DAVID PENBERTHY: Heres the woman who was the Finance Minister in the former Labor Government and is now the Opposition Leader in the Senate, South Australian Senator Penny Wong. Good morning Senator.
PENNY WONG, LEADER OF THE OPPOSITION IN THE SENATE: Good morning, good to be with you all.
PENBERTHY: Great to have you in here. Now, Joe Hockey just said some of these recommendations are common sense, others are courageous. Do you think that there are any recommendations in this report which would be good policy or is your overall view that it is a recipe for disaster?
WONG: Lets talk about the overall view about this report, I think, its a blue print for broken promises and what does is it sets out a vision of Australia where low and middle income Australians pay more and get less.
It sets out a view of Australia where education, health, support for older Australians is more difficult to get. And I think it is pretty extraordinary that a Prime Minister who told Australians, no cuts to health, no cuts to education, no changes to the pension, hes handpicked a team that produced a set of recommendations that really fly in the face of the promises he made Australians before the election.
PENBERTHY: But if you talk about what politicians have said or what politicians have done, I can remember your Treasurer Wayne Swan use the term come hell or high water we will deliver a budget surplus, then he recanted on that. That happened when you were Finance Minister. I know we had a GFC but we had successive deficits under Labor. How much responsibility does or should the Labor Party take for the set of books that currently confront the Federal Government?
WONG: Lets understand what Tony Abbott and Joe Hockey are doing. The Budget emergency is a political trick, thats what it is, it is a political trick in order to give themselves cover for breaking promises they made to Australians. Thats what that is.
You dont need to take my word for it. One of the good things that Peter Costello did and credit where credit is due he put in place a charter of budget honesty and before the election we saw the true state of the books because the Secretaries of Finance and Treasury bureaucrats, public servants not politicians they put out a snap shot of the books.
And what that showed was that there was no budget emergency. What the budget emergency is, is a political trick to cover broken promises, increasing taxes and thats whats been floated, that Tony Abbott will increase your taxes, and cuts to health, education and to the pension, also all broken promises.
PENBERTHY: Ok, if its not a budget emergency now, there are some graphs that you can look at, that show that if we keep spending the way we are spending, it could very easily become a budget emergency in a decades time or even in five years time and a lot of our listeners say to us well surely when you guys got in in 2007 you inherited terrific surpluses from John Howard and Peter Costello which vanished overnight.
WONG: Thats not true David, they didnt vanish overnight, they were hit as every other economy around the world was hit by the greatest economic downturn since the Great Depression and we came through that as a nation in a much better state than most other economies.
And if you say, you spent money in order to save a couple of hundred thousand Australian jobs yes, well, guilty as charged but what I would say is this, you made a good point about the long term position of the budget. There is a challenge that has to be met and that is the ageing of the population and the increasing budget expenditure as a result of that. But you demonstrate your priorities by how you respond to that. For example two things we did. We means tested the private health insurance rebate, the fastest growing program in the Government, bitterly opposed by the then Opposition, by Tony Abbott, but we think that was a much fairer way to go. We got rid of the baby bonus. Again what did Joe Hockey say? He said it was like the one child policy in China.
What do they want to do? They want to hit low and middle income Australians with more taxes, with a tax for going to the doctor and a tax for going to hospital Emergency Departments. I dont think thats how you deal with the long term challenges of the nation.
JANE REILLY: Senator, do you think this is an over-reaction, you say its a reaction to an emergency situation but do you think the recommendations are an over-reaction and if you were still the Finance Minister what would you be doing now?
WONG: I think that this report has a view which makes education, has an agenda that makes health, education, access to the pension all harder for Australians and I think thats a problem. I think the bigger problem is that that approach represents a set of broken promises by Tony Abbott.
My point about the budget is, I think all this talk about a budget emergency is, Australians understand this, they get when politicians talk up something; they are often trying to do it for a political reason.
REILLY: So you dont think that the situation is a bad as were being told?
