Asia-Ready People, Asia-Ready Policies: Wayne Swan Speech

This is the text of Treasurer Wayne Swan’s address to the Australia in China’s Century conference in Sydney today.

Wayne Swan

  • Listen to Swan’s speech (20m)

    Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Speech by Treasurer Wayne Swan to Australia in China’s Century conference.

Asia-Ready People, Asia-Ready Policies

Can I start by thanking you, Paul for that introduction, thanking you all here for that warm welcome, and especially acknowledging The Australian and The Wall Street Journal for putting this event together. The rise of China, and especially the stupendous growth in its middle class, sits alongside the Global Financial Crisis as one of the two defining economic events of our lifetimes. Both are transforming the world. Indeed, China’s return to pre-eminence in the global economy is the most momentous development since the industrial revolution re-shaped the Western world over 200 years ago. So what China’s rise means for our place in the global superstructure is certainly a big enough topic to warrant this high-quality gathering today. I’m thankful for the opportunity to offer some thoughts and then to discuss them with my distinguished colleagues on this panel. I know that by this stage you don’t want me to go over too much of the same ground or recite the same stats. Instead, I want to offer the personal perspective of an Australian Treasurer whose seven trips to China mean I’ve probably visited there more times than all my predecessors since federation combined. That’s not a perfect statistic, but it does illustrate the shifting focus of Treasurers since the second world war, from markets in London, New York and Tokyo towards Shanghai and Hong Kong today. [Read more…]

National Accounts Show 3.7% Annual Economic Growth

The National Accounts figures released today show economic growth of 0.6% in the June quarter. The annualised growth rate if 3.7%.

Treasurer Wayne Swan said the figures showed that Australia’s economy grew faster than every single major advanced economy, not only in the June quarer but over the year to June.

Australia has now completed 21 years of consecutive economic growth.

  • Listen to Swan’s press conference – transcript below (18m)

    Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Media statement from Treasurer Wayne Swan.

Today’s National Accounts reaffirm Australia’s position as one of the strongest economies in the world, and shines a light on our ongoing resilience in the face of significant international headwinds.

Gross Domestic Product rose by a solid 0.6 per cent in the June quarter, which builds upon exceptional growth in the March quarter, revised up to 1.4 per cent. This takes Australia’s growth performance to a robust 3.7 per cent through the year.

The National Accounts show the Australian economy grew faster than every single major advanced economy both in the June quarter and over the year to June, and has successfully completed a stunning 21 consecutive years of economic growth – a feat not matched by any other advanced economy over this period.

Australia’s economic performance in the June quarter was even more impressive against a backdrop of worsening global conditions, including a contraction in the euro area, moderating growth in the United States and the return of financial market turbulence. [Read more…]

Gine Rinehart Video Message To The Sydney Mining Club

This is the video of Gina Rinehart posted on the Sydney Mining Club’s YouTube account.

Rinehart argues that Australia has become uncompetitive and too expensive for exporters because of the carbon tax and the minerals resource rent tax.

She says: “Now the evidence is unarguable – that Australia is indeed becoming too expensive and too uncompetitive to do export-orientated business,” she said at the video posted on the Sydney Mining Club Web site… Our federal and state governments must know that now, more than ever, we must lift our international competitiveness just to stay as well off as we are. And with state and federal debts we must get realistic – not just promote class warfare… What was too readily argued as the self-interest complaints of a greedy few is now becoming the accepted truth, and more ominously, is showing up in incontrovertible data.”

Glenn Stevens Forecasts Peak Of Resources Boom In Next Two Years

Glenn StevensIn one of his regular appearances before the House Standing Committee on Economics, Reserve Bank Governor Glenn Stevens has forecast a peak in the resources boom, stable economic growth in the near future, and defended the bank over its handling of the Note Printing Australia and Securency corruption allegations.

On the economy, Stevens said “the economy appears to have been recording reasonable overall growth, relatively low unemployment, and low inflation”. He forecast a peak in the resource investment boom in “the next year or two”. He said: “After that the rate of resource investment is likely to decline, while the export shipments of the resources themselves will pick up. By then we might expect that some other sectors that have been weak of late, like residential and non-residential construction, might be starting to pick up. Overall, growth is forecast still to be close to trend, albeit with a different composition from that seen in the past year or two, and inflation consistent with the target.”

Opening statement by Reserve Bank Governor Glenn Stevens to the House of Representatives Standing Committe on Economics.

