JOURNALIST: Senator Wong, good morning.
WONG: Good morning to you both.
JOURNALIST: Well, Joe Hockey for the Opposition says it is time to deliver. Are we going to get anything out of this?
WONG: All that Joe Hockey has delivered in his time as shadow treasurer is numbers that are wrong and a $70 billion black hole.
JOURNALIST: Its a good question though, are we going to get something out of a two day talk fest?
WONG: I dont think its a talkfest and I have to say, and I know its not as interesting for people who arent necessarily interested in tax. But sitting in that room yesterday, I thought this is a very constructive dialogue. We had a lot of different suggestions, some of which were probably stronger than others. But it was probably good also to have people with very opposing views hear what others were saying. And as Finance Minister, and as someone who has been talking about the long term perspective and needing to think about what we spend not just in 5 or 10 years, but where will the budget be in 20 or 30 years, particularly given the ageing of the population. I was really pleased that was a perspective that a lot of people brought to the discussion.
JOURNALIST: One of the things thats come up, its been mentioned by others but Rob Oakeshott, the independent, is the latest to espouse it. He calls it the one big idea, an office of tax simplification that keeps on going, and keeps hacking away at it. Is there are a chance that something like that will get up?
WONG: Im not one that thinks the sort of job of simplification is an on-going task. Its not necessarily something you fix by creating a particular office or not. But obviously thats one of the suggestions that has come forward. A lot of other suggestions, including from the states about harmonising payroll tax which would be a welcome change. I think that would be a very good thing for the economy.
JOURNALIST: Of course, theyll want something wont they? If theyre going to lose payroll tax, theyll want something. And guess where theyll want it from the feds.
WONG: We already give the states a fair bit of money as youre probably aware. Not just the GST but a fair bit of money in health and education, and weve picked up the growth funding in years ahead in health which is a very important contribution to state budgets. The harmonising of payroll tax would be a good thing because it would mean businesses that work in different states wouldnt have different definitions theyd have to deal with. So if the states were prepared to work with us to deliver that, that would be a good outcome.
JOURNALIST: Penny Wong, where do we stand in Australia internationally? Are we a highly taxed nation? Whereabouts are we compared to our OECD partners?
WONG: Interestingly, yesterday a number of people put a very different view about that. You can cut the statistics anyway you want but I think the Henry Review said were around the middle of the pack. Certainly you need to keep your tax system competitive and thats why weve delivered some $47 billion worth of personal tax cuts. And as part of the Clean Energy package, you probably know were going to triple the tax-free threshold. To get out of the jargon, that means a million people will actually move out of tax system, they wont actually need to be paying any tax.
JOURNALIST: The biggie, in terms of keeping companies competitive and therefore our workforce at full tote odds is the corporate tax. Everybody knows that the pressure is on to cut it. Can you sell any cut, and relate it to jobs? Because it sounds like let the big end of town off how do you sell that if youre looking at a cut of any kind.
WONG: Were already proposing company tax rate cuts for some of the reasons you put forward. And were funding that through the mining tax. The mining tax will fund the company tax rate cut with a head start for small business. So small business would actually get it earlier than the rest of the economy and thats trying to deal with the pressures of a patchwork economy. Youve got a mining sector going pretty strong. Not everybody else is doing as well, so youve got to try and use some of the benefits of the boom through a tax cut. Can I just say the bizarre thing about this is Tony Abbott supports lower taxes for miners and higher taxes for small business and manufacturers.
JOURNALIST: Small business as you know, this is your home state, is absolutely vital to jobs in South Australia. Can you streamline the tax system more for small business?
WONG: Were always looking at ways to try and lessen the red tape burden for small business. It isnt easy, and Ive met with a lot of small business people who tell me that we can do better. I think yesterday we did have the various representatives of small business, tell us pretty clearly all of us, not just Government but other stakeholders more broadly that they needed things to be more streamlined. Well continue to work through that.
JOURNALIST: One of Australias prominent economists Saul Eslake says the current tax system rewards speculation and doesnt reward hard work. Hes talking of course, one of the big areas is negative gearing on investment properties. Investors get a break, renters dont. Is there a chance you will at least manipulate that? Its a huge hot potato but will you have a go?
WONG: Negative gearing has been part of Australias tax scene for some time, hasnt it? And a lot of people have made a lot of investments on that basis. And its benefited people in terms of enabling additional housing
JOURNALIST: But he points out that it tends to reward the top end of town, you get more expensive houses built, you dont get new, starter houses built.
WONG: I think theres a lot of people I mean, Im sure youve got mates, or you might be someone whos also invested in a rental property. But I dont think its only the top end of town.
JOURNALIST: No, I mean in the sense that people invest in houses further up, rather than the cheaper houses that first home loan buyers need and want.
WONG: Which is one of the reasons why the Government has put a very substantial investment into affordable housing and social housing. So, I think its different policy mechanisms to achieve different ends. Yes, we do need more affordable housing. Weve put a lot of money into that, including via the states, to try and increase the supply of affordable housing. But Sauls very right on this point: reward for effort is important, and one of the key ways in which you do that is you change your personal tax system, including in the ways the Government is, to reward work more. I think tripling the tax-free threshold and giving everyone under $80,000 a tax cut is one of the ways you reward work.
JOURNALIST: Penny Wong, just finally, Bob Katter seemed to be sound asleep yesterday.
WONG: (laughs) Poor Bob.
JOURNALIST: They were nodding off left, right and centre, it seemed, yesterday. Will you be staying awake today?
WONG: Its always hard, isnt it, when youve got hours and hours of a meeting, and the camera gets footage of just that one moment where you close your eyes. But, I guess the camera doesnt lie.
JOURNALIST: Do you live in fear of that, Penny Wong?
WONG: I try to make sure that doesnt happen to me, but yes, I think every politician worries about that sort of thing, dont we.
JOURNALIST: (laughs) Thanks for your time this morning.
WONG: Good to speak with you.
ENDS