JOURNALIST: Penny Wong, the Finance Minister, joins me now. Good morning Penny.
WONG: Good morning to you Paul.
JOURNALIST: Penny, how far away do you think a decision might be on whether we go down the track of a levy, a tax?
WONG: Weve been working our way through a range of options around this fundamental question of how do we best help the people of Queensland and other Australians who have been affected by this natural disaster which is, as you know, one of the largest natural disasters in our history. Thats the question, how do we best help these Australians.
We have said very clearly we know we have to find room in the federal budget. Thats going to mean some spending cuts. The Prime Minister said there will be those cuts. And what we have said is that it is only commonsense for us to consider whether or not we need to look at a levy to help assist in what is going to be a very substantial cost of rebuild.
We will make those announcements when those decisions are finalised. But we are very conscious that people are keen to know what we are doing as we go forward.
JOURNALIST: But its got to be sooner rather than later, doesnt it?
WONG: We are conscious of that. I dont want people to think that these decisions in any way are preventing assistance already flowing. Remember this is funding of infrastructure rebuild that were talking about, how we fund that. We are already putting a very substantial amount of assistance into Queensland through the emergency relief arrangements, through the income support arrangements and other payments which were triggered immediately upon the disaster area being identified.
JOURNALIST: Penny, it has been reported in Fairfax papers, in The West Australian today senior government sources saying that the amount needed to be raised by any prospective tax would be nowhere near the $10 billion thats been touted. Can you confirm that?
WONG: There have certainly been a lot of figures out there, hasnt there. We are trying to get a handle on the price tag Paul, remembering that the amount that the Commonwealth has to focus on apart from providing income support and assistance to small business and income support to people who are in dire straits the thing that we have got to focus on is the rebuilding of infrastructure. Thats the big economic and social cost, which is how do we make sure we rebuild our bridges and our roads and our railways. All of those things which we saw watching the awful images on our TV sets being washed away and damaged.
JOURNALIST: Penny, can you give us a range of what you might be looking at in terms of what revenue you would need to reap from a tax?
WONG: Paul, Im not really in a position where we can do that yet because we are still in the process of working out what the price tag is and talking to the Queensland Government particularly about the sorts of costs which are involved.
This is a pretty big process, as you can imagine, because we are still seeing the costs being disclosed. We are still finding out what has been damaged. I mean the floodwaters havent receded from every area. So as they do, we find more information out. Putting that together is obviously what we are trying to do at the moment.
But our view is this. We think Australians do want to think about how we best help other Australians who are in need. It is commonsense to keep a levy on the table. It is disappointing that Mr Abbott continues to do what he usually does which is to want to have an argument and want to oppose everything. We know
JOURNALIST: Makes you wonder why hes called Opposition Leader.
WONG: I do think though theres an issue about thinking about what is the best thing for the people of Queensland here. And the reality is hes been happy to support levies previously. He supported a levy to pay for his paid parental leave policy which he announced during the election. He supported a levy to buy back guns. The question is why does he want to rule one out now and oppose it now before he even knows what sort of support the Australian Government is going to need to provide Queensland to rebuild.
JOURNALIST: Those two levies that you mentioned one real, one prospective were both additions to the Medicare levy. Is that the easiest mechanism?
WONG: There have been six levies which were initiated by the Howard Government and there were different designs for each of those. Obviously we are considering what is the best option if we do go down that track. We are very conscious of the need also to find as the Prime Minister said significant spending cuts so that we make the space in the federal budget to make the investments we need in Queensland.
JOURNALIST: So you are prepared to make cuts as well?
WONG: We have said we will be. We said we may have a levy. We definitely will be making spending cuts out of the federal budget to make the space, as I said, to make investments in Queensland to rebuild the infrastructure thats been damaged.
JOURNALIST: Your opposite number, Andrew Robb, claims theres $15 billion of unspent stimulus money available. Is that true?
WONG: Mr Robb has been running this line for some time. And Mr Robb is also the shadow Finance Minister who got 90 per cent of his costings wrong during the election campaign and left them, the Opposition, with nearly an $11 billion black hole.
But leaving that aside, the truth is that the vast majority of stimulus money is out the door. Weve got around 97 per cent of projects commenced or completed. For example, primary schools - over 99 per cent have been commenced.
