6 November 2012




CURTIS: Penny Wong welcome to ABC News 24.

WONG: Good to be with you again.

CURTIS: The Reserve Bank didn’t move interest rates but some business groups say they should have because domestic activity needs to be assisted and it would help getting the dollar down. Did the Reserve Bank get it wrong?

WONG: As you know monetary policy is a matter for the independent Reserve Bank and they’ve made their decision. Of course the backdrop to that decision is six interest rate cuts since the last Melbourne Cup. So there obviously has been a loosening of monetary policy over that period that the RBA’s taking into account in making its decision today.

CURTIS: But the picture for the economy is still a mixed one. Where does the balance lie? The resources investment boom will peak next year. Do the other sectors of the economy need an interest rate cut to make their contribution to growth?

WONG: You’re right to say that it’s a complex picture that we’re all managing at the moment. We’ve got, as you say, a very large pipeline of investment, we’ve got very strong private sector investment data. But by the same token the high dollar is making life a lot more difficult for certain parts of our economy.

Having said that, it’s important to recall that Australia’s going to grow faster than any other advanced economy in the year to come and that’s a pretty good position to be in.

CURTIS: But is that growth faster than any other advanced economy enough though?

WONG: I’d certainly rather be growing faster than be in recession, as some advanced economies are, I think that’s self evident. And I’d certainly rather have our unemployment rate with a five in front of it than Europe’s unemployment rate with an eleven in front of it.

Because we know that behind those figures there is a very significant human story, isn’t there? That’s why you try and run an economy well, because you want to ensure people have jobs and families can be supported.

CURTIS: As you mentioned the dollar’s still high. The Reserve Bank board says the dollar is higher than it expected. Would a rate cut necessarily bring it down though, because previous rate cuts haven’t done that?

WONG: We’ve certainly seen a lot of market interest in our dollar and we’ve got a floating exchange rate and I think what we’re seeing, for various reasons, people are liking the Australian dollar. Obviously our economy and our currency is seen as a safer bet than many other economies, so that’s obviously going to have an impact.

I think the Reserve Bank ultimately has to do what it sets out to do, which is to look at inflation and make sure it charts the course it sees fit in terms of monetary policy.

CURTIS: The Treasurer has said bringing the budget back to surplus would give the Reserve Bank room to cut rates. If you miss the surplus target and remain in deficit does that mean cuts are less likely?

WONG: I think what you’ve seen is the Reserve Bank already taking decisions – as I said six interest rate cuts since the last Melbourne Cup and interest rates lower now than at any time since the Liberal Party left office. I think that demonstrates what we have been saying, which is that when you engage in the sort of fiscal consolidation we are, it does give the Bank room to move. Ultimately, though, the RBA makes its decisions on the basis of where it thinks monetary policy should be, and that’s why they’ve made the decision today.

CURTIS: If I could ask you a question about the Treasury costing of Opposition policies. The Treasurer’s office says it made those public and it says from time to time Governments of both persuasions publicise information to contribute to a more ‘fulsome debate’ about policy. How do you do that when Treasury didn’t cost all of the publicly available Coalition policies, didn’t cost axing the carbon and the mining tax, and didn’t cost all of its policies on the company tax?

WONG: If Joe Hockey doesn’t like this costing, he’s got a Parliamentary Budget Office, independent of Government – this is a resource no other Opposition has ever had – he can trundle down there and get his policies costed, and then he can release them.

CURTIS: But should you have asked Treasury to have costed all of the publicly available policies, rather than just some of them?
WONG: Are you inviting us to do what Joe Hockey should do, which is to cost all of his policies? The reality is: he is the man who wants to be the Treasurer. This is the Coalition that wants to be the Government. What they are doing, Lyndal – and you know this, just as the Australian people know this – they are trying to hide the true costs of their policies in the lead-up to the next election. And I for one don’t think that’s appropriate.

I don’t think that’s transparent, it’s certainly not accountable. And I think Australians do deserve to know what their policies will cost. All of the bluster we’ve seen from Mr Hockey in the last 24 hours is because he doesn’t like Australians knowing the true cost of his policies.

CURTIS: Penny Wong, thank you very much for your time.

WONG: Good to speak with you.