Interview with David Speers
Sky News, Pittsburgh, USA
26 September 2009
SUBJECTS: G20 Leaders' and Finance Ministers' meeting in Pittsburgh; executive pay; climate change.
SPEERS:
Treasurer, firstly on the commitment with the G20. It will become the premier group, the world body to deal with the global economy. How important is that for Australia?
TREASURER:
Well, it's a truly historic decision and it means that for the first time in Australian history we've got a seat at the top table where all the top economic decision-makers in the global economy are sitting – very important, very historic.
SPEERS:
And how will Australia use that? What difference are we going to see as a result?
TREASURER:
Well certainly we've been very engaged with the G20 since the first emergency meeting last October, which led to the first Leaders' Meeting which was of course last November. But, of course, there's been three meetings since then.
The G20 has been very active. In fact, through its processes and the coordination of global governments around the world, they have averted an economic catastrophe. So it's played a very important role in dealing with this global recession. But that's been short-term and what we've really focused on today is the long-term.
SPEERS:
If we look at what decisions have been taken at this summit. Firstly for executive pay there will be tighter restrictions now that require salaries and bonuses to be linked to performance. How quickly will you move on enacting changes in Australia in relation to that?
TREASURER:
Well, we've already moved. APRA prepared a paper which has been used by the Financial Stability Board to be the basis of the decision that was taken today. It's a very important decision because when decisions are taken in large financial organisations and they're taken with personal greed in mind, we've all seen the outcome of that. So what this process does is link executive pay to long-term value creation in the company, and the pay structures must follow that. So the Financial Stability Board will work with national regulators such as our APRA to make sure that these guidelines are applied and enforced around the world.
SPEERS:
And there will also be better coordination amongst G20 nations of how they deliver the economic recovery now and that includes submitting national plans to be peer-reviewed by the G20. Is Australia comfortable with that?
TREASURER:
We certainly are. This is a huge step forward. There have been items agreed at this summit and including in the summit back in March which would never have been on a global agenda in the past. So what we have had is very substantial progress because the one thing we know is the global economy as we go forward will be very different to the global economy people have come to know in recent times.
SPEERS:
And by that you're talking about changing the pattern of relying on consumption in the US to consumption in China.
TREASURER:
Well it's not just that. What we do know is that the American consumer and certainly consumers elsewhere in the west are not going to be driving the global economy the way they were. So what we have to do is to look at what are going to be the new sources of demand and growth in the global economy, and how can we encourage those. Because the more strongly the economy emerges from this recession, and the more quickly it does it, the better off for all, because we still have a huge jobs challenge ahead of us.
SPEERS:
Are you disappointed there wasn't a more concrete outcome on climate change though?
TREASURER:
I think that the decision here to directly involve the G20 Finance Ministers and the determination of all the Leaders in the room to make sure we do everything we possibly can leading up to Copenhagen to make it a success was very obvious.
SPEERS:
But, one of the things that Finance Ministers, including yourself, will have to come back with concrete ideas on financing what's called adaptation finance – helping developing countries adapt to climate change. What is Australia going to put on the table there?
TREASURER:
Well that's a very important part of the process but it's a much larger process than that, because what we're with dealing with here is a United Nations process. But what we've been tasked to do over the next month is to get together and look at what some of the financing options may be in the lead up to Copenhagen. So I think that's an important step but it won't be the only steps that have been taken. I think there was a political will around the room today on the part of Leaders to be more directly involved over time, as we move forward to Copenhagen and financing options are just a part of that.
SPEERS:
Wayne Swan thankyou.
TREASURER:
Good to be with you.
