ALBERICI: Penny Wong, thanks so much for being with us.
WONG: Good to be with you again.
ALBERICI: Now the Senate vote on the same-sex marriage issue is due this week. Today we heard that Liberal Senator Sue Boyce says she will defy Tony Abbott and speak up in favour of the bill. The truth is though, you will need many more Liberals to potentially cross the floor for this to get passed, won't you?
WONG: There's no doubt that Tony Abbott's refusal to allow the Liberal Party a free vote, a conscience vote on this issue, has made it very difficult for the bill to pass this time. And I certainly welcome Senator Boyce's indication, and I wish there were more of her colleagues who would be prepared to not follow Tony Abbott's edict on this issue.
ALBERICI: The Prime Minister is also making it difficult for this bill to pass because she doesn't agree with it. Have you spoken to her about this?
WONG: I speak to the Prime Minister regularly, and on this issue, as you know, we have a different view. But the Labor Party has a free vote on this issue, the Liberal Party does not, and I think that really demonstrates the difference in the approaches of the two parties of government.
ALBERICI: The Prime Minister's partner's a man, your partner is a woman. Does the Prime Minister give a reason why she believes her relationship and yours shouldn't be on equal footings in the eyes of the law?
WONG: Emma, I'd refer you to what the Prime Minister has had to say publicly on this, and in terms of my relationship and other same-sex relationships. I'm on the public record many times saying I think we're at a point in Australia where we should judge relationships by markers such as commitment, love, respect, not by the gender of the partners and I think that's where most of the Australian community is.
ALBERICI: Well, according to Jim Wallace, the head of the Christian Lobby, your lifestyle is more dangerous to your health than smoking. What do you make of that?
WONG: I think it only has to be said to be demonstrated to be ridiculous. Really, I mean, does anybody out there honestly think because you're in a same-sex relationship somehow that makes you as unhealthy as a smoker? I don't think it deserves a reply.
ALBERICI: He's actually calling for more research into the health of gay people. Do you think that's actually even necessary?
WONG: Well, I think it's really unfortunate that a debate that is about equality and about the thing that is most important, I think in all of our lives... I mean if you ask anyone what is the most important thing in your life, it's your family. I think it's unfortunate that a debate about the people we care about most has descended for some people into a broader debate about whether being gay is legitimate or normal. That's been a very unfortunate aspect of this debate and not one I think which accords with mainstream Australian values.
ALBERICI: Let's move to something else you're very passionate about, the economy. Are you as convinced today as you were six months ago that your Government can deliver a surplus?
WONG: We remain committed to a surplus because it's the right thing to do for the Australian economy but you're right to... I think what's implicit in your question is the fact that it's been made harder because of where commodity prices are. The Treasurer has made that clear, we've been upfront about that, but we remain of the view a surplus is the right thing to do given where the economy is. Our economy remains very strong by comparison with the rest of the world we've grown 11 per cent since Labor came to office, created 800,000 jobs, and we've got to build also for the future because jobs today is one thing, but we also need jobs tomorrow and that's what we're focused on.
ALBERICI: The Bureau of Resources and Energy Economics says that minerals exports will be down some $20 billion this year. You've also got corporate profits more generally lower so less taxes there; a slowdown in China; domestic asset prices are down, so capital gains tax revenues are also likely to be hit. So where is the money going to come from to plug all these holes?
WONG: There are a whole range of data sets you just put to me, and I just want to make a couple of comments if I can. The Bureau of Resources and Energy Economics figures that you talked about it really show two countervailing trends. One is commodity prices coming down but export volumes lifting, because as we get more investment into the resources and energy sector obviously, that's going to lift export volumes.
There's no doubt commodity prices have come off their peaks since 2011, but the Government did factor that into the Budget we did say that we assume the terms of trade would step down over the Budget estimates period. In terms of your broader questions about revenue, there's no doubt we've had to deal with a big writedown in revenue over the period we've been in government because of the global financial crisis, and we have dealt with that in every budget update since the GFC.
ALBERICI: And you will have to do it again?
WONG: Well, that's the job of the Treasurer and the Finance Minister when you want to run a responsible fiscal strategy at a time where you've got an economy that's growing but revenues still being hit. That's not an easy set of circumstances, but in that set of circumstances you have to keep focused on what is the right thing for the economy now and also down the track.
ALBERICI: So you didn't answer my question, which was: how are you going to plug the revenue holes? Where will the money come from?
WONG: When it comes to... I think that's a question about what's in the mid-year budget update, Emma, and we will certainly make sure that I come on this program and answer your questions after we've released that, but until that time obviously we're not going to be discussing that.
ALBERICI: Well, this morning you earmarked ICT - technology expenses - travel and advertising as areas of the government budget where you could find savings, but really that's small beer in the scheme of things, isn't it?
WONG: We've saved probably about $13 billion from public sector savings since we came to Government, and the list that you mentioned where we prioritised those efficiencies. So less advertising, savings on travel, savings on things like ICT spend. And that really demonstrates the approach we've taken to find efficiencies and responsible savings an approach I have to say which is in stark contrast to what you see, particularly in Queensland, but in other Coalition states where people are just cutting into jobs and frontline services.
ALBERICI: We'll get to a discussion about what the states are doing in a moment, but just to get back to this: I mean, things like travel, as I understand it, the Federal Budget for travel is about $500 million a year, advertising is about $100 million a year and ICT is about $5 billion a year. So, even if you got rid of all of those in their entirety, you still wouldn't be able to fund some of the pledges you've made for the National Disability Insurance Scheme, the dental health care, the Gonski education reforms not to mention the new offshore processing regime. These are all big ticket items that simply need quite a bit more funding than what you've earmarked so far as areas where you could make savings?
