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Transcript of interview with Marius Benson: ABC Newsradio: 23 August 2012: Olympic Dam; China's economy

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PW 171/12 23 August 2012




BENSON: Penny Wong, good morning.

WONG: Good to be with you again Marius.

BENSON: Disappointing news for you as a Government, but also as a Minister from South Australia.

WONG: It’s a very disappointing decision for South Australia. Obviously, we would’ve preferred the investment to proceed immediately. I’m pleased that BHP have said they will continue to look at ways they can expand Olympic Dam, but it is a very disappointing decision.

BENSON: Does BHP deserve any criticism? Tony Maher from the miner’s union, the CFMEU, says they’re still minting money; they’re getting a 23 per cent return on capital, they’re just stalling this until a time when they’ll get even more money out of what’s in the ground.

WONG: Well, the company’s made a commercial decision and that’s what companies do - they make commercial decisions based on what they think is best for their shareholders. It is disappointing for my home state of South Australia and for all South Australians. But, as the Premier said, the resources are still there. They’re still valuable and they can still be developed and I hope that BHP can find a way to make the expansion more viable.

BENSON: What’s the Government’s reading of the resources picture more broadly? Has the biggest boom - the biggest resources boom in our history - peaked?

WONG: We’ve still got a long way to run when it comes to this investment boom. We’ve got over half a trillion dollars of investment, and over half of that, over half of that, is at the advanced stage. So I think the ‘doom and gloom’ that some are putting about isn’t appropriate. And I do think that the worst thing about this is we’ve seen such a dishonest, self-interested fear campaign from the Leader of the Opposition,

who is asking Australians to do what he’s done, which is completely ignore and not read the BHP statement giving the reasons for this decision.

BENSON: Now, there is actually an argument that this is not a bad thing - that this project has been deferred. Other projects are also being deferred by BHP. In the Government’s view, could a slower resources boom be a good thing in terms of rebalancing the economy, a lower dollar, less pressure on interest rates?

WONG: As a Government we want investment to be realised. We want these projects to come to fruition and we wanted Olympic Dam to expand. That’s the Government’s view. Of course, you have to plan for beyond the boom and that’s what the Government is doing with our investment in schools, our investment in skills, our investment in universities, and our investment in productive infrastructure like the National Broadband Network.

BENSON: But in terms of the resources boom itself, are you saying that a boom is good and a bigger boom is better, and any deceleration in the boom is not a good thing?

WONG: I’m saying that I would have preferred, as would the Government have preferred, Olympic Dam to proceed. I’m saying that the Government has always been conscious that you have to plan for beyond the boom as well, and that’s why we’re investing in Australia’s people. And I’m also saying, Marius, that I do think the way in which the Leader of the Opposition, Tony Abbott, has sought to use this decision, which is disappointing, to fuel a fear campaign, is dishonest in the extreme.

BENSON: Everything depends on exports obviously with resources - China above everything else. How does the Government read the Chinese economy? Because there’s an official growth rate over 7 per cent, but analysts say maybe the real growth rate is half that. What’s the Government’s view?

WONG: We anticipated, as the international institutions did, that China would not keep growing at the levels it was growing, and we factored that into the Budget. But I think the reality is we know there’s a lot of momentum in the Chinese economy. We also know that the Chinese authorities have a lot of room to move when it comes to economic policy to stimulate their economy or to fine tune their economy. So, again, I’m not one of those that sees ‘doom and gloom’ on the Chinese front. I think that is an economy over this coming decade which will continue to grow, and obviously that creates enormous opportunities for our country.

BENSON: Penny Wong, thank you very much.

WONG: Good to speak with you.