LANE: Penny Wong, thanks for talking to PM.
WONG: Good to be with you.
LANE: One economist says this mini-budget means that the Government is sticking to its crazy, brave plan of delivering a surplus. Isn't this what MYEFO is all about, protecting that promise?
WONG: MYEFO is about making sure we keep the right fiscal strategy for the economic circumstances and given where the economy is at, trend growth, low unemployment, and a strong pipeline of investment, that is a surplus.
But it's certainly the case that the global economy is a lot weaker than it was at Budget and that's had an impact on government revenues. And you've seen the figures today; $22 billion over the forward estimates a very substantial write-down in revenues.
LANE: What happens if the global situation deteriorates, will you make further cuts to protect your surplus?
WONG: I don't want to get into hypotheticals because unlike some people on the other side I don't believe in talking down the economy. But we have always said we run the right budget policy for the economic circumstances; we've got a track record of doing that and the right call at the moment remains the surplus.
LANE: Is there a plan B? Because Treasury forecasts have been out.
WONG: We always look to where the economy is and ensure that our budget settings reflect that.
LANE: Because our Australian summers certainly don't respect budget forecasts or pictures.
WONG: That's true.
LANE: We've had floods and cyclones in recent years that have added to the... to your bottom line by billions. What happens?
WONG: I can only give you, I can say to you, look, our update is the one we've presented today and that's the best update we can do given where we know the global economy is, and we've made very substantial spending and savings decisions in this mid-year review to ensure we continue the surplus strategy.
LANE: Are there other savings up your sleeve?
WONG: (laughs) Well, finance ministers don't disclose that, do they?
LANE: The Government's cutting the Baby Bonus for the second and subsequent child down from $5,000 to $3,000. You're winding back the Private Health Insurance rebate. Isn't this politically dangerous for you, tinkering with these things, when families are feeling under pressure?
WONG: It's never popular to make decisions to find savings. Notwithstanding that some people think it's very easy, it's rarely popular. My view is you have to think about where you want to be in the long term. And you want to make sure you have a sustainable health system that you can... governments can continue to fund in the years and decades ahead and a sustainable family payments system. And these changes that you've described contribute to that sustainability.
LANE: Business missed out on the Government's promised cut to corporate tax earlier this year. You're now asking business to pay company tax more often. That will fill your coffers by $8.3 billion starting from 2014. Are you effectively arguing for business now to pay for your surplus in the next financial year and possibly they're now going to be stumping up some cash for Gonski, maybe even the National Disability Insurance Scheme.
WONG: We are giving substantial notice of those, Id make that point first. We're doing this over three tranches. And we're not asking business to pay more tax as a result of these. It is a change in the timing of payments.
LANE: Did you consult the Business Tax Working Group on this?
WONG: The Business Tax Working Group is with the Treasurer and the Treasurer's portfolio and I understand they've done some consultations on a whole range of matters but this is a budget measure.
LANE: Including this one?
WONG: This is a budget measure.
LANE: The Opposition says that the Government has spelt out in the MYEFO documents $432 million over the forward estimates to enable a recently announced boost to the humanitarian program yet it points out that the Houston panel actually set aside $1.4 billion for this. The Opposition says where's the extra billion coming from?
WONG: There's a number of aspects of the MYEFO which do provision for the increased costs as a result of the Government adopting the Houston report. And I think you'll find that there's a $1.1 billion measure which is described. There's additional funding for DIAC and there's also what we call an estimates variation, so that would be increased funding through other functions which wouldn't appear as a separate measure. What I can say to you is we have provision for the Houston report.
LANE: You haven't missed a numerical
WONG: No, no. We are provisioning for our policy.
LANE: And why haven't you been upfront with the voting public about why you're not putting in the detail as to how much it's costing for those processing centres on Nauru and Papua New Guinea?
WONG: We will, we will, I mean this is normal practice when you have a significant contract that you're negotiating and you want to make sure you get the best deal for taxpayers. You wouldn't put out into the public arena, before contracts are finalised, the cost. But they will be made public.
LANE: The university sector's not too happy. It says that the billion-dollar cuts to the higher education sector will harm it. It points out that the budget dilemma exists because of Australia's high reliance on the resource sector, and that you're putting at risk the very sector that provides Australia with the greatest hope of long-term economic transformation.
WONG: This Government is investing more into Australia's university sector than any government in Australia's history. Just one figure: in the years ahead, that's between 2012 and 2015 we will more than double the funding to universities as compared with the last four years of the Howard Government.
What we have done in this budget is to make some decisions that that funding would not grow as fast. And I don't think it's unreasonable given that there are a whole range of different areas of the economy and the community have had to make a contribution to a sound budget strategy to ask the universities to grow a little less fast in terms of their funding profile.
LANE: How much of this needs parliamentary approval and have you got the Greens and the independents on side?
WONG: Quite a lot of this needs parliamentary approval and so ultimately the Parliament will have to decide the way forward.
ENDS