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Transcript of interview with Keith Conlon and John Kenneally: Five AA Breakfast: 23 August 2012: Olympic Dam



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SENATOR THE HON PENNY WONG

MINISTER FOR FINANCE AND DEREGULATION

TRANSCRIPT

Parliament House, Canberra ACT 2600 Australia  Tel: (02) 6277 7400 Fax: (02) 6273 4110

PW 174/12 23 August 2012

TRANSCRIPT OF INTERVIEW - FIVE AA BREAKFAST WITH KEITH CONLON AND JOHN KENNEALLY

SUBJECT: OLYMPIC DAM

E & O E - PROOF ONLY

JOURNALIST: Penny Wong, good morning.

WONG: Good morning to you both.

JOURNALIST: What does the Government say first of all about the BHP decision?

WONG: It‟s a very disappointing decision, isn‟t it? It‟s a very disappointing decision for the country, and it‟s a disappointing decision for South Australians. Obviously, everybody would have preferred that BHP hadn‟t deferred the expansion of Olympic Dam.

JOURNALIST: Tony Abbott says the mining tax and the carbon tax have been contributing factors. Has that set the tone?

WONG: This is just another dishonest, self-interested scare campaign from Tony Abbott, and it‟s a real pity that he uses an investment decision like this to his own political ends.

JOURNALIST: But they are realities aren‟t they, Minister?

WONG: Well, no. If you read BHP‟s statement, their statement to the market, to shareholders, to investors, and to South Australians, they make it very clear that what is driving their decision is what is happening in the market, and particularly what‟s occurring in terms of commodity prices.

I think it‟s extremely disappointing, and not good for South Australia, that we‟ve got Tony Abbott running around trying to use this decision, which is very disappointing, for his own political purposes.

JOURNALIST: What about, on your own side, Martin Ferguson saying the mining boom is over. We don‟t want to hear that.

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WONG: There‟s no doubt that the prices we‟re getting for our resources are tailing - are coming down off very high levels. The Government‟s been saying that for some time and that‟s factored into our budget. There‟s also no doubt that, whilst we have a lot of investment in the pipeline, you wouldn‟t anticipate that that same level of investment will continue indefinitely. Obviously, we‟re not going to sustain that forever, but no one‟s suggesting that the investment pipeline is „turned off‟.

JOURNALIST: Why say „the mining boom is over‟?

WONG: I think Minister Ferguson was making the very important point that you have to plan for beyond the boom, which the Government is doing. He was also making the very important point that Tony Abbott‟s suggestion that BHP‟s decision is related to his scare campaign is simply untrue.

JOURNALIST: When would the boom be over, in your mind? Say, in South Australian terms, we have to be aware of these cycles. How far away is it?

WONG: That‟s a good question. I think it‟s important to think about, what are we talking about. We were in a very heavy investment phase, and that‟s why you‟ve got half a trillion dollars in the pipeline of investment, over half of which is at the advanced stage. We‟ll shift from an investment phase to what you call a production phase, I suppose, where you would anticipate more output, that is, an increase in export volumes as a result of all that investment.

There is no doubt you‟ve got to plan for beyond the boom, and that‟s why we‟re investing in things like the NBN, things like schools, universities, skills, because this is all about productivity and planning for beyond the boom.

JOURNALIST: The Premier was pretty upset and talked about BHP has got to get community agreement back onside and so on. What about from a Federal Government point of view? Are you engaged with BHP right now about the next phase of the mine?

WONG: BHP obviously is in close contact with the Federal Government and the State Government, and we are supporters of the expansion. We want to see this go ahead, and we‟ll continue to work with BHP to ensure jobs for South Australia and jobs for Australians.

JOURNALIST: Senator, are we likely to see a falling Australian dollar out of all of this?

WONG: Obviously the dollar moves for a range of reasons. One of those is commodity prices. But also at the moment our dollar - because we have a floating dollar - is reflecting the fact that a lot of people want to buy our currency because we‟re seen as a pretty good bet, given the strength of our economy and how solid our public finances are. Ultimately that will be a decision that global markets will make.

Ultimately what we‟ve got to focus on are the investments that we‟re making, things like investment in Holdens, the investment in the submarines project - both of which are not supported by the Opposition.

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JOURNALIST: It takes us back… that dollar question brings us back to a comment from Charlie that came in a few minutes ago. He says, “indirectly the cost of the carbon and mining taxes would‟ve helped BHP make up their minds not to go ahead. We‟ve had a high Aussie dollar for a few years now, so how can Labor blame that?”

WONG: I think people have got to really stop and look at the facts here. BHP have said very clearly that this is a decision that is about the market, where commodity prices are, and their cost of capital. It is not a decision that is about mining taxes, which of course the mining tax does not apply to the output of Olympic Dam because it‟s primarily copper and uranium as well as gold, and they are not included in the MRRT.

JOURNALIST: Senator Penny Wong, thanks for your time this morning.

WONG: Good to speak with you both.

ENDS