5 December 2012




WILKINSON: Finance Minister Penny Wong joins me now from Canberra, good morning to you.

WONG: Good morning, good to be with you.

WILKINSON: And you. Now Senator, when rates don’t go down everyone criticises the Government because the economy is failing; when they do go down they criticise the Government because the economy is failing. As Finance Minister, which do you prefer?

WONG: I think the reality is that this is good news for Australian families. If you’ve got a $300,000 mortgage, you’re about $5,000 a year better off as a result of a series of rate decisions by the RBA. That’s obviously good for people when it comes to the cost of living.

WILKINSON: But it does mean that rates are now at emergency levels. That means that they’re as low as they were during the GFC. Why is that the case?

WONG: We’re in very different circumstances to the GFC, and let’s remember what happened then, is that the global economy fell off a cliff and governments all over the world, including here, had to put a lot of money into the economy. What have we got now? Unlike the rest of the world, Australia has got solid growth. Unlike the rest of the world, we have got relatively low unemployment and we’ve seen interest rate cuts over time which as I’ve said is good for families.

WILKINSON: It’s not good for self-funded retirees though. This is going to hurt them. Do you feel sorry for them?

WONG: I understand that, unfortunately what’s good for families with mortgages is not always good for every other part of Australia but we’ve done things like increase the tax-free threshold which helps a range of people including low income people.

WILKINSON: Our economy has well and truly piggybacked off the mining boom over the last few years. Is it over now?

WONG: There’s no doubt we’ve got an investment boom which will peak and then start to decline, but remember we’ll then have what we call a production boom. So as a result of all that investment, we’ll then be able to produce more volumes of export. So there’s still a lot of strength in the mining sector but you’ve got to plan for the future and that’s what the Government is doing. You’ve got to look beyond the mining boom and make sure you’re investing in those things which will make sure we’re a strong, productive economy in the decades ahead.

WILKINSON: Talking about the future, is the Government still on track to deliver its much-promised budget surplus at this stage?

WONG: Our last update has us on track to return to surplus. Of course, it’s made much harder by the fact the global economy is facing some headwinds.

WILKINSON: Yesterday Senator John Faulkner, who is one of the most respected figures in the history of the Labor Party – yesterday he savaged some in Labor’s ranks, particularly those in NSW, in a fairly major speech. Here’s what he had to say.

[Excerpt] It’s time to publicly acknowledge that there have been some in our party’s ranks with neither political principles to defend nor moral convictions to uphold.

Senator Faulkner then went on to say that the factional system concentrated power within the stunted perspectives of just a few, isolating the party from the broader community and allowing corruption to flourish. Pretty damning words, is he right?

WONG: First, corruption has no place in public life or in the Labor Party and he’s absolutely right to say that that needs to be dealt with, wherever it is, swiftly and effectively. My view is we need to continue to reform the Labor Party to make sure we do build on the things that we’ve done and to open the party up and we’ve done a lot of work on that front. But there’s always more to do to make sure we continue to grow.

WILKINSON: But it does appear there has been a place for corruption in the Labor Party, particularly in NSW.

WONG: And that’s completely unacceptable Lisa, and those people need to be dealt with.

WILKINSON: OK, let’s hope that happens. Senator Penny Wong, thank you very much for your time this morning.

WONG: Good to be with you.