GREENWOOD: Minister, many thanks for your time.
WONG: Good to be with you Ross.
GREENWOOD: Lets start first up with the National Broadband Network today and its implication on the budget. I thought that the Government was trying to actually tighten up the spending. Surely the National Broadband Network is the ultimate in stimulation for our economy at a time when it may not need it.
WONG: Ross, its an investment in increasing the capacity of the economy. This is the infrastructure of the 21st century. And just as building the copper network was a major infrastructure investment that the government of the day funded that is the current phone lines system and just as we build roads and rails and bridges, this is the roads, rails and bridges of the future.
This is what will help Australian businesses and Australians all over this country trade with the rest of the world and communicate with each other and deliver education and health services and a whole range of other things more efficiently.
GREENWOOD: Notwithstanding that weve heard from the new Treasury Secretary that he believes that the budget does actually help to contract the economy overall, it is also reasonable to say that the Reserve Bank, looking through, sees inflationary pressures out there and sees in the potentiality to respond. The National Broadband Network with such an enormous amount of stimulus and also using up so many jobs, it cant necessarily help when you contract the economy as the Government would like to do right now.
WONG: There are a few things there, arent there. I mean, inflationary pressures are a consequence of the massive investment boom were seeing and were very conscious of that. And what were engaging in is as you would know, is the largest turnaround in federal finances since the 1960s. Since we started keeping records of these sorts of things. Its a very large turnaround in the federal budget and the reason were doing that is precisely because of some of the risks youve outlined. We know that the private sector is growing, particularly the mining sector. We know that will lead to price pressures. Weve got to do what we can not to compound them. And that means making sure were back on track to get back in the black. Were on track to get into surplus again.
Now in terms of the NBN, as I said, this is an investment for the years ahead. Its not just for the now, its for the years ahead. It will be the infrastructure we need for today and in the future.
GREENWOOD: Minister, you talked about the surplus and about getting back into the surplus. I just want to play you something from the Press Club, the National Press Club today with Joe Hockey, the shadow Treasurer. He was taken up at least on the allegation of double counting, saying some measures inside his own budgetary measures.
[Excerpt played]
ANDREW PROBYN: Mr Hockey, Andrew Probyn from the West Australian. You have repeatedly said in recent weeks that you could get the budget back to surplus earlier. I want to go to accusations against you of double counting. You claim, for example, to have booked a $1.7 billion saving by not going ahead with Labor's company tax cut which is funded by the billions generated by the mining tax - which you plan to rescind in government thereby making this an illusory saving. You proposed increasing company tax by 1.7 percentage points for big business to pay for the paid parental scheme, but then propose a 1.5% cut to company tax paid for by freezing public service recruitment, yet this saving is allocated to your direct action on climate change policy. On the public service, as Chris Johnson said before, you claim it has blown out by 20,000 since 2007 and yet this does include military and reservists. Given your boasts, what's to give?
JOE HOCKEY: When the other mob give you questions, you should challenge them on the status of it. Can I say to you, our numbers stack up. Our $52 billion stacks up from last year. Our numbers stack up. You could have asked that question any time over the last 12 months if you thought there was double counting. There was no double counting. Our numbers are accurate. We stand by those numbers at a point of time.
GREENWOOD: So that was Joe Hockey today, the shadow Treasurer, Finance Minister. And Im interested in your response to that because quite clearly, as he indicates, 20,000 extra public servants since 2007. And of course that could be pointed directly at your government.
WONG: First his numbers are wrong on the 20,000. But theres a more important question in many ways here and its this: Joe Hockeys economic credibility.
I mean that saving of public servants that hes pointing to which I might say would result if implemented in a reduction in frontline services to Australians but he keeps pointing to that for a whole range of policies.
I mean, its the one policy that he appears to think will fund a range of his spending programs including the floods package, plus helping getting him back to surplus. I mean, we all know you cant spend the same money twice. And thats what Joe Hockeys doing. It was an extraordinary performance today.
It was a performance where he simply was unable to explain any of his numbers and theres a reason for that: they dont add up.
GREENWOOD: Ill just keep on going there if thats OK. One point I do want to make here before we finish up is Moodys Investors Service today downgraded the debt rating of our four biggest banks from Aa1 as they were previously the highest ratings of all down to Aa2. Do you think thats a reflection on Australia?
WONG: Not at all. I think our banks are very highly rated. We know we came through the global financial crisis better than almost any other advanced economies and one of the reasons we did is the strength and solidity of our banking system.
GREENWOOD: Brilliant. Finance Minister Penny Wong, I appreciate your time as always.
WONG: Good to speak with you.
ENDS