CURTIS: Penny Wong, welcome to News Breakfast
WONG: Good to be with you.
CURTIS: The Prime Minister urged last night forum participants to go forth and spruik the good news about the Australian economy. Is that because the Government isnt getting the message through on its own?
WONG: No, its because it is good for the Australian economy for people to be aware of the economys strengths. I mean you went through the data we saw last week weve got strong growth, weve got interest rates falling, contained inflation and weve got jobs growth. And thats a very good position for Australia to be in and I think theres been a little bit too much of people wanting to talk down the economy and people being very negative. I think its important that thats not good for confidence which ultimately isnt good for growth.
CURTIS: Isnt that primarily the Governments job? Youre the Government, part of your role is to show leadership. If you havent managed to get the message through, why should people believe it if it comes from business as well?
WONG: I think this is about remembering we are all in this together, just as we came through the global financial crisis in better shape than almost any other advanced economy, because we worked together. Also now, I think in the face of some of the things that are concerning people such as whats occurring globally, its important that we remind each other, look, were actually in a pretty good place. There are challenges. This forum today is to talk about some of the challenges such as the high dollar. But really, the economy is strong, growth is strong, inflation is contained, interest rates are falling and weve got good jobs growth over 800,000 jobs since we came to government. And that means a lot to those families.
CURTIS: Arent there are other problems though? I mean the hailstones on a tin roof that the Prime Minister talked about, the news of the global economy is actually real. The global economy, particularly the news from Europe, continues to be bad. The Australian economy is good, but in parts there are some parts that are not feeling the growth. And when you talk about the high dollar, theres actually very little the Government can do to bring the dollar down.
WONG: A few things youve mentioned there. I think the Reserve Bank Governor spoke about our tendency to see the glass half empty rather than the glass half full and our glass is probably more than half full and I think thats probably good advice. But youre right about Europe, and the Government... we dont look to Europe and think, well, everythings fine. In fact, we took a more pessimistic view of what was occurring in Europe in our Budget than most of the international institutions in terms of our forecasts. You talk about the high dollar, that is a challenge. It's one of the challenges of having a strong economy, and one of the challenges of being much stronger relatively than many other countries because of course investors look to us, people look to our currency as a sign of that strength.
CURTIS: The Prime Minister also last night talked about the need to get people... convince people to possibly move across the country if theyre going to get a job. She said that you were turning your attention to issues like state transaction taxes on property. Given state budgets are already under pressure, why would you expect them to give up that sort of revenue?
WONG: I think what we have to think about are what are the best settings to ensure we increase productivity and we continue to grow the economy because ultimately thats whats good for revenues, thats whats good for jobs, thats whats good for governments and for communities. And its quite clear that some state taxes are very inefficient; we had a discussion about this at the Tax Forum. Remember, state treasurers talk about falling revenues we understand that, weve had falling revenues but were still bringing the budget back to surplus by making hard decisions.
CURTIS: But youre also not willing to talk about one thing you could do that would increase the money that flows to the states and thats deal with the GST either broadening the base or increasing the rate and a number of things, the Treasurer has taken the GST particularly off the table for discussion.
WONG: Because were a Labor Government and we dont think that asking people to pay more through the GST, which is a regressive tax, is the way we should fund tax reform. We should have a discussion, a continued discussion, about tax reform. It was a pity that weve seen so much opposition from the Coalition to tax reform but that is part of the discussion about how we ensure we have a productive economy for this century.
CURTIS: Business also wants to lower the company tax. The AI Group will bring to this conference a proposal to cut it to 25 per cent. Youve not gone that far though, although you want to try and continue to cut company tax. Is 25 per cent realistic?
WONG: On the company tax cut I am of the view, and the Government is of the view, that a company tax cut is meritorious. But we have to do two things, we have to work out how we fund it, particularly in the current environment because its got to be revenue neutral, and we have to get it through the Parliament. Remember, we had a funded company tax cut that we couldnt get through the Parliament because the Coalition, were going to vote with the Greens to oppose it. Now, we need to resolve those issues because I think its a good thing for the economy if we can together to deliver a company tax cut.
CURTIS: Do you need to do more work perhaps to convince the Greens because you dont need the Coalition to get a company tax cut through.
WONG: I dont want to have to convince the Greens on a company tax cut. I think we should be in the position of saying to the party that says theyre a party of business, the Coalition, this is a sensible policy for the nation. And if they continue to be as negative as they are, what theyre really showing is theyre not really interested in jobs and growth.
CURTIS: One final question, why should people see this one day forum, discussing the broad scope of the economy, as anything other than a talkfest? Will there be actual formal proposals to come out of this?
WONG: I just want to remind you of our record on this. Tax Forum: people described it as a talkfest possibly not by you policy came out of it including one particular measure we funded in the Budget. The Business Advisory Forum, before the Council of Australian Governments, has led to one of the most substantive work programs in terms of deregulation reform that weve seen in years. So we have a record of having the dialogue, but using that dialogue both to build peoples support and to bring people with us, but also to hammer out the details of that reform. I think today is really important because its dealing with the big issues: how do we build prosperity into the future?
CURTIS: Penny Wong, thank you very much for your time.
WONG: Good to be with you again.
ENDS