CONLON: Senator Wong, good morning.
WONG: Good morning, Keith. Good morning, Jane. How are you both?
CONLON: Were good.
REILLY: Good, thank you.
CONLON: But unfortunately the numbers arent too good. Can you take us through why, and what the shortfall is?
WONG: Sure. Look, whats happening is weve got a very high dollar, which you probably know. Weve got lower prices that were getting for the things we sell to the rest of the world what economists call the terms of trade. Those things combining means businesses are making less profits, and lower profits means less money to the government.
So, in fact if you have a look at this financial year, the year of 2012-13, a couple of years ago Treasury anticipated wed get about $20 billion more in revenue in money coming in than we expected last year. We wrote it down by $20 billion. And what the Treasurer has said is, since last year, weve actually had to write it down already to date by another seven and a bit billion dollars.
So, thats a lot less money coming in to government, not because government is spending in fact were spending less than we anticipated at this time, but because profits are down because of the high dollar and because of the prices of the things we sell to the rest of the world coming off.
CONLON: In percentage terms, how much are we down in terms of tax income on year on year?
WONG: I looked at the raw figures, not a percentage, but what I can say is this: we are well below what the Howard-Costello Governments were taxing. For example, in their last year in Government, they received about 23.7 per cent of GDP. So, as a share of the economy they took about 23.7 per cent in tax. In the 2012-13 year the current figures are that were just over 22 per cent. So, were actually taking less tax.
And, of course, what weve got to do is to in that environment is make the responsible savings to make smart investments. And those smart investments are things like our reform of schools and, of course, DisabilityCare, and it was great to see Jay Weatherill and South Australia signing up to that last week.
CONLON: I noticed the Treasurer also said the mission is also about protecting jobs. How do you do that when, in effect, youve got to tighten the budget further?
WONG: Thats a good question Keith. Well, you dont cut mindlessly. You make responsible savings and you recognise that if you cut too hard, if you cut to the bone, the effect is felt in businesses and in jobs across the country. Just as we made sure we stepped in when the global financial crisis hit the Australian economy and the global economy to support jobs, well be very mindful of supporting jobs in this Budget.
We are going to make responsible savings and Im sure Ill be on your program and some of them will be unpopular. Weve already had some savings that people have said are not a good idea. But unfortunately these are the sorts of things youve got to do if you want to fund things like our school program.
REILLY: I suppose the difficult position youre in is that youve got to keep the economy going because if it stalls then we all end up in trouble ...
WONG: Thats right, thats exactly right. And thats why, when we stepped in during the global financial crisis, that was about keeping the economy going and keeping jobs. We saw millions and millions of people unemployed internationally. In Australia, weve created about 900,000 jobs since we came to Government. Its something we should all be really pleased about because every one of those jobs means a lot to someones life and someones family.
CONLON: Tony Abbott says the Government is still spending too much, particularly with this latest news. One of the biggest areas of expenditure is, of course, public sector jobs. Is the public sector up for another cut?
WONG: Ive already taken a lot of savings out of the public sector federally about $13 billion. And whilst weve targeted efficiencies that arent about jobs we already have seen, regrettably, some voluntary redundancies.
Mr Abbott, to be frank, really isnt up to it. He seems to think he can just cut the public sector to fund big programs. Youve always got to get rid of waste and youve always got to find efficiencies, thats what were doing. But if you really want to fund things like our school program which is all about making sure we dont leave so many Australian children behind then you have to make broader savings.
CONLON: In the Gonski area switching to education youve got the issue that in fact you cant get them signed up. So how do you write the Budget when youve got until June 30 to try to get them over the line?
WONG: That offer remains on the table, as the Prime Minister said. I know theres a lot of press in todays world, you know, why dont you get the deal tomorrow. I would make the point that it took us longer than a week to get Medicare up, it took us longer than a week to get superannuation up, it took us longer than a week to build a fair system of wages and conditions in this country.
This is the largest reform to schools in probably forty years and what its all about is saying that at the moment weve got too many children being left behind. Weve got children who finish school three years behind their peers. And if we dont want kids to be left behind and if we dont want the country to be left behind we have to find the resources to lift our schooling system for every classroom across the country.
CONLON: Will you stick your South Australian Senator hat on for a moment. Its a bit of a two edged sword because NSW is saying it might be close to the line, $5 billion in their little penny bank. Now, in the meantime we get, what was it, $600 million?
WONG: Well, with my SA Senator hat on, can I also add you said that the boys had a good win, which they did, but congrats too to the Thunderbirds for a great win against the Vixens yesterday in the netball.
CONLON: Yeah, we gave them a plug
WONG: I was there and it was a great match.
CONLON: But back to this issue, $600 million. It seems like weve been penalised for doing the right thing here.
WONG: I know that thats the way some people have interpreted it. If you want to do what the Government is saying, which is lets give every child and every school the same level of resourcing, then some states have further to travel. Thats just a fact.
South Australia has done better and weve got less far to travel than some other states. Western Australia has even less distance to travel, other states have more. But it is a change.
Remember, what were proposing is to change how we fund. Were not going to fund our system in the same way. Were going to say every child in every school should have the same level of resources, the first time any Government has put that on the table.
CONLON: Can we switch, finally, to the National Disability Insurance Scheme a great scheme. It seems to be accepted very widely. But can we afford this much so soon, particularly after the Treasurer tells us how crook the budget is?
WONG: Im going to be upfront with you: there are going to have to be some more difficult, but responsible, decisions to make room to fund this, DisabilityCare, as well as these schools reforms. But I think if youd ask your listeners, anyone who is someone with a disability or has a family or friend, I dont think the level of support we provide Australians with a disability is the sort support that in a civilised, advanced society like Australia we should. And if were going to do it, were going to have to find ways to fund it.
CONLON: If we look, its not very long until September now and the election. Are you confident that as a Government you will get that National Disability Insurance Scheme fully in place and youll get the schools system in place?
WONG: Well, certainly on DisabilityCare weve made a lot of progress and, as I said, it was great to see Jay Weatherill signing South Australia up at the meeting in Canberra last week. And that means, I think, 30,000 South Australians with significant or profound disability will get more choice and control over the support they receive and thats a really great thing, so theres good progress there.
On schools, thats a big reform and ultimately its whether the Premiers decide to put their school children first or whether they want to put politics first. I think we should be putting our kids first. I think its critical for our economy in the decades to come but its also part of making sure we are the society of a fair go.
REILLY: Minister, can you just explain to us how your role is different from the Treasurer and sometimes it seems to me that they really do cross over?
WONG: Well, we do cross over a fair bit. I think technically he deals with one side of the Budget and I deal with the other. So he deals with revenue and I deal with expenditure, thats the traditional difference. But we work pretty closely together and, as you probably know, we talk about the same issues because we both confront the same big problems which is how do you find the room to make the smart investments to build a fairer, stronger and smarter country.
CONLON: Thanks for your time this morning.
WONG: Great to speak with you both.
ENDS