WONG: If there were a budget emergency why would we have a triple A credit rating from all three ratings agencies? If there was a budget emergency then why is Joe Hockey spending billions of dollars on giving high income families a lot of money to have a child?
PENBERTHY: I still think there are areas of the budget that, something like the disability support pension, 500,000 Australians qualified for that just over 10 years ago, now 800,000 qualify for that, it has gone from $13 billion to 15, its heading towards $15 billion. There did seem to be a lot of areas in the budget that if they keep growing at that rate, the whole joint could come crashing down around their ears.
WONG: I think that youve got to look to the long term and youve got to do what Labor did which is to look at what are sensible long term savings, as I said means testing private health insurance rebate was an example. But they need to be savings which are sensible and dont hit the wrong people.
I dont understand why youd say we are going to get stuck into families taking their kids to the doctor but were going to give high income people a lot of money to have a baby. Now, youre right, youve got to have a view to the long term but I think this Governments priorities are all wrong.
PENBERTHY: There are two very South Australian aspects to this set of recommendations, Senator Wong, that I want to ask you about. Youre a former
WONG: Penny is fine.
PENBERTHY: Penny alright. Trying to keep it formal here. Were all friends.
WONG: Its Adelaide, everyone knows everyone.
PENBERTHY: Now youre a formal federal Environment Minister, firstly what do you think about the Murray Darling Basin Commission being absorbed into the Department of Environment, as is being proposed? And also what do you think about this plan for different minimum wages in different states, where South Australians would end up being the lowest paid workers on the Australian mainland?
WONG: In terms of the first, wed like to see, on a lot of these issues we want to see what the Governments actually going to propose. And well make a judgement about their responses and well make our response to that. The benefit is that the independent Commission, as you know, it sought to take it out of the hands of government, out of politicians, and have an independent voice for the river.
But the minimum wage issue, I mean, theres some very strange approaches in the report, and one of them is that were going to treat the Australian economy as a bunch of different economies, and were going to look at different wage rates, different tax rates which I think goes against the whole way in which the economys actually going. When people treat the economy, business works in different markets, its a single economy. And I think the other thing that is extraordinary in this is you know, it really shows what a political report this is they werent asked to talk about the minimum wage. What have they recommended? A lower minimum wage.
REILLY: Here in South Australia. Because the cost of living
WONG: Two things, lower minimum wage across the country, and even lower, as you say, in South Australia.
REILLY: Penny, weve had a number of texts during this week from our listeners who are putting the blame for where we are financially in this country at the feet of the former government. We had a text yesterday from a fellow saying well now Im paying for the plasma TVs that I bought with the $3000 I got a couple of years ago. I know a lot of what you did was to keep the GFC at bay, but there was a lot of wasteful spending during that period.
WONG: Well if there was so much wasteful spending, why is Tony Abbott talking about increased taxes? If theres so much wasteful spending, you can cut all the spending and you can fix the budget
REILLY: But thats spending thats happened.
WONG: Why is he talking about increasing taxes now?
REILLY: Things like the GP super clinics, theyre still being built. And as theyre being built in one suburb were seeing down in Noarlunga theyre being closed. Some of these clinics are costing $25 million to build in areas where theyre not even required.
WONG: What Id say to you is that if you talk to the overwhelming majority of health experts, youve got to do more in what we call primary care thats the first person you see, and if we want to try and manage our health costs going forward, we actually need to put resources into primary care.
REILLY: Theyre a great idea but theyre going in the wrong places.
WONG: Im not sure thats the case. Ive had a lot of good feedback as well. But I take your point about perhaps someone might say this should have been there or that should have been there. But I think its really important to take a step back and say, look, understand why the Government keeps talking about the budget emergency and why they want people to blame Labor. Its because they want to break promises and they dont want to be blamed for them.
PENBERTHY: Senator Penny Wong, thank you very much for joining us in the studio.
WONG: Good to be with you.
ENDS