EPSTEIN: Good afternoon Penny Wong.
WONG: Good afternoon to you and to everybody.
EPSTEIN: Youre going to cop an immense amount of political flack for giving up on a surplus, arent you?
WONG: Ill leave the politics for the commentators at the moment. What Im focused on is the economy and jobs. Theres a substantive policy issue here, which is what to do in the face of the falling tax revenues. And weve made it clear that what we want to focus on is whats right for the economy and whats right for jobs. So thats why the Treasurers made the announcement he has today.
EPSTEIN: Its incredibly hard to be consistent though, isnt it? Youve said so many times I think the Liberal Party put out a statement that the Prime Ministers committed to a surplus a hundred times. To commit to a surplus for so many years and then all of a sudden abandon it, doesnt it make it very difficult for people to trust what you say?
WONG: I understand why Joe Hockey and Tony Abbott want to take that approach. As I said, theres a substantive economic issue here. Weve got the monthly statements that I released today show us at about $3.9 billion down on the cash receipts to the end of October, behind what we thought wed get at Budget time. Thats about how much we revised down the whole of the tax receipts for the whole of the 2012-13 year. Were actually spending less than we forecast, but weve got a hole in revenue. Now, lets just take it back and remember what weve done. Since about mid-2009, the Governments actually offset every cent of a new policy decision, and weve also offset downgrades in tax revenue, and weve continued to do that. But we are now at the point where we think if we continue to cut harder or further in 12-13 to deal with this tax revenue loss, that that might jeopardise growth and jobs.
EPSTEIN: But you cant change the script like that can you? I mean you keep on insisting every dollar you spend youve made up somewhere. Youve also said, in the same breath, and were going to deliver a surplus. Now, all of a sudden, youre going to have a deficit. People dont think well it sounds very much like youre not being consistent.
WONG: Well were being honest and very clear with the Australian people that we dont think it is economically responsible to cut harder. We have offset all new spending and we have cut to offset revenue previously. But what we are saying is that we dont think its responsible to cut harder and further into 2012-13 to fill a hole in tax revenue if thats going to jeopardise Australian jobs and jeopardise economic growth. Now I appreciate that that is a change, as you say, in the script. What it isnt a change in is our commitment to doing whats right for the Australian people and whats right for the economy.
EPSTEIN: Youre essentially asking people to believe that what youre doing is going to save their job and is more important than a former commitment youve made.
WONG: I think what were asking people to look at is the facts. And the facts are: just in the 2012-13 year alone weve seen a revenue downgrade since we made a commitment in the election campaign to a surplus in excess of $20 billion. Now weve offset a lot of that already through the savings decisions weve made. It comes to a point where you have to consider, is it economically responsible to continue to cut spending in a particular year, if that is likely to jeopardise growth, likely to jeopardise jobs, if that is to offset less tax. The reality is like it or not we are getting less tax than the Howard Government when they were in power, and those facts are clear.
EPSTEIN: Stephen Mayne is here, Minister. We havent prepared you for this, but if its OK, he just wanted to ask you a question.
WONG: (laughs) He always wants to ask me a question.
EPSTEIN: Yes he does.
MAYNE: Hi Penny, how are you? I guess just one quick comment. It is pretty embarrassing for Australia overall, dont you think, and it goes back to the big spending final Howard years as well, that we have just been through the biggest commodities mining boom ever and weve got nothing to show for it. We have a government in deficit. We havent got a fully funded sovereign fund. I mean youve all just spent it before its even come in even though the last 10 years each side of politics have had a massive revenue windfall on what the forecasts were back then and you have just spent all of it and more.
WONG: Stephen, I hope you understand the budget well enough to know we are spending less and taxing less than Peter Costello. So thats a first point. I dont think its embarrassing that we are an advanced economy that has a AAA credit rating from all ratings agencies. I dont think its embarrassing that we are one of the only major advanced economies to avoid recession. I dont think its embarrassing that we have seen a number of jobs, in excess of 800,000 jobs since the Government was elected, created in Australia. I dont think any of those things are embarrassing. I think what is important is to try to do whats right in an unusual set of circumstances where we see continued decline in anticipated tax receipts.
EPSTEIN: OK Minister, thank you so much for making the time this afternoon I appreciate it.
WONG: Yes, and to you Merry Christmas and early Christmas greetings for everybody.
ENDS