Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Disclaimer: The Parliamentary Library does not warrant or accept liability for the accuracy or usefulness of the transcripts. These are copied directly from the broadcaster's website.
Budget $5 billion better off -

View in ParlViewView other Segments

ELEANOR HALL: The Federal Government has more money than it anticipated.

The Treasury this morning released the final Budget figures for the last financial year and the
damage to the Budget bottom line from the year of financial turmoil is nowhere near as bad as the
Government initially warned.

The improved deficit figure has though stirred more debate about whether the Government's stimulus
measures should be reviewed.

In Canberra, Emma Griffiths reports.

EMMA GRIFFITHS: The May Budget registered the first deficit in seven years. For the financial year
just ended it was to be $32 billion in the red.

Since then Treasury has done its final sums and found a bit more money in the kitty.

The Treasurer Wayne Swan:

WAYNE SWAN: The final budget outcome for 2008/09 is an underlying cash deficit of $27.1 billion or
2.3 per cent of GDP. Now this is a stronger budget outcome and stronger balance sheet than
anticipated at time of May budget.

The budget outcome is $5 billion better than expected at budget.

EMMA GRIFFITHS: The Treasurer says the financial boost has largely come by way of higher company
tax receipts, lower payments of income support and last but not least, the Government's
multi-billion dollar stimulus programs.

WAYNE SWAN: Economic stimulus has helped fill a hole in activity and supported employment and this
has had positive outcomes for this final budget outcome. The truth is that stimulus has kept
customers coming through the doors of business and that has been very important and has meant more
Australians in jobs and less Australians collecting unemployment benefits.

EMMA GRIFFITHS: The better-than-expected final outcome is likely to provoke more calls from the
Opposition to review the stimulus measures.

But the Treasurer's defence of the Government's plans has been bolstered by statements from the
Reserve Bank governor Glenn Stevens.

He gave testimony to a Senate committee yesterday that Wayne Swan says torpedoed the Opposition's

Mr Stevens also acknowledged the Government may want a stimulus contingency plan - a plan B - to
stop the economy overheating - but that's not how the Treasurer heard it.

WAYNE SWAN: He acknowledged and the Government has been very open about this, that as we move
forward next year the stimulus is gradually withdrawn. That is we have fiscal policy and monetary
policy working in tandem.

EMMA GRIFFITHS: Is there a plan B?

WAYNE SWAN: The stimulus was always designed to be targeted, and to be temporary and to be
withdrawn as private sector demand came back and that is what we are doing.

EMMA GRIFFTHS: The Reserve Bank governor did say though that if you wanted to avoid overheating in
the economy then the Government should be looking at a plan B, perhaps during the budget process
that is probably just kicking in right now. Is there any thought of having a contingency plan if
the economy does overheat?

WAYNE SWAN: Well, the Government always adjusts its budget strategy for the circumstances of the
time; but the stimulus that we have put in place is deliberately targeted to support the economy
and particularly small business and jobs while private sector business investment is very weak.

And private sector business investment is going to remain very weak for some time so the stimulus
will be required as we go through next year.

It will be a good thing if growth rates are somewhat higher than have already been forecast but
that doesn't mean to say that the stimulus which fills that hole in private demand is not required.

But naturally as we go through to next year's budget, we will take judgements about our overall
fiscal settings. The stimulus is only a part of that.

EMMA GRIFFITHS: So it is open to change?

WAYNE SWAN: No, there was no mention in my reading of yesterday's transcript of the governor saying
or using the word plan B.

EMMA GRIFFITHS: For the record, here it is.

GLENN STEVENS: Whether there is a case for the Government to have in their top drawer a kind of a
plan B that seeks to wind this back faster next year. There might be.

EMMA GRIFFITHS: The Opposition has its own interpretation of Glenn Stevens' words. Here is the
finance spokeswoman Helen Coonan.

HELEN COONAN: He said that the Government may indeed, if the economy starts heating up, have a plan
B and look at either deferring or cancelling the 20 or 30 billion they haven't yet rolled out.
Reason being that that's going to allow him to keep interest rates lower for longer.

ELEANOR HALL: That's the Opposition frontbencher Helen Coonan, ending that report from Emma
Griffiths in Canberra.