SENATOR THE HON PENNY WONG

MINISTER FOR FINANCE AND DEREGULATION

TRANSCRIPT

19 June 2012

SKY PM AGENDA WITH DAVID SPEERS

TOPICS: BUDGET, CARBON PRICE, ECONOMY, G20, GINA RINEHART

E&OE - PROOF ONLY

SPEERS: Penny Wong, thanks for your time. There’s been some criticism of the Prime Minister for telling the Europeans they should model themselves on our economy and our economic performance. Why should Europe look to the Australian model?

WONG: The Australian model has delivered over 800,000 jobs since we came to Government; an economy that’s over 10 percent bigger than it was when we came to Government. It’s delivered contained inflation, falling interest rates, and growth in the last accounts of in excess of 4 percent through the year. Now, they are pretty good results. The Prime Minister is doing what she should do, which is advocating the policy responses which are needed overseas because all of us in this global economy are obviously affected by each other …

SPEERS: But there’s a pretty big difference …

WONG: Now, obviously we’re in a much better position, but …

SPEERS: Exactly. We have a resources boom, we have a big customer called China sitting right there. There are big differences between us and Europe …

WONG: Are you suggesting that the Prime Minister shouldn’t be telling other global leaders what has worked in Australia? Let’s understand what’s happening at the moment. There are real risks in Europe; we’re all aware of them. And world leaders, all of them, need to respond to that. Whilst it’s primarily a European problem, the policy solutions are something that are relevant to the whole of the world, and the Prime Minister’s doing what she should be doing which is advocating for Australia’s interests.

SPEERS: Do you think European leaders don’t know that already? Do you think they need to be told?

WONG: I’m not going to get into judging European leaders. I would say that we have had a very unfortunate set of bouts of uncertainty. We’ve had policy responses which have shifted over time. And I think it is in Australia’s interests for the Prime Minister to be advocating for a sensible, clear policy response that has a long term objective.

SPEERS: Looking at Europe, after the Greek election result which will, it seems, see Greece stay within the Euro, has the danger passed at all? Or are you still very concerned about what’s happening there?

WONG: Our Budget factored in some pretty pessimistic figures for Europe and I think the reality is that when we said there’ll be a long and painful adjustment in Europe, we meant it. What we’re likely to see is what we’ve seen, which is bouts of uncertainty, different policy responses which have possibly calmed the waters for a period, but, fundamentally, they have to deal with the fiscal sustainability issue, as well as issues in their banking sector, and they have to get growth going. Now, none of those issues are going to be fixed in the short term, but what we need is a credible medium and long term plan as well.

SPEERS: Martin Parkinson, the Head of Treasury, said in a speech last night that we need to be more, quote, “agile and versatile in responding to these developments in Europe”. Is he talking there about whether the budget should return to surplus or not? Is that the sort of ‘agility’ and ‘versatility’ he’s referring to?

WONG: I can tell you how I’ve spoken about adaptability and flexibility. I’ve spoken about in the context of making sure that as the global economy changes, and as our economy changes – and we know our economy is changing very rapidly because of the sort of investment we’re seeing and the growth we’re seeing in the minerals sector particularly – that we have to be agile. We have to be able to adapt. That’s how we make sure we make the most of this opportunity for all Australians.

SPEERS: But should we be locked into the surplus target? Should we be more flexible around that?

WONG: We’ve laid out our surplus position, and the reasons we’ve laid those out, the reason we want to bring the budget back to surplus, you and I have discussed on a number of occasions. It’s about where fiscal policy should be positioned at this moment and at this time we’ve got an economy growing and I think the rate cuts demonstrate the sense of that position.

SPEERS: Now, the carbon tax is just a couple of weeks away, or less. Tony Abbott appears to have shifted his focus, certainly this week, to where the price is going to be in 2050, in the middle of the century. He’s pointing to Treasury modelling that it’s going to be $350 a tonne. His point is that the $23 starting price is just the starting price; it is going to go up and up and up. He’s right about that …

WONG: This is a man who’s desperately in search of a continued fear campaign – all he has is a scare campaign. This is a bloke who said the carbon price would be the end of the coal industry. What have we seen? More investment in coal. This is a bloke who said that towns in my home state would be wiped off the map. Well, I’ll bet you here and now they’ll still be there on July 1 and July 2.

SPEERS: But his point is what happens years down the track …

WONG: And what does it say about a man who aspires to be leader of this country, that the best he can do is to talk about what might happen in 2050 in his attempt to whip a great fear campaign. He’s now walking away from some of the things he’s said, because he knows they were over the top. We’ve gone from ‘wrecking ball’ to ‘python squeeze’. I mean, this is becoming Monty Python-esque.

SPEERS: And, finally, Minister, can I ask you about Gina Rinehart and the Fairfax Board. The Government’s been expressing concern today about her refusal to say whether she’ll sign this Charter of Editorial Independence, and effectively not throw influence on what the newspapers do. Is there any role for the Government here when it comes to major media companies and saying that board members should all have to sign something like that?

WONG: You wouldn’t want Governments to have to do that. You wouldn’t want Governments to have to regulate to impose a principle that I would have thought media companies want to have, which is a principle of editorial independence. That’s fundamental to our democracy, it’s fundamental to your job, and the jobs of many journalists in this building; it’s fundamental to the way Australians understand what the media does.

SPEERS: So there’s no role for the Government to enforce that? To say, look, this is a major media company, your board members should stay out of the editorial content …

WONG: I think the company and the market should reflect that. Because I think what people need to remember is that editorial independence is about quality journalism, and quality journalism is about the value of the company. And I think Fairfax, particularly, people look to those papers because they have a certain regard for journalists and for the content. That would be a value that would be diminished if editorial independence was compromised.

SPEERS: Penny Wong, thank you.

WONG: Good to be with you.

ENDS