JOURNALIST: Finance Minister Penny Wong. Many thanks for joining us Minister.
WONG: Yeah, good to be with you.
JOURNALIST: First things first, I guess. Why should the people of Australia right now trust this Government, after there was poor implementation of the economic stimulus package to be able to, if you like administer properly the support thats needed to rebuild Queensland after the floods.
WONG: The first thing Id say is to ask people to look at the package that the Prime Minister announced today. Its a package of $5.6 billion, two thirds of it is funded through spending cuts where weve cut government programs which we believe can be better spent on rebuilding Queensland. Weve ensured that there was a delay on a range of infrastructure projects and the reason were doing that is that we recognise, you cant do everything at once. That we know weve got only a certain number of skilled people, only a certain number of resources. And that if you try to do too much at once the price goes up. Now that is very much with value for money in mind that these decisions have been made.
JOURNALIST: The very fact that this Government is in power at the moment is because of its coalition with the Greens. Is that coalition strong tonight given many of the cuts youve made to raise the $2.8 billion dollars clearly come directly from schemes and initiatives that would be very much, Id suggest in favour with the Greens.
WONG: Look we have made decisions to cut things like the Green Car Innovation Fund, the Cleaner Car Rebate Scheme. And the reason weve done that is we believe the money is better spent in light of the enormous challenge in rebuilding, that money is better spent in rebuilding.
Now I know this wont be popular with everybody. But our job as the Government is to try and go through with a lot of discipline in the budget, the expenditure. Look at how were spending taxpayers money and the judgment we came to, is that the money was better spent doing what we know we have to do, that all Australians want us to do and that is to rebuild after these floods.
JOURNALIST: Well given the fact that these cuts have been made and many of them are green projects. Is the coalition between the Labor Party and the Greens now stronger than what it might have been yesterday?
WONG: Look I think that we have very clearly, we are governing with the support of a number of members of Parliament who arent in the Labor Party. Everybody knows its not just Mr Bandt but Mr Oakeshott and Mr Windsor. What wed say to all members of Parliament, them and also Mr Abbott is this there is an immense national challenge in rebuilding Queensland. It is a unique set of circumstances. We have to fund some $5.6 billion, thats what the best advice at the moment about the cost of the rebuild. We have to fund it sensibly. We have gone through a rigorous process where for every dollar were raising from the levy, weve got two dollars of cuts or deferrals, reductions in spending by government. We think that is a responsible package.
JOURNALIST: The other thing of course is the levy itself is amongst a very large proportion of Australians who feel as though they are already on the limit. Its highly unpopular, thats the one thing that were getting through at this radio station and the broader community as well. That people really find at this point in their lives, a levy as unpopular. You said youre prepared to make hard decisions. The issue is however I guess, trying to justify to all Australians as to why at this stage they needed an increase in taxes, as distinct from the Government in the very short term because of an emergency, going into deficit for that extra year.
WONG: Can I say this Ross. Around 50 per cent of taxpayers will in fact pay less than a dollar a week. Thats what this levy is. The majority of taxpayers will pay less than a dollar a week. It lasts for a year. If you earn less than $50,000 there is no levy. If you earn between $50,000 and $100,000 were looking at half a per cent. What that means is someone on around $60,000 a year is paying less than a dollar a week. So to put it into perspective, it is a modest contribution to a national challenge that is, to rebuild Queensland.
JOURNALIST: But your critics are highly credentialed. The Reserve Bank Board Member, Warwick McKibbin, the Institute of Chartered Accountants, the Centre for Independent Studies, a number of them are simply saying a levy was simply the last thing that Australia needed.
WONG: Well Id make a couple of comments. First again, Id point to the fact that this is a very modest levy. Most people 60 per cent of taxpayers will pay less than a dollar a week. No one below $50,000 will be asked to contribute to the levy. So its very progressive. That is, you pay, if youre on a reasonable income you pay a modest amount. You pay more if you earn more.
The other point Id make is this. We have an economy, as you and I have discussed, that is growing. Weve got low unemployment. Weve got growth. Weve got a very strong pipeline of investment. And our judgment as a government is that there are very strong economic reasons why youd want to bring the budget back to surplus in the timeframe weve outlined because as you have an economy thats nearing capacity you do want to reduce the footprint of government in the economy and the way you do that is by returning to surplus.
JOURNALIST: Just a final question for you. Of course there were $2.8 billion worth of spending cuts. You would have been through your budgets with a fine tooth comb. Could you have actually cut those programs without the Queensland floods.
WONG: Look, weve said very clearly that as we go through bringing the budget back to surplus, we have to make sure we are very disciplined in going through the programs, working out what is this good value for money for taxpayers or better spent elsewhere. That is what good budgeting is.
JOURNALIST: So in other words Minister, the answer to that was yes, you could have cut these programs without the Queensland floods.
WONG: No, what Im saying is you would ordinarily through the budget process make sure you apply this discipline. But we have been confronted with a need to come up with funds quickly as Anna Bligh said today. We need to make sure we can start this rebuilding and we need to do so with the confidence that the funds are available. Thats been very front-of-mind for us. Thats why we provided this down-payment to Queensland $2 billion. And we have to make space in the budget to fund the cost of reconstruction.
JOURNALIST: Finance Minister, Penny Wong. We appreciate your time here on Money News Tonight.
WONG: Great to speak with you.
ENDS