GRAHAM RICHARDSON: In our Adelaide studio, I think is Penny Wong. Good evening Penny, how are you?
PENNY WONG, LEADER OF THE OPPOSITION IN THE SENATE: Good to be with you Richo.
RICHARDSON: Yes its been too long. Now youve got a new role these days, I mean apart from being the Leader in the Senate which is a role you already had, you are now Shadow for Trade and Investment, is that correct?
WONG: Thats right, thats right. Looking at Australia in the global economy, Richo. A pretty important issue.
RICHARDSON: It is an important issue but its always worried me when were in Government and way back when I was a politician back by the way, when I left 20 years ago this month, so it is a long time ago
WONG: So should I congratulate you or commiserate?
RICHARDSON: No, the anniversary is not for a couple of weeks. Ill let you know. You can send me a bottle of champagne.
WONG: No worries.
RICHARDSON: But I was always worried about this whole idea of free trade because it seemed to me and especially the last 20 years proves it conclusively we seem to be the only ones who take our commitment seriously in this regard. Everybody else seems to find ways around it. And it amazes me that as an example the US is talking about a free trade agreement when they do everything they can to have anything but free trade. How do you resolve that kind of conflict?
WONG: I think it has got to start with first principles and the fact is our economy needs to be able to trade with the rest of the world if were going to continue to grow and create jobs. Thats a reality.
Its always been important but its even more important now as we live through this period in the Asian Century where we see Asia, particularly China, but other countries in the region really developing. Now to hook into that growth requires us to be able to trade with them, it means we need market access, we need to be able to sell into those markets, to trade with those economies, and we also need to make sure that trade isnt just agriculture and resources but also services which is obviously a big growth sector for Australia.
RICHARDSON: Now its huge but it doesnt work too well if we let them sell everything in here and they still find ways and means to get around the intent of a free trade agreement and that seems to happen all the time.
WONG: The point you make is a pretty good one, because your first best policy as you sort of pointed out first up is to have multilateral trade liberalisation. That is, everybody doing the same thing. Thats obviously your first best policy position.
If you cant get that then you know people have looked to free trade agreements so bilateral agreements or plurilateral agreements. But youve got to make sure theyre high quality. So you dont just sign up to anything because youre absolutely right, you want to make sure you get a good deal for Australia. And thats the approach that well be taking, whether its on the Korean Free Trade Agreement which the Government has released or the upcoming agreements which are being negotiated, many of which have either commenced or progressed in negotiation under the Labor Government.
RICHARDSON: Yeah, because its interesting the Korean one. At the very time that you were trying to save the car industry a couple of months back you announce a free trade agreement with a country that exports cars here by the zillion.
WONG: I think if you look at the car industry the major factor which drove the decisions to close the Australian operations were the actions of the Government in taking money out of the industry scheme half a billion dollars and giving them nothing but uncertainty with the Productivity Commission review, and then of course the Treasurer standing in the House of Representatives demanding that the company made a decision before the review had even reported. I mean those things were really the drivers behind those decisions that were made by the companies.
RICHARDSON: We dont often disagree but wouldnt it be possible to just make a slight suggestion that maybe the economies of scale are simply non-existent in Australia when you talk about Korea which is making what, twenty times more cars than we are, and so their production runs are so much bigger, the economy scale is much better, and of course the dollar has been an absolute shocker. Dont you think they might have contributed as well?
WONG: I dont disagree that we are up against it when it comes to, as you said, economies of scale, scale in particular industries. I think the issue with cars was always whether or not we thought that was a very important strategic industry for Australia because of the level of skills which were developed around the car industry.
You know Im from Adelaide, South Australia and if you walk around the defence industries here youd have to say a fair few of the highly skilled tradespeople working in those sectors did learn the tools of trade in the auto sector and it certainly made a valuable contribution there. But anyway those are issues we can discuss for a long time I think fundamentally.
RICHARDSON: Penny you raise a good point though. When I look at Adelaide at the moment, youve had the arguments about the submarine program which I think wed all have to agree wasnt exactly a stellar performance. And now that youve got this talk about the destroyers and apparently the overcosts and all the rest of it.
Is it worth Australia trying to prop up the defence industries here? I mean, its been costing us a fortune. And when those submarines sailed out of the dock in Adelaide they could hear them in Beijing before they got 100 yards. Isnt there a bit of a problem there?
WONG: When I was the shareholder Minister for the Australian Submarine Corporation I said to them I want us to be able to win work on our merit. I want us to be so good that the Government wants to give us work based on the merit of the organisation, and thats what we should aspire to. And we did a lot of work in Government with the ASC the Australian Submarine Corporation to improve their performance.
I certainly think having defence industries on shore is a good thing. Making sure we have that capability is a good thing, as well as a good thing for Australian jobs but youve got to make sure the organisations perform and people learn from their mistakes.
RICHARDSON: Are we doing that now? Are you confident that if the next destroyer contract is given here, or given in Adelaide or given in Australia anyway, that youre going to get the value for money and then youll get actually something that works?