Since the meeting we had in February, assessments of the global and local economies have waxed and waned. In February, sentiment about the international financial system was recovering somewhat, after a scare late in 2011. The actions of the European Central Bank in extending its liquidity provision to euro area banks had taken major re-funding hurdles out of the picture for a time. This was a critically important action that bought time. It was clear that the European economy had slowed, that the United States was still growing, but at only a modest pace, and that China’s growth was moderating to something more sustainable. But high-frequency indicators of the global business cycle were stabilising. So even though forecasts for global growth were at that stage being marked down a bit, we did not seem to be seeing a slump of the kind seen in late 2008. Subsequently, there were actually some small upward revisions to global growth forecasts.

But, as we said at the last hearing, sorting out the problems in the euro area is likely to be a long, slow process, with occasional setbacks and periodic bouts of heightened anxiety. We saw one such bout of anxiety in the middle of this year, when financial markets displayed increasing nervousness about the finances of the Spanish banking system and the Spanish sovereign. The general increase in risk aversion saw yields on bonds issued by some European sovereigns spike higher, while those for Germany, the UK and the US declined to record lows. This ‘flight to safety’ also saw market yields on Australian government debt decline to the lowest levels since Federation. Meanwhile, many European economies saw a further contraction of economic activity. Share markets declined sharply. [Read more…]

Abbott Releases Foreign Investment Discussion Paper

The Coalition has released a discussion paper on foreign investment in agricultural land and agribusiness.

Abbott, Truss & Hockey

Opposition Leader Tony Abbott said “the Coalition unambiguously welcomes and supports foreign investment”. However, “there is scope to improve Australia’s foreign investment regime when it comes to investment in agricultural land and agricultural business”.

The paper was released by Abbott, Nationals leader Warren Truss and Shadow Treasurer Joe Hockey in Sydney today.

The paper is titled: “Foreign Investment In Australian Agricultural Land And Agribusiness”. Shadow Treasurer Joe Hockey has been put in charge of managing a “Discussion Paper process”. Submissions to the process are open until October 31, 2012.

Abbott, Truss and Hockey discussed foreign investment at a press conference this morning:

Media release from Opposition Leader Tony Abbott on the Foreign Investment Discussion Paper.

The Coalition unambiguously welcomes and supports foreign investment.

Foreign investment has been and will continue to be instrumental to the economic development and growth of Australia.

We support a foreign investment regime that strengthens our economy, promotes growth, and fosters confidence that foreign investment is in our national interest. [Read more…]

Turnbull Speech: Open Markets, Open Minds And An Open Society

Malcolm Turnbull has delivered a speech on the economy in which he sounds a warning about Australia’s economic future.

Malcolm TurnbullThe Opposition’s shadow minister for Communications said of the changing world environment: “The real story is much more than China, or indeed Asia. At the centre of the great economic changes in the world today is an accelerating convergence triggered by trade liberalization and supercharged by the Internet. As people in developing countries acquire more skills at first world standards and as the Internet makes historically non-traded sectors thoroughly trade exposed, there are grave risks as well as new opportunities for high wage, developed economies like Australia.”

Turnbull called for inefficient and uncompetitive industries to adapt or die. He warned against government attempting to pick winners. “Now change is often very unsettling – but we need to remind ourselves and our fellow countrymen that just as firms which cannot change to new circumstances will decline, and sometimes close, the same is true for national economies.”

The speech also deals with education, broadband and “harmonious diversity”.

Text of Malcolm Turnbull’s ANU speech: Open Markets, Open Minds and an Open Society (or why we should be more like Stephanie Gilmore and less like King Canute)

It’s an honour to be here at the ANU for the launch of Asia & the Pacific Policy Studies, the new flagship journal of the Crawford School of Public Policy.

Under the editorial leadership of Tom Kompas, Director of the Crawford School, APPS will focus on public policy research from – and about – Australia, Asia and the Pacific, with the first edition out at the start of 2014.

As the newspaper industry’s travails remind us, paper and ink are yesterday’s story, and I note with approval that Tom and his team have future-proofed APPS – it will be published electronically and free of charge, thanks in part to support from AusAID.

Public policy is ultimately the most pragmatic and applied of disciplines. But it must also be founded in rigorous thinking about economic and social behavior – big ideas about the interrelationships that have to be taken into account in successfully leading social and political change.

Rigorous empirical research based on sound precepts – studies of outcomes across jurisdictions, of what worked, what didn’t, and which unanticipated consequences arose – are the most valuable analysis and data available to policymakers considering a problem. And while we are often, but not often enough, aware of what has been tried in the UK, US or New Zealand, we typically know less about what’s been tried elsewhere, particularly beyond the OECD. [Read more…]

The Case For Carbon Pricing – Treasurer’s Economic Note

Every Sunday, Treasurer Wayne Swan publishes an Economic Note dealing with issues of the day.

Today’s Note deals with the carbon pricing scheme that begins operation next weekend. It’s a well-argued piece that highlights the abject political failure of the government to prosecute its case with the electorate.

