STEVE VIZARD: On the line from Canberra, the Minister for Finance and Deregulation Senator Penny Wong joins me. Penny, good to talk to you.
WONG: Morning Steve.
VIZARD: Good news.
WONG: Very good news for Australian families with mortgages, very good news for businesses. 25 basis points. That means that a family with a $300,000 mortgage will pay around $50 less a month in interest repayments, so thats obviously very good news.
VIZARD: Commonwealth and Westpac have said theyre going to pass on the rate cut in full. Where are the other two? Whats your view about what they ought to do?
WONG: We certainly welcome the decision by Westpac, which I think was out first, saying wed pass it on in full. As well as the Commonwealth, the Bank of Queensland and I think a few other smaller institutions. Theyve done the right thing by their customers. I dont think theres any justification for banks not to pass on the full rate cut. And I think any customer of a bank who doesnt do that is certainly within their rights to think about alternatives.
VIZARD: And they need to do it quickly. I mean when the interest rates go up theyre very quick to put the hike on their own interest rates. Youd be disappointed if they eventually got there but took a little too long, wouldnt you?
WONG: I think its more than disappointed. I think its doing the right thing by their customers. We believe competition is the best way of ensuring the best deal for Australians from the banking system. And thats why weve introduced a range of measures to support competition that I think weve spoken about before.
VIZARD: One of the reasons the Reserve Bank presumably has reached its decision is because of global uncertainty, and particularly whats happened in Europe. And you only have to look at whats happened in Greece overnight, holding a referendum about a rescue package. Its like taking a vote on whether someone should apply a tourniquet when youve been bitten by a snake, one can imagine. It is an uncertain time globally still, isnt it?
WONG: A few points about that. Look it is a very disappointing situation in Greece, and we look to the Europeans to resolve this. But I would say in terms of interest rates, one of the reasons the Reserve Bank has had room to move, is obviously the Government is putting in place a pretty strong fiscal consolidation. That is, bringing the budget back to black very quickly. That obviously gives room for the Reserve Bank to move.
But youre right, this is a volatile time. We accept that. What we do say to Australians is, were determined to manage the economy for the best interests of Australians and their families. And we do face this volatility with a great deal of strength.
VIZARD: So weve got a volatile international market and yet you want to return the budget to black. And with that in mind youre introducing the Governments mining tax Bills today into the Lower House. Is this the best time to be doing this?
WONG: This is absolutely the right time to be introducing a tax on mining which will spread the benefits of the boom. We know that to Australia mining is very important. But we also know that you can only dig these resources up once. And this is about making sure we use the benefits of the mining boom and spread it across the country to other businesses that arent in the fast lane, and to Australian workers through superannuation increases.
So this is a very important piece of legislation. Its about dealing with a change that we know is happening in the Australian economy, the patchwork economy, the Governments been talking about. We want to do something about that, and we want to spread that opportunity. Thats what these bills do.
VIZARD: And yet its controversial. To get it up youre going to need the support of, well, four crossbench votes effectively, and Greens MP Adam Bandt. You need Tony Windsor, you need Rob Oakeshott, you need Andrew Wilkie and you need Adam Bandt. Where are they sitting at the moment, and what are you saying to them?
WONG: We are talking to the crossbenchers. But the reason this is controversial, the reason that we have to speak to the crossbenchers, is yet again we have Tony Abbott saying no. And I think, leaving aside any partisan comments, the policy proposition, or the policy issue, is this: Tony Abbott thinks miners should pay less tax, and that small business and manufacturers should pay more.
That makes absolutely no sense if youre interested in an economy that is focused on the needs of working Australians, thats focused on jobs, and focused on small business. Why would you say miners should pay less tax? Now because hes taken that position, we are talking to the crossbenchers. Well continue to do that, because this is a very important policy. Its about securing the benefits of the boom now and into the future.
VIZARD: Could this be a repeat of the proposed amendments to the Migration Act where you get done?
WONG: Thats not what were countenancing. What were saying is, this is very clear legislation. We were very clear for a long time about the benefits of this. We have struck an agreement with significant parts of the mining industry, and we are implementing that agreement. We dont want politics to get in the way of what is a reform that is absolutely in our national interest. For today but also for the long-term - about strengthening our economy for the long-term and for the next generation.
VIZARD: Penny can I just make an observation. I think one of the problems, communication problems, amongst other things, that this Government has suffered from, is its been great at setting out what it imposts on the community and on business its proposing to put in place, and what taxes its going to introduce. But not so good, in fact lousy, the polls would suggest, at setting out the vision for which those proceeds are to be used, painting a picture for Australia in the future. Lets just talk about the mining tax. Can you succinctly set out a vision for Australia, particularly for which the proceeds from this mining tax are going to be specifically applied?
WONG: We want to use the benefits of the mining boom to give tax breaks to small business, to reduce tax for companies across the board and to increase the superannuation savings of all Australians. So you reduce tax for business, you give Australian workers more superannuation and you fund that by asking mining companies to pay a bit more tax. Thats how you use the benefits of the boom.
VIZARD: I want to talk about Afghanistan, very quickly. Weve got three more deaths of Australian soldiers in Afghanistan. Very tragic, I think wed all agree. Your Government has said its going to stay the course. Do you understand what staying the course means?
WONG: Weve laid out quite clearly why were there. Weve been obviously, you know, like everybody very, very saddened by the most recent tragic events there. And unfortunately what weve seen is a lot of tragedy, and thats what war brings. But there is an important job there to do in terms of the transition. The Prime Minister has talked about that. And I think if you listen to what the previous Chief of the Defence Force has said particularly, and more recently, I think the Defence Force and soldiers do understand the important job that theyre doing there. Having said that, it is very hard. We all know that behind each of these stories is families and friends who are dealing with a real tragedy.
VIZARD: Are you convinced that in ten years time, for all the billions were spending and for the loss of 32 lives, that we will have made any difference in Afghanistan ten years from now?
WONG: I think were making a difference now. And we have made a difference. And we should never forget that. That we are making a difference now, and people have made a difference until now. What happens down the track, these are always issues Im sure people will debate then.
But we are making a difference, and what we need to ensure is that how we handle the transition that the Prime Minister and the Minister for Defence have spoken about recognises the benefits of the change that weve been part of.
VIZARD: Another asylum seeker tragedy, Penny Wong. A boat capsized off Java, and at least five children at this point drowned. It could be any number, we just dont know how many people got on. It could be 70, it could be 100. Who do you say should bear responsibility for these deaths?
WONG: Im not sure I want to get into that. What Id say is this is unfortunately another terrible tragedy and it is our worst fears realised. Our motivation in putting in place the arrangement with Malaysia was to try and remove the incentive, and remove the reason that people get on boats. And I think weve had a stark, today, or yesterday rather, reminder of why we dont want people to get on boats.
VIZARD: If I could just ask you about your partners pregnancy, hows she going?
WONG: Shes going well, thanks very much Steve -
VIZARD: And is she far into it?
WONG: Shes very healthy.
VIZARD: Thats good. And, she hasnt had any cravings? Anything of that sort?
WONG: Well, she might have, but Sophies very private. Im not sure talking on radio about what she might have been eating would be - I think I might get into a bit of trouble. (laughs)
VIZARD: Very wise answer (laughs). Good on you Penny, great to talk to you.
WONG: Good to speak with you.
ENDS