ROWLAND: We're joined now by the Finance Minister, Penny Wong. Senator Wong, good morning.
WONG: Good morning. This is an interesting and chilly environment.
ROWLAND: It is a very chilly environment theres a deficit of heating here, I can tell you that!
WONG: (laughs) There sure is.
ROWLAND: Now, given all of the criticism the Government has copped about those way out-of-whack forecasts to date, how can voters trust you when you say there'll be a budget surplus of $6 billion in four years?
WONG: What we've done is a Budget that is responsible, that lays out a pathway to surplus and that deals with the economic circumstances we've been presented with, which is the largest write down in revenue that is, tax money coming into government for a very long time. In fact, it's the second largest since the Great Depression $60 billion over the forward estimates from what we anticipated just four months ago.
Now, those are the economic facts. I know that Joe Hockey and the Opposition would like to pretend they don't exist or that someone's just made it up. They are the economic facts. So, what do you do when youre presented with that? Well, you do what the Governments done. You make responsible savings for the long-term but you protect jobs and growth here in Australia through the forward estimates by making sure you keep the economy strong.
ROWLAND: Looking at the Budget, it strikes me, as it has struck a lot of people, that it's really a legacy Budget; its not your traditional pre-election Budget laden with sweeteners to win votes, this is more about cutting and axing and not trying to win popularity.
WONG: It's interesting one half of your question I think is right, that it's not your traditional pre-election Budget. It's a Budget that is very much about the long-term.It's a Budget that's very much about making sure you protect jobs and growth but make the savings required for the future even if they are politically difficult. But I think youre very wrong when you say we thought about legacy. You know what we thought about? How do we make sure we fund these important school reforms? Lifting every class room, making sure no child is left behind in the way that some are at the moment. How do we fund DisabilityCare? How do we make sure Australians with a disability in this country get the care and support they deserve. Thats what we were thinking of when we put the Budget together.
ROWLAND: Lets look at some of the measures. The Baby Bonus. The $5,000 Baby Bonus has gone, folded into a much more modest family tax payment structure. What was guiding that decision?
WONG: No savings measure that Ive found is painless or is without criticism, and that's one. But, ultimately, if you want to make room to fund something like the investment in our schools, you have to find savings within the Budget. Weve put in place a paid parental leave scheme so people do have access to that. And we have ensured that there is an increase in the Family Tax Benefit of a couple of thousand dollars for your first child paid over a period of time. So we are still assisting families on top of the other things weve done, which are things like increases to child care rebate a very important reform that the Government's introduced.
ROWLAND: But as the Treasurer pointed out, this is going to be make a lot of prospective parents very unhappy. In fact 28,000 families will now miss out on the Baby Bonus all together.
WONG: And what Id say is what families get in return for the savings that were asking them to make, just as were asking for savings across the budget, is the knowledge that you will have a schools program that resources every class room. That means your child will not be left behind no matter which post code you live in. I think thats a pretty important thing.
ROWLAND: Looking at some of the Budget measures the mining tax. It was finally confirmed it would only raise $200 million this financial year, down from the forecast of $2 billion. That's just simply embarrassing, isn't it?
WONG: This is a volatile tax. We've said that for some time I would make the point that whats occurring is not driven by the mining tax. That is a fraction of the revenue write down. That is, the reduction in money that government gets from tax that weve seen. Remember, even with all those changes that people are talking about, if you look at taxes as a share of the economy we are a much lower taxing government than Peter Costello. And that reflects what is happening in our economy with the high dollar and the terms of trade coming off, and how they're combining to put pressure on profits in our economy.
ROWLAND: On the carbon price, more than half of the initial forecast from $29 per tonne to $12 per tonne. Again, how did you get it so horribly wrong on that front as well?
WONG: I do think it's kind of ironic, isnt it do you remember Tony Abbott when the carbon price first came in? He said the carbon price would go up and this was an underestimate it was going to be $40, $50 ... well, whats occurred, as you know we have a fixed price period and we will move to a floating price because of what's happening in the global economy and particularly whats happened in Europe, I mean theres a recession in Europe and thats an (inaudible) prices, we've had to adjust down the carbon price. Thats not actually a bad thing. We have had to make savings in the Budget to offset that but what it is actually meaning is that Australia can reduce its pollution for a lower economic cost. There's not a bad thing.
ROWLAND: Savings include winding back some of the assistance to the energy industry?
WONG: I don't think anybody who thinks they were going to get something and then is not going to get it is happy, but the point weve made is were adjusting assistance in line with a lower carbon price.
ROWLAND: A lot of measures in this Budget youve only got 18 sitting days before the election. Do you intend to aim to legislate all of those changes?
WONG: We certainly have got a big legislative program and we'll continue to press for that program and make sure we get as much through, as always, as we can in the sitting. I would say though, really, it's incumbent upon Tony Abbott in his Budget Reply tomorrow to say to Australians what he would do. These are the facts. If you want a pathway back to surplus such as the Government's put down, you have to make decisions. I would say, lets remember weve had our AAA credit rating reaffirmed as a nation overnight on the back of the Government's Budget.
ROWLAND: How confident are you of support in the first instance from the key cross benchers ?
WONG: Well, I actually think the key is Tony Abbott. This is the man that wants to be Prime Minister. If he wants to be if he says I want to be Prime Minister and I want to run a strong economy should I be elected, isn't the pressure on him to tell Australians what he would do? And if he doesn't agree with the Governments cuts, what would he cut?
ROWLAND: Do you really believe in your heart of hearts this is an election that will help Labor win voters?
WONG: I believe in my heart of hearts this is absolutely the right Budget for the nation. Absolutely. And ultimately the choice is in voters hands because just as Budgets are about choices, so too are elections about what sort of country you want. What sort of future do you want? And weve made clear that we want a future that has a smarter economy; more kids being brought up to the level we need all of our children to be, a fairer society DisabilityCare, the next wave of Medicare and ultimately a stronger economy, more jobs.
ROWLAND: And well see what voters thing about that in four months time. Penny Wong, thank you so much for your time this morning.
WONG: Good to be with you.
ENDS