ABC News 24 with Gillian Bradford - 27/01/2011

27 January 2011

JOURNALIST: Penny Wong, do you acknowledge that the first reaction of some people might be to this, Im getting slugged with a levy now, Im not going to dip into my own pocket and contribute a donation to the appeal?
WONG: Look, what I say is this. First, these are unique circumstances. This is a very costly, dreadful natural disaster and this requires everyone to do their bit. And obviously we are all very grateful for the donations from the corporate sector and private individuals for the Queensland flood victims.
But what we have announced today is the Government doing our part, and our part is to fund the rebuild that is, the cost of rebuilding roads and bridges and railways. The cost of community and public infrastructure; that will be a very significant rebuild.
The package that the Prime Minister has announced today is $2 of savings for every $1 of levy. Its majority-funded through the Government tightening its belt, cutting programs, making savings, and a modest levy which is very progressive to provide a contribution from the Australian community.
JOURNALIST: But have you factored it in that the voluntary donations might dry up now?
WONG: What Id say to people is remember they are funding different things. There is short-term relief, people who need help in the short-term. Then there is the larger task in many ways of rebuilding the infrastructure. This levy, lets remember, for someone on $60,000 a year, it will be less than $1 a week. For someone on $100,000 it will be less than $5 a week.
So we have been very conscious when we were designing this levy to make sure it was progressive, that people on higher incomes pay proportionately more, and also that the levy was modest. More of the burden was borne through spending cuts in the budget than in the levy.
JOURNALIST: Now you are targeting higher income earners deliberately with this. Do you also acknowledge there is a risk and many economists believe this to be the case that it could hit discretionary spending? The retail sector is already struggling. This could hit consumer confidence, stop people putting their dollars into the retail sector.
WONG: We have to manage this unique event in the short-term. But we also have to look at the medium and longer term outcomes for the Australian economy, the outlook for the Australian economy. The fact is we do have a strong economy. We are going to have to fund the cost of the Queensland rebuild and rebuilding in other areas.
But the reality is we have low unemployment, we have strong growth. We also know we have a very strong pipeline of investment. So we do believe its important to make the decisions weve made today. Savings cuts, rephasing infrastructure so that we recognise that there are capacity constraints. Weve got to make room in our economy both in terms of funds but also in terms of tradespeople to do this rebuild. And of course a modest levy.
JOURNALIST: Now a number of schemes have been axed as part of this. Were they duds anyway? Things like cash for clunkers, a good excuse to get rid of a dud program?
WONG: I think that the issue here is that we have made very clear the Prime Minister has made very clear since the election that this is the year we want to deliver a carbon price. We know that a carbon price is the most efficient way of changing our economy to become a more low-polluting economy. And weve been very conscious to look very closely at government programs to consider what is the best value for money for taxpayers.
These arent easy decisions, I acknowledge that. And I acknowledge there will be some people who wont like some of the decisions today. What I would say to them is these are the sorts of hard decisions the Government has to make when were confronted with these unique circumstances.
JOURNALIST: The Prime Minister has said shes had a word to the Independents in the Lower House; let them know whats coming. Have you done the numbers in the Senate? Have you been in touch with Senator Xenophon, Senator Fielding and the Greens?
WONG: As the Prime Minister said, we have announced this package. We will go through a process of speaking to our parliamentary colleagues across the board, briefing them on why weve done what weve done and why this is so necessary to rebuild Queensland. And ultimately, theres a lot of politics around. Ive seen Mr Abbott do what he always does, which is to oppose and to say no and to have a fight.
But fundamentally, the question is this: do we want to rebuild Queensland? If we do and we all do how do we fund it and whats the best way.
JOURNALIST: Are you confident that you will carry the numbers in both houses?
WONG: We will obviously have to negotiate this passage through the Parliament. But what Id say again is this. People who care about rebuilding Queensland will, I hope, recognise this is a responsible package, that this is a sensible package. It is both fiscally responsible and economically responsible.
JOURNALIST: And just finally, the Prime Minister didnt quite answer this about where the buck would stop on this. We know of course, when some of the spending started to go awry, that Minister Garrett really came under the pump when it came to the insulation scheme. Are you going to be that person? If money is misspent, if it goes astray, if it is rorted, does that come back to you as Finance Minister?
WONG: I think what the Prime Minister was saying is that weve got in place a structure between the states and the Federal Government. Headed by Major General Slater to make sure that we look very carefully at how these dollars are being spent. So I think her point was we do have accountability arrangements between the governments. Were very conscious of the importance of value for money. In fact its one of the reasons why we wanted to re-phase infrastructure because we know you cant do everything at once. If you try and do everything at once, youre likely to put up the price.
JOURNALIST: Minister, thank you very much.
WONG: Thank you.
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