ABC News Radio

Subjects: PM's economic forum, NSW budget, mining tax, Abbott's fear campaign.

Transcript, E&OE

11 June 2012

GLEN BARTHOLOMEW: The Prime Minister will chair a two-day forum on the economy which opens in Brisbane tomorrow as Labor aims to build on strong economic figures released last week. And the drive to sell Labor's economic policies comes as the Opposition steps up its attack on the Government's least popular plan: the carbon tax, which comes into effect in three weeks now.

To look at what this week's economic gathering might bring, Marius Benson is speaking to the Trade Minister, Craig Emerson.

MARIUS BENSON: Craig Emerson, the Prime Minister will be chairing this economic forum in Brisbane over the next two days. Is it just going to be talks? Is there anything concrete, anything definite going to be coming from it?

CRAIG EMERSON: It's an effort to map out the second great transformation of the Australian economy. We are in the midst of making history here. The Hawke and Keating governments created the open competitive economy, refashioning our inward-looking Fortress Australia approach that had not served Australia well through the first few decades in the post-war era. Now the second great transformation is occurring and it's been led by the shift of the centre of global economic activity to our own region.

BENSON: There are unions attending the conference. They'll be one of the voices at the economic forum, and they're talking in the papers this morning about co-investment: the co-investment in the car industry, which is another way of describing subsidies for the car industry or protection — that that needs to be extended to other industries. Is that a valid argument, or is that the argument for what you dismiss as Fortress Australia?

EMERSON: No, I think the truth is that we do need to work our way through this transformation. People are moving various parts of production processes into various countries, and we should see that partly as a threat but also as an opportunity to re-fashion our manufacturing industry to take advantage of these sorts of opportunities in our own region. So that's what we're really working on, and I think Dave Oliver's absolutely committed to the best interests of the working men and women of this country. And he's obviously going to make a contribution to that debate.

BENSON: The Labor Government was greatly cheered by strong economic figures last week on growth, on unemployment and also a cut in interest rates. But this sense of prosperity doesn't seem to be widely shared. For example, Michael Baird, the New South Wales Treasurer, brings down a budget tomorrow. He's talking about tough times, selling assets, cutting services, cutting staff because these are tough times. Is that an accurate assessment from him?

EMERSON: No it's not. Obviously, we have challenges and any state premier will probably use excuses to do what they want to do anyway — but we are a strongly growing economy. We do need to ensure that the benefits of that growth are fairly shared. That's why we, from 1 July, are implementing the mining tax — obviously opposed by the Coalition.

It would actually be of substantial benefit to New South Wales, because they're a non-mining state and they've got a lot of small businesses who would benefit from the small business tax breaks being funded by the mining tax, and also the boost to retail sales from increased family payments and the Schoolkids Bonus. All of these are good for the New South Wales economy, those economies that are not necessarily in the mining fast lane. And you would hope at some stage that that would be recognised by state premiers in New South Wales, Victoria in particular. But there we are: we're doing the right thing by the country and sharing the benefits of the mining boom.

BENSON: Can I take you to the carbon tax, because we are now three weeks away from the carbon tax coming in. It still remains vastly unpopular according to all the polls. Adam Bandt, your Green colleague in the carbon tax field — they support you in this — he is with the Labor Government on it but he says maybe we've failed to explain the need for it. Is he right?

EMERSON: Well, it's always going to be a controversial measure to implement a price on carbon. We knew that to be the case. There's been the mother of all fear campaigns: the sky was going to fall in on 1 July, according to Chicken Little Mr Abbott. Now he says 'oh, it's not actually going to be a cobra strike; more like a python squeezing the life out of the Australian economy'.

The fact is the economy's strong. Investors have known that from 1 July there'd be both a carbon price and a mining tax, and yet we have investment at 50-year highs, half-century highs, and the Business Council of Australia identifying a pipeline of investment of more than $900 billion.

The fact is people, businesses are voting with their wallets and they're not listening to Mr Abbott's scare campaign.

BENSON: Craig Emerson, thank you very much.

EMERSON: Thanks very much Marius.

GLEN BARTHOLOMEW: Craig Emerson's the Trade Minister in the Federal Government. He was with Marius Benson.

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