SKY News PM Agenda with David Speers - 26/10/2010

26 October 2010

SPEERS: Penny Wong, thank you for your time. The Australian Stock Exchange takeover, or proposed takeover, has met some political resistance here in Canberra today. Bob Brown, for example, says that Singapore doesnt respect Australia. He cited amongst other things the execution of an Australian drug trafficker. Should these human rights issues be a factor in deciding whether this takeover should be allowed to go ahead?
WONG: As you know, this takeover will be subject to a range of decisions by the Treasurer and those decisions will be about looking to the national interest. Now Im not going to comment on those decisions. Theres a process that is gone through for these sorts of investments and corporate decisions.
SPEERS: But as the Treasurer said
WONG: ... but what I would say is I think everyone should just perhaps take a step back. I think the key issue here will be whats in the national interest. And thats as it should be.
SPEERS: Those processes the Treasurer talked about dont involve a human rights consideration though, do they? Thats not part of the process.
WONG: Im not going to comment on the process for consideration of this issue.
SPEERS: But in general, in general, with foreign takeovers
WONG: In general terms, what Id say is this: we are an open economy. We have benefited greatly from engagement with the world and trade with the world. Thats the approach that successive governments have taken. And thats the approach that I think has served Australia.
SPEERS: I mean we do trade with China, for example, and we have human rights concerns about some of the things China does. The bottom line is its not something this Government would stop a foreign investment because of.
WONG: In the context of the ASX announcement I think I have to be a little careful about the response because I wouldnt want to pre-empt the way the Treasurer will approach this. And hes outlined how hell do that.
SPEERS: But the principle is what Im getting at. The Government doesnt have a principle problem with accepting foreign investment from countries that might have human rights issues.
WONG: You raise the issue of foreign investment. Thats a very, very important issue and we know that Australia has been a net importer of capital. That is, foreign firms have invested in Australia for many years. Thats been a good thing because those investments have created jobs, theyve helped build our economy, theyve helped grow our national income. So obviously foreign investment has been something over the years that successive governments have looked at and that has been of benefit to Australia.
Obviously the nature of the investment may mean its subject to approvals and on those issues, the national interest and the legislation test will apply.
SPEERS: Is there a special case when it comes to the Stock Exchange though that, you know, it might affect our competitiveness with the region if we dont own the Stock Exchange?
WONG: Well I think youre asking me to comment on something that Ive said I really cant comment on.
SPEERS: Economic Hansonism is the attack from Julia Gillard. Shes accusing your opponents of economic Hansonism which she says means opposing sensible economic reform. But the sort of reforms that Government is pursuing its not just the Coalition worried about them. Things like putting a price on carbon, the mining tax, some of the other reforms like the National Broadband Network business groups are also worried about your approach on this.
WONG: Weve just come through a Global Financial Crisis with very, very good outcomes compared to the rest of the world: higher growth, lower levels of unemployment, public finances in a sound position. One of the reasons why the Australian economy over the years has been a strong economy has been that successive governments both Liberal and Labor have implemented a range of important economic reforms. Floating the dollar, the independence of the Reserve Bank, deregulating our financial system, opening up our economy so we could trade more competitively with the rest of the world. These are important, although not easy, economic reforms.
SPEERS: But there hasnt been bipartisanship all the time. Labor in Opposition opposed the GST, workplace reform, superannuation reform...
WONG: ... Hang on, hang on, Labor in Opposition was very supportive of superannuation reform. I remember Labor in fact introduced it in Government. My point is this, those major economic reforms, by and large had bipartisan support, or at least a sensible discussion, a sensible debate. We no longer have that, we no longer have that. We have a shadow treasurer who is flirting with re-regulating interest rates. We have a shadow finance minister who is suggesting we should be intervening in relation to the dollar.
SPEERS: Well, they would deny that.
WONG: I think how people took those statements was as an indication of the path this Opposition is taking.
SPEERS: Because Labor whipped up their comments to suggest that they were saying something they werent.
WONG: Well David, I think what we see, is a party in Opposition that is not prepared to advocate for reform; it is only prepared to walk away from it. Their answer to reform at the moment is no. And I think, and what the Prime Minister is saying, is that Australias economic prospects deserve a better discussion than that and a further
SPEERS: Isnt that exactly what Labor did on the GST, on tax reform? They said no. And now you support it. But in Opposition, you didnt.
WONG: It doesnt mean were not going to have differences of views. We didnt agree with WorkChoices. That is quite clear. But I think were in a different world here and perhaps what we are seeing is a Liberal party that is different to the way in which Peter Costello might have approached these things. As I said, not prepared to advocate reform, only prepared to walk away from it.
SPEERS: Just on one of those reform issues where the Government is battling the mining tax. We saw even the big miners the big three who signed up to the deal with Julia Gillard raising concerns, well they are saying the Government is reneging on a commitment to cover them, to compensate them for state mining royalties. Is that any closer to being sorted out?
WONG: This was traversed quite a lot, as you know, in the press last week and I think the Prime Minister, the Treasurer, the Minister for Resources as well as I have made clear this is a process that will go through the Policy Transition Group and weve made our position clear.
SPEERS: Does this mean its closer to being resolved?
WONG: Look I cant add anything further to what Ive said.
SPEERS: Just a final issue. The Treasurer in the Labor caucus meeting today gave a few hints it seems about the upcoming Budget statement, the MYEFO, the Mid-Year Economic and Fiscal Outlook. He said the economy and employment in particular were looking better than they were before the election but the strong dollar could impact on the Budget bottom line. To what extent?
WONG: (laughs) As much as Im sure youd like me to talk about that, Im not going to. But
SPEERS: Yes, please do.
WONG: But Im not going into details. Obviously MYEFO is due to be released by the end of the year. But it follows as a matter of logic, if youve got a high dollar that benefits us in some ways cheaper imports. Its a challenge for industries such as manufacturing or tourism. It follows as a matter of logic that where youve got the high dollar that may impact, that is likely to impact on export income, that is likely to impact on Government revenues.
SPEERS: So thats already showing up in the numbers that it is hurting exports and therefore the budget bottom line will be affected.
WONG: If the high dollar, we know, is likely to impact on export revenue, therefore thats likely to impact on company revenue to the Government. So I think its a pretty logical sort of sequence of what you might look at. But all of these issues obviously will be dealt with in detail in MYEFO.
SPEERS: Will the deficit be bigger than earlier forecast?
WONG: As the Prime Minister said today, we are very clear about our commitment to bringing the Budget back to surplus.
SPEERS: But will this years deficit be bigger?
WONG: We are very clear about bringing the Budget back to surplus and the Governments made that commitment.
SPEERS: Even though in the meantime, while were waiting for it to get back to surplus, we might have some bigger deficits?
WONG: Look, obviously these are always things you have to deal with but our commitment to the surplus is what anchors our economic policy and the Prime Minister has made that clear.
SPEERS: Finance Minister Penny Wong, thank you.
WONG: Good to speak with you.