Ask a Question

The Hon Wayne Swan MP answers your questions - Transcript

Hi, I’m Wayne Swan, Australian Treasurer, welcome again to the Australian Government’s Nation Building – Economic Stimulus Plan website.

Last month I asked for your questions about the Government’s policies to keep jobs and employment strong during the global recession.

There’s been a lot of public debate – that isn’t surprising given what’s at stake.

Some of the questions raised include:

• Is the stimulus too much, too soon?
• What will be its effects on interest rates?
• And do we have any plans for more spending bonuses and investment projects?

One fact stands out above all others in this debate: the Government’s stimulus package is working.

Australia currently has the highest economic growth of the world’s 33 advanced economies.

Without the stimulus, the Australian economy would have gone backwards by 1.3 per cent and unemployment would have been 1.5 per cent higher. Instead, our economy grew by 0.6 per cent in the last financial year.

That’s a great result for businesses and employees, and above all families nationwide.

The point of the stimulus is to provide maximum support to the economy when economic activity is at its weakest.

It’s been carefully designed to withdraw from the economy as private sector activity recovers. As the effect of the initial cash payments now recedes, the nation building infrastructure investments are kicking in to keep economic activity and employment stronger. And as the recovery continues to build the private sector will step in to take the place of government spending and investment.

The responsibility for setting interest rates lies with the independent Reserve Bank, not the Government, but our commitment to fiscal discipline will ensure we’re not putting upward pressure on inflation.

In the meantime, even the most optimistic forecasts don't have private sector activity returning to normal any time soon. The global recovery will be long and difficult. The worst thing we could do now would be to stop the recovery in its tracks.

One questioner asked whether the nation building investments are making us more environmentally sustainable. They are.

The Budget contained 4.5 billion dollars for a new Clean Energy Initiative to make Australia a world leader in solar and other forms of renewable energy, carbon capture and storage and energy efficiency.

Others asked what’s happening to the First Home Owner’s Boost.

Support for first home buyers was temporarily increased last year to prevent the sort of collapse in house prices that has happened elsewhere in the world. It will now reduce in two stages – on October 1 and January 1 – but will remain a substantial incentive for Australians to buy their first homes.

Thanks for your feedback to our Nation Building – Economic Stimulus Plan.

I encourage you to stay tuned and stay informed as Australia continues to buck the trend and we keep building a sustainable economic recovery.