GILBERT: Joining us now on the program, the Finance Minister, Senator Penny Wong. Minister, thanks for your time.
WONG: Good to be here on a brisk Canberra morning (laughs).
GILBERT: Its lovely to have you here. The general consensus from the economists, though, is that everything really needs to be working in your favour to achieve the three and a quarter per cent growth rate forecast for next year and to achieve that slender surplus that youre predicting.
WONG: We know that the global economy has real uncertainties in it, but thats one of the reasons why we want to bring the budget back to surplus. It gives us a buffer in an uncertain global economy. Its the right thing to do with an economy returning to trend growth. But this Budget is also about, as you know, strength in the economy but a fair community; delivering more to low and middle income Australia. Its very important, at this time, to make sure we spread the benefits of the boom.
GILBERT: Youve made a lot of savings but youre spending a lot as well: $17 billion net savings but theres a lot going out the door. You could have been a bit more prudent couldnt you?
WONG: $34 billion worth of savings, thats a very large amount of savings, and we are prioritising
GILBERT: What about spending?
WONG: We are prioritising spending. This is a Budget where you see less tax being given to Government than when Peter Costello was Treasurer, so less than we inherited. And spending, as a proportion of the economy which is the best measure is at very low levels. It stays below 24% for the whole of the budget period. The last time you saw that kind of spending restraint was in the 1980s. So its not correct to say we havent exercised spending restraint: we have. But youre right, weve prioritised in that, and weve prioritised low and middle income families.
GILLON: When youre talking about a buffer, when it comes to the surplus, its a pretty thin buffer, $1.5 billion. Why should Australian voters believe that youre actually going to carry through with that, when last year your forecasts for a deficit were more than $20 billion out?
WONG: A few reasons. One is, remember when we talk about a buffer its not just 2012-13. Its the surpluses growing over time. And the Budget we handed down shows surpluses growing over time, each year of the forward estimates. But remember also what weve been battling: a $150 billion write down in revenue.
We have offset, not only offset new spending, but weve continued to find savings to protect the bottom line. And, probably the best example of that is that, in 2012-13 weve lost about $10 billion of revenue compared to where we thought wed be last year. Were still in surplus because weve made savings to ensure we are.
GILBERT: What about the productivity focus here? There are question marks over that because youre giving family payments, increasing the Family Tax Benefit Part A, and also these school bonus payments. But wheres the productivity agenda here? Because what youve done is youve replaced one from the company tax cut, which actually wouldve provided a bit of incentive and growth.
WONG: You recall when Joe Hockey gave his weve got to get rid of the culture of the entitlement speech and said they were going to go hard on pensioners. When he gave that speech I said, look, you judge people, the Government, a political party, by where we save as well as where we spend.
Think about the places we havent gone to cut spending. We havent made any savings when it comes to higher education, investment in research. We continue to invest in infrastructure. Weve almost doubled the schools budget. Were continuing to grow the investment in skills. All of these things are drivers of productivity, in a Budget where almost every area of government has had to contribute to the savings task. There are certain areas we really have protected, weve safeguarded, because of their contribution to productivity.
And can I say, one of the things when it comes to savings, I look forward tomorrow to Tony Abbott telling Australians just what savings he would put in place.
GILLON: Just looking, though, at what youve done. Are you sure that these big cash payments to families have nothing to do with buying votes? We all know how unpopular the Labor Government is at the moment. Were coming up to an election over the next 18 months or so. Are you just trying to appeal to your heartland here and buy votes?
WONG: Can I say first, we have always said we want to spread the benefits of the boom. Thats why weve put in place the mining tax, something which was opposed by the other side of politics. We were prevented from spreading the benefits of the boom through the company tax cuts because of Tony Abbotts opposition. So what weve said is we want to provide that to working Australians, to low income Australians. Thats a very Labor thing to do, its a very sensible thing to do when youve got room as the result of a mining tax, and thats what weve done.
GILBERT: Im not sure you wouldve entirely supported the delay in the foreign aid budget though. What did you argue for?
