MATTHEW ABRAHAM: Before we go to Stephen Baker - he'll be very interested in listening to this man - Lindsay Tanner, Federal Finance Minister, is able to join us. Lindsay Tanner, good morning to you.
LINDSAY TANNER: Good morning.
MATTHEW ABRAHAM: I hope that was a crucial vote, Lindsay Tanner.
LINDSAY TANNER: It certainly was. It's on the carbon pollution reduction scheme [indistinct]...
MATTHEW ABRAHAM: Ah excellent.
DAVID BEVAN: And how's it going?
LINDSAY TANNER: Well, so far, so good. We won that vote.
DAVID BEVAN: Right. But that's in the house where you control the numbers.
LINDSAY TANNER: That's right.
DAVID BEVAN: Yeah, no surprises there.
MATTHEW ABRAHAM: Okay. Now Lindsay Tanner, Federal Finance Minister, if the economy is not in recession, will GST revenue remain stable?
LINDSAY TANNER: Look, I can't give you an answer on the impact of those numbers with respect to the GST estimates, but we see no cause to revise our estimates generally. They do get revised every six months as a matter of course, so time will tell. But it's still a pretty thin number. We're not out of the woods yet. It's certainly welcome news and it shows the Government's stimulus efforts are working. But we've got a lot of challenges in front of us and we're expecting things to get tougher.
DAVID BEVAN: Can you understand people being a little confused. We were told that this was the worst of economic times since the Great Depression, and we have stories in The Australian today about people going out and buying plasma TVs and coffee machines for $1700. I mean, if this is a recession, let's have more of them.
LINDSAY TANNER: Well, I think those comments were about the global situation, and underlying the impact that that's having on Australia. But also, both the Treasurer, myself, the Prime Minister have pointed out on many occasions that Australia is much better positioned to resist these pressures than virtually any other cont... country. Now, all three of us have, of course, said in recent times, you know, it's pretty inevitable that Australia will be pushed into recession as a result of the global recession. It's certainly welcome that we haven't hit the technical recession definition and that we've got a very modest positive growth number for this quarter. But there's a long way to go and a lot of tough challenges. Unemployment's going to keep rising, we think, so there's plenty more work to do.
MATTHEW ABRAHAM: In your view though, have we seen the worst - seen off the worst of it?
LINDSAY TANNER: Look, I don't think you can make that claim, I'm afraid. And, certainly, our projections suggest that the answer to that question is no. It's welcome news that we've had a positive number for this quarter. It certainly does reflect the stimulus efforts of the Government in infrastructure, in payments and insulating homes, all of those things, and that continues to flow and, in fact, will ramp up over the next few months and into early next year. But we've still got enormous downward pressures on our economy internationally, and, of course, the international economic environment's very fragile, so we don't know what's around the corner. So we shouldn't make any assumptions.
MATTHEW ABRAHAM: Is it time though to revisit racking up $300 billion in debt? Do we need to do that? If we can get this sort of result with, you know, some fairly cheap and cheerful cash handouts, do we need to rack up $300 billion in debt now for school halls and buildings around the country?
LINDSAY TANNER: Well first, let me correct some of the essence of that statement. The net debt figure that we're projecting to peak at is a little over 200. The 300 figure is a gross debt figure and what it includes, of course, is that we also lend money. So the Commonwealth is both a borrower and a lender, and it's the net debt figure that really matters.
MATTHEW ABRAHAM: All right, well let's say 200 million.
LINDSAY TANNER: So it's a bit over 200. And, of course, what that overwhelmingly reflects is the drop in revenue that the global recession has imposed upon us. Yes, it does, in part, reflect the impact of the stimulus packages, but any suggestion that the stimulus packages that we've put together, much of which are yet to hit the economy, are excessive, I think, is simply incorrect. I don't believe the evidence supports that. And it's important we don't get carried away with one positive number for a quarter. If you actually look through the detail of the numbers, it's still a pretty ordinary performance for the economy compared with normal times. It's still - if you multiply it by four, it still only gives you, you know, 1.6 per cent. That, in normal times, would be seen as a very ordinary growth number. So it's good that it's positive, it's very important that we are stimulating economic activity and sustaining jobs, but we shouldn't underestimate the challenge that lies in front of us.
DAVID BEVAN: Lindsay Tanner, George Megalogenis from The Australian was telling our listeners before nine o'clock that the Federal Government is now, effectively, underwriting state budgets because of the big infrastructure spend. Is it the case that you will be carefully watching the states to make sure they don't pull back on their commitments to infrastructure?
LINDSAY TANNER: Yes, it is absolutely, and that's a very important issue, and it's something that we made very plain to the states and is specified in the agreement with the states about these matters, that the last thing anybody wants to see, and particularly people living in the relevant states, is the state governments being able to take their foot off the pedal in their commitments to infrastructure investment because the Commonwealth has increased its commitment. We need more infrastructure investment in this country. People, I don't think, mind that much whether it's coming from the state or Federal Government, they just want to see the infrastructure built. And the whole purpose of our commitment is to increase the overall level of commitment. So we are red-hot on that issue.
DAVID BEVAN: And Peter Costello, former Treasurer, has called the current Treasurer, Wayne Swan, a moron and the Prime Minister is a nasty man and a dope, according to News Limited this morning. Surprised things are getting so personal?
LINDSAY TANNER: Look, I think those comments really tell you a lot more about Peter Costello than they tell you about the Prime Minister or the Treasurer. Frankly, nobody gets to those kind of positions on either side of politics who's a moron. I think that really is unbecoming of Peter Costello, and it tends to suggest that there's a lot of frustration, and a lot of anger and a lot of bitterness there on his part and he would perhaps do well to consider his own circumstances rather than handing out that kind of advice to people.
DAVID BEVAN: Lindsay Tanner, thanks for talking to us.
LINDSAY TANNER: Thank you kindly.
DAVID BEVAN: Lindsay Tanner is the federal Finance Minister.
- ENDS -
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