FED: Swan dismisses two decades of debt as 'wild speculation'

AAP General News (Australia)
04-26-2009
FED: Swan dismisses two decades of debt as 'wild speculation'

By Julian Drape

CANBERRA, April 26 AAP - The federal government says it's nothing more than "wild speculation"

to suggest it could take almost 20 years to pay back the debt it's currently accumulating
to help cushion the Australian economy from the global financial crisis.

News Ltd has reported it will take 19 years to balance the national books if Labor
runs a budget deficit of between $35 and $50 billion.

But Treasurer Wayne Swan says that analysis lacks credibility.

"I don't think it's credible at all," he told Network Ten.

"I actually wonder where people get these sorts of stories from sometimes ... (it)
is nothing more than wild speculation."

Mr Swan, speaking from Washington, also denied it was inevitable the government would
have to raise taxes to help pay down the deficit.

Last week, Prime Minister Kevin Rudd hinted the government could target high-income
earners as a way of funding other spending initiatives.

However, Mr Swan said taxes wouldn't rise "on average".

"I'm not going to speculate (on the budget) ... but what I can repeat is our commitment
to keep tax levels below the levels we inherited for 2007-08 on average," he said.

"That's the commitment we took to the Australian people at the last election."

The promise was "very credible", he said.

The treasurer further denied claims the government was wasting money on "cash splashes"

rather than investing in major infrastructure projects.

International Monetary Fund (IMF) chief economist Olivier Blanchard last week suggested
governments should spend more on infrastructure because it will take years to recover
from the global recession.

"Nobody's playing Santa Claus or Santa Stimulus," Mr Swan said.

"The tax bonuses are out there to support demand until the investment that we've put
in place through the nation building and jobs plan kicks in."

That investment in schools, housing and roads would flow through during the rest of
this year and next year, "supporting demand in the economy", the treasurer said.

"That is the approach that is recommended by organisation like the IMF, the OECD and
the World Bank."

AAP jcd/cdh

KEYWORD: BUDGET09 SWAN

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