JOURNALIST: Hello Penny.
WONG: How are you Ross?
JOURNALIST: Very well thank you. Ive done the maths and Ive worked out there are 11 million workers in Australia. Its already estimated by the ANZ Bank at least, that the Governments bill could be between $10 and $15 billion. My maths says thats $1000 per worker. Do you think you could actually take back those economic stimulus payments of $900 now per person?
WONG: Well as you know the economic stimulus, the vast majority of it has all rolled out the door. Thats the reason why weve had strong economic growth and low unemployment.
But we face a different set of challenges now, as you pointed out.
JOURNALIST: But the correct thing is youve got to raise the money from somewhere. And either number one, youve got to raise a levy or raise a tax. Or alternatively, youve got to cut your own spending and your own programs to be able to try and get the recovery effort underway. And its going to be needed very, very quickly. Surely the real answer is to raise taxes in some way, shape or form.
WONG: We know theres going to be a significant price tag associated with the rebuilding in Queensland. And I think what weve got to do is stand with the people of Queensland, manage the budget to enable that rebuild to occur and to bring the budget back to surplus.
JOURNALIST: What sort of estimates are you hearing yourself now? What are you hearing from Treasury? I mean, youll be getting the first initial estimates right now because youre going to have to try and plug them into a budget in May this year at least anyway. What sort of numbers are you hearing?
WONG: Well Ross, I do think its too early to actually put a final price tag or a price tag on this rebuild. We are still assessing the extent of the damage. I dont think anybody watching whats been happening, listening to whats been happening, or anybody who has lived through it, would be thinking anything other than theres going to be a pretty big price tag.
The challenge the nation has got and that weve got as a Government is to manage the budget, to stand with Queensland on the rebuild, but also to bring the budget back to surplus.
JOURNALIST: But do you think really that the $10 billion price tag the ANZ has talked about do you think thats really completely out of the ballpark?
WONG: Look, as I said, I think it is pretty early to tell. But I dont think anybody would be thinking small numbers. Theres obviously been a lot of public infrastructure thats been destroyed. Thats going to have to be rebuilt. There are a lot of homes still flooded. There is a lot of damage to be cleaned up. So theres no doubting were talking a lot more than a few hundred thousand, isnt it?
JOURNALIST: I know, quite certain. The other side of this, I guess, is really the point of those people who have been flooded without insurance. Now there are two sides of this. Quite clearly as Australians you simply cant let whole communities become impoverished because they have not had insurance. And yet, on the other side of it, people who pay their insurance premiums year after year after year if they see people being given effectively a hand from the Government, theyre saying, well why on earth did I waste my money paying those insurance premiums? That is a dilemma that the Government is going to have to balance as well.
WONG: It is a very difficult situation and I think as you know the Treasurer has already been engaging with the insurance industry about these issues. And there are certainly going to be some grey areas that we think should be clarified.
But ultimately there is a very big cleanup. There will be a lot of people having to put money in. We hope there will be a fair amount of contributions from the private sector and certainly from Australians. Weve seen a lot of donations so far but they really need to continue. As to the total cost of all this rebuilding and damage, that will become clearer in the short and medium-term in the coming weeks. But what we do know is were going to have to make some tough choices, Ross.
JOURNALIST: I do understand that. As the Finance Minister though, you quite clearly have to make the ultimate pragmatic choices for that budget. And you also have said that you believe that the budget should still go back into surplus in 2013. The ACTU today has called on the Government to effectively delay that return to surplus to help to refund the building. Is that completely out of bounds for you at the moment?
WONG: We made a very clear commitment to the Australian people that you and I have discussed before on your show, and that is we will bring the budget back to surplus. We have to do two things. We have to find the money for the rebuild and the reconstruction, and weve got to bring the budget back to surplus. Now that is going to involve some tough choices, but thats the right thing to do.
JOURNALIST: But then, do you really rule out at this stage levies? Do you rule out any form of tax cut to try and raise the income? At the same time that, quite clearly, youll be cutting other measures to try and get some of those savings.
WONG: Well Ross, I think the Prime Minister has already said were not in the business at this point in time of ruling things in, ruling things out. What we want to do is to assess very carefully and soberly what needs to be done. And we know there are some very hard choices that will have to be made. What we want to do is make sure we manage the budget sensibly. Bring the budget back to surplus, but also make the decisions necessary to back Queensland in what is going to be a very long, tough process of rebuilding and repairing the damage.
JOURNALIST: But the truth is youre going to have to move pretty quickly because a lot of that transport infrastructure, the power infrastructure, some of the rail infrastructure that needs to be fixed ASAP. The question is, where is that money going to come from to actually fix that infrastructure, not in the coming months, but in certainly the coming weeks?
WONG: Absolutely. Look, there is money that is already being provided to Queensland. Certainly for income support payments, money thats already started to flow, as well as some contributions to the Premiers Fund. But youre right there is a set of initial considerations that were going to have to make as well as longer term. And we are in the process of considering these things. But as yet, its pretty hard to get a handle on the total price tag that were looking at.
JOURNALIST: Do you think that in hindsight now, and I know that this is hindsight and I know that the money is gone, all that type of thing. Do you think that it would have been handy to have the $14 odd billion that was handed out as the second wave of the economic stimulus payments? Do you reckon it would have been handy to have that in your back pocket right now?
WONG: But if that hadnt have occurred Ross, we may well have gone into recession, we might have very high unemployment. Instead weve got an economy thats strong, thats resilient and thats able to cope with the sort of demands that we see will be flowing from the Queensland floods. Thats the history of the stimulus package.
JOURNALIST: As I said, Senator Penny Wong is the Finance Minister. Shes the one who is charged with balancing the budget in 2013. A pretty tough ask when youve got damage of the magnitude in Queensland and around Australia right now. And Penny Wong we appreciate your time here on Money News tonight.
WONG: Good to be with you.
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