WONG: The Australian economy is in very good shape. Government finances are in very good shape. But we do see from what we released today the Final Budget Outcome for the 2009-10 year. We do see the impact of the global financial crisis.
The writedown of revenue of about $50 billion for that year just reminds us what a substantial economic challenge we faced in that time, reminds us also that the Government made the right call the call to invest in jobs, to invest and spend in stimulus so that we kept people in work and kept the economy ticking over.
JOURNALIST: There is still a substantial portion of the stimulus money which is still being spent or still to be spent. If you are looking for cuts, isn't that an obvious place to look because the worst of the revenue writedowns are behind you?
WONG: Lets remember that stimulus is being wound down. It has peaked and it is being wound down. In fact, as the Treasury has demonstrated, stimulus being wound back is subtracting now from economic growth and will continue to do so as we wind back over the months and years ahead.
JOURNALIST: But if you are looking for cuts, couldn't you wind it back a little bit faster and that would help be a break against any potential rising inflation and interest rates as the economy picks up?
WONG: The key thing we have to do is to ensure that we meet the fiscal discipline that we've outlined. And the strategy is to return the budget to surplus by 2012-13 - the fastest fiscal consolidation this country has seen since the 1960s at least.
The strategy is to ensure that we meet our strict spending rules. No more than an increase in real growth in spending of 2 per cent. That is a very strict rule. I mean, this is not a rule that Peter Costello and John Howard met for the last five budgets they were responsible for.
JOURNALIST: Lindsay Tanner used to say when he was Finance Minister that the Government had got a lot of the low hanging fruit when it came to spending cuts, that the task gets more difficult as time goes on.
Do you have to realistically have a look at things like stimulus payments, maybe have a look at all the things you promised in the election to see if there is room there for the cuts you might need?
WONG: Obviously we remain committed to our election commitments and unlike Mr Abbott we offset that spending. We were upfront with the Australian people. We put in our policies for costings and we ensured that the spending was offset and we didn't disrupt any return to surplus. That stands in stark contrast to Mr Abbott whose policies cost, that we know now, $10.6 billion more than he told the Australian people they would.
But obviously, as I said to you, this is a strict rule. This is a rule that does require discipline. We don't pretend it is an easy rule for us to meet but we've explained very clearly why we need to do that and we need to run a sound fiscal strategy. That is important for sustainable growth.
JOURNALIST: You say getting the budget back to a surplus is the number one fiscal priority but in this Parliament where you are in a minority in both houses, it is not entirely within your gift to deliver promises. There may be legislation that comes from the minor parties, from the Opposition that Parliament might pass that might involve spending money.
WONG: On that can I say that the Independents in the course of the period where they determined who they would support showed a very responsible approach when it comes to costings. They were keen to find the truth out about Mr Abbott's costings and the Government's costings and it is thanks to Mr Oakeshott and Mr Windsor that the $10.6 billion became as public as it did and they deserve credit for that.
Obviously we are a minority government. We have to negotiate things through the Parliament. But as I said, we cannot negotiate on returning the budget to surplus.
JOURNALIST: But there is the potential there isn't it for the Parliament to pass legislation that is not Labor legislation that spends money. In those circumstances it would be very hard to say no we are not going to spend that money
WONG: As I said Lyndal to you, we can negotiate on many things, we are a minority government. But we are not in a position to negotiate on the return to surplus and I think the Australian people would expect us to hold that discipline.