MOTTRAM: Good morning, Minister. Thanks for your time.
WONG: Good morning, Linda. Good to be with you again.
MOTTRAM: Now, obviously the big aim here is to fund these iconic Labor projects like the NDIS the DisabilityCare scheme Gonski funding. But youre not getting a lot of ticks, are you, this morning. Were you hoping for a more optimistic reception?
WONG: Oh, look, I always thought this was going to be a difficult Budget because its not a Budget thats full of giveaways, as pre-election budgets obviously have often been. What were saying to Australians is, look, these are difficult economic circumstances in terms of how much tax government is getting. But we have to handle that responsibly, which we will, and we also to find the savings to invest in the reforms that youve described.
And what Id say is theyre not just Labor iconic projects. These are really nation-changing reforms. If we are serious about lifting all our classrooms and not leaving so many Australian children behind, then we have to reform our schools and increase resourcing of them. And I think DisabilityCare is really long overdue.
MOTTRAM: Opposition Treasury Spokesman, Joe Hockey, this morning said that your assumptions are fundamentally dishonest and that this is undeliverable. That its all spin. Do you accept that voters might have trouble believing your assumptions, given the history of recent times?
WONG: Well, Id say a couple of things: Joe Hockey would say that, and Joe Hockey has an opportunity to lay out his plans. The only thing hes told Australians is that he wont tell them what his plans are until after the election. And I dont think thats being upfront with Australians or taking Australians into your trust. But, look, I accept well take some political criticism for moving away from our previous position. And what Id say to people is this: economic circumstances have changed. Thats a fact.
The Opposition might like to pretend its not but they are the facts. And you have to, as a responsible Government, deal with those changed circumstances and you have to make choices. And weve made two very important choices. The first is were going to support jobs and growth and that means no surplus this year because we know that if we chased revenues down wed have an impact on growth and risk jobs and the economy.
And the second big decision weve made is to make the savings such as some of the ones youve described, to find the room to fund really important reforms that are all about the future of the country.
MOTTRAM: Why couldnt some of these cuts have been delivered earlier? After all, a lot of observers, commentators, were saying a long time before you admitted that there wouldnt be a surplus that there were problems. It was obvious to many that the world was not recovering from the GFC so quickly.
WONG: I think its important not to rewrite history and forget that the Government actually has been adjusting downwards in both the mid-year review and the Budget how much revenue we thought wed get. Its just that this revenue write-down is so much bigger. Just to put it in perspective, this is the second largest revenue write-down since the Great Depression. So, this is not a normal set of circumstances.
In terms of previous savings, well, there are a fair few savings weve put on the table already and many of them have been opposed. I mean, we reformed the private health insurance rebate, that will continue to yield savings to the Budget over the long term, continue to help find the space for important reforms, bitterly opposed by the Opposition and criticised by many, but thats one example of the savings that weve already put on the table. But we have had to add to that quite substantially in this Budget for the reasons you and I have spoken about.
MOTTRAM: Penny Wongs with us, the Finance and Deregulation Minister. Shes in Canberra. One of the measures that I mentioned there you know, theres obviously a lot in there, but this change to how the excise is calculated on smoking. I mentioned it on air a little earlier this morning and Professor Simon Chapman from the School of Public Health at the University of Sydney has given us a call on that one hes on the line. Hello Simon, how are you going?
CHAPMAN: Hello Linda, how are you?
MOTTRAM: Good thanks. Whats your view of this move, is it a good one?
CHAPMAN: Oh, look, the Government has been absolutely terrific on tobacco control world class in fact. So, were very, very disappointed that all theyve done is effectively put up a 0.4 per cent tax rise, whereas if theyd adopted the recommendation of the Preventative Health Taskforce, which asks for another 25 per cent, they wouldve had a billion dollars in the next financial year. I mean, thats a substantial amount and, you know, given that most smokers want to quit about 90 per cent of smokers regret ever having taken it up. The number of people who politically would kick back against that would be very, very small indeed. Many people would like the price of cigarettes to go up because it disciplines their own smoking and stimulates them to quit and it gives Treasury a lot of money as well.
MOTTRAM: Ok, Professor Simon Chpaman, thank you. Penny Wong, its not the hugest element of this whole package but it is one area where should you not have done more?
WONG: And I suspect on another show Ill probably get criticised for doing what weve done.
MOTTRAM: For doing it at all (laughs) ...
WONG: (Laughs) ... I appreciate the Professors recognition upfront that the Government has done an enormous amount in the public health space when it comes to smoking and really the plain packaging laws were world-leading and still are being regarded as best practice around the world.
This is an increase in the taxation calculated on cigarettes, so there is a public health benefit there. I mean the Government just has to make a range of decisions there are people who would probably criticise us for that decision as well. But I think in terms of public health the Governments credentials are pretty clear.
MOTTRAM: Were going to talk to Mike Baird, the NSW Treasurer, in a moment, but I know a couple of issues that he has flagged for this state include the winding back of the amount of GST this state will get and the impact in particular on health of not rolling over health agreements. What do you have to say to the voters in NSW who, after all, are going to be very important to your electoral chances?
WONG: Id make a couple of points and one is that I know State Governments always like to blame Federal Governments for their own cuts and just to be aware of what people are saying and how much of it is real. In terms of the GST, if there has been a reduction in the GST distribution that is because of the way the formula is applied. So, thats not a decision where the Labor Government has said were going to change that. And, if you look at the investment of this Government, the increased investment across the country, including in Sydney and NSW on hospitals, on health, it is certainly a much greater investment than you ever saw under the previous Coalition Government.
MOTTRAM: Believability is a huge issue for your Government isnt it, even for those voters who are still listening to you. Do you hold out any hope that this Budget can give you some kind of an electoral boost?
WONG: You know, I was asked yesterday, how will this help you win the election? And I said and I think the reporter didnt believe me, but it was the truth I said, well, you know, when we sat down around the Cabinet table, around the Expenditure Review Committee table, which is the committee that puts the Budget together, that wasnt the question we asked ourselves.
The question we asked ourselves was, first, how do we handle this hit to tax revenue so, the hit to the amount of money the Government gets, whats the best thing to do in these economic circumstances, and, second, were not walking away from DisabilityCare and our school reforms, even in these circumstances. How do we find the room over 10 years to fund them?
My view is Budgets are about choices and theyre about what sort of future you want, just as elections are about choices and what sort of future you want for the nation.
MOTTRAM: Sure, but there must have been consideration of the political calculation here too. I mean Wayne Swan alluded to it last night, well, made it quite clear last night hat its now up to the Opposition to decide wether it will support these measures. Its a wedge, isnt it?
WONG: Thats not why weve done it. What youre suggesting to me is that we have set out a range of savings, some of which are politically controversial, to fund these programs over a decade and that the only reason we did that was to wedge the Opposition. I mean thats just not how Government works. And not how the people around that table work.
I think it is incumbent upon Tony Abbott to do what he hasnt done so far, which is to take Australians into his confidence. I mean, he is saying: I will cut more, but Im not going to tell you where. Thats what hes saying to Australians. And really tomorrow in his Budget Reply, in an election year, instead of just thinking he could cruise to becoming Prime Minister without telling Australians what he would do, I think he really has a responsibility to tell Australians what choices he would make. Weve made our choices clear.
MOTTRAM: Penny Wong, thanks for your time today
WONG: Good to speak with you Linda.
ENDS