19 September 2014
Transcript - #2014099, 2014

Press Conference, Cairns

SUBJECTS: G20, ISIS, State Treasurers Meeting

TREASURER:

This morning the Treasurers had very productive discussions. Christine Lagarde spent the morning with us talking about some of the challenges in the world economy and we shared war stories of different jurisdictions working together for a common cause. And then in the general discussion of State Treasurers with the Commonwealth, we talked at length about infrastructure and some of the challenges associated with the rollout of infrastructure across Australia. They are embracing the Asset Recycling Initiative. I fully expect that the first two states to sign up to the Asset Recycling Initiative will be the South Australian Labor state and the ACT Labor state, which makes a mockery of the Labor Party at a Federal level being opposed to the Initiative. It is also the case that we had a very extensive discussion about the economy, generally, some of the structural challenges that are facing us, over the medium and long-terms. And importantly there was a deep resolve to all work together to co-operate to deliver the sorts of reforms Australia really needs in order to maintain our quality of life, maybe even improve it, over the years ahead. Over to you.

PRESENTER:

How do you expect [inaudible]?

TREASURER:

Sorry?

JOURNALIST:

How do you intend to get your Asset Recycling Scheme through the Senate?

TREASURER:

As I have said before, this money for asset recycling has actually been appropriated. It has already passed through the Senate. So, it has already gone through. The money is going to flow for asset recycling, no matter what because we all know that if we don't get those assets built, if we don't get the infrastructure built, then there is going to be higher unemployment in Australia and less productivity. So, there is a steely determination amongst the states to embrace the Asset Recycling Initiative, a $5 billion initiative, particularly in the case of Queensland. I have assured Tim Nicholls that if he proceeds with the leasing of electricity assets in Queensland, if the forecast proceeds of $9 billion to go straight into productive infrastructure are made available, we will make available a billion dollars for extra infrastructure in Queensland.

JOURNALIST:

Treasurer, on the G20, how is your 2 per cent growth target looking? Are all the action plans now on the table? And how do they stack up?

TREASURER:

There have been more than 900 initiatives put forward; the IMF and the OECD have worked through that. We are going to have a discussion about where those initiatives are at over this weekend. I always said 2 per cent is ambitious but we have all put in a lot of effort, there has been a lot of activity behind the scenes over the last few weeks. I have spent a large amount of time on the phone to various Finance Ministers over the last few weeks, encouraging them to renew their efforts. You will see on Sunday how we have gone so far, but obviously there is more work to be done.

JOURNALIST:

Just on the State Treasurers meeting today and asset recycling in general, how much of an impact does infrastructure spending have on your growth forecasts? Does it change them at all? And what sort of impact can it have over the forward estimates if you actually get this thing going [inaudible]?

TREASURER:

I can’t give you the exact figure, but what I can say to you, as was revealed in the Budget, the total commitment on infrastructure by the Commonwealth, the states and the private sector is going to add about 1 per cent to GDP over the medium-term. This is as much about trying to stimulate the other side of the economy, from mining production to the other 90 per cent of the economy – mining construction and production, to the other 90 per cent of the economy. And Andrew Constance, the NSW Treasurer was talking to us about the cost of congestion in Sydney – the amount of unproductive hours lost to the congestion challenge in Sydney. So, you can see it on the ground, that the infrastructure rollout is hugely, hugely important for the inherent strength of the Australian economy over the medium-term and Martin Parkinson also took us through some of the medium and longer-term challenges to the Australian economy that if we don't start moving on improving productivity overall, then Australia will end up with a lesser quality of life.

JOURNALIST:

[inaudible]

TREASURER:

JOURNALIST:

You have been in office for 12 months, (inaudible) getting some galvanising?

TREASURER:

There is activity happening, there is no doubt about that and Jamie Briggs, the Assistant Minister for Infrastructure, in particular has been working closely with the states on the rollout of that infrastructure. I must say, so far, there is no infrastructure rollout that has run at a slower pace than we expected, which is very encouraging, very encouraging. I do have some concerns the East-West project in Melbourne will be held up. But the asset, in terms of asset recycling, a lot of that money from asset recycling, in the case of Victoria, they have announced the sale of a port, and that money will be used for new projects in Victoria which will contribute, obviously a substantial amount of money.

JOURNALIST:

Treasurer, infrastructure is also part of the G20 growth agenda; what is your assessment so far of the proposals coming from some of those G20 members to spur new private investment in infrastructure? Are there any really positive ideas you are seeing? What is the quality of what is coming forward?

