VIZARD: On the line Finance Minister, Penny Wong. Penny, thanks for your time.
WONG: Good morning to you.
VIZARD: Penny, mixed responses. The Herald Sun has led its editorial saying, This is Mr Swans fourth budget, but it is unlikely to do anything to convince tax payers to wish more of the same. Is that a fair critique of the budget?
WONG: Its a budget which brings the budget back to black. It brings the country back into the black and its a budget very much focused on jobs; on creating jobs, on training people for jobs and on getting more people into jobs. Theyre all very important things. Theyre all very Labor values.
VIZARD: I want to talk about Victoria in this budget. Several of the papers down here are Leading, Victoria is railroaded. We say, the words it uses are snubbed, missed out, the Federal Government has previously committed $20 million for a study of the Metro Underground Rail from Footscray to Domain, but not a cent has been allocated towards building it. And it goes on, the North East link from Greenswood to the Eastern Freeway, the Western Ringroad, the Eastern Freeway, $500 million for the previously and allocated regional rail link, thats now been deferred. From Victorias point of view, its a light on budget.
WONG: Were spending, in the nation building program one, I think its something like $30 odd billion across the country in our projects all around the country. Obviously, in this budget, we havent had the fiscal space to put a lot more money on the table across the board for infrastructure. What we have done is put in place a range of things to try and get the private sector more engaged because we know that infrastructure over the next 10 years requires more than governments to fund it. Governments wont be able to fund all the things we need. So there are things in the budget which are all about trying to get better private sector interest in funding infrastructure, and they include improving tax arrangements in terms of what we call the loss, being able to carry forward the loss on particular projects of national significance.
VIZARD: I want to run through a couple of the criticisms and get your response. One of them has said, Look close and Swans savings start to vanish. It particularly says that the temporary levy for flood and cyclone reconstruction accounts for around 39 per cent, a whopping 39 per cent of the so called savings. Thats in fact a levy. And whilst its budget practice to incorporate levies as savings, nevertheless, nearly 40 per cent of the so called savings are from a levy.
WONG: Im not sure what the 40 per cent is from because we have some $22 billion worth of savings in this budget.
VIZARD: Over the next several years.
WONG: Thats true, and weve also exercised a lot of spending restraint. Weve said no to a lot of new spending, and weve reduced spending. I mean if you look at the next four years or out to the end of the budget period, the average growth, real growth and expenditure for the Federal Government is around 1 per cent per year. The last time that kind of spending restraint was achieved was in the 1980s.
So off the back of a big write down in government revenues, that is how much money the government gets as a result of the hangover of the global financial crisis, floods, cyclones. And as you said in your introduction, of course, the high Australian dollar which is impacting on a lot of firms, in states like yours and in mine, in South Australia, which has had a hit on revenue, were still coming back to surplus and weve done it by finding savings and by exercising real restraint on spending.
VIZARD: The governments hinged a lot on the relationship with China, the continuing resources boom. For example, Paul Kelly says that the budget shows that Australias prosperity and Labors survival now depend on China. The budget transformation from hefty deficit to thin surplus comes via the fantastic power of the China driven resources boom; thats true, isnt it?
WONG: China is very important for our economy, everybody knows that. The region in which we are gives us opportunities, has helped us come through the global financial crisis better than most other advanced economies, but the budget also comes back to surplus because we found savings and made sure we kept a lid on spending.
And can I say, we will see tomorrow night whether Tony Abbott shares the same sort of commitment to budget surpluses. Weve seen Joe Hockey running around saying the Coalition, the Opposition will bring the budget back to surplus in 2011-12, but since budget night, hes already opposed a range of the savings measures the Government has put forward.
Well you cant come back to surplus if youre not prepared to make savings, so Im sure were all looking forward to seeing how Tony Abbott will deliver the surplus he says he supports tomorrow night.
VIZARD: Weve got Ozzie on the line, in fact, weve got several callers on the line, Penny Wong, whod like to ask you a question.
WONG: Sure.
VIZARD: Ozzie, question for Penny Wong?
CALLER: How come weve got all these resources that are being given to China right now and they can seem to make a whole pile of goods and bring them over here for us to buy but weve got a deficit where, by population, we should be all very, very rich, but the management of the government seems to have put us in a deficit. Im not saying just your government, but every government that comes in, they havent managed it well because we should be a very, very rich country right now.
VIZARD: Okay, thanks Ozzie.
WONG: Well, Ozzie, youre right, weve got a resources boom at the moment, where China and other countries are paying a lot for things like coal and iron ore, but thats also having other effects. Thats pushing up the Australia dollar, in the global markets, and when the Australian dollar gets pushed up, those people, those firms that export, they obviously take things like manufactured goods, for example, they obviously take a hit in terms of their profits.
Weve also seen Australians spending a lot less. Thats a good thing. Were saving a lot more than we used to, but thats having an effect on other sectors which rely on consumer demand, things like the retail sector.
