LANE: The Shadow Treasurer Joe Hockey heads the Opposition's razor gang, which has the job of finding the savings to pay for the Coalition's policies, and leaked documents show it has a ginormous task - that it has to find $70 billion. The Prime Minister says that's the equivalent of the entire Medicare budget for four years.
HOCKEY: Finding $50, $60 or $70 billion is about identifying waste, identifying areas where you do not need to proceed with programs and no apologies for it. LANE: The $70 billion figure includes $27 billion from ditching the carbon tax and $11 billion from axing the mining tax. On ABC radio in Canberra, the Liberal Senator for the ACT Gary Humphries admitted that could mean whole government departments are closed down to pay for it.
HUMPHRIES: And we've made clear we intend to do with somewhat fewer public servants than we have at the moment, 12,000 fewer public servants in fact, and if that means consolidating some departments, well so be it.
LANE: The Coalition's plan also includes finding $8 billion to offer tax cuts. Back in 2003 the Coalition offered $10 billion in tax cuts, and that was derided at the time by former Liberal Minister Amanda Vanstone.
VANSTONE: Five dollars, hell, what will it buy you? A sandwich and a milkshake if you're lucky.
LANE: The Finance Minister, Penny Wong, says Joe Hockey's not up to the job of being treasurer.
WONG: He appears to be very good at creating budget black holes. We know that he started this electoral term with an $11 billion black hole and all he has done is add to it.
LANE: He's already said that they would pay for that partly through cutting the public service, I think they have already talked about 12,000 public servants would go. Others have said that the climate change department would go. The Liberal Senator Gary Humphries says that some departments, plural, could be merged with others, that they could be consolidated. Can that be easily done?
WONG: Mr Hockey would need to explain how on earth he could do that and deliver the services Australians need. And equally, he should explain why is it that he just wants to unilaterally shut down Government departments because they repudiate his economic thought bubbles? That's clearly his agenda behind wanting to close the Department of Climate Change. He doesn't like the fact that that department, along with Treasury, says that his policy won't work and will cost Australian taxpayers more.
LANE: But is it the case that there are some government departments now that are a bit, you know, flabby and could do with being trimmed back further?
WONG: Well look, we've already put in place additional efficiency dividend to ensure that we reduce waste and make departments more efficient.
LANE: Based on these leaked documents, the Opposition appears to be planning to offer tax cuts worth about $8 billion. How does that compare with previous tax cuts?
WONG: What I would say about offering tax cuts is we see Tony Abbott talking about a lot of things he wants to do, but we have yet to see him or Joe Hockey show us how he is going to fund them.
LANE: Given the global uncertainty right now and the indication that Government revenues will be down because of a drop in business tax receipts, that makes your job of delivering a surplus more difficult now, doesn't it?
WONG: We've been upfront that whilst the Australian economy has a lot of underlying strengths, our fundamentals are sound - obviously the international situation does make it harder.
LANE: There has been a change in the Government's language when talking about the surplus promised for 2012-13, that it is an objective or something that you are quote 'aiming to do'. Will you deliver a surplus or not?
WONG: Well, look Sabra, our Budget has us returning to surplus in 2012-13. We're simply saying of course, the international situation makes it harder. But our plan remains to return to surplus as we've outlined.
LANE: And economists say that if you are rigid on this point by sticking to a surplus that you could in fact do more harm than good, that it is merely a political imperative, not an economic one.
WONG: I'm not going to speculate about what will or won't occur in terms of the global economy. What I will say is that we have outlined a very clear fiscal strategy, and of course we are saying the international situation makes it harder, but our plan remains a return to surplus.
LANE: Again, it's a plan - not that you definitely will?
WONG: I have answered that question, Sabra. We've laid out our return to surplus plan in our Budget. That is what we are working towards. But of course the international situation does make it harder. Unlike, of course, the Opposition, we are focused on doing what is right for the Australian economy instead of recklessly talking it down, as is the obsession of Joe Hockey.
LANE: What are the implications for the Government if you don't meet that surplus promise?
WONG: I'm not going to speculate on that, Sabra. We've laid out our plan. That is what we are working towards. We would expect that we will be in a position to implement that plan, but I am not going to speculate any further.
ENDS