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Transcript of interview with Peter Riley: Radio ABC 97.3 Illawarra: 8 July 2009: visit to Wollongong; stimulus; infrastructure funding; minimum wage decision; financial service.



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INTERVIEW WITH PETER RILEY

RADIO ABC 97.3 ILLAWARRA

8 JULY 2009

SUBJECTS: Visit to Wollongong; Stimulus; Infrastructure funding; Minimum wage decision; Financial service

RILEY:

Today is an important day. Treasurer Wayne Swan is visiting Wollongong and the Illawarra for a business lunch and we're told some sort of announcement being made for the area. Mr Swan, good morning and thanks so much for joining us today.

TREASURER:

Good morning, Peter. It's good to be talking to you and it's good to be down in the Illawarra.

RILEY:

It sends an interesting signal when you visit somewhere like this not so long after the Prime Minister has visited.

TREASURER:

Well, certainly the Prime Minister and I spend a lot of time moving around Australia. It's a big country, it takes a lot of time to get around, but it's very important we get out into the regions. They're a very powerful engine in the Australian economy and your region is one where your local Members, Jennie George and Sharon Bird, have said to me I've got to get down there, so I'm coming down.

RILEY:

Well, I like to hear that. What sort of message do you get in Canberra about the state of the economy and unemployment in the Illawarra and the Shoalhaven?

TREASURER:

Well, as you know we've got a very big challenge on our hands from the global recession. It's challenging us at every level and, of course, it poses particular challenges down in the Illawarra. So, I'm coming down today to talk to the Chamber of Commerce, to talk to our local Members again. They tell me that the area has faced challenges for some time. Unemployment I know is higher in the region than it is elsewhere in the country. The steel industry is very important and that has certainly been challenged by the global recession.

Transcript of 08/07/2009

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The challenges also that come from the dramatic drop in demand globally and nationally are also felt in the Illawarra, which is why our stimulus packages are particularly important. So I want to hear from the local community about what's happening and talk a bit about what we're doing nationally and locally.

RILEY:

Interesting you mention the stimulus package and unemployment, because about 3,000 people a month are losing their job here. What can we expect from infrastructure spending in the stimulus package?

TREASURER:

Well, certainly what we've seen is a very important element of the stimulus working in the Illawarra. It is the case that unemployment is going up around the country and including in the Illawarra. That's why the stimulus is so important - because of this global drop in demand and its impact on our economy. The Government has moved very quickly with stimulus, first of all through our payments to people on low and middle incomes. It's certainly been a big impact in the Illawarra. The total cash payments in the Illawarra are something like $286 million to feed demand and boost local consumption, so that small business and so on have got consumers and customers coming through the door. That's just the stimulus payments to families and pensioners and carers and so on. But also a very, very big investment in infrastructure, particularly our school modernisation program which will also be supporting small business and many other businesses in the region.

RILEY:

It's interesting, New South Wales and the Illawarra have this sort of sense of missing out on federal infrastructure funding. Why is it so? Is it that the submissions which you found unsatisfactory?

TREASURER:

Well, New South Wales got its share of the total infrastructure funding, but there has been a huge infrastructure deficit develop over a long period of time in Australia and it's going to take some time to address. It's just not possible in one Budget or two to attend to all of the

infrastructure needs. But one of the reasons I'm coming down today is to meet a critical election commitment we gave for a pre-feasibility study for the Maldon-Dombarton link, and I'm going to release that pre-feasibility study today to keep that commitment and I'll be talking to the local community about that.

RILEY:

It's interesting you mention that, because you're keeping us a little guessing there about what your announcement might say, but other media outlets are already saying that you want to give it the go ahead. Will you?

TREASURER:

I can't pre-empt the announcement. What I can do is say that I'm going to release the pre-feasibility study. This is a very complex project. That pre-feasibility study has now been completed, so I want to take the local community through what it says and what the next stage would be, but I think it would be too early to draw that conclusion. This is a complex

project. It is one that deserves thorough evaluation and we're serious about that evaluation, but I can't take it any further than that.

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RILEY:

Do you have an idea in mind as to making a financial commitment to the next step in the process?

TREASURER:

Well, it's certainly far too early to be doing that. What we have to do is to gather all of the available information to get the rigorous analysis and then we move through the processes of Infrastructure Australia, but I'll be talking about that down there this morning.

RILEY:

What message would you have for workers and families in our area who are struggling on the minimum wage which has just been held at the same level? Do you think they deserve better?

