WONG: Thanks very much for coming. Well today Ive been speaking with Per Capita about why we need to come back to surplus in 2012-13. Talking about where the economy is going to be in 2012-13 and how we need to prepare for it through making the difficult decisions in this budget.
But its important to remember that a surplus has also got a human face; that we need a surplus because fiscal responsibility is ultimately social responsibility. That we need a strong, sustainable safety net here in Australia and a surplus is a building block of that.
But can I also make some comment about things that Tony Abbott has been saying in recent days when it comes to public finances. Mr Abbott seems to be saying that he doesnt want to have to come forward with any real costings, with any savings, with any real policy in his budget reply. Well last year Mr Abbott himself said that as the alternative prime minister, as the alternative government, he was required to put forward policies and costings so that the Australian people knew that what he was proposing was deliverable and affordable. If he is seriously suggesting that he doesnt have to do this now, what hes doing is not holding himself to the same standards he used to believe he should be held to.
Mr Abbott has failed the economic credentials test three times. Hes had an $11 billion black hole in his election policy costings. He double counted his floods package. What he needs to do now is to show the Australian people that he can in fact put forward alternative savings in his budget reply.
Happy to take questions.
JOURNALIST: In setting out a case for the progressive side of politics for cutting spending, is your speech a warning to the Greens about knocking off parts of the budget?
WONG: My speech is an articulation of why people who are progressive should look to the long term and not just the short term. That we need to ensure that our spending is sustainable because we want our children and the next generation to have better standards of living and improved social services. We have to remember that spending today can mean less spending tomorrow and we need to factor that in.
JOURNALIST: Just on interest rates theyve been kept on hold. When you look at unemployment forecasts in your budget, havent they just really delayed the inevitable, meaning further interest rate rises?
WONG: Obviously interest rates are a matter for the Reserve Bank. We certainly welcome the news of todays decision which obviously will be welcome for many families around Australia. In relation to the Governments position we know that theres a lot of long term and medium term strength in the economy, which is why we want to bring the budget back to surplus.
JOURNALIST: Is this a phoney budget given that the carbon tax is not included?
WONG: Thats certainly something that Mr Abbott wants to say and he wants to say that to avoid having to respond sensibly to the budget. We will deal with the carbon price in the way that we dealt with it on the last occasion, and the way John Howard dealt with it, which is when decisions are made, they will be properly accounted for. Thats the way well approach it.
JOURNALIST: But isnt it the case the budget has been structured to allow for spending for the carbon tax if needed?
WONG: As the Treasurer said today, our broad expectation is the carbon tax is likely to be broadly neutral revenue neutral so we dont anticipate a substantial movement. But look, the issue here is we will account when policy decisions are finally made, we will account for the carbon tax appropriately in subsequent budget figures.
JOURNALIST: Given theres likely to be more interest rates at the end of the year, do you think this budget thats already going to be a bit tougher than normal, you know, is that going to make things tougher for families?
WONG: Obviously cost of living is a real issue for people. The best thing the Government can do is to ensure we make the hard decisions to bring the budget back to surplus, that we dont add to cost of living pressures by coming back to surplus, and to make sure that we look to the long term. And thats what we intend to do.
JOURNALIST: Hows the strength of the Aussie dollar and the growing strength of the Aussie dollar in the last year? Hows that been calculated into the budget this time?
WONG: Obviously the Australian dollar is at record highs and its one of the differences between this boom and the last boom. As I said previously, in the last boom we saw the dollar on average at 78 cents. Its substantially above that at the moment. Thats making things tough in many parts of the economy. And obviously that is something thats affecting the budget figures. It has certainly affected revenue to date, as weve announced.
JOURNALIST: Do you think the average Australian taxpayer will be happy after next Tuesday?
WONG: We have said this is going to be a difficult budget. Its going to be a tough budget. And its not likely to be a popular budget. But it will be a budget about jobs and a budget about the future.
JOURNALIST: Speaking of jobs, any estimate on job losses in the public sector as a result of the efficiency dividend?
WONG: As Ive said, we dont expect there to be job losses as a result. Our expectation is that agencies will be able to find efficiencies without resorting to job cuts.
JOURNALIST: Just back on the carbon tax, the Prime Minister has invited some business leaders around for dinner. Is this an acknowledgement that maybe the Government hasnt dealt with the business community in the best possible way?
WONG: I think this is the Prime Minister ensuring she has a dialogue with the business community just as she has a dialogue with other parts of our community.
JOURNALIST: Just on the Future Fund the fund has just dropped its investments in companies that make munitions. Does that show that the Government needs to have some influence, perhaps in its ethical guidelines?
WONG: Those are matters that are a matter for the guardians of the Fund, the board of the Fund. We set the target in terms of return but the Fund has to direct its own investments. Thats the way it was set up. Thats the way both parties of government have treated the Fund and its a matter for the Future Fund to deal with its own investments.
JOURNALIST: Do you think it should change though given that there was investment in munitions?
WONG: Well, as I said, its a matter for the Fund to deal with its investments. We dont direct them. When it comes to cluster munitions, as you know, the Governments position is clear.
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