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Transcript of doorstop interview: Adelaide Airport: 6 June 2007: National Accounts.

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WAYNE SWAN MP Federal Labor Shadow Treasurer




SWAN: Well we welcome this strong GDP figure of 1.6 per cent for the March quarter and 3.8 per cent for the year. Now these figures come from a strong combination of consumption, business investment and positive signs in the housing market and of course that’s a good thing for some parts of the country.

The strong number is also underpinned by very strong growth in Queensland and in Western Australia and that’s further confirmation that the mining boom is certainly powering our economy at the moment, particularly when you consider that we’ve got the strongest world growth in over 30 years.

It’s also worth noting that the drought has subtracted from growth. Certainly agricultural production is down 20 per cent.

But the most important thing is this: that if we want to continue with strong, non-inflationary growth, we’ve really got to attend to the productive side of our economy. Productivity in these figures, productivity growth for the year - just 0.9 pre cent - barely half our long-term average.

That’s why Australia needs an Education Revolution. That’s why we need a government which is committed to modern infrastructure, particularly the provision of fast broadband - highspeed national broadband.

That’s why we need a government which is really going to attend to the basics of the economy to lift our productivity. Because if we don’t lift our productivity we can’t continue to have low-inflationary growth in these strong world conditions. And of course what that requires is a disciplined budget - budget discipline from the Federal Government in these very strong global conditions.

Interviewer: You’d have to be happy that interest rates haven’t picked up today?

SWAN: Interest rates certainly haven’t done that today. But the most important lesson from these figures is that we must lift our productivity growth if we are going to continue to have strong growth without having it accompanied by higher inflation which of course can lead to higher interest rates.

If we’re going to have high growth which is not inflationary, we must lift our productivity. That’s why need an Education Revolution. That’s why we need political leadership when it comes to infrastructure such as fast highspeed national policies for broadband - but they’re not there at the moment.

Interviewer: (Inaudible) ……these figures make it much harder for you to push your economic message in the lead-up to the election?

SWAN: No, not at all. Labor has been arguing for a range of policies to lift our productivity so that when we grow strongly with the rest of the world we don’t get higher inflation because higher inflation brings higher interest rates.

Labor has been fairly and squarely in the centre of the economic debate urging the government to put in place a range of policies to lift productivity. And indeed it has been the government’s inaction and complacency in education and in training and skills, their complacency when it comes to highspeed broadband and their failure to put incentive in the tax system soon enough that has led to a higher inflationary outlook.

So we say the Labor agenda is the one that is directed to putting downward pressure on inflation and downward pressure on interest rates.

Interviewer: How do you (inaudible)……. South Australia’s figure of around 3 per cent……?

SWAN: Well South Australia’s been disproportionately hit by the drought. The drought has had a very big impact on the South Australian economy. So I think the 3 per cent growth figure given the drought is still a good figure.

Interviewer: Do you expect mining’s pushed it up over the year?

SWAN: Yes we certainly do. I’m very optimistic about the South Australian economy, as I am about the Australian economy because we are now the beneficiaries of the strongest global trading conditions in 30 years, the highest terms of trade in 50 years.

What we must do is put prosperity in place beyond the mining boom and the only way to do that is to lift productivity. And the government has been complacent when it comes to productivity. They have not been directing their attention to skills

development and to education more broadly. They’ve been reluctant to work with the states and the business community to put in place modern infrastructure, particularly highspeed broadband. And thirdly they’ve not been putting incentives in the tax system where it’s required to lift participation in the economy.

So we’ve got an agenda which is fairly and squarely directed at lifting productivity, putting maximum downward pressure on inflation and ensuring that our growth

continues beyond the mining boom. Because we are the only party in this country that has been talking about a range of policies to lift productivity and put downward pressure on inflation.

Interviewer: A new poll of small business indicates growing support for the government’s IR laws. How accurate do you think that’s been?

SWAN: Well I haven’t seen that survey, but we’re out consulting with the business community - small business, large business - and also with working Australians about laws which are balanced, fair and flexible.


Contact: Matthew Coghlan 0415 098050