KEITH CONLON: The Federal Finance Minister's on a mobile phone; joins us now, he's in for a busy day, Lindsay Tanner joins us. Minister, good morning and welcome.
LINDSAY TANNER: Good morning to you.
TONY PILKINGTON: Gee, it wasn't much of an Australia Day internationally, was it? Seventy thousand jobs have gone, and Barack Obama is pressing for a trillion dollar package, however big that is. [Laughs] Big week ahead for the Australian Government too?
LINDSAY TANNER: Yeah, I think that's probably a fair call. Certainly the numbers that are coming out of the States are pretty hard to grapple with, aren't they? The, you know, trillion dollar budget deficits and trillion dollar packages. We've only just adapted to working in billions here [laughs]. So, it is pretty bracing when you consider all of the news that's coming our of particularly the United States, but also Europe and other parts of the count... of the world.
KEITH CONLON: Yeah, Finance Minister, we understand that the Prime Minister and the Treasurer have put off overseas trips. And so, what will happen this week at Cabinet level?
LINDSAY TANNER: Oh, look, we're obviously dealing with a range of issues and considering our options. We've been working, as you know, on the arrangements for a commercial property structure in case foreign banks pull out from established commercial property arrangements, in order to make sure that things don't fall over that shouldn't...
TONY PILKINGTON: Now...
LINDSAY TANNER: ...that are perfectly profitable.
TONY PILKINGTON: Now the Opposition Leader says, look, hang on, that's just keeping some fat cats basically happy. What's your response?
LINDSAY TANNER: Ah, look, I think that's completely misconceived, a really silly comment. It ignores the fact that underneath these major shopping centres, big developments, big buildings in our major cities, there are thousands of jobs; there are thousands of people who depend on these developments. And of course there are lots and lots of small investors who've got $1000, $5000, $10,000 in units or in some kind of investment. And fair enough, if a company's badly run, or it makes a poor decision and it goes broke, or a particular development stops, well, that's the market. But in this case, the risk we're facing has got nothing to do with the strengths or weaknesses of the company; nothing to do with the strengths or weaknesses of the development, the shopping centre, the commercial building. But simply because of what's going on overseas we're worried that some foreign banks - who've had long-standing investments here - because of what's happening in their own backyard may decide to pull out; and that'll create a gap, and someone's got to fill it.
TONY PILKINGTON: Now today Deputy Prime Minister Julia Gillard meets welfare, charity groups and so on. Do you anticipate that there will be swift action come our of that?
LINDSAY TANNER: We're obviously consulting with a very diverse range of interests in our community all the time because of the circumstances that we're dealing with, and the rising unemployment problem that we're clearly going to have to grapple with during the course of this year is very much front and centre in our considerations. Our primary approach, of course, is to do everything possible to sustain jobs. We just talked about one of the approaches we're taking that's designed to make sure that we minimise job losses, but clearly it is expected that there is going to be an increase in unemployment. So one of the issues that we have to deal with is strengthening the way that we assist people to get back in work as quickly as possible, so that's one of the critical things on our agenda and that, of course, involves talking to people.
KEITH CONLON: It's 13 past eight, we're talking to Lindsay Tanner, federal Finance Minister. Minister, what's the word from China? I mean, realising just how dependent we are, especially in South Australia for the mining industry and BHP up the road. what's the word out of China? I mean, is it as bad up there as we're led to believe?
LINDSAY TANNER: We had some growth figures from China last week that were pretty bad and showed that it hasn't quite ground to a halt but it's slowed much more quickly than I think anybody expected, and that is bad news for Australia, it's bad news for jobs and for the mining sector. But I wouldn't want to overstate the problems in the mining sector, because you've seen a dramatic drop in prices that is the natural consequence of demand for their products slowing very quickly, but supply will slow quickly as well. So I'd expect prices will start to rise again at some point in the near future, nobody can be certain about these things. But clearly China is crucial to Australia's future and we're going to lose very substantial export income as a result of it slowing down but other nations in our region are equally crucial: Japan, Korea, and they've, of course moved into recession. So, we've got this problem on numerous fronts.
TONY PILKINGTON: And at the same time, of course, you, as you say, are considering a whole lot of stimulus ideas. There's talk now - The Australian today headlines that tax cuts will be next. What can you tell us about them and how soon they might be?
LINDSAY TANNER: Oh, look, it's premature to speculate on where we might head on further stimulus. We're still evaluating what the December payments did, what impact they had on our economy. You've no doubt seen there's been a bit of debate about that as to whether or not they were effective and, if so, how much.
KEITH CONLON: Do you agree with Gerry Harvey that maybe it had a bit of a kick on, but it's not worth much now?
LINDSAY TANNER: Look, I don't - I don't agree with that assessment. I think they clearly had an impact. And the best response I think is to ask, where would we be had those payments not been pumped into the economy. I think we would have been in a significantly more difficult position because that December/January period is really crucial for a lot of our economy, particularly the retail sector. And retailers very much rely on that December period to give them a real kickstart for the new year, because often January's pretty quiet and as you get into the year proper it can be reasonably slow. So I think kicking things up in December was probably a pretty important thing. But stimulus of the economy, you've always got two options, you can either reduce tax or you can increase spending. And we chose last year to go down the spending route, but as we get up to the Budget, we're already in the Budget deliberations, then we've got a whole range of possible scenarios that we can consider here. We've got to work out what the right settings are and then whether it's reducing tax or increasing spending or a mix of the two is the right way to go.
TONY PILKINGTON: Lindsay Tanner, you were quoted yesterday as saying really we've got to go into this with optimism and with aggression, and you said that's what the Australian cricket team does. Maybe poor timing [laughs] in terms of yesterday.
LINDSAY TANNER: Well, in fact I drew a bit of an analogy and said, look, mining booms don't last forever, the economy always turns and, of course, the same thing happens with sporting dominance. We've seen an extraordinary era for Australian cricket but, of course, the players who drove that have mostly retired. There's really only Ricky Ponting, I suppose, and maybe one or two others left who were central to that dominance and the wheel always turns. But the great thing about Australia is that we don't sit around weeping and gnashing our teeth for five years about these things, we do the necessary, we invest in youth, we attack, we change and we get back on top. And I think that applies to a whole range of things in Australian life and certainly that's the approach the Government's trying to take; that is get on with it. We've got a problem here, we're going to attack, we're going to go on the front foot, we're not going to sit around kind of vacillating and getting all upset and, you know, staring at our navel. Now I think that's central to the Australian character, and that's what I was trying to talk about in an Australia Day speech yesterday.
KEITH CONLON: Lindsay Tanner, we much appreciate your time this morning. Thanks.
LINDSAY TANNER: My pleasure. Thanks very much.
KEITH CONLON: The Federal Finance Minister, and it is going to be a very big week in Canberra as they look at things. Some of the ideas coming up, Tony, I mean, we talked tax cuts; company tax cuts is on the list as a maybe because that helps companies maybe stop shedding jobs, in other words it protects jobs. Infrastructure, we already know they're spending on; the first home grant, that's maybe going to be extended from the end of June onwards; another cash handout, all sorts of things up for grabs.
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