Now its not good economic management to be cancelling projects halfway through a build. I dont think people in those communities or the tradespeople involved in those construction works would be saying thats a sensible thing to do, to down tools halfway through.
JOURNALIST: So even though that figure may be right, the reality is that the money is allocated and people are working towards spending it?
WONG: The vast majority of it is out the door, as I said. For example, 99.7 per cent of primary schools, which was a significant part of the economic stimulus, as you will recall.
These are old arguments that the Opposition has had for some time. The reality is that what we see from Mr Abbott and Mr Robb is a fairly knee jerk and predictable response around the levy. We think the sensible thing to do is to keep that option open; to look at what the best way is to support Queensland as it rebuilds.
JOURNALIST: Greens Leader Bob Brown, who appears to have some influence with your Government, wants low income earners to be exempted from any flood tax or levy. Do you agree with that?
WONG: We will look at the various options in terms of these decisions. And well look at them in the national interest. Obviously Senator Brown has his views just as other members of the Senate have their views. But ultimately, the Government will be guided in its decisions about what it thinks is the best way forward and the best way to help Australians.
JOURNALIST: Im interested in your views but Im not getting very many of them this morning. Youre leaving everything very wide open.
WONG: Paul Im sorry, Im happy to have a chat to you when weve made these final decisions but weve obviously been working through quite a lot of decisions. Well make those announcements when theyre finalised. We will be very upfront with the Australian people when weve done that. And Ill be very happy to come on your program again to talk through the detail of those when they have been made public.
JOURNALIST: Were interested to see how broadly youre viewing these issues. Bob Brown is also saying in terms of taxpayers, the corporate sector needs to be taken into account as well. Are you looking at that, at the possibility of some addition to corporate taxes to pay for this?
WONG: We are certainly tapping into the corporate sector. The Prime Minister and the Treasurer yesterday met with the Business Taskforce and theres obviously a lot of corporate donations which are going in. The Prime Minister wrote to Australias largest companies seeking their assistance with donations and in-kind help, and met with the task group yesterday about how we best leverage assistance from the corporate sector.
We know that were all going to have to work together, all parts of Australia. Whether it is business or the rest of us, we are going to have to make a contribution because this is probably the most costly natural disaster weve seen. It certainly outranks the Victorian bushfires and Cyclone Tracy.
JOURNALIST: No doubt. But this is a pretty simple proposition here. We know that youre looking at the prospect of levying pay-as-you-earn taxpayers. Are you also looking at the prospect of levying corporate taxes?
WONG: Im afraid Paul, as I was saying, these are decisions well have to announce after weve made them. But again I say weve got to make a judgment about what is the best way to fund this from the Budget. Were working our way through those decisions. And as I said, we are considering whether or not we need to look at a levy and what the design of it would be.
JOURNALIST: Yeah and I thought you might like to take Australians into your confidence about what the range of options are given that the other side of politics is playing a negative game here. And if youre trying to build on the compassion of Australians, I thought you might like to give them some idea of what the issues are.
WONG: Well Paul, the issues are this, that we have a very substantial rebuild. Weve got a lot of costs in Queensland to meet. This is a natural disaster which will be more costly than what weve seen in our lifetimes in terms of things like Cyclone Tracy or the Victorian bushfires.
We have been upfront in that we will be making cuts to the federal budget and weve been working our way through those decisions. And we have said that its only common sense to consider whether a levy will be needed. Obviously, that consideration requires us to look at how much we can fund out of the budget and what the price tag will be. Some of the costs are still yet to be determined. Were still seeing flood waters receding. Were still working with the Queensland Government to work out how much the cost is.
But I say this to Australians: we are absolutely committed to helping Queensland rebuild. And were absolutely committed to doing it in a way thats both compassionate but also sensible.
JOURNALIST: OK Penny Ill take you up on that offer to talk to you at a later date.
WONG: Good on you.
JOURNALIST: Thanks a lot.
WONG: And if I can say Paul, happy Australia Day to you and to your listeners.
JOURNALIST: And a good one to you as well.
WONG: Cheers.
JOURNALIST:Penny Wong, Finance Minister.
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