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Transcript of interview with Glen Bartholomew: ABC News Radio: 3 June 2010: the economy.



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DATE: 3/6/2010

TITLE: ABC News Radio

TOPIC: The Economy

GLEN BARTHOLOMEW: Well the latest assessment of the Australian economy has brought some good news and some bad news. The National Accounts figures released yesterday show that Australia is still one of the world's best performing economies with an annual growth of 2.7 per cent. But growth in the March quarter slipped from 1.1 per cent to less than half that - half a per cent. And even that lower growth figure depended entirely on government spending. To look at the health of the Australian economy, and the Government's role in it, Marius Benson is speaking here to the Finance Minister, Lindsay Tanner.

REPORTER: There is some good news and some bad news in the latest National Accounts figures for the Australian economy, but overall, there are assessments like this one from The Age which describes the economy now as still being on life support. Is that fair?

LINDSAY TANNER: No, I think that's a serious exaggeration Marius. There's no doubt that the stimulus that is still in the system is very important to keeping reasonable growth ticking over. But the economy is still fragile in the wake of the global financial crisis and, of course, events in Europe haven't helped that in recent times. But we've got a solid set of National Accounts that were released yesterday, indicating that Australia has done very well through the global financial crisis, but is still feeling the effects.

REPORTER: Do you think that means that more stimulus is needed? Do you think you'll be ha... oh, sorry, let me just begin that question again. Does that mean you have to review the level of stimulus, with a view to increasing it?

LINDSAY TANNER: No, we believe that the stimulus is about right in its settings and we felt that all along. There's still a significant amount of stimulus in the system and that, for example, is proving crucial to sustaining building activity. You can see there's been a very substantial drop back in non-residential construction over the past year or so, for example, and of course that gap has been very significantly filled by the stimulus activity. But stimulus is, in fact, winding down, so some of the major elements of it, of course, finished at the end of last year. The initial payments to individuals and households, of course, are now long gone. So it is, actually, diminishing month by month. But it's still important to keeping growth and employment at reasonable levels and it's ultimately about jobs, it's ultimately about ensuring that we keep people in jobs.

REPORTER: The electorate seemed to be giving the Government credit for its economic management during the economic crisis, or the global financial crisis. Less so, recently, the

impression seems to be now that it is viewed not so much as an expensive economic salvage operation which was necessary, it's now just seen as waste. The numbers are turning against you.

LINDSAY TANNER: Look, I'm not sure that's true Marius. I think inevitably there's been some controversy about specific issues and we accept that there have been genuine problems in the home insulation program. We've acted to address those problems. But I think you need to keep the big picture in mind here and that is that we've got over a couple of hundred thousand people who have kept their jobs, who otherwise would be unemployed now. And, of course, the ripple effect of that huge increase in unemployment that we were staring at, would have been enormous right across the economy. It leaves a scar on families. It leaves a scar on individuals and it shatters prospects for years and it leaves an impact on the economy for years. We lived through that in the early 1980s, we lived through that in the early 1990s. It is enormously important that we haven't had to suffer that again in Australia.

REPORTER: Okay, can I close with a question about a particular area of the economy, because you were at the Mineral Councils dinner in Canberra last night representing the Government, one of the few Government representatives there. Did you find anyone amongst the miners who is in favour of the Government's super profits tax plan?

LINDSAY TANNER: Oh Marius, I didn't wander around doing a snap opinion poll amongst people. Obviously I spoke to a number of individuals, but mostly they were people who have been fairly active in the public debate anyway. So there are no surprises in their views. And I don't accept that I was one of the few from the Government there. We had numerous government ministers and backbenchers. I was there as acting Treasurer. We had the Resources Minister Martin Ferguson there, so - the Trade Minister Simon Crean. So there was a very significant attendance from the Government. And we believe it is important to continue to engage in dialogue, even though there's some obvious disagreement, because we believe that our tax strategy for cutting company tax, cutting small business tax, investing more in superannuation and giving ordinary taxpayers individual tax breaks on savings and on their tax returns, we believe that's important to pursue. And yes, we've got some battles, but we're going to fight them.

REPORTER: Lindsay Tanner, thank you very much.

LINDSAY TANNER: Thank you very much Marius.

GLEN BARTHOLOMEW: Finance Minister Lindsay Tanner standing firm. Speaking there to Marius Benson.

Media Contact: Website:

Nardia Dazkiw - 0418 144 690 www.financeminister.gov.au