SPEERS: Im joined by Finance Minister Penny Wong. Thanks for your time.
WONG: Good to be with you.
SPEERS: Now it is true the Reserve Bank generally doesnt cut rates to emergency lows if everything is fine with the economy.
WONG: Lets remember what the Reserve Bank has said and lets remember a few of the facts. Relative to other countries, Australia is doing very well. Whilst of course not everyone is on easy street, we know that we are projected to grow faster than any of the major advanced economies. Weve got relatively low unemployment, weve got low interest rates, contained inflation and a lot of investment and solid growth. So these are all good things and I dont think its good for the country to have people like Mr Hockey trying to talk down the economy.
SPEERS: So why does the Reserve Bank have to cut rates to emergency lows?
WONG: Well you should go to their statement and the comments the extracts that you put. In their statement they referenced a few things: the global economy and its true, the global economy has been much more fragile than you would have hoped. That is true
SPEERS: And is that fiscal cliff in the US a big worry for you?
WONG: there is whats happening in Europe, theres the fiscal cliff. Now we look forward to that being resolved, as does the rest of the world.
SPEERS: But on the domestic economy, clearly there are some concerns there.
WONG: I think theres two points. I think the quote you read out where the Reserve Bank itself talks about the economy growing close to trend, I think that is an important thing for us to recall
SPEERS: Over the past year, but looking ahead it was talking about over the past year, but looking ahead it does seem to have some concern.
WONG: The second thing the Reserve Bank also referenced is public spending being constrained. So I think a very important thing to remember in the face of Joe trying to make political hay out of an interest rate cut which is obviously good for many people around Australia, is that were in a very different position to where the world was in 2009.
Lets remember what happened during the GFC: global growth fell off a cliff, literally, in fact the global economy started contracting. We had governments across the globe including the Australian Government putting stimulus into the economy and interest rates obviously very low.
So its a very different context to now where what were seeing is solid growth in Australia, certainly risk in the global economy but relatively low unemployment and the Government being very disciplined in its spending and this of course means were in a very different position.
SPEERS: But do we still need to push back into surplus given some of the concerns that are out there about the economy?
WONG: We have been really clear, you have the right economic settings for the time and our latest Budget update still has us not only returning to surplus but also as the Reserve Bank has referenced
SPEERS: Do you still think thats the right thing to do?
WONG: as the Reserve Bank has referenced, the economy growing at or around trend. But can I talk about the future because I think thats really important and you did ask about that earlier. Certainly the Government is really clear that you do need to look ahead to make sure you plan for the future, to make sure that beyond the peak of the resources boom we still continue to increase the countrys wealth and ensure Australias prosperity.
SPEERS: So what are you doing about that? What are you doing about post-mining boom?
WONG: Thats right. Well what were doing is, you try to increase Australias productivity. You invest in your people, you invest schools, you invest in our universities, you invest in schools. Now weve done a lot of these things. Weve substantially increased funding to universities and the number of people going to university. Weve substantially increased the number of available places when it comes to skills
SPEERS: But all of that investment seems to be at odds with getting back into surplus. Its a lot of spending.
WONG: Thats true youve got to make your priorities. But there are other things you do to try to increase your productivity. Investment in the NBN, thats a long-term investment, again opposed by those opposite, but I think critical to a 21st century
SPEERS: But this is all spending. Is it still a priority to get back into surplus?
WONG: We have taken a lot of savings, something that I think the Opposition seem to forget that over the course of a number of budgets weve got in excess of $130 billion worth of savings
SPEERS: Youre still struggling to get back into surplus.
WONG: If the revenue was at the level it was under Peter Costello we would have a $24 billion surplus this year.
SPEERS: But its not. So the question is, is it still a priority to get back into surplus?
WONG: I think weve demonstrated our priorities by the savings we just took in the MYEFO.
SPEERS: So it is still a priority?
WONG: Its absolutely very clear that the Government believes fiscal discipline is a priority.
SPEERS: Can I ask you about the mining tax, because the Reserve Bank points out that the peak in mining investment is approaching and the Opposition is saying get rid of the mining tax. Now its not just the Opposition; there are calls for at least some major changes to the mining tax from your own GST Review. John Brumby and Nick Greiner who chaired this say that youve got to fix this issue of refunding state mining royalties. Will you do that?
WONG: That Review has been handed to the Government and the Government is considering the outcome of that review. I mean Im always interested in the Oppositions shifting position when it comes to mining
SPEERS: Im not asking about the Opposition
WONG: Well, no, you
SPEERS: Will you look at that?
WONG: Hang on, you referenced the Oppositions position and Id just simply make one point. Initially remember this was going to be the worst thing in the world, it was going to stop the economy, it was going to be dreadful. And now theyre saying, Oh, but the designs not the right design and you...
SPEERS: Well it hasnt raised any money and youve committed funding from it.
WONG: And all of our funding commitments are in the Budget bottom line. It shows us going into surplus
SPEERS: Will you consider changing this part of the mining tax that refunds state royalties?
WONG: We said we are considering the GST Review recommendations and thats the position of the Government.
SPEERS: Is there a case for doing this?
WONG: Im not going to go any further than what Ive said which is that we are considering the recommendations.
SPEERS: And finally on a completely different subject John Faulkner, your colleague, gave a speech today. Im sure you would have read it.
WONG: (laughs) Well, Ive been a bit busy today but thats OK.
SPEERS: He calls for urgent action on a number of fronts; electoral funding disclosure, whistleblower protection but also internal reform within the ALP. For example hes saying the entire party membership should choose Senate candidates, there should be an independent panel to resolve internal disputes, not factionally dominated committees, and any member found guilty of corruption should be expelled. Do you agree?
WONG: Absolutely, certainly on that last point.
SPEERS: And Senate candidates should be pre-selected by the entire party, Senator Wong?
WONG: I certainly wouldnt mind that but obviously youve got to work that through the party processes and people may have different views on that.
SPEERS: And the electoral funding disclosure laws, will that happen before the election?
WONG: Gary Gray has been dealing with that, so hes probably the person you need to speak to about that. But I would say weve got a pretty good record in terms of increasing transparency and disclosure.
SPEERS: Finance Minister Penny Wong thank you.
WONG: Good to speak with you.
ENDS