JOHN STANLEY: Of course the news today from Canberra was that Australia has avoided, for the time being, a technical recession. The growth figures emerged at 11.30, GDP grew by .4 of a per cent and by now even those who aren't economically literate would be aware that if you get two quarters of economic growth you are out of recession. Two quarters of so called negative growth and you're in technical recession. So we avoided that today, following that very, very strong increase in the trade figures yesterday which pointed to today's result. What does it mean though for the future, particularly with dire predictions for the rest of this year on the job front? The Finance Minister Lindsay Tanner joins me now on the line from Canberra. Mr Tanner, good afternoon to you.
LINDSAY TANNER: Good afternoon, John.
JOHN STANLEY: What did you say at 11.30 when you saw those figures flash up on the screen?
LINDSAY TANNER: Oh, look I...
JOHN STANLEY: Did you punch the air?
LINDSAY TANNER: [Laughs] No, I certainly didn't do anything of that kind, John. But obviously getting a positive figure in the current environment's very pleasing but we're not out of the woods yet, and we do, as you say, expect that unemployment is going to get worse over the balance of this year. But it is clear evidence that the Government's stimulus packages have worked and have made an impact in the way we most want them to impact, which is to protect jobs and keep businesses afloat and keep people working.
JOHN STANLEY: Does the result today, and the figures you're seeing within there, tell you anything about whether it might be less likely that some people will lose their jobs later in the year, that there'll be a lower level of unemployment than you may have thought?
LINDSAY TANNER: I think that's too early to call. It's really very difficult to interpret single quarterly figures, John. Obviously we take some heart from these figures, but in the very, very unusual circumstance that the world's now in we don't want to get too excited about one quarter's figures. It's great that they're positive, and it's great that it's clearly showing that injecting money into the economy in the way that we have has had an effect. And of course some of that effect is still yet to come. Much of - most of the stimulus package payments that were announced in February didn't actually go out until early April, so in other words they went out just after this quarter finished. But I think it's too early to say that we could necessarily expect anything in particular on unemployment later in the year. And of course the global economy is still in very fragile shape, and that's the big factor that's influencing all of these problems.
JOHN STANLEY: Yeah. What of those who look at these figures today and say well, maybe we didn't need to spend as much money and we may have had perhaps a slight decline in the economic growth as a result of spending less money, but we wouldn't have as much dept to pay off down the track?
LINDSAY TANNER: The amount of the stimulus payments that are reflected in these figures is about $4.5 billion, plus some of the stimulus payments from December last year, which people would not have spent immediately. Remember the debate we had about oh some people are going to save it, they won't spend it. Well of course inevitably what happens is that people spend it, but not immediately.
JOHN STANLEY: Yeah.
LINDSAY TANNER: So some people spent it three months later, six months later. So it's not easy to tell just how much of those payments are reflected here. Of course most of what the Government's been doing and is committed to doing is actually on building things. So about 70 per cent of the money we've committed is actually on school maintenance, it's on building new school buildings, new homes, insulating homes, new road works, rail works, all of those kinds of things. So I wouldn't agree with that assessment. It's inevitably inexact, you know. This is not some kind of machine we're talking about here where you put in $10 and you know exactly what comes out at the other end. But I think the evidence is it's working and we want to keep people in jobs. That's the key thing and Treasury's advice suggests that had we not injected that money into the economy we would have got a negative figure, we would have got minus .2 or thereabouts.
JOHN STANLEY: Yeah. I mean, anyone who's bought a house knows that you have to go into debt. So - and the debt that we're building up is sustainable and can be paid off but it's true to say though that to pay it off you will have to get Budgets back in to surplus won't you?
LINDSAY TANNER: Oh, there's no doubt that's right, John. And that is a critical thing, particularly for anyone in my position it's fundamentally important and we've set ourselves a pathway back to surplus and it's that point then you start paying down that debt. And in doing so we've also set out some fiscal rules and we'll be judged by that. The pathway we've set out, the various steps, the assessments of the amounts of money involved, and complying with the rules, no doubt you and other commentators and people in the general public will all be watching very closely as to whether or not we adhere to those rules.
JOHN STANLEY: Yeah, and yet both Malcolm Turnbull and Joe Hockey are continuing today to argue that there's been too much spent, that the debt level is too high. What's your comment on that?
LINDSAY TANNER: Look, I - obviously I disagree with that and I think, you know, we've still got pretty close to the lowest debt in the developed world, and it is entirely sustainable. Yes, it is important that we've got a strategy to get back to surplus and to pay down the debt, that's obviously critical. But the debt levels that we are projecting are both unavoidable because we've lost such a huge amount of revenue because of the global crisis, and it's sustainable and frankly the Opposition are all over the shop. We've had Malcolm Turnbull earlier on saying that the Government's stimulus packages didn't create a single job, and yet this morning on your radio station Joe Hockey was conceding that in fact of course they created jobs. It's a no-brainer. So I think they are in a completely incoherent position.
JOHN STANLEY: All right, just - and finally, election. Is that an attractive proposition based on what's happened today?
LINDSAY TANNER: Oh, well no it's not, John and maybe...
JOHN STANLEY: Go the full term?
LINDSAY TANNER: Well that's certainly what I want to see happen because as I said at the commencement of our discussion, we are by no means out of the woods. We got huge challenges facing the nation here and the impact of this global recession is just unprecedented and it's by no means over, although there are some positive signs in various parts of the world and certainly positive signs in Australia. We've got a huge task on our hands and a lot of very challenging things to deal with, and so elections are very disruptive to those kinds of things, so the last thing on my mind or the Government's mind. It's, you know, our job is to govern, our job is to tackle these problems. That's what we want to do.
JOHN STANLEY: Right. I'll let you go. I appreciate your time this afternoon. Thank you.
LINDSAY TANNER: Good to talk to you, John.
JOHN STANLEY: The Finance Minister there, Lindsay Tanner.
-ends-
| Media Contact: | Website: |
|---|---|
| Nardia Dazkiw - 0418 144 690 | www.financeminister.gov.au |
