JOURNALIST: Finance Minister Penny Wong thanks so much for chatting to us, as always. Over here at the Commonwealth Business Forum, what is the overarching message that youre getting from other people that live in the Commonwealth and business participants about doing business in Australia?
WONG: This is a really great event. I mean the Commonwealth is an organisation with a lot of longevity, and has some 54 nation states in it. So, encompassing the gamut of different stages of development. So, a very important event, and a very good opportunity to speak to business people, about doing business not only in Australia but also listen to their experience of doing business across the world. So its been very rewarding so far.
JOURNALIST: Whats the message that youre essentially getting from them? Weve been speaking to a lot of mining companies and the like, and of course the concerns about the mining tax and the carbon tax are continuing to dominate. Is that something that youre hearing as well?
WONG: I think in terms of the mining tax and the carbon tax, lets look at the investment that is underway or planned in Australia. It doesnt show signs of abating. Weve got some $430 billion worth of investment either underway or on the planning board. So theres a lot of investment in the resources sector in Australia.
JOURNALIST: Youre over here in Western Australia, obviously very different to some of the economic pillars that were seeing in some of the east states with respect to retail sales and the like. How concerned is the Government about the sustainability of the resources boom, and the countrys overall dependence on it, given that essentially Western Australia is preventing Australia from falling into a recession?
WONG: Im not sure thats correct. But lets just take a step back and understand whats happening. Whats happening is a global shift from West to East. Whats happening is not just the urbanisation of China and India, but also increasing affluence over the next decades in those countries. This is a decadal transition. A transition which will affect the whole of the world economy, but will also affect the Australian economy. Thats the perspective we bring to this.
The next proposition is that we are obviously getting higher prices than we have historically got for many of our resources. Our terms of trade remain elevated. In effect what Australia is doing is exchanging a non-renewable capital asset for an income stream. And thats why we want to put in place the MRRT, the minerals tax. And thats why we want to invest the revenue from that into lowering the company tax rate, into capacity expanding infrastructure, as well as increasing national savings through superannuation.
So I think its important to recognise there is a very big shift going on a very big change. But the key question for all of us is, how do we manage this change for the future? How do we invest now for the future? And thats certainly the approach were taking.
JOURNALIST: Alright, another big shift thats going on globally is of course the situation in Europe. Will there be an organised Greek default, or wont there? Of course, the Australian banks dont necessarily have any direct correlation to the situation there, but obviously the flow-on effects would come through with respect to China and their reliance on Europe. Is the Government crunching any numbers on what the impact would be for Australia?
WONG: Obviously we are always aware that we live in a global economy. Australia is part of a global economy, were an open economy, and were not immune from what is occurring on global markets. We never have been and we never will be.
We do face this situation from a position of significant strength, with low public debt. Very low public debt. Our net debt peaks at less than one-tenth of the average major advanced economies. So it gives you some sense of it. And obviously our unemployment rate still remains low. Its certainly very low compared to the sorts of figures you see in Europe and the United States.
What I would say about the global economy at the moment: were seeing a lot of volatility. Were not unaffected by that, and that is why the Prime Minister has continued her call for Europe to take decisive action to deal with both the contagion and the recapitalisation of their banks. Thats very important, not just for Europe, but for the whole global economy.
JOURNALIST: Alright. Of course the Governments been fairly steadfast in saying that the budget will return to surplus by 2012-13. Is that an absolute that we will return to surplus in 2012-13? Or given what may happen with respect to Europe, and the flow-on effects, would you consider waiting another year?
WONG: Weve got a very clear plan to return the budget to surplus. We remain determined to get there. But it is unsurprising to say current global circumstances have made it more difficult. Obviously, if theres an effect on global growth, theres an effect on Australian growth. That affects Government revenues. The Treasurers made that clear, as have I.
But we do remain determined to implement our plan, and the reason is quite simple: we think fiscal certainty is important. And if you look at the global economy, and you look at the way in which markets are reacting sometimes in quite a volatile fashion to decisions, or failures to take decisions, by politicians, it reminds us again that markets do like certainty from Government. We laid out a very clear fiscal strategy prior to the global financial crisis, and weve held to that. We intend to continue to implement our plan.
JOURNALIST: Alright, one final question for you as well. I had a chat this morning with the Premier of Western Australia, Colin Barnett just jumping back to the MRRT and he says that the Chinese feel that the MRRT is a personal attack on them, or a tax on Chinese, because, given its structure, and given that its a tax on iron ore and also coal. What do you make of that statement? Is that something that Australia should be worried about?
WONG: Thats not the intention at all. I again come back to what I said earlier. This is about saying as a nation, we are getting good prices for various resources, various commodities at the moment. We know that never lasts forever.
What do we do with that? How do we ensure we get a better income stream from it? And how do we invest that income stream wisely, for the benefit of the economy now, and into the future. And I think it is wrong to suggest there has been any effect on investment. Were continuing to see very large growth in investment, particularly in the resources sector.
JOURNALIST: OK, thank you so much.
WONG: Good to be with you.
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