VAN ONSELEN: Were joined now out of Adelaide by the Finance Minister Penny Wong. Ms Wong, thanks very much for your company.
WONG: Good to be with you.
VAN ONSELEN: Can I ask you right off the bat, what are the implications of the deal that was struck over in New Zealand by the Prime Minister for you? Youve got to balance the books and make sure this Government gets back to surplus by 2012-13. What are the implications?
WONG: This is a bipartisan position, as I understand it, closer economic relations with New Zealand has been a longstanding position of both parties. Increasing the opportunities for investment across the Tasman is a good thing for both markets and both nations. So we will continue to work through the ways in which we can leverage more economic opportunities for both New Zealand and Australia through these relationships.
KELLY: If we just look at the negotiations this week Minister about the levy. The Government has had to make fiscal concessions to both Andrew Wilkie and to the Greens in terms of getting support on the levy. Now I know you argue that the amounts involved arent all that great. Isnt the reality though that this is a suboptimal outcome and how do you feel as Finance Minister being in a situation where youre just locked into making more and more compromises like this?
WONG: Isnt the question Paul, why is the Government in a position of having to negotiate with the cross benches? And the Government is in that position because the Opposition refused to negotiate on this issue or in fact on any issue. And in the face of Mr Abbotts simply taking a position where he says, I am not going to negotiate on anything. I am not going to support anything. My only job is to say no and to attack the Government, the Government has to get on with governing.
We have to do the right thing by the people of Queensland and other people in Australia in other flood affected areas. And we will do that. So our priority is to get the levy through; to get the certainty around the funding package for the rebuilding of Queensland that is required.
You made the point, in your question, you acknowledged that the numbers are small. Its less than 3 per cent of the entire package. Thats the reality of the Government prioritising getting this levy through the Parliament to give Queenslanders the certainty we believe they deserve.
VAN ONSELEN: Minister, what you say about the Opposition and its obstructionist approach is true and no doubt the voters will cast their view on that when we next go to the polls or when you next go to the polls. But in the meantime, nevertheless, to get what you need to get done, youre going to need to continue to deal with independents a mixed bag of independents Greens, across both chambers. Now inevitably, issue by issue, thats going to lead to them wanting things. Its going to be $50 million here, $200 million there. Thats going to be the deal in reality. Now that must be incredibly frustrating for you. Youre the person whos got to make all of that add up and still get to surplus by 2012-13 because the Government has hung its hat on it.
WONG: And Peter the surplus is not up for negotiation. And what weve said around the arrangements weve entered into with Mr Wilkie and the Greens is that we will find additional savings through the budget process to reflect those arrangements. We will do that. And I have no doubt that this is going to be a difficult process in the lead up to the budget and in the negotiations that follow.
But we are very clear about this. It is the Governments intention to bring the budget back to surplus. That is our commitment. That is not negotiable. We think there are very strong economic reasons to do that and that its the right thing and the responsible thing to do.
Can I say also though, Mr Abbott does have the opportunity at some point this year to demonstrate that he is capable of responsibly negotiating on fiscal issues. At this stage, what we see is an Opposition saying theyre responsible when it comes to the fiscal position but clearly not being so when they continue to put forward policies that do not have offsetting savings. And one wonders what Mr Robb as shadow finance minister is actually doing.
AKERMAN: Ms Wong, what do you say to those Australians who are questioning why Queensland didnt take out insurance on its own state assets? And what do you say to those independents who want to make it a bargaining issue that any financing or any passage of the levy includes a guarantee that Queensland will have to take out insurance in the future?
WONG: Well Piers, I think theres really two separate issues there which I think should be addressed sequentially.
The first is how do we rebuild Queensland? How do we ensure weve got sufficient monies in the kitty to give people the funds they need to rebuild the community and public infrastructure which has been destroyed. And that is really our first priority.
And notwithstanding that there have been a few weeks since we all saw those images on our television sets of the enormous damage thats been done. We need to bear that front of mind as we go through the parliamentary process. This is about giving people the funds and the certainty they need to rebuild their communities and their lives.
On the issue of insurance, that is obviously an issue that has been raised and there are genuine policy considerations across the board. I notice that my colleague Bill Shorten has agreed a process with the insurance sector about getting more clarity, a more standard definition, better information to consumers when it comes to flood insurance. And I think on the issue of state insurance there are matters there that we can have a discussion with Senator Xenophon about and we will do that.