So thats why weve had a lot less money coming to government in these couple of years, and before, than we would have expected. Some $16 billion less over two years coming into Government coffers than was anticipated. Having said that, theres an expectation things will improve and that we will see a lift in the revenues to Government and well see more jobs; 500,000 more jobs in the years to come. Thats why this budget is focused on jobs and getting people into them.
VIZARD: Penny Wong, is $150,000 earned between a couple, both of whom are working hard, is that rich?
WONG: We know that families are doing it tough and that dual income families, single income families, of the sorts that youre talking about, on those sorts of income levels, dont have an enormous amount of money to throw around. Thats why were supporters of the family payment system despite some commentators saying, dismissing this as simply middle class welfare.
But we also have to make sure that we bring the budget back to surplus so that we dont add to price pressures that would have an impact on peoples cost of living. We have to try and make sure these payments are sustainable and thats why weve taken the hard decisions weve taken.
VIZARD: Penny Wong, immigration seems to go up, skilled workers being brought in, skilled migrants being brought in goes up, and yet Tony Burke who was supposed to be framing up your overarching population policy hasnt, one year on, delivered the framework within which these particular measures should have sat. How can you introduce particular measures when you havent actually delivered the overarching report identifying how Australias population should be framed looking out decades?
WONG: Look, Steve, our priority is to train Australians first, and we want Australians to get the opportunities that this economy, as it grows, the 500,000 jobs on top of the 750,000 jobs weve already seen created under this government.
Thats our priority and thats why this budget has an emphasis on skills, a $3.1 billion package on getting better training, more responsive training, and working more closely with industry on getting that training delivered.
VIZARD: But immigration is going up.
WONG: But also, we know we are not going to be able to train all the workers we need in the time we need, so weve put a real focus on getting more Australians into the workforce and on skilling them. But there is a small increase in skilled migration, particularly to the regions. So what weve done is weve increased regional migration to ensure that we can get skilled workers into the regions where theyre needed.
VIZARD: So are you for a big Australia, a small Australia? Is this a revision of your previous announcement that youre not for a big Australia? Where do you stand on this now?
WONG: Well, look, I think, as Tony Burke said, this isnt a matter of a number, this is a matter of
VIZARD: Of an idea.
WONG: I think the idea is a sustainable Australia and an Australia where we can leverage the benefits of the boom for the benefits of all Australians. That is what this budget is focused on. There are some sustainability measures and urban policy measures in this budget. Theres a lot more to do, we acknowledge that, but
VIZARD: Is Tony going to announce his population plan any time within the current term?
WONG: Well, if you look at this budget, there are some steps there, and the Treasurer referred to them in his speech. Things which are about making our cities more liveable, programs which are about focusing on the regions. And lets not forget, part of the argument around population is weve got, its not necessarily weve got too many people, its just that we dont have them necessarily in the right places.
VIZARD: And thats what the report was supposed to do. Say what the right places are and which people. Penny Wong, can I just get Danny to ask you a question if I may? Danny, a question for Penny Wong?
CALLER: Hello, Penny. Yes, Id just like to ask you a question. You mentioned, I think it was either the previous call or one before, you mentioned the fact about things like things to export to China and how important China is, and you mentioned coal as one of the products we export, and that being important. Well arent you exporting our emissions overseas, if we bring a carbon tax
VIZARD: OK I reckon weve got the question, Danny. Fire away Penny
WONG: Yes, this is a question I was asked in my previous job, Steve, when I
VIZARD: Thats right.
WONG: - was Climate Change Minister, and I got asked it from both sides, some people who didnt want a carbon price, but then also some people who didnt like us exporting coal. And what I said was this: that coal is a part of the worlds energy supply. It is going to be a part of the worlds energy supply, and so what we need to do is try to focus on how we make energy, produced by coal, less emissions intensive and theres a lot of work being done globally and in Australia to do that.
VIZARD: Pams on the line. One final question for Penny Wong.
WONG: Hi Pam.
CALLER: Morning, good morning Steve and Penny.
WONG: Morning Pam.
CALLER: Look, Penny, it really worries me, $500 million in overseas aid when were borrowing, on a daily basis, $135 million including, I think it is including, I hope it is not extra, $18 million in interest.
VIZARD: OK thank you Pam.
WONG: Look, Pam, overseas aid is something this country has always put its shoulder to the wheel on and thats something that both parties have supported, both Tony Abbott as well as the Labor Party, and we know why. It is an investment in a more secure world. So there are major commitments there, but they dont come at the expense of the commitments we have to investing in Australians and investing in skills and investing in getting more people into work.
VIZARD: Penny Wong, I appreciate your time. I particularly appreciate you taking a few calls on this very busy budget day. I look forward to talking to you again.
WONG: Thanks very much, good to speak with you all.
ENDS