By all accounts, former prime minister Kevin Rudd was prevailed upon by Swan and Julia Gillard to drop the Emissions Trading Scheme in 2010. Since then, Gillard’s unconvincing meanderings on the issue, of which the alleged carbon tax ‘lie’ is just one element, have seen the government’s credibility on climate change issues destroyed.

Despite attempts to blame Opposition Leader Abbott and the media, the failure is a political one by a government that lacks the personnel with the political skills to build community support for its programs.

Treasurer’s economic note

I’ve always believed that markets offer the most effective way to create prosperity across the economy. Individuals and businesses make their own decisions about what to buy and what to sell, how much to spend and how much to invest, and where their time, energy and money is directed. This is the best way to encourage investment, drive growth and generate jobs. But of course markets are far from perfect. They don’t always work as they should. That’s why we need laws and regulations to try to make markets work for everybody. One example is pollution. At the moment, big polluters in Australia can release as much carbon dioxide and other greenhouse gases into the atmosphere as they want. They don’t pay a cent. The real cost of this pollution is borne by all of society. And ultimately – without necessary action – it will be a cost paid by our children, grandchildren and future generations. [Read more…]

Gillard-Swan Open Letter To G20 Leaders

This is the text of an open letter from Prime Minister Julia Gillard and Treasurer Wayne Swan to G20 leaders.

The G20 met at the Los Cabos resort in Mexico. Various reports suggest the letter was not well received by other leaders.

The G20 is the “Group of Twenty Finance Minister and Central Bank Governors” from 19 countries plus the European Union. The countries are: United States, Canada, Australia, Saudi Arabia, India, Russia, South Africa, Turkey, Argentina, Brazil, Mexico, France, Germany, Italy, United Kingdom, China, Indonesia, Japan and South Korea.

Dear colleagues,

The G20 Los Cabos Summit comes at a challenging time. Risks in Europe have intensified significantly in recent weeks.

Increasing concerns over Greece and the stability of the Spanish banking sector are adversely affecting global financial markets and moving us quickly into crisis management mode. [Read more…]

Pipeline Or Pipe Dream: Business Council Report Warns Of Risks To Investment

The Business Council of Australia has issued a report that says high costs and low productivity put at risk Australia’s pipeline of investment.

Text of news release from the Business Council of Australia.

Pipeline or Pipe Dream? New Research Uncovers What’s at Stake If We Don’t Get It Right on Major Projects

High costs and low productivity are risking Australia’s unprecedented $921 billion pipeline of investment in resources, energy and economic infrastructure, new research for the Business Council of Australia has found.

In a landmark study released ahead of next week’s economic forum in Brisbane, the BCA has for the first time provided a total picture of how capital investment is driving the economy. [Read more…]

Unexpected 1.3% Economic Growth Rate In March Quarter

National Accounts figures released today show a 1.3% economic growth rate in the March quarter.

A growth rate of around 0.6% was predicted by most economists.

A beaming Treasurer Wayne Swan told a press conference that the nation should have a bounce in its step today and described the result as “stunning set of numbers”.

Shadow Treasurer Joe Hockey awkwardly told his press conference that the economic situation would be even better, “if only we had a good government”.

  • Listen to Treasurer Wayne Swan’s press conference (25m)

    Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

  • Listen to Shadow Treasurer Joe Hockey’s press conference (10m)

    Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Text of media release by Treasurer Wayne Swan.

Today’s National Accounts paint an extraordinary picture of exceptional growth in the March quarter, and showcase the rock-solid economic fundamentals which put our economy in a league of its own, despite ongoing global turbulence.

Gross Domestic Product rose by a stunning 1.3 per cent in the quarter to be 4.3 per cent higher through the year, underpinned by a broad-based surge in business investment and strong growth in household consumption.

This is a remarkable outcome and reaffirms Australia’s position as one of the strongest economies in the world, with the Australian economy growing faster than every single major advanced economy in the March quarter. In through the year terms, this result is the fastest growth in over four years, which have been the most turbulent in the global economy since the Great Depression of the 1930s.

These figures come at time when many advanced economies are struggling to grow at all, with a number of economies already in recession and suffering crippling levels of unemployment. Europe faces profound economic challenges and this continues to cast a shadow over the global outlook. Despite these global challenges, the contrast between many advanced economies and the Australian economy could not be more stark.

Household consumption grew by a strong 1.6 per cent in the quarter and 4.2 per cent through the year, which is above its long term trend. Consumption growth was broad-based in the quarter, with continued strength in the consumption of services, but also of goods, with consumers taking advantage of price discounting by retailers. At the same time, households continued to strengthen their balance sheets, with the household saving ratio remaining high at 9.3 per cent in the quarter, supported by strong growth in household incomes. [Read more…]