WONG: Im the Finance Minister and Im part of this Budget. And, you know, my view on foreign aid is
GILBERT: Is it really a Labor thing to do?
WONG: The Labor thing to do is increase aid, and thats what were doing. And remember, this Government has increased aid over time. Aid still grows. It still grows in every year of this Budget, we are delaying the target year by one year, but were still seeing aid grow.
GILLON: But the rhetoric was that you were having to make tough decisions. By picking on foreign aid and big business is that really a tough decision? You didnt really make the pain spread out to the average Australian.
WONG: Lets remember what weve done: $34 billion worth of savings. I mean one of the things Ive already been asked is the number of public servants by which the Commonwealth will be reducing. And weve seen a net reduction in public servants in this Budget because of the efficiency dividend and other efficiencies. We take no joy in that, but we have asked the public service to contribute, and well see a reduction in the numbers in the public service as a result.
Weve laid out our surplus plans. And I want to say this: Tony Abbott, the alternative Prime Minister, he says he wants a bigger surplus. Well he should come out and tell Australians how hes going to deliver it, because hes never done that. And this is the surplus year. This is the time to do it.
GILBERT: He is backing the family payments, the increase in the Family Tax Benefit Part A
WONG: Without supporting the mining tax.
GILBERT: But its a bit rich to say that you have to support the mining tax to pay for that because its out of consolidated revenue.
WONG: No, the revenue source which enabled us to increase family payments is the minerals tax. He opposes it. He opposes the mineral tax. Thats why he opposed the company tax cut.
GILBERT: But its not part of the same Bill, they can find the revenue elsewhere. WONG: But Kieran, this is about a Budget. Its about a surplus. Now remember Tony Abbott says I oppose the company tax cut because its funded by the minerals tax, but hes not opposing the family tax benefit increases; theyre funded by the minerals tax. Thats his decision, but he needs to tell Australians what is he going to cut?
Because hes not going to tax miners properly, hes not going to tax profitable miners. How is he going to fund this? Hes only going to fund this by making more cuts. And its time he was held to account about how he is going to fund these promises.
GILLON: Penny Wong, can I ask you about the goings-on in Parliament yesterday. On the floor of Parliament we saw a couple of motions to suspend standing orders. Weve seen a lot of pressure on the Government over Craig Thomson and the Speaker, Peter Slipper. Tony Windsor and Robb Oakeshott are saying today that theyre very concerned about the full Fair Work Australia report that came out the other night, and theyre considering their options when it comes to Parliament and how the Parliament should deal with Craig Thomson. Do you have any understanding of what those options are, and does it sound to you like the Coalition might be winning them over, winning over Tony Windsor and Rob Oakeshott to support their view on that?
WONG: Firstly on the Fair Work Australia report, obviously I have been focused on the Budget, so I havent read the report. But I have read some of the media commentary on it, and I want to say first that if that conduct is true, it is unacceptable, manifestly unacceptable. And I think all of us agree with that.
In terms of what Mr Windsor and Mr Oakeshott how they want to handle it, obviously thats a matter for them and youll have to speak to them. There is a process in place. Whatever we think about the allegations, there are obviously legal processes which will be resolved.
GILBERT: Ashleigh mentioned earlier, just in the context, the political context in which this Budget has been delivered. Do you think this is enough of a base for the Government to use, a foundation to turn things around? Because at the moment there are real question marks as to whether or not people are still listening to you, or listening to the Prime Minister, more appropriately. WONG: I think this is a very important Budget, and I think this is a very good Labor Budget. I think this is a Budget which shows our values and our priorities, and the Prime Ministers values and the Prime Ministers priorities.
She made it very clear she wanted to put in place the National Disability Insurance Scheme launch, and we put that in place, brought that a year forward. Shes made very clear the importance of investment in skills and education and theyve been safeguarded through this Budget. And she has also made very clear the importance of responding to cost of living issues, because we understand how many low and middle income families are doing it tough and we want to make sure more people get the benefits of the mining boom. Thats what this Budget is about.
GILBERT: Finance Minister Penny Wong, thanks so much for your time.
WONG: Good to be with you both.
ENDS