JOURNALIST: Senator Penny Wong joins us, Minister for Finance and Deregulation. Senator Penny Wong, good morning.
WONG: Good morning to you both.
JOURNALIST: Senator Penny Wong, well get to Finance and Deregulation in a moment but scandals like this, headlines like this, are they a political partys worst nightmare?
WONG: Well it was certainly, I think for all South Australians, a pretty extraordinary and shocking front page of The Advertiser today. But obviously theres a police investigation ongoing and its not something I want to comment on. But obviously it was, as I said, pretty shocking, I think, for everybody whether youre in a political party or not.
JOURNALIST: And this comes the same day as the Rann Government was given, I think, its worst poll since the state bank.
WONG: Yes youre talking about yesterdays poll and well, you know, I mean I get asked about polls a lot. I think on this
JOURNALIST: What do you think of this one? You dont want to disappoint, do you?
WONG: I usually say the same thing, which is, you know, they do come and go and youve just got to focus, whether youre in the federal or state
JOURNALIST: But these are all going in the same direction.
WONG: And
JOURNALIST: Come on. The elephant in the room. This Government is sliding just a year out from the last election. Its sliding.
WONG: And thats, you know, thats the view you have. But any issues that the state party has obviously the state party will have to deal with. Thats a matter for them. What I would say is I think the approach should always be you should do whats in the best interests of the country or in this case the best interests of the state rather than just focus on polls.
JOURNALIST: Now were being softened up for another tough budget, were told. You know, because weve got a boom but its not really going to be a boom because its only going to be a boom in little areas like where theres a big hole in the ground where theyre pulling out iron ore or copper or uranium.
WONG: Its going to be a pretty big boom. But I think the issue is whats happening in the rest of the economy and, as you know, what Ive called and what Wayne Swans called the patchwork economy. Here in South Australia we do understand that because I think were probably right in the middle of that.
JOURNALIST: So manufacturing and retail.
WONG: Look, weve got a
JOURNALIST: Not part of the patchwork; the holes in the patchwork quilt
WONG: Thats not a bad picture I suppose. But youve got some short term softness. Thats primarily being driven by a number of factors, but certainly the cautious consumers so were all saving more than we used to, which is probably a good thing but were certainly consuming less. That obviously has an impact on those areas like retail.
Weve got a very high dollar. So its above parity; so its more valuable than the US dollar. So obviously thats going to affect particularly manufacturing, as youve said. Then youve obviously got the natural disasters which have had a hit on the economy or knocked some, probably about three quarters off the cent, with the Japanese tsunami, off GDP this year.
But we know if you look over the medium term weve got a massive amount of mining investment, a massive amount. $35 billion invested last year. We anticipate $55 billion this year. $75 billion next year.
JOURNALIST: But weve had a two-speed economy in this country for years and years and years, right through the Howard years. We had an export boom from the mining states WA, Queensland. Were doing gangbusters. And the rest of us, were just struggling along. This is not new.
WONG: I think the point that the Treasurer was making yesterday and its an important point is that we shouldnt anticipate, weve got a lot of the conditions of the boom, but we dont necessarily anticipate an enormous amount of revenue to government from this boom, particularly
JOURNALIST: Why?
WONG: Well for a number of reasons. One is the softness in other parts of the economy. You talked about what happened during the Howard years. I think the dollar, on average, in the first mining boom was around 78 cents. What is it now? A dollar something and on average at the moment its 98 cents for this second boom. So obviously thats going to mean that other parts of the economy are a lot softer.
Mining also is very capital intensive. So even when you get a lot of profit not as much of that translates as revenue to government because obviously they deduct a lot for the massive investments theyre making. And this is a very capital intensive boom, particularly over the coming years.
JOURNALIST: So youre telling Australians, this budget is going to be tough?
WONG: Im saying to Australians this does need to be a tough budget because we do need to come back to surplus. We do need to make sure we dont add to price pressures in the years ahead. We also have a hit on revenues and that is going to add up to a difficult budget.
JOURNALIST: And yet The Sydney Morning Herald reports that despite attempts to reduce federal travel costs and bargain for bulk discounts, new tender documents show federal public servants will spend at least $1.5 billion on airfares over the three years. The estimated domestic travel bill for the whole last July and June 2013, is $1.03 billion enough for 975,000 business class return flights between Canberra and Melbourne. If you cant reign in the fundamentals like that how do you sell a message of a tough budget?
WONG: Well we have actually reigned in the fundamentals of that. And my predecessor Lindsay Tanner put in place arrangements around whole of government purchases for travel which has yielded some savings. What youre talking about is I think a tender process, from memory, in anticipated travel. The advice to me is that we have seen savings through this area as a result of the changes the Government has made.
JOURNALIST: Well a spokeswoman for your department says its incorrect to state that thats the bill because this is the estimated air travel commitment?
WONG: Thats right.
JOURNALIST: Well its money youre going to spend?
WONG: Well, no this is money people say they might spend. I think the key issue here is government, like big companies, do spend money on travel and whether we can extract - get the best bang for dollar.
JOURNALIST: Just before you leave us, to return to South Australian politics. Your colleague in the state parliament, Kevin Foley has referred to Labors backbench being full of immature political novices. The nervous nellies and the panickers that are in the Labor Party in South Australia should take a cold shower. Aspiring backbenchers who wish to be ministers, and those aspiring to be MPs have about as much political genius as I do in my left toe.
And he went on to take a swipe at Leon Bignell who was very successful at the last state election. Penny Wong?
WONG: Kevins obviously got a very clever left toe hasnt he?
JOURNALIST: Youve always been impressed by his political astuteness?
WONG: I have to confess Ive never looked at his left toe.
JOURNALIST: Or shooting it out of his mouth?
WONG: (laughs)
JOURNALIST: With the rest of his foot?
WONG: I want to say something about Leon. Leon had a very good result at the last election in pretty tough circumstances. And I think has demonstrated his capacity to campaign on the ground.
JOURNALIST: Is the future of the Labor Party more with the Leon Bignells of this world than with the Kevin Foleys?
WONG: The state party has to work through its own future and it has to look at what it believes it is best for the state and the government.
JOURNALIST: But you think hes a good campaigner Leon Bignell?
WONG:I do think hes a good campaigner. So do the people who voted for him, I think, if you have a look at the vote at the last election.
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