WONG: Its good to be with you again Fran.
KELLY: Minister, if you believe the polls Joe Hockey will be the next Treasurer of this country. Hes promising, as we just heard, truth in numbers. Hes promising to work hard to build a stronger Budget. Youre critical though, because hes not laying a detailed path to surplus. But why should he be doing that right now?
WONG: Well, what Im actually most critical of is that he and Tony Abbott are saying to Australians: Were actually going to hide from you what our real plans are until after the election.
Joe Hockey talks about a fiscal repair job but hes not prepared to tell Australians what choices he would make, what he would cut. And we all know from experience, experience in Queensland and past experience, what Liberals do they cut too hard and they cut in the wrong places.
Now, I think it is time for Mr Hockey and Tony Abbott to be upfront with Australians and say, Look, if we are elected these are the cuts to your services that we will make.
KELLY: Is it fair enough though to hold any promises and any threats, if you like, until they might be in charge of the books because, as youve seen, revenue is volatile, forecasts are unreliable as the Treasury has said this week. Its perhaps wise to just hold off a bit...
WONG: Look, Fran, I understand that the Liberals want to use that as an excuse. But understand it is only an excuse. And the Secretary of the Treasury this week really blew that excuse out of the water when he said that if the Pre-Election Fiscal Outlook that is, the document released just prior to the election by the Secretaries of Treasury and Finance... If the Pre-Election Fiscal Outlook was released on Budget Day, the numbers would have been the same.
So, that really blew apart Joe Hockeys excuse that he cant release his policies because the numbers would be different and because the numbers in the Budget are wrong. The Secretary of the Treasury said thats not the case.
But leaving aside the Liberals excuse here, Joe Hockey doesnt need the numbers to tell people what his plans are. He can make it very clear what hes prepared to do, what services he will cut. We know a little bit we got a bit of a sneak peak on Budget Reply night and since of the approach the Coalition would take. Theyre happy to cut into working peoples superannuation. Theyre happy to take $16 billion out of Australias schools. Theyre happy to put the GST on the table, which as we all know if extended to food would really hit low income Australians and families.
And yesterday, Joe Hockey made it clear hes also prepared to look at reducing support for childcare. Now, if theyre really going to do these things I think they should be telling Australians what their real plans are.
KELLY: To be clear, yesterday the Shadow Treasurer didnt say they would reduce the childcare rebate, he didnt rule out looking at everything. He said everything will be clear by Election Day. But can I ask you, as the Finance Minister, why shouldnt childcare be on the chopping block given the state of the Budget? Is there a strong case to keep the childcare rebate non-means tested?
WONG: Fran, where you take your savings says as much about your values as where you make your investments. And I think the fact that the Coalition is prepared to support the rebate for millionaires private health insurance but is prepared to cut childcare really says something about their values.
The reason... and, you know, Im the Finance Minister and weve means tested a lot of assistance, and thats appropriate because assistance should go to people who need it... but the issue with childcare is that were talking about second income earners.
Were talking about people generally women, not always, but generally women who want to go back to work part-time. And the reality is that if you start to tightly means test that kind of assistance you really start to give a disincentive for women to participate in the workforce. And there are broader social and economic benefits to making sure we support womens labour force participation.
KELLY: Its seventeen to eight on Breakfast. Our guest this morning is the Finance Minister Penny Wong. All week the Government and the Opposition have been arguing about school education reform and funding for it the Opposition trying to cast doubts on your claims of the amount of funding that is there, increased funding for schools. Christopher Pyne said this week your numbers were a con, and now Joe Hockey adds to that:
[JOE HOCKEY: In order to achieve their claimed $16.2 billion increase in school funding, they are taking the worst numbers of the current system, the best numbers of Gonski, mixing it with heroic assumptions and then placing the funding burden on a Government two elections away.]
KELLY: Thats Joe Hockey yesterday. Is he right? And why should voters then be excited about school funding reform if the extra money comes beyond the next two elections?WONG: Well, the first thing is what we laid out in the Budget was a plan to fund both the education reforms and DisabilityCare well beyond this Budget. So, weve laid out our savings measures and our funding strategy to make sure these big reforms can be delivered.
And the reason we want to deliver schools reform is really twofold. One is it isnt fair our current system is not fair. It treats students differently depending on where they are. It isnt giving the best outcomes for Australians students. And, as importantly, you cant be a first rate economy with a second rate education system...
KELLY: But centrally, this claim that under your funding model for Gonski there wont be extra money in these first few years, therell be less money is that true?
WONG: No, this is another con from Christopher Pyne. I mean, the reality is the Budget lays out in detail what the current system would deliver, and of course indexation under the current system reflects many of the cuts that have already been made by State Governments in their public schools system. And the Budget makes very clear that if you look at what is currently estimated for funding by the State Governments and compare that to where you want to be, that is where you get the $16 billion.
Now, if Christopher Pyne doesnt like the Budget papers, well, he can join Joe Hockey in making all of these things up. But the reality is these are the numbers and the reality also is that we have a system at the moment which is not doing what it needs to do for many students across Australia.
KELLY: Minister, on another issue, the structural deficit. Australia has been in structural deficit since the last years of the Howard Government thats the finding from two reports yesterday by the Parliamentary Budget Office and Treasury, showing the structural deficit will continue until at least 2016-17 and perhaps longer. Income tax cuts which began under the Howard Government and continued under Labor are being blamed for two thirds of the decline in the tax revenue over the past decade. How long will it be before we see any more personal income tax cuts in this country?
WONG: I think whats striking about the structural budget balance reports that youve described which were released is that you see the impact of the savings measures and the structural improvements of the Budget over time that the Labor Government has made. And, in fact, savings measures over a number of our budgets improve the cumulative budget position by about $300 billion by the end of this decade...
KELLY: But it also shows the income tax that you put in place are part of the reason for the structural deficit
WONG: Actually, the tax cuts
KELLY: Thats true.
WONG: The tax cuts that were promised at the 2007 election by both parties are obviously already in the system. But, the reality is if you look at the structural balance in the papers, you actually see a steady improvement over time under the Labor Government and weve added to that substantially in this Budget.
KELLY: Just finally, this week you personally took on the Australian Christian Lobby over its claim that children of same sex partners could become Australias next Stolen Generation because theyve been robbed of their biological identity. You described that as bigotry. Now, Labor leaders, including Julia Gillard, have in the past addressed the Christian Lobbys Make It Count annual conference. Is Labor pursuing their vote again this year? Is it appropriate, do you think, for your leader to be attending that conference?
WONG: I made some comments a couple of days ago which I think were a response to some pretty offensive comments by members of the ACL. I dont really have anything further to add to that.
KELLY: Penny Wong, thank you very much for joining us.
WONG: Thanks Fran.
ENDS
