WONG: Today we will be releasing the mid-year budget update. And it will be a mid-year budget update that will be responsible. That will chart the right course between the global uncertainty that we see, particularly in Europe and the imperative of supporting jobs and economic growth.
It will be a responsible mid-year review, in the face of a $20 billion write down in revenue since the budget. Evidence of the way in which global uncertainty is affecting the Governments budget. But we remain committed to fiscal discipline. And we remain committed to doing what we did do in the global financial crisis, supporting Australian jobs and supporting confidence.
JOURNALIST: Why return the budget to surplus when it has no real economic value? I mean just admit that it is just for purely political purposes.
WONG: Well thats wrong. I think when you look at the global economy, you get a very clear view of what occurs when markets dont believe governments are committed to fiscal discipline. We see in Europe, financial markets passing very harsh judgments on governments that arent able to ensure their budgets are on a sustainable footing. We will ensure that but equally we will also ensure that we support jobs, we continue to support economic growth.
JOURNALIST: Can you explain where the $5 billion that the Herald is reporting in budget cuts will come from?
WONG: Well be standing up in just a few hours and all details of the decisions we have made will be clear then. But it is important to recall that weve seen some $20 billion written down off Government revenues, less money coming into Government as a result of the weaker global economy and thats one of the things weve had to grapple with in this MYEFO.
JOURNALIST: Will the deficit be $30 billion?
WONG: Im certainly not going to be talking about budget numbers, youll get all the details of that in just a few hours.
JOURNALIST: Will there be any spending initiatives at all, or is it all just cuts?
WONG: Youll get all the details of the decisions in just a few hours. And what youll see then is a responsible approach, an approach that recognises the importance of fiscal discipline but also recognises the importance of continuing to support jobs and growth in the Australian economy.
JOURNALIST: How would you characterise these cuts? Do families have a reason to be worried this morning?
WONG: What Ive already said previously is that weve taken some $100 billion worth of cuts, taken savings decisions in our previous budgets. There are no easy decisions left. But I would say this. Weve seen the shadow finance minister and others out there this morning calling for more cuts and Id say this.
The test for the Opposition will be two fold. First, will they support the Governments decisions today and second, if they dont think the Government has done enough they should tell the Australian people what theyre going to cut. Because weve got the Opposition with $70 billion worth of cuts to make just to get to the starting line and theyve never been upfront with the Australian people. Tony Abbott has never been upfront with the Australian people about what hes going to cut to get back to the starting line.
JOURNALIST: Were talking about $20 billion being cut out of revenue over the next four years.
WONG: On top of $130 billion that were still seeing from the wash out of the GFC.
JOURNALIST: Is it worse than we expected, or better than we expected? How would you rate the $20 billion thats been cut?
WONG: I rate this as a challenging economic environment in which to put a budget update together. Because -
JOURNALIST: Is it worse than you thought it would be?
WONG: Its a challenging environment because the global outlook is certainly weaker than we anticipated at budget time. And I think thats the case for most advanced economies around the world.
JOURNALIST: Why is it correct to do spending outlays in the first GFC when we might be facing a second one and youre doing drastic cuts?
WONG: Lets remember, if you look at what the OECD has said today there are two things which are important. The first is, they are saying the OECD economies, the advanced economies, will grow more slowly but they are also projecting solid growth for Australia.
And thats the macro-environment this Government has to manage and chart the right course through.
JOURNALIST: Is the only reason you need to have for a surplus in the next financial year is for political reasons?
WONG: Ive answered that question already.
JOURNALIST: If the OECD is forecasting 4 per cent growth next financial year, do you think its necessary to have such harsh spending cuts this financial year for this mid-year review?
WONG: I think these questions demonstrate the balance the Government has to strike. We have got global weakness, global uncertainty, risk particularly in Europe. But at the same time, the central scenario as the OECD has indicated is for solid growth next year. This demonstrates the balance the Government has to strike in the economic circumstances.
JOURNALIST: Who is going to be affected by these spending cuts?
WONG: Ive answered that question, well talk about that in a few hours.
JOURNALIST: If the economy goes belly up, will the Government be prepared to do fiscal priming again?
WONG: Were getting into hypotheticals here. Were very conscious of the risks in the global economy, and youve seen the manifestations of that in the revenue write down that will be in the MYEFO.
JOURNALIST: But Europe going belly up isnt that hypothetical though is it?
WONG: The Europeans do need to get their house in order. Weve continued to say that, they have the capacity to do that and they need to do that. Its affecting not just Europe but other nations.
JOURNALIST: Can you guarantee that low income earners will be protected from these cuts?
WONG: The savings decisions and all decisions in MYEFO will be clear in a few hours but I will say this - just as we were guided during the global financial crisis by Labor values and the importance of supporting jobs, we will continue to be guided by them in the context of the mid-year review. Thanks.
ENDS