BENSON: Penny Wong, I know Finance Ministers dont discuss specifics in the lead up to the Budget, but the Financial Review is reporting this morning that you are looking at cutting nursing home subsidies, or at least the aged care sector is warning that that is your intention in the Budget.
WONG: As you said, you cant respond to every assertion in the papers in the lead up to the Budget but I would say that the Minister, Mr Butler, has made very clear how important it is that we look at aged care, as has the Productivity Commission. This one of the challenges Australia faces in the long-term. We have a population thats ageing and we have to work out how it is we best respond to the needs of older Australians in the years ahead.
BENSON: Can you say anything specific to older Australians who might be listening in a nursing home and concerned that its going to specifically affect them?
WONG: What Id say is were a Labor Government and we have a strong track record of responding to those in need. This is the Government that put in place the increase to the aged pension.
BENSON: You make the point there that youre a Labor Government but theres a concern in some circles that you are being reduced by your devotion to the surplus to be merely accountants and not reformers as you would present yourselves. Is that the way the Budget is going to appear or is it going to be a real Labor Budget?
WONG: The surplus is about reform. The surplus is all about setting us up for the future. I think one of the difficulties here is that people seem to forget that the surplus is not just about 2012-13. A surplus is about the long-term. It is about ensuring we have sustainable spending and it is about ensuring that we are able to fund things over the long-term. I think this is a false dichotomy or a false proposition that some people are making, where they say you cant have a surplus but you should fund something else instead, and we have the same issue the following year.
Because if youre going to fund long-term investment for the nation, long-term social policy spending, then you have to make sure it is sustainable. And the surplus, I believe , is not just about 2012-13; its about making sure that you have a sustainable budget into the future so you can deliver the things that Labor wants to ensure we deliver, so you can ensure you put the funds that are needed into the services people want.
BENSON: Another lobbying voice in the mix this morning is Paul Howes, whos the union voice in the manufacturing sector, he says the Reserve Bank has got it wrong on rates low rates and the high dollar are killing steel in particular and manufacturing generally. Hes meeting the Prime Minister today. Is there any chance of the Government intervening on rates or the dollar in a way that it hasnt done?
WONG: No there is not, and the settings that have served Australia well including through this investment boom include the independence of the Reserve Bank in setting interest rates and the floating dollar. It is the case were in the middle of a very substantial investment boom, and remember that mining investment over the 3 years that were in the middle of, has gone from $47 billion to $95 billion to $120 billion that is a massive investment.
It is one of the reasons why a surplus is the right thing to do, because if you do bring the budget back to surplus, it enables the Reserve Bank, should it think fit, to have the flexibility for further interest rate cuts. We think a surplus is the right policy setting. But in terms of a proposition that you peg the dollar or intervene in interest rates, the Government will not be doing that.
BENSON: The carbon tax is not specifically a budget measure but its coming in in July. Its in the news today because the Salvation Army has said that it is unjust and unfair and will add about $3.5 million dollars to the cost for charities because of the impact of goods being dumped in landfill. Do they have a point?
WONG: I think all of us know the good work the Salvos do I was at the Breakfast with the Prime Minister to launch the Red Shield campaign for this year and Id encourage all Australians to give generously. In terms of the carbon price Id make the point, first, that we have put in place a fund for charities to assist them with the transition to a carbon price. In terms of the detail of landfill, Ill leave that to Minister Combet to respond, but I would say that we have worked to ensure that there is assistance for charities, as well as substantial assistance to Australian households. Lets remember if youre concerned about low income Australians, we are tripling the tax-free threshold. Thats a tax cut for every Australian earning up to $80,000 a year and that will come into place from 1 July.
BENSON: Penny Wong, thanks very much.
WONG: Good to speak with you.
ENDS