JOURNALIST: This morning with me is the Finance Minister, Senator Penny Wong. Good morning.
WONG: Good morning Deb. Good to be with you.
JOURNALIST: Thank you very much. Now hearing of the extent of the profits of this miner in particular but all of them as a group and compound that with the reports today that you have foregone $60 billion in revenue over ten years to keep the miners happy, is there now room to reconsider your policy on taxing the miners?
WONG: I think in your first question you talked about bounty in boom time and that is very much at the forefront of the Governments mind. Its true that were getting Australian companies, Australia as a nation is getting extraordinarily good prices for the things we export, mainly resources. And part of the challenge at the moment, in this period in history, is to make sure we use that bounty well and we use it wisely.
In terms of the taxation regime and the minerals tax, lets remember the context and the history of this. We put forward a tax last year. We faced a very aggressive and very well-funded campaign against it by some mining companies, supported by Mr Abbott. Now we had a choice about how we would handle that and we chose to sit down calmly with the miners and negotiate a taxation arrangement which would see a better deal for Australian taxpayers from these mineral resources. Can I say, a tax still opposed by Mr Abbott and the Coalition.
So we do recognise the importance of using, as you put it, the bounty of the boom well. And weve put forward an arrangement which does see more money come back to taxpayers as a result.
JOURNALIST: But as the Finance Minister, you must look at that money foregone and weep just ever so slightly.
WONG: (laughs) Well, finance ministers always want a bit more revenue, dont they? Thats pretty normal and you look at things and you think, I wish that revenue figure was a bit better or whatever. But thats the job of finance ministers.
Obviously we did have to renegotiate the tax. It was something we did Julia rolled her sleeves up and sat down with the mining companies and struck an arrangement which we think does provide some significant benefits to taxpayers, certainly compared to where we were previously. Which was the likelihood of not getting a tax through at all given Mr Abbotts opposition.
JOURNALIST: But the Prime Minister has also instituted a review of the relationship between the Government and the miners and she may have some capacity to revisit this entire policy. Especially if the Greens hold the balance of power in the Senate and would agree to come along with you.
WONG: But Deb, I think the issue here is governments do come to arrangements with different stakeholders and I think its important that we honour those arrangements. Its true that some of the detail of the tax did go to a committee of which Don Argus was involved along with the relevant minister, Minister Martin Ferguson. And those matters will be worked through and the Government will respond to that committees report in terms of some of the detail of it.
JOURNALIST: But isnt the greater pact with taxpayers with, with voters? I mean, isnt that the greater pact? I understand
WONG: Yes, and we went to the Australian people at the last election with this as our policy. And I think people would expect that we would honour those commitments. And as I said, we did put in place an arrangement which ensures more value for Australian taxpayers from our mineral resources than we have previously seen. And we did it because we do want to make sure we manage this boom wisely. And that we ensure we get better return on these resources, which are non-renewable, than we had previously.
JOURNALIST: To the carbon question now. Do you believe Australia will have a carbon price by years end?
WONG: (laughs) I can remember being in here when I was Climate Change Minister and you and I talking about this Deb.
I think a carbon price is the best way for us to reduce our pollution and the best way for us to transition to a much cleaner economy, an economy that is more predicated or more focused on clean energy. Were obviously working our way through that. Its a very big reform; its also a highly contested reform. Its contested from some parts of industry but also some parts of, for example, the Greens party who have said previously they want a range of different approaches on the carbon price.
So I think the multi-party Committee is a good forum for us to be working through some of these issues. We have said for some time that obviously the longer we wait, the higher the cost. But weve also got to get something through the Parliament that is supported by the Parliament but also supported broadly in the community.
JOURNALIST: Its interesting though, because the miners as you know did not appreciate it when you barged through the front door to get at them and their profits. Will they see this as a way of trying to get at them and their profits through the back door?
WONG: I dont think any of these policies whether its the minerals tax or the carbon price are about getting at any company, or getting at any industry. Theyre about whats good for Australia, whats good public policy.
On the minerals tax, its about saying were getting a lot of money for resources that are not renewable. We need to make sure the return on that to the Australian community is reasonable.
On a carbon price its saying, look, climate change is an economic cost as well as an environmental and a social cost. How do we adjust to reduce our contribution to climate change as a nation? The best way to do that is to price carbon. Because as long as you leave pollution free, theres no incentive to reduce it and to move to cleaner forms of energy.
JOURNALIST: Now it was very interesting to see Rob Oakeshott saying he wants to see some compensation available to some small and medium business against the risk of a carbon price damaging some businesses. In your previous policy, there were massive compensation benefits paid to the big export-exposed industries, who also happened to be major polluters. So how do you think youll compensate people this time around having learnt what you learnt about making these policies?
WONG: Can I say the first thing Ive learnt is that sometimes its important we get the facts on the table. And theres a lot of talk about and you used this phrase, I think in your question about the compensation or the benefit to big polluters. Lets remember, we sought to impose a price on carbon. What we gave them was some discount on how much they would pay for a period of time to enable the transition. So thats actually the policy framework that we previously had. As you know, the Greens and Tony Abbott voted against that.
Going forward, those are some of the issues we have to talk about. How do you transition? What is a fair set of arrangements in relation to different parts of the economy? Theyre things I know Greg Combet is very focused on and theyre things that well have to talk to industry but also to members of the multi-party Committee which does include the crossbenchers such as Mr Oakeshott and the Greens.
JOURNALIST: Its a really interesting shift in personnel as well. You as the former Climate ChangeMinister into the portfolio of finance. And as well as that, the former head of the climate change department into the head of Treasury just to replace Ken Henry when he leaves. The brain power being held at this question seems pretty significant.
WONG: (laughs) I dont always feel like theres a lot of brainpower, particularly at this time of the morning, Deb. But Ive always thought of climate change as an economic issue. I think Nicholas Stern was right. The problem is a market failure. That is, we dont price pollution. So the cost of it is paid by future generations. So its fundamentally an economic question. Thats the way Greg Combet has approached it and I think thats the right way to do it.
JOURNALIST: Now theres been a very interesting development overnight in New South Wales. The Opposition has announced a policy on its position with regard to mining and farming and well be speaking in a little while to Duncan Gay who is the Opposition spokesman for primary industries and energy. As a general principle, it would seem this policy favours farmers over miners because of the problems of land destruction. Now this is a matter of great interest of course for the Federal Government because these are nationally significant decisions. Do you take an interest in a policy as big as this at a state level?
WONG: Well I think everyone should take an interest, youre in an election campaign here, so I think both parties policies should be scrutinised pretty closely. This is an issue I havent seen what the opposition here is announcing certainly it was an issue in my previous portfolio that was raised with me.
And there is a balance you have to strike about how you manage our natural resources and theres very good reasons why you want to make sure farmers can keep farming. But therere also obviously industries such as mining which do bring a fair bit of wealth into Australia. And its a question of making sure you balance the use of those natural resources wisely.
JOURNALIST: One last question, and it goes very much to the news of the day. The Opposition has attacked the Government for flying grieving relatives from Christmas Island to a grave site in Sydney for a service. Now, do you have any second thoughts at all about the rightness of signing that Government cheque?
WONG: No I dont. I think its disappointing that thats the approach in the face of this sort of human tragedy that some parts of the Opposition will take. And I do want to say publicly, I absolutely endorse the way Joe Hockey has responded to this. It is good when the moderates in the Liberal Party find their tongue and find their voice and I thought Joes comments yesterday were absolutely on the mark.
JOURNALIST: Thank you very much for your time this morning Senator.
WONG: Good to speak with you.