts and where the Treasury lies everybody else in their assessment s. Generally the

Treasury is always the most

conservative of most of the

forecasters in terms of its growth projections. We had

this, for example, in terms of

commodity prices, you might

recall, at the recall, at the Budget last

year, and I think pretty fair

to say that Treasury was to say that Treasury was closer

to that than just about anyone

else was. So forecast something

not an exact science, but I think the Treasury of Australia

has a reasonable record or in

fact a very good record at

forecasting, but things have the most volatile time since

the Great Depression in the

international economy, and new challenges present themselves.

What this government has shown itself capable of is correctly assessing those changes and

acting when required to act,

but I think anyone who looks at

the Australian economy, anyone

who looks at the region, anyone

who looks at growth in the

region, accepts the fact that there are some

there are some very special

things happening in Australia,

and they mean that we are in a

position to grow at around

trend when many other economies are not. REPORTER: Treasurer, have you adjusted

any of the mining tax revenue

projections given the changes

in commodity prices in recent

months? months? Secondly, related to

that, you've made some changes

in relation to the outlays

linked to the mining tax than what was originally announced,

including the staged

introduction and so fort, can

you say whether the overall package of reforms linked to

the mining tax positive for the Budget.? Well,

around about even Stevens for

2013/14. We have adjusted 2013/14. We have adjusted the revenues. As you know, revenues from any of revenues from any of these

sorts of taxes are affected sorts of taxes are affected by

quantity, price, and the

exchange rate, and one of the very big differences between

now and Budget is the exchange

rate. So the exchange rate has

exerted an upward lift, if you

like, on the amount of and that's been important. I

think the revenues are down in

terms of the MRRT by about 0.5,

half a billion, so that's about where they are. REPORTER: Down

by half a billion Yes. REPORTER:, Treasurer, about

$600 million saved in deferrals to bonuses to teachers and

schools and universities, so has the Education Revolution

hit a wall here? Also hit a wall here? Also you're

booking a $216 million save on Solution. What's the increased cost because of that failure? Just on education,

some of the measures we are

still implementing but they are the subject of the states and major

stakeholders, so deferrals stakeholders, so deferrals in the context of trying to get

the measurements and metrics

right and I think the major stakeholders

stakeholders will all say that,

so we want it make sure we get

it right and that's what we're

doing there. The Education

Revolution is power ago hed. A lot more money going into education under this government because view of the world about opportunity and about prosperity. We talk a lot about

productivity in Australia, but

we don't tend to have the

broader debate that is required which is productivity also in the context of education, the context of education, if

all its facets from early childhood all the way through

to university and of course the

skills that go with that. will skills that go with that. I will just throw to Penny. Just

on this issue, the backdrop to these decisions is some $5 billion additional investment

in universities. Around about 100,000 more Australians in universities as a result of this is wrong to suggest that this

is not a priority and certainly

this Prime Minister this Prime Minister has delivered continued investment

in the education sector.

REPORTER: On the risks to the Budget over Budget over the next six months? That's an unusual

question. Well, as we know,

there are downside risks which

are examed in our statement of

sensitivities, David, which you

can have a look at, but I would

just note that the downside

sensitivities dealt with here

is one which is predicated on a fixed exchange that's moving, so I think it

should be read in that context. I did refer in my opening remarks to the downside

scenario in the OECD material scenario in the OECD material published overnight and that's

certainly sober reading, but

what we have done here is exercised our best judgment

about where we think we are

right now at home, in the region, and in the global

economy. I know there is a economy. I know there is a lot of speculation and talk about China, for example. we've got growth in China

coming off a bit, we always did. We've got commodity prices

coming off next year, then

coming off after that for some

time. I think we've got pretty conservative set of

forecasts, but there are no set

of forecasts that can deal with very big and unforeseen or

sudden events. I come back to Mark, the onshore Mark, the onshore processing

costs are expected to increase

by $1.3 billion over 4 by $1.3 billion over 4 years as a result of the increase in

expected arrival rates as expected arrival rates as a

consequence of Mr Abbott's being able to implement its

policy. This has been partially

offset by 1.1 billion in

reduced costs associated with

not proceeding with

processing. The point of that

is that the net increase in

costs is $200 million.

REPORTER: Treasurer, you referred to discriminatory spending and so forth and you've deferred a lot of items.

Did it occur or bring forward the come peb sensation

sensation for the sensation for the carbon package... No. REPORTER: package... No. REPORTER: That package is down you've estimated 3.3, A revision in the estimates as a result of better information particularly

in the jobs. It's not a change in policy.

Not a change in policy. There

a change in the cost in the jobs and competitiveness package relating to baseline

data on production levels. So

there is no change at all in

terms of policy. REPORTER: Carbon capture and storage history, is it, in the global institute in the carbon capture and storage? Well, it's a

technology that will take a lot

of work and time to prove up.

REPORTER: Treasurer, only $7.4

million in the Budget for the

contract for closure for the

big electricity generators. big electricity generators. I

thought that that was actually

going to be in the MYEFO, the

actual figure for the krot to closure Still subject to

negotiations. That wouldn't be disclosed. We would never

disclose something that is the subject of commercial

negotiation in our Budget papers, otherwise

papers, otherwise you wouldn't have

have a commercial negotiation.

REPORTER: Clarifying on the

MRRT, 25 billion decrease,

think it's shown in year

2014/15 a little bit, 13/14,

does that include the $200

million you had to give Tony

Windsor for the higher Windsor for the higher regional

assessments, or just to do with

volumes and prices? No, I don't

think it includes that. It just includes includes our pricing and volume data. So, those other

measures are referenced as well. REPORTER: well. REPORTER: Treasurer,

just on mother matter on the

Labor Party conference coming up this weekend, there seems to

be a fairly full-on be a fairly full-on debate of same-sex marriage, which way

will you be votes on changing

the party platform around secondly the conscience vote. I

thought we managed to get through without that yes. I was

going to say that at going to say that at the conference. I think I've made

my view clear. Thank you. Alright. We'll leave that media briefing there with the Treasurer Wayne Swan and

Finance Minister Penny Wong who

have been briefing reporters on