WONG: And I point you to our record in terms of savings. We've taken about $130 billion of savings over our last few budgets, and some of those savings are savings which yield savings to the budget through into the future. Things like removing the Dependent Spouse Tax Offset. That's not just a save for this budget period, that's a save that goes on because you no longer have to provide that tax offset, like the Private Health Insurance rebate...
ALBERICI: But if I can just interrupt you there just to clarify something: they are things that were already considered in the upcoming budget, were they not? And these extra spends were on top of that, weren't they?
WONG: The point I'm making though is these are... there are structural saves to the budget which not only help the budget in the forward estimates period, but also help the budget beyond the forward estimates period. Another example is the private health insurance rebate which, as you know, the Coalition opposed, which, you know, I think demonstrated their priorities. They'd rather retain assistance for millionaires than help families with frontline services.
ALBERICI: But those areas were already known, you've already announced them in the past. I'm talking about new expenditure items that have come up since then and have not got a commensurate saving attached to them to pay for them?
WONG: What I'd say, Emma, is that I think you have seen from the Budgets we have delivered to date, and the space we've made for items such as the launch of the National Disability Insurance Scheme, Paid Parental Leave, a whole range of other social spending, for example, in health, that we have made space in the budget through making difficult decisions. And I'm not suggesting to you these are not difficult things to fund.
The Prime Minister, I think, in her speech to the Press Club when she talked about the importance of reforming schools and improving schooling standards made very clear there are difficult funding decisions associated with these, but it's about your priorities, and it's about what you think is important for the future - for the future of Australian children today, but also making sure we've got a strong productive and competitive economy in the decades ahead.
ALBERICI: Barry O'Farrell, the NSW Premier, says you're simply writing cheques you will never be able to cash.
WONG: Mr O'Farrell is the man who's just cut education, so I think his priorities are there on display for all to see. They're not Labor priorities.
ALBERICI: The states say they have little choice given their GST revenues... the revenue growth in GST is going down. In fact Barry O'Farrell is the one who is suggesting there should be a debate around lifting the rate of GST. He's certainly not the only one suggesting that. We've had Dick Warburton a veteran company director and former head of the Australian Tax Board and Ken Henry, your own former Treasury Secretary. They're all calling for a debate around lifting the rate of GST. It's the lowest in the OECD; shouldn't there at least be a discussion around that?
WONG: As I recall, Joe Hockey also left the door open for the states to ask for it. We've made a position on this. We don't think you should deliver the cost of tax reform, the bill for tax reform, to families who are already facing a lot of cost of living pressures. It is true that revenue has been hit as a result of the global financial crisis - and if Mr O'Farrell would like to actually mention that to Joe Hockey it might be a useful thing, because he seems to deny that that has occurred - and governments have to deal with it. The point I'm making is you've got to think about what your priorities are, and you've got to think about what sort of savings you put on the table. We don't think that increasing the GST nor extending its base is fair tax reform.
ALBERICI: Now, mining companies are crying foul over their costs of actually doing business in Australia. We talked about the fact that China's slowing and commodity prices are going down - it's now 30 per cent more expensive to build an iron ore mine in this country than elsewhere. When it comes to thermal coal it's 66 per cent more expensive. How do you explain these rising costs?
WONG: I want to make a couple of points first. That's not the only thing mining companies are crying foul over. They're also very upset with the Newman Government's decision to raise royalties a decision which will cost jobs because as we know royalties are inefficient taxes.
ALBERICI: They're not all in Queensland, but
WONG: No, that's true but I do make that point because you've had, I'm sure Coalition people on this program telling you how the mining tax or the carbon price was the end of the mining sector, but I haven't heard too many of them saying that Campbell Newman's big tax on mining in Queensland was going to be the end of the mining industry there, despite what the mining industry itself says, which is that it will cost jobs.
But in terms of the cost of projects, look, it is true we have to make sure we can bring as much of the investment that is in the pipeline to actuality. We've got $500 billion in the pipeline of investment and a lot of that is at the advanced stage. We want to make sure that's actualised into projects. But if what you're suggesting we should look at the $2 a day suggestion that was so famously made by one business person, that's not what a Labor government will be doing.
ALBERICI: That's certainly not the suggestion I was making. I was asking you to explain what you think is driving these costs up so high?
WONG: I think there are a number of factors. Certainly, one of the factors is we do see duplication in terms of regulation, and that's one of the things that the Prime Minister is working on through the Council of Australian Governments how is it that we can try and streamline the approvals process for these projects? You know, we'd certainly welcome the opportunity to work with the states cooperatively on this, and I hope that will be forthcoming.
ALBERICI: What about the issue of IR reform? Do you concede their argument that that is partly to blame?
WONG: I think it's very easy sometimes to blame a system rather than perhaps look to practices. Ultimately, decisions about wages and conditions are made by management in the context of bargaining, you know, and they're business decisions that management have to make.
ALBERICI: And so do you think it's as much a reflection of the company's management than any Government policy, the fact that they can't contain their costs?
WONG: All I'm saying is that I think simply to blame a particular law for costs is not the right way of looking at it, and I think also if people are really suggesting the wages and conditions ought to be cut then they should be upfront about that, and we can have a debate about that, and certainly we're not in the camp for cutting workers' wages and conditions.
ALBERICI: Penny Wong, we'll have to leave it there. Thanks so much for joining us.
WONG: Good to be with you again.
ENDS