HOST: Before leaving Adelaide to fly to Canberra for the all important Cabinet meeting to sign off on the Commonwealth's first flood package, Senator Wong spoke to Alexandra Kirk.
WONG: We've said as a Government that we will make the hard decisions that will be necessary to find the resources needed to rebuild Queensland. We've said there will be significant cuts. We've said we are leaving all options on the table.
The Prime Minister today will be announcing the Government's decisions about finding those resources needed to rebuild Queensland.
Can I say this Alex - I think Australians do understand there is a lot of hard work ahead to rebuild Queensland. This is likely to be the largest natural disaster in our history in economic terms. It is an extraordinary event and it demands an extraordinary response.
KIRK: Well how are you going to convince taxpayers that they really do need to pay an extra Medicare levy? That it is a good thing?
WONG: I think every Australian who either lived through this event, is rebuilding from this event or watched the images on our television screens as we saw people's homes being destroyed, we saw the rescues, we saw the damage that was being done. I think anyone who saw that or lived through that would know that we are going to have to pull together as a nation to rebuild Queensland and other flood affected areas.
This is a very large natural disaster and we are going to have to pull together to make the resources available to rebuild.
KIRK: Economist and Reserve Bank board member Warwick McKibbin says the new tax on households will hit the economy and slow consumer spending unnecessarily. He advocates that the Government accept a temporary increase to the deficit.
WONG: We're focused on doing the right thing for the nation and that means thinking first about what we need to do now to make space in the federal budget to rebuild Queensland and other flood affected areas.
But it's also recognising where the economy is going, that we do have very strong economic fundamentals, we do have a very strong pipeline of investment. And you'd anticipate in a couple of years time that we would see the economy running close to capacity.
It is the right time to come back to surplus. And that's why we remain committed to the target of bringing the budget back to surplus by 2012-13.
KIRK: Cabinet is meeting this morning to approve the flood levy. When she got the top job Julia Gillard made much about restoring the Cabinet process. But ministers won't be doing anything more than rubber-stamping the extra tax. So have things really changed?
WONG: You know I don't talk about Cabinet processes Alex. But I can say there has been a lot of engagement at ministerial level on these decisions.
KIRK: Yes from the, as I understand it from the Expenditure Review Committee. That is the razor gang of which you are a member.
WONG: Across the Government there have been ministers engaged on the floods issue. I think the Prime Minister has spoken about that. Ministerial engagement on ensuring the Government's response to the floods is something that Government considers very carefully.
HOST: The Finance Minister Penny Wong speaking to Alexandra Kirk.
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