Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Transcript of interview: ABC Radio, AM Program with Alexandra Kirk: 29 March 2012: 2012-13 Budget; increasing retirement savings for Australians

Download PDFDownload PDF



THE HON WAYNE SWAN MP Deputy Prime Minister Treasurer


29 March 2012


SUBJECTS: 2012-13 Budget; increasing retirement savings for Australians

EASTLEY: The Treasurer, Wayne Swan, is warning the Government will have to cut and scrap programs in the May Budget so it can deliver its promised surplus next financial year. Mr Swan says the lead-up to his fifth budget is the most difficult the Government has faced.

The Treasurer is today outlining the budget parameters in a speech to business economists. He's saying there's been an expected further collapse in revenue since the last budget update four months ago. Wayne Swan is speaking here to Alexandra Kirk.

TREASURER: Well, it's so difficult because revenues have been written down already by $140 billion over five years. And as we look at the outlook, as we see the global turbulence particularly from Europe late last year, that's further impacted on revenues. But what we're also observing is a structural change particularly when it comes to company tax and we are receiving less than we would have expected in that area as well and that means we'll have to make further saves in the Budget.

KIRK: How big a hit has tax revenue taken? How much do you need to cut spending in order to deliver a surplus next financial year?

TREASURER: Well, I can't tell you that figure on the program this morning Alex, because we are putting the budget together now but we are going to have to look very hard at spending. We are going to have to look really hard at priorities. We are going to have to make saves in the Budget, in particular if we wanted to do anything that was new in the budget. But this is going to be a very tough environment for new proposals and what we are going to have to do is to look right across the budget yet again for further savings.

KIRK: So no new spending measures?

TREASURER: Well, I can't say what's in the budget and I can't really play that game as we go through the next couple of weeks. There will be plenty of assertions about what's in and what's out. The most important thing to do is what is responsible given the economic circumstances we're in.

KIRK: Are you willing to make tough decisions like cutting middle-class welfare?

TREASURER: Well, we've already made over the years some pretty significant savings and we'll have to do that again. We'll make them consistent with our principles, with our values. We want to support jobs, we want to ensure fairness when it comes to spending and we also want to support opportunity.

KIRK: You support means testing. You've means tested a lot of benefits. Will you means test the childcare rebate?

TREASURER: Well, as I said before Alex, I’m not getting into the rule in, rule out situation. The fact is we'll work our way through all of these issues.

KIRK: Well, last year the Treasury proposed means testing the 50 per cent rebate but you ruled it out. Are you too worried about a voter backlash considering the big whack that you've just got in Queensland and also your standing federally?

TREASURER: What we'll do in this budget Alex, is what is right - what is right for the country in the long term, what is right to create prosperity so we can spread opportunity.

KIRK: So where in general are there big savings to be made?

TREASURER: Well, Alex we'll have to wait until budget night, but we have made in past budgets around $100 billion worth of savings in the past and we'll be looking again to make some significant savings.

KIRK: Is there more fat to cut, do you believe, in the public service?

TREASURER: Well, certainly it's getting tougher every budget to find the savings wherever we look.

KIRK: There is a general view that you really can't squeeze any more out of government agencies without it costing jobs.

TREASURER: As I said before Alex, I'm not going into the detail of what may or may not be in the budget.

KIRK: You are warning that the Government will need to cut and cancel existing programs if you are to meet your surplus targets. So how much pain will that inflict?

TREASURER: Well, I think it is going to be a difficult budget but we'll go about it in a way which recognises our values and the objectives that we stand for which is to support employment and make sure that those who are vulnerable get a fair go and most particular to deliver the outcomes which deliver opportunity to all of our people.

KIRK: But can you cut and cancel programs without affecting employment?

TREASURER: Well, it depends where you are cutting and what you are doing.

KIRK: But if you say that jobs are your priority, can you say that you can cut and cancel programs without increasing unemployment?

TREASURER: Well Alex, we have made savings through past budgets and we've had over time very good employment outcomes. The employment outcomes in Australia in the last few years compared to what has occurred elsewhere in the developed world are simply outstanding.

It doesn't mean to say that there aren't some industries where it's tough. It doesn't mean to say that some people aren't losing their jobs but other jobs are also being created in our economy and what we have to do is to manage that process in the interest of the economy and in the interest of working people. And that's what a surplus budget is all about - making sure that our finances are in good shape, sending a message to the world about a strong economy at a time of global turbulence.

KIRK: The Government has introduced a staged increase in superannuation contributions from 9 to 12 per cent as part of the mining tax. Now your colleague Bill Shorten maintains that business won't be forced to cover the full cost on top of normal wage rises but the ACTU says that no way will unions agree to any wages-super trade-offs over the next seven years. Who is right?

TREASURER: Well, this will be a very slow phase-in of the increase in the super guarantee. It's phased in over six years by relatively small amounts. It will be a factor that will be taken into account by employers and employees when they sit down to do their enterprise bargaining. It is not for me to be dictating what is on the table in those negotiations. That's the way it's always been and that's the way it will be in the future.

KIRK: Would you consider making it a condition of the Fair Work Act that the cost of super increases be rolled into wage rises to some extent so business won't be forced to cover the full cost?

TREASURER: No, but that's a question better directed to the industrial relations

minister. But the fact is we have a system of enterprise bargaining where employers and employees sit down and negotiate. That's the way it is done. That process has brought great productivity improvement to this country over a long period of time, including during the period when the superannuation guarantee went to 9 per cent.

KIRK: In that time employees bore the majority of the cost because it was subsumed into the wage rises.

TREASURER: Well, there were various outcomes in different sectors.