KELLY: Minister in relation to your commitment to the budget surplus can I just ask, as Finance Minister, do you think the Government should achieve this primarily on the tax increase side or the cutting spending side. And if you favour the latter can you give a commitment, therell be no new taxes or no tax increases in the budget?
WONG: The budget process and the interviews about the budget process have started early this year, Paul. And you know we dont get into a rule in, rule out when it comes to the budget.
But I think our approach around savings I think can be taken from the approach to the Queensland package. We have a $5.6 billion liability where we are going to have to fund a very substantial amount of rebuilding in Queensland and in other flood affected areas of Australia in New South Wales, in Victoria in particular. And the approach we took in the package was to have two thirds of that package funded through savings measures and one third through a levy.
But I think, given the circumstances of what is probably the most economic costly natural disaster weve seen, we demonstrated the priority given to savings measures. And what you said, as Finance Minister, of course I always want to look to how we can improve Commonwealth expenditure, where we can find savings, how we can become more efficient.
KELLY: Sure, but Minister just on what youve said - if we use the Queensland situation as a template, a third of the solution there was a new tax, was done on the tax side. Is this the sort of proportion that the Government will have in mind when it approaches the budget in terms of the return to surplus?
WONG: No I wasnt making that point Paul. Im making the point that even in the context of the most costly economic disaster this nation has probably seen, we still prioritise savings and that is the approach we intend to take into the budget. It is going to be a tough budget, Ive made that very clear. We have a set of natural disasters where there is a substantial amount of costs. The Prime Minister has made clear, for example, additional costs for the floods, or the costs of Cyclone Yasi which we know will also be significant that those costs will be met through savings. And I think the Governments attitude to that is clear. We are focused very much on how we improve the savings side of the budget; how we find the savings that are needed to bring the budget back to surplus.
And we have made clear Paul, as Ive said before, that all new spending and these are the fiscal rules that my predecessor Lindsay Tanner made clear as well all new spending will be offset and we intend to continue to do that. Can I say that puts us in stark contrast to the Coalition who have not done so, who have a $10.6 billion black hole in their election policies and just a couple of weeks ago, voted for legislation unconstitutional legislation that would put an impost on the budget of $300 million with no offsetting savings.
KELLY: Sure, Minister, Id like to ask you, as Finance Minister, how you will approach the debate over carbon pricing and assistance to industry generators? Because the degree of assistance in the former Carbon Pollution Reduction Scheme that you were very, very familiar with was very substantial. As Finance Minister, will you be seeking to cut back that degree of assistance or will you operate on the basis that industry needs that degree of support and hence go for a more generous degree of industry assistance?
WONG: Well as Finance Minister, my first priority is obviously fiscal policy in bringing the budget back to surplus and, as importantly, looking ahead, looking to the longer term and ensuring that we do everything we can to ensure that the nations finances are sustainable not just in the short term, but the long term. Thats my priority.
In terms of the design of any carbon pricing mechanism, that is being worked through the Multi Party Committee. That is something Minister Combet is very focused on. And those discussions are proceeding. These are complex policy issues. They are difficult policy issues. They are certainly difficult politically when theyre simply opposed by the other side of politics. But they are issues that are not going to go away and if we think forward 10 or 20 years, I think the case for a carbon price becomes very clear.
VAN ONSELEN: Minister, one final question before we let you go, we are almost out of time. Id be interested in your reaction to the furore surrounding the alleged remarks by Scott Morrison in December last year in Shadow Cabinet. Do you think that those remarks, if theyre true, border on racism?
WONG: I think that what we hear about whats in shadow cabinet from people in the Liberal Party, what Senator Bernardi has said these sorts of comments really do not reflect, I think, contemporary Australian values. Australia is a country where we do not discriminate on the basis of peoples religious position. That has been a longstanding position of both parties.
And it is really extraordinary that Mr Abbott is not taking control of this. Either Mr Abbott has lost control of his party or hes sanctioning it. And neither of those two options look good for Tony Abbott.
JOURNALIST: Alright, Penny Wong, Finance Minister, we appreciate your company on Australian Agenda, thank you.
WONG: Good to be with you.
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