JOURNALIST: Good morning Minister Wong.
WONG: Good morning to you both.
JOURNALIST: And Christopher Pyne is the Liberal MP for Sturt, the South Australian seat, and hes Manager of Opposition Business in the House. Good morning Christopher Pyne.
PYNE: Good morning David.
JOURNALIST: Now, before we put to you both your spin on the Federal Budget that was handed down last night, lets hear what people were saying to Spence Denny this morning. He hit the streets and asked people if there was anything in the Budget that would prompt them to change their vote.
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JOURNALIST: Penny Wong, Minister for Finance, where will the pain be in this Budget?
WONG: Weve taken over $33 billion worth of savings in this Budget, and they come across government. Theres a net reduction in the number of public servants. Theres savings in defence. There are savings as a result of the deferral of the aid target. Essentially theres been savings across government. We have redirected a number of those savings to important priorities, and they include the Schoolkids Bonus, so giving families upfront assistance with school costs, as well as increases for lower and middle income families through the Family Tax Benefit system.
JOURNALIST: But youve pulled back promises that were made as compensation to ordinary taxpayers. We know youve done that to the business community, but youve pulled back promises that were made in selling the mining tax. There was going to be compensation or sweeteners. Taxpayers were going to get a standard deduction, to simplify their tax returns, and a discount on interest income that was meant to encourage bank savings. Now that was promised in the original mining tax. If you can break those promises, whats to stop you breaking the promises for compensation from the carbon tax?
WONG: The carbon tax assistance is already rolling out so you dont have to trust me on it. You can just receive the assistance. If youre a person earning less than $80,000 a year, youre going to receive a tax cut. If youre a person on the Family Tax Benefit or the pension, youre going to get those increases.
But in terms of the two issues you raised. They were part of the original mining tax package. But recall what we have done, instead, is triple the tax-free threshold. So, the standard deduction, once youve taken a million people out of the tax system through increasing the tax free threshold, was not the most effective policy. And remember also what were doing with the mining tax revenue now is providing it to families. Thats what the increases for Family Tax Benefit are.
JOURNALIST: While youre handing out cheques to families, those same families, what sort of services will they get in South Australia when the South Australian Government is looking at GST revenue being cut by billions of dollars?
WONG: Regrettably the South Australian Government, like us, are having to deal with the same problem which is less revenue than occurred previously. Remember we are actually getting much less in tax than Peter Costello got when he was the Federal Treasurer. And I suspect
JOURNALIST: Yes, but you can compensate. You can compensate for that fallen GST revenue. Instead you choose to hand out cheques to families which is very good politically for you. But those same families if they turn up to a hospital there might not be the same services, their school might not have the same services. Jack Snelling is going to cop the pain there isnt he, while youre handing out cheques?
WONG: Lets recall how much more money this Federal Government is investing in health. Health spending will continue to grow as a result of our policies. Weve also increased infrastructure spending. Weve in fact doubled the annual infrastructure spending per South Australian since weve come to government. So there is a substantial amount of assistance that weve put into the state. All governments this Government and all state governments are having to deal with the fact that revenue, that is tax to government, is less than it used to be for an equivalent level of growth and the way weve dealt with that is to make the savings measures, make the cuts that weve had to.
JOURNALIST: Chris Pyne, is this really snookering Tony Abbott, your leader? Paul Kelly describes it as an Abbott trap, using the mining tax to fund a new $5 billion resources boom family package in substitute for corporate tax cuts that the Coalitions opposed. This time politics will surely dictate that Tony Abbott cannot oppose a new cash splash for families?
PYNE: Matthew, no I dont think thats the case at all. The truth is that this is an unbelievable Budget. The public wont believe that the Government can deliver a $1.5 billion surplus while theyre saying that they want the debt ceiling raised by $50 billion. So they want the debt ceiling raised from $250 to $300 billion at the same time as theyre saying theyre going to have more money than they did last year. So if you have more money coming in, if you have a surplus, why would you need to borrow $50 billion more? And I think that is the hole in the heart of this Budget. And I just heard Penny talking about how they had less revenue. But theyve forecast $39 billion of more revenue by next year when the terms of trade have fallen by 5 per cent. So I dont think the public will buy this Budget.
