Isra-Mart srl : Carbon price less damaging than dollar rise

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Isra-Mart srl news:

The Treasurer Wayne Swan says the budget he will deliver next week will provide half a million new jobs by the middle of 2013, cutting the unemployment rate to 4.5 per cent.

He's also hit back at claims the carbon tax will wipe out the steel industry, arguing that a surging Aussie dollar is a much bigger threat.

Nevertheless, he's rejected a demand from the Australian Workers Union calling for compensation for the carbon tax to be tied to the level of the dollar.

Mr Swan told Alexandra Kirk the Treasury modelling isn't aimed at dampening expectations for industry assistance.

WAYNE SWAN: I think we should have a calm and informed debate in a rational way about these issues, but the fact is, the impact of a carbon price on sectors such as coal, steel and others will be small compared to fluctuations in commodity prices and exchange rates.

ALEXANDRA KIRK: So is the point you're making that steel manufacturers and other industries can easily afford a carbon tax?

WAYNE SWAN: Look I understand that some of those industries are doing it really tough at the moment and the Government understands that and that is why we are having an informed discussion with them about carbon pricing.

ALEXANDRA KIRK: So what's the point of the comparison?

WAYNE SWAN: Well, the point of the comparison is that Mr Abbott has been out there in a reckless way making all sorts of extreme statements about the future, ill informed and only designed to scare people and what I want to do through the presentation of the economic note, is to inject some facts into the debate so the community can have an informed discussion.

ALEXANDRA KIRK: He is not the only one though who is making critical statements. For example, the head of the Australian Workers Union, Paul Howes has been talking about the effect of a carbon tax on the steel industry. Is the Government...

WAYNE SWAN: He is entitled to talk about the impact and we welcome that discussion but what Mr Abbott is trying to do is to seek personal political advantage with an issue which is so important to our long term prosperity and what I'm doing is putting out all of the facts on the table so people can judge what the relevant facts are.

ALEXANDRA KIRK: Is the Government considering tying the treatment of some of these industries, steel, aluminium, coal, cement, gas, tying the treatment of those industries under the carbon tax to the level of the Aussie dollar?

WAYNE SWAN: No and the note that I've put out doesn't suggest that at all. I am simply making a very simple point that there have been dramatic movements in the value of the dollar and dramatic movements in terms of prices for basic commodities.

They have a far greater impact on these industries than a potential carbon price.

ALEXANDRA KIRK: You've revealed that the budget will contain a forecast unemployment rate of 4.5 per cent in two years' time. Where will the jobs be do you think?

WAYNE SWAN: Three hundred thousand jobs in the past year have been created and 98 per cent of those have been full-time. As we go forward, I would expect to see them spread broadly across our economy but as you know, there is a patchwork economy and with unemployment down at 4.5 per cent, we haven't got a person to waste in our economy or in our society and that means the Government has to give special emphasis to participation for so many of those groups that have been excluded from the labour force in the past.

ALEXANDRA KIRK: And what do you plan to do about places, for example, like Tasmania, Cairns, Wollongong, where unemployment is much higher and much more intractable?

WAYNE SWAN: Well, that's one of the reasons why we've made a number of moves particularly to provide tax breaks for small business. There is a whole variety of approaches that we will need to put in place to recognise that not every business, particularly small business, is in the fast lane of the resources boom.