GILBERT: Senator Wong, thanks for your time.
WONG: Good morning.
GILBERT: You heard a bit of what Tony Abbott said. You know his general argument. Lets start off on the
WONG: Well what is his general argument?
GILBERT: First of all, lets go through a few of the points. Middle class welfare is one. Is now the time, really, to be reining in and capping the family tax benefits given the cost of living pressures that exist. Tony Abbott obviously does not think its the right time.
WONG: Were acutely conscious of cost of living pressures and we have made an effort in this Budget to deliver on those election campaign commitments which did address and did go to cost of living issues.
But remember what we also have to do when we look at the cost of living, and that is to bring the budget back to surplus. Because we know that if we dont do that, that will put upward pressure on price pressures which we know are increased by the mining boom.
So the right thing to do is to bring the budget back to surplus. That includes making some of the tough decisions.
GILBERT: And a bit of pain along the way for a lot of people who, really, when you look at western Sydney and places like that $100,000 a year is not a lot of money when youve got kids and mouths to feed, is it?
WONG: We understand that and thats why as you know this Government has delivered previously tax cuts. Weve delivered an extension to family tax benefits if your teenager is studying. These are things which are important. Weve increased the Child Care Rebate.
But the reality is our job is to be responsible and it is to bring the budget back to surplus because we know cost of living pressures could worsen if we dont.
GIILLON: The other side of the coin a lot of economists are saying today that this Budget isnt nearly tough enough. You didnt make enough cuts; youve spent all the savings that you made in this Budget. The rhetoric we heard from Wayne Swan about how unpopular this Budget was going to be was pretty overblown, wasnt it?
WONG: I think there are tough decisions in this Budget and weve made a lot of spending cuts some $22 billion and
GILLON: But youve spent most of them straight away.
WONG: Actually we reprioritised spending and we also ensured that spending was restrained. I mean, the amount of spending increase per year over the course of this Budget is around 1 per cent per year. You know the last time that was achieved? In the 1980s. Now that is an enormous amount of spending restraint.
But can I also make this point about Mr Abbott who is complaining about a range of things. Mr Hockey and Mr Abbott have said theyre going to put forward their plan. Mr Hockey a week ago said that he would bring the budget back to surplus a year earlier. And now I see hes trying to walk away from that. Hes also made his job harder because hes saying he doesnt want to support things like the family tax targeting that you talked about. He doesnt want to support the fringe benefits tax change to vehicles.
Well you cant bring a budget back to surplus if you oppose savings, unless you put forward your own. So we look forward to seeing how theyre going to do it.
GILBERT: Tony Abbott says that this is a if the surplus does eventuate, that it would be on the back of the commodities boom. That its a surplus made in China, not made in Australia. Is it a flimsy platform upon which to set your trajectory back to the black? I mean its only $3.5 billion as well. Its not anywhere near the whopping $50 billion or $49.4 billion deficit weve got this year.
WONG: Its a surplus thats based on spending restraint and a surplus that were going to achieve despite the massive write-down in revenue that weve seen. But can I say this: its a surplus we will achieve. Weve laid out our plans of how to get there. If Mr Abbott is so concerned about the size of the surplus, he has his opportunity tomorrow night to tell Australians how he would get there.
GILLON: How much faith can you really put in those forecasts though, considering as Kieran mentioned the deficit for this current financial year was blown out by a few billion dollars?
WONG: As Ive said, this is a surplus that reflects a lot of spending restraint. Were very conscious of that. And its a surplus that reflects the ability to come back to surplus despite the massive revenue write-downs weve seen in the early years. So weve laid out our plans. That includes savings and spending restraint. Get the budget back to black, get more Australians into jobs, train more Australians, increase participation.
GILBERT: Is there a bit of trickery in this Budget in that if you look at the big spending items the mental health package. Tony Abbott says its back-end loaded, that in fact a lot of it is just rebadged money. He says that when it comes to new money, its closer to half a billion dollars.
WONG: What an example of Abbott economics. On the one hand, the budget surplus is too small, on the other hand he wants to spend more on a range of things without telling people where hes going to get the money. Well thats a recipe for deficits, not surpluses.
On mental health, this is something we feel very strongly about. And we have reprioritised spending and found space in a tight budget for a $2.2 billion package on mental health - $1.5 billion of new spending.
GILLON: Thats all over five years, isnt it? Initially, its pretty small. I think its, what, $200 million in the next year?
WONG: Of course we would like to be able to fund mental health earlier and in larger amounts than weve been able to; everyone would. But you have to make the space to do it. Weve made hard decisions in order to fund the largest package on mental health that weve seen and weve done it because its a priority. Weve done it because its important.
GILLON: How
GILBERT: Sorry Ashleigh, after you.
GILLON: How much tweaking are you going to have to do to these budget numbers once you do include figures to do with the carbon tax a bit later in the year?
WONG: Well do what John Howard did, which is after the decisions have been made, we will reflect those decisions in the next Budget update. Just as he did with the GST when he announced it in 1997 but didnt include it in the next Budget. We will include it in the next Budget update after the details have been resolved.
GILBERT: If its revenue neutral though explain to us and to our viewers who might not be as across it as you are, certainly Im not. You know, in terms of the if its revenue neutral, does that mean that inflation figures and forecasts remain as they are? I mean, will all of those figures have to be revised?
WONG: We will update budget figures after the scheme has been finalised just as we did previously. But its important to understand that Mr Abbott is saying this about the carbon price.
GILBERT: But on inflation as one example, wont it inevitably hit inflation because youre going to hit prices across the board with the carbon tax?
WONG: I think the Reserve Bank has made very clear that they would look through any particular short term increase to inflation, look to the longer term [break]
GILLON: (laughs)
GILBERT: A bit windy weve had a bit of a
GILLON: A chilly morning, obviously a windy morning at Parliament House
WONG: (laughs) Its a very windy morning.
GILBERT: Im not sure if you saw that on the camera but one of our lights did just fall over, but well carry on.
GILLON: We like to keep it exciting here at Sky News.
WONG: (laughs) I didnt realise that Sky could be such a dangerous interview. Its like, you know, extreme interviews.
GILBERT: (laughs) We shouldve given you a helmet. But if we could carry on with the inflation discussion.
WONG: We will update all these figures as and when it is appropriate after these things are resolved.
But I do want to say this. There is a reason Tony Abbott wants to talk about this. Its because he doesnt want to talk about what his budget numbers will be. And lets understand thats the only reason he keeps talking about the carbon price. Its because he doesnt have an answer to this Budget. And he doesnt have an answer to the very simple question: how would you bring the budget back to the black?
GILBERT: OK Senator Penny Wong, Finance Minister, appreciate your time and coming out on the cold lawns this morning.
WONG: Good to be with you both, and dodging the lights this morning.
ENDS