JOURNALIST: You will pass the Budget, or will you block any of these measures?
PYNE: Well we dont... since 1975 and I think most people remember that particular year we dont make a habit of blocking supply. The Government is entitled to pass its Budget bills. Not of course all measures are part of the Budget, and the Opposition doesnt have to pass every single measure. But we dont have a position where we would block supply. I mean this is a fiddled figures budget, and I think the public will know that. Theres also cruel hoaxes in this Budget. The Government says it has delivered a National Disability Insurance Scheme but the Productivity Commission said it would cost $3.9 billion when the Government is saying its going to cost $1 billion. So $2.9 billion that was to go to the National Disability Insurance Scheme has been cut and so I think people who had a high expectation that the NDIS would be delivered should be very disappointed today. In my own portfolio area, the Gonski review called for $5 billion more a year in education. The Governments delivering $5 million. Thats $5 million rather than $5 billion.
JOURNALIST: Penny Wong, just quickly before we go to calls, can you respond to Christopher Pyne?
WONG: Well, a few things. One is he isnt being upfront with you about what theyre going to oppose and what theyre going to support and what that means. Christopher is the shadow spokesperson for education and hes going to be opposing the Schoolkids Bonus.
PYNE: Well its not an education payment.
WONG: Well its an upfront payment to families
PYNE: Its not an education payment.
WONG: Its an upfront payment to families to deal with the costs of putting children through school, and
PYNE: It can be spent on anything, Penny.
WONG: Can I finish my sentence, if that would be alright?
PYNE: Well it can be spent on anything Penny, you should tell the truth.
WONG: Im trying to tell the truth but I actually cant speak at the moment
PYNE: Well thats never stopped you before.
WONG: Its an upfront bonus because we had in place the Education Tax Refund and we found that about a million families werent claiming what they were entitled to because, obviously, keeping receipts isnt at the top of the to-do list for families. Thats the first point Id make.
The second point Id make is we have close to doubled the amount of funding for schools. So I think its wrong to say this Governments not investing in education.
But I think whats more interesting is, what would the Coalition do? I notice Andrew Robb, my counterpart, last night was promising a surplus of $15 billion. Now, that would mean, this year, that the Coalition, if in Government, would have to not pay any Medicare out. So, if theyre seriously saying to the Australian people, we believe we can deliver a $15 billion surplus
JOURNALIST: Well there are other ways of finding that
WONG: Well then tell us.
JOURNALIST: for instance
WONG: Let them tell us, because they dont
PYNE: Now youre interrupting the radio host.
JOURNALIST: Well thats ok because this is a robust democracy, as we all know. I do
PYNE: Very robust.
JOURNALIST: I do my share of interrupting, as you both know.
WONG: To a point.
JOURNALIST: Now, your public service cuts. 3000 jobs out of a workforce of 258,000, so 1.2%. Are you saying you couldnt find any more? I mean, thats almost the level theyre looking for in South Australia.
WONG: Its actually slightly more than that if you take out the increase as a result of Defence reserves and so forth. Theyre not the only efficiencies were making
JOURNALIST: And its less, if you take off casual census collectors moving off the books Its less than that
WONG: Im not sure thats right. But its important to remember, we dont say to people we just want you to sack people. What we say is we want to take more efficiencies out of the public service and weve done that. Weve put in place whats called an efficiency dividend, a very high one, 4% for 2012-13.
JOURNALIST: So Minister, what youre saying is you can only take out 1.2% out of a workforce of over a quarter of a million public servants?
WONG: No, what Im saying is that we have taken many efficiencies. My instruction or my indication as Finance Minister was people should look to non-staffing matters first. They should look to consultancies, travel, advertising, those sorts of things, and that voluntary redundancies and forced redundancies should be a last resort. And thats the approach the public service has taken. This is the first net reduction in the public service that weve seen since figures were started, which were I think in the early 2000s. So it is a very substantial
JOURNALIST: Lets go to calls. Gunther has called 891 Breakfast. Good morning Gunther.