TREASURER:

The quality is strong, of course if you look at, you know, the United States there has already been a major announcement by Secretary Lew and the President in relation to infrastructure in the US, which is in the Congress. I know that in Germany, the Finance Minister is developing some new infrastructure plans. I think overall, there is widespread recognition across the G20 that governments no longer have the budget capacity to deliver the infrastructure, not just that our communities want, but that they actually need and unless we form partnerships with the private sector, which has a massive amount of capital available, then we are simply not going to be able to meet the needs of growing economies over the medium-term. So, the public-private partnership, and our work on the establishment of a Global Infrastructure Centre is very important, very, very important for the strengthening of infrastructure around the world. But importantly, about ensuring that we don't reinvent the wheel every time we roll out new national infrastructure and when I talk about reinventing the wheel, I’m talking about the rules surrounding the use of that infrastructure, access to infrastructure, financing of that infrastructure, cross-border activity, access regimes and the like. I think you will see later today we have an infrastructure session in the lead up to the G20, which will be very important in relation to some of these matters. We have been working very hard behind the scenes on garnering support for a new infrastructure hub that will be a source of information, and perhaps even common documentation and benchmarks for global infrastructure. So, we are working on that as well.

JOURNALIST:

Treasurer, what do you make of [inaudible]

TREASURER:

Sorry?

JOURNALIST:

China has been pushing infrastructure and encouraging Australia to do the same [inaudible].

TREASURER:

We have been in discussions with China about the AIIB, we said that we would engage in those discussions and we have been. We’ve been very actively engaged in discussions. I fully expect that when I meet with Lou Jiwei in the next day or so that we will further discuss that initiative. I know that the President of China is very keen to have Australia involved but we also need to be sure that whatever the rules are surrounding foundation membership for the AIIB are in tune with our own goals for the AIIB and ensure that there is appropriate transparency in activities and that it is not a closed shop, it is open to others as well.

JOURNALIST:

With the Scottish vote result coming in in the next couple of hours, is there any discussion in the G20 about what sort of responses you might need to take if there is dramatic [inaudible]?

TREASURER:

Well, look, I had a lengthy discussion with Governor Carney yesterday morning when he was in Cairns. He has now flown back to the United Kingdom for the vote. We talked at length about the possible outcome, but also the implications of the outcome, should it be a vote in favour of secession. Quite frankly, in many ways, it is uncharted territory for Scotland, should they choose to leave the United Kingdom because their financial system is actually much, much larger than their economy and that raises massive structural challenges for Scotland. How they vote, well, we will wait and see. I am not going to pre-empt it.

JOURNALIST:

What do you make of the revelations terrorists were planning an attack on Parliament House? Does it heighten your concern at all this weekend?

TREASURER:

What gives me great comfort is that we’re finding out about these things and doing something about them before any event occurs. We have increased the resources available to our security agencies. We cannot let the behaviour of potential terrorists change our everyday behaviour but we also need to make sure that our security arrangements are well-resourced and that they get all the support they need to be able to ensure that we live in a safe country. I am absolutely satisfied that everything is in hand for the G20 and certainly here in Cairns.

JOURNALIST:

What about the attendance of the Russian Finance Minister this weekend? Is that a signal that the Russian President is likely to come in November and will you talk to the Finance Minister this weekend about (inaudible) concerns about what has happened in Eastern Ukraine?

TREASURER:

The Minister for Finance is not coming, but the deputy Minister for Finance from Russia is here and there is a Russian delegation. In fact, they have been very supportive of a number of our initiatives in the G20, which is encouraging. If, during discussions, with Sergei, I can raise that issue, I will, in relation to the Ukraine and certainly, I have already spoken to Christine Lagarde about it. The fact is, we can’t close the door on Russia, it is not Australia's decision, we are host to an international conference and the very clear message we got from a large number of players was it is important that the door be left open for Russia to attend in November. It is – they were, very keen to ensure that there was continuing dialogue and the G20 is an economic Forum, not a political forum and that is a consistent message everywhere that it is not Australia's decision, it is a decision for all the members of the G20. And all the members of the G20 expect Russia to be at the table.

JOURNALIST:

[Inaudible]

TREASURER:

I’m not commenting on operational issues. OK. Thanks very much, thank you. See you with Jack Lew in a little while.