WONG: Were not in Government anymore and you know that will be a matter for the Government to make sure it manages those contracts appropriately. What I would say is weve got some very skilled people in Australia, weve got a real possibility of losing a lot of skilled employees if the Government doesnt deal with this issue and weve seen a lot of job losses already. This is an area where you would want to retain these skills in Australia and I think the Government needs to deal with it promptly.
RICHARDSON: But it just seems to me that the tendency is that yes you do, you throw some more money at it but as I said in the case of the submarines there were so many things about the submarines that wouldnt work. So whatever message you were imparting to them, are you sure they actually got it?
WONG: The project was over a long period and you would know a bit more than I would about the early years of it Richo, but I think Stephen Smith when he was Defence Minister did a lot of good work to try and make sure we did a full and frank review and we faced up to the issues, and the organisation engaged in a lot of change as a result.
So my view is we always have to make sure were doing a good job, but there have been many very highly skilled employees working on the Air Warfare Destroyer. Thats very important for our economy and our capability and we dont want to just leave them in the lurch by not making procurement decisions and capability decisions which the country needs.
RICHARDSON: Yes, it seems to me that when youre looking at investment in Australia I always believed that a logical thing for Australia to do and you imagine youd be able to do it well would seem to be secondary processing. Weve got all the minerals here, theres everything here basically. So youd think whether it was iron ore or aluminium or whatever youd have secondary processing. But even that, we seem to be failing dramatically with that as well.
WONG: We certainly are going through a period of a lot of change in the economy and certainly weve seen a lot of jobs lost since the election of the Abbott Government. And I think we have to say to ourselves is ok, what is it that we think we can do together as a nation to make sure we keep growing jobs? I think trade is a really important and an important part of that jigsaw because hooking into the growth of Asia going forward is going to be so important for jobs. Ive just come back from Tasmania
RICHARDSON: Oh, youve been overseas already?
WONG: Ive just got back from Tassie this afternoon and visited a couple of firms there and the University of Tasmania, but a couple of firms who are selling into Asia. One company got some very substantial contracts with Malaysia, exploring opportunities in Vietnam, another producer sending his product into Korea and China, and it really is a reminder that when we talk about Australia in the Asian Century were talking about jobs in Australia which are generated by tapping into that growth, making sure weve got the products to tap into that growth. Now thats what we have to do, and what we have to work out as a nation is where do we invest, what are the things we need to do in order to best tap into that growth, and trade is an important part of that.
RICHARDSON: It is, I just dont think weve ever been able to quite get the mix right. If you look for instance at the Japanese theyve got some of the most inefficient industries in the world in terms of beef and rice, and yet they keep everybody else out, its so hard to break in. How do you as someone now involved in the trade area, how do you try and break that down?
WONG: The point is, Im not sure you could look at that and say that was a great thing for their economy.
RICHARDSON: Its dreadful, but I mean they do it. Its politics sometimes you know.
WONG: Thats the point Im making. And thats a matter for them. I mean we have our views about wanting access to the Japanese market. But I think, its certainly not a prescription for economic growth. Trade and trade liberalisation, bringing down the tariffs, which was done under the Government of which you were a part Richo, has been a very good thing overall for Australia. It certainly did hit some industries very hard and government should make sure they respond appropriately, but from a broader perspective for the community and the economy it certainly ensured, one of the things that has driven economic growth, certainly, cheaper good for consumers and that has its own benefits.
RICHARDSON: There has certainly been plenty of that although I remember when we shut down the TCF textile, clothing and footwear I just remember when you displace 600 workers in somewhere like Wangaratta you leave them in a terrible position because their houses are worth next to nothing compared to buying a house in Sydney or Melbourne where they had to go to try and get a job. I just hope in the current wave in the car industry and other industries where people are losing their jobs there is some thought given to that.
WONG: Well actually on that, Im deeply worried about that. And weve seen these closures, we still have no plan from the Federal Government. If you go out to the northern suburbs of Adelaide where Holden is located, youve already got high levels of youth unemployment, you add these sorts of job losses, its obviously going to be a really significant regional impact. Its very disappointing and says something about Tony Abbotts values that we havent seen from him what the Federal Government would do for those communities and those workers.
RICHARDSON: Ive already been critical of that, and I still believe there needs to be a real package for those workers and I havent seen anything near what it needs to be yet. Now Ive got to ask you this last question before we go. It would seem now certain I know youre a realist that on Saturday the last two Labor governments, bar from the municipal government in Canberra, the last two go on Saturday. Whats gone wrong? Only a few years ago everywhere was Labor. After Saturday, midnight, there will be none.
WONG: Lets wait and see the result. But youve been around in politics a fair while Richo, you know that sometimes you win and sometimes you dont. What I would say about these elections, the most important thing in many ways is that you know Tony Abbott is refusing to release his commission for cuts, his Commission of Audit report, nine hundred pages of secret cuts sitting on his table that hes making sure dont come out before the South Australian and Tasmanian elections and before the Western Australian Senate by-election. I think that says all you need to know about what Tony Abbotts agenda really is.
RICHARDSON: I agree with that. But it still doesnt explain why Labors going to do so badly on Saturday, but I didnt really expect that youd give me a long explanation on that. Penny Wong, thank you for your time.
WONG: Good to be with you.
ENDS