CALLER: Good morning. Yeah, Chris actually said my point about the deficit and the debts. The debts increasing and yet weve got a surplus. But where does the actual money come from? Do they actually, in cartoonistic terms, do they actually go to another big bank to draw out $50 billion cash in hand?
JOURNALIST: Penny Wong, where do you get the money from?
WONG: No there is currently what is called a debt cap, a legislative debt cap in place, which sets the size of what we call the Government bond market so how much money the Government can issue in terms of its debt. We anticipate being below that at the conclusion of every financial year of the forward estimates. But during each year there is a large amount of variability because of technical reasons about when you get payments and when revenue comes in, when expenses cant go out and also different Government bond lines maturing at different times. So the advice from the office that runs this, the Australian Office of Financial Management, is we do need to have the capacity to deal with this temporary fluctuation during the year, bearing in mind
JOURNALIST: If you were as fiscally responsible as you are telling our listeners, you wouldnt need to increase it by that much would you?
WONG: Were seeking to increase it for the reasons Ive outlined. But the important
JOURNALIST: Yes but if you were fiscally responsible you wouldnt have to.
WONG: We are fiscally responsible, and thats why weve taken $100 billion of savings out of the last four budgets, another $11.5 billion in the mid-year outlook
JOURNALIST: So why do you need to borrow more?
WONG: and another $34 billion of savings in this Budget. We have as a Government experienced $150 billion writedown in revenue as a result of the global financial crisis, but we are still predicting a return to surplus. And the only way we have done that is by protecting the bottom line through taking savings.
PYNE: Can I make two points on that question
JOURNALIST: Well, you can make one because Robyn wants to call.
PYNE: OK, well very quickly in the Penny Wong keeps saying that theyre making $33 billion worth of cuts, or savings, she euphemistically calls them. She is not. Half of those $33 billion are new taxes and charges in six new areas and, at forecast, high dividends from Government business enterprises. Its actually about half of that $33 billion are actual cuts in a $350 billion Budget WONG: Tell us what youd do. Tell us what youd do -
PYNE: I let you speak, now you let me speak
WONG: You will never say what
PYNE: Penny Wong talked about her forecast
WONG: you will do.
PYNE: Penny Wong talked about the forecast that the Government has made. Two years ago they forecast a $12 billion deficit this year. Last year it became $23 billion. Then it was $37 billion in MYEFO. And its ended up actually being $44 billion of deficit. So why would anybody believe
JOURNALIST: Theyre forecasting a surplus arent they?
PYNE: Well, no. The actual deficit this year is $44 billion forecast next year to be a $1.5 billion surplus. Why would anybody believe that a Government that cant get it right so often is suddenly going to find fiscal prudence?
WONG: Can I just make one point?
JOURNALIST: Yes.
WONG: We have laid out our Budget. My challenge to Christopher if he is so sure he can do better, is get Tony Abbott to tell Australians what hed do.
PYNE: See (inaudible).
WONG: No, I just think
JOURNALIST: Lets go to Robyn from Wynn Vale, hes just called in. He wants to put something to both of you. Good morning Robyn.
CALLER: Hello, my question is regarding the Medicare funding of mental health services with regards to the Better Access Scheme to psychologists and mental health social workers. Penny, in last years Budget your Government told sufferers of anxiety, depression and other mental health illnesses that they must recover in ten sessions, which is half what research shows. Research consistently shows 18 to 20 sessions.
JOURNALIST: OK, and you want to know whats happened to that funding, whether its been restored or cut further I suppose? Minister?
WONG: Theres been no change to that in this Budget. But youre right, we did make some savings in the mental health package that we announced in the last Budget. Bearing in mind it was a very substantial additional investment in mental health. And whilst I understand that some people would prefer more sessions, what Id say is we did find a lot more other services, services that were very much needed by people who do suffer with a mental illness and their friends and families.
PYNE: And I actually introduced Better Access to psychologists and social workers when I was the Minister responsible for mental health, so I thought the Governments measure last year was the wrong measure, and Im still disappointed with the changes and the cuts they made to what was an excellent program.
JOURNALIST: Finance Minister Penny Wong, thanks for your time this morning. WONG: Good to be with you.
JOURNALIST: We appreciate it. And Christopher Pyne, Manager of Opposition Business in the House.
ENDS