TREASURER:

Well, certainly it's a disappointing outcome. As the Deputy Prime Minister Julia Gillard said yesterday, a disappointing outcome, but certainly we've been doing our best to support people on lower incomes. The stimulus payments that were paid at the end of last year to families with children, to pensioners, to carers, and indeed the Tax Bonus that was paid this year, has certainly done a lot to increase the disposable incomes of those on low and middle incomes and, of course, we've got tax cuts that have flowed through from 1 July. All of those things combined during our period of Government are giving a very substantial economic boost to people on low and middle incomes who have been struggling to make ends meet. But nevertheless the decision yesterday was by an independent body. It is disappointing and Julia Gillard expressed our disappointment at that yesterday.

RILEY:

The Federal Opposition Treasury spokesperson, Joe Hockey, is saying the Fair Pay Commission's decision to keep the minimum wage on hold is perfectly understandable despite union calls for the $21 a week increase. He says the Commission has taken a realistic view of the economy.

TREASURER:

Well, Mr Hockey has never been particularly sympathetic to those on the lowest incomes because he was one of the architects of WorkChoices. It was a matter for this tribunal to decide. When we made our submission we suggested some increase was appropriate. We left the quantum up to the tribunal. But the Deputy Prime Minister and I are disappointed by the decision, but what we can say is that through our stimulus payments and through tax changes in the last Budget and the one before that, we have certainly directed very substantial assistance to those on the lowest incomes. And, in addition to that, the lowest level of interest rates in over 40 or 50 years is also providing considerable additional support to those people who've got mortgages.

RILEY:

There have been suggestions today that the Government should back a new bank. It's almost like a back to the future idea, to ensure some real competition in financial services. Do you think there is enough competition?

TREASURER:

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Well, the Government is always mindful of how competitive our financial system is, and we are always prepared to look at other arrangements that may be necessary if we deem that the level of competition is not sufficient. But at the moment interest rates are at low levels and certainly that is something which has added to the economic stimulus in the economy and certainly added to the disposable income available for many people who have mortgages.

RILEY:

Mr Swan, I appreciate you taking the time to talk to us on your drive to Wollongong this morning. What's the traffic like?

TREASURER:

Not too bad so far but we'll see how we go as we go down the highway. I've been down here quite a few times before but this is the first time as Treasurer. I'm certainly really looking forward to it.

RILEY:

One final question if I may? What likely changes might be made to the Youth Allowance after the backlash and Senate Inquiry?

TREASURER:

I'm not going to speculate about changes. We brought down our Budget a while ago. I think that the package that the Government has produced is a fair package. Certainly there are many people who are going to benefit from this package who were previously locked out of receiving any assistance whatsoever.

RILEY:

Thank you for that, and you just mentioned traffic on your drive down. One of the issues for local people and certainly the PHOCUS group which is the Southern Illawarra Councils Group is the Princes Highway. Spending has just been cut in the State Budget by about 50 per cent. How can the Federal Government allow the highway to remain so dangerous?

TREASURER:

What I said to you before is that there is a significant infrastructure deficit in Australia. It developed over a long period of time under the previous government. They weren't willing to work with either State Governments or Local Governments at any level on any of the critical infrastructure issues facing Australia. We are now doing that...

RILEY:

Your Government hasn't actually made a commitment to the Princes Highway. You've said it's a state issue.

TREASURER:

Well, we can't, when working with the State or working with Local Government, make up in one or two Budgets across a whole range of infrastructure demands, and they are very wide and they are very deep, make up in one or two Budgets all of the demands - many of them legitimate - that the community has. But we have made a very big start on infrastructure in the Illawarra, as I was indicating to you before - record levels of federal spending in the

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Illawarra.

RILEY:

But how is it that the Pacific Highway and the Hume Highway get more money and fix the issues than the Princes Highway?

TREASURER:

Well, I can't go into the pros and cons of the decision making that's been taken on the various highways, but priorities have to be set. I go to many parts of Australia, including regional Australia, where many people are agitating legitimately for additional resources for local roads. We simply cannot meet them all in one go or two goes or three goes. It took a long time for those needs to develop and it will take a long time for them to be dealt with.

RILEY:

I appreciate you taking the time to talk to us today Treasurer, and enjoy your drive to Wollongong and enjoy the lunch. I'm sure we look forward to the announcement after the feasibility study has been released.

TREASURER:

Thank you.

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