GILBERT: Minister, thank you very much for your time.
WONG: Good to be with you, Kieran.
GILBERT: We knew that revenues were down $7.5 billion since October. Now its $12 billion, how did Treasury get it this wrong?
WONG: Well, $12 billion is a very substantial hit to revenues, isnt it? And lets understand whats driving that. Whats driving that is were getting less for the things we sell to the rest of the world so prices have come off, weve got a high dollar, and weve got a lot of competitive pressures in the economy. All of those things are adding up to lower profits for business, and when you have lower profits for business you get less money in tax paid to government.
GILBERT: But just a few months ago the Government was still saying thered be a small surplus. The dollar hasnt shifted that much...
WONG: Well, the dollar hasnt shifted much at all and the reality is if you look at the figures at the moment, what were seeing is nominal GDP which is growth in values below real GDP which is growth in volumes for the longest period since records began. So, I hear Joe Hockey today saying Oh, well, people should have anticipated this. Well, Treasury didnt anticipate this and I dont think any macroeconomic forecaster out there predicted this and its a very unusual set of circumstances over half a century since records were kept and we havent seen this sort of gap.
GILBERT: Well, if its a new economic reality as youve said today how can the Government justify continuing with a fixed carbon price? Companies are obviously struggling with this high Australian dollar. Is it really the time to add a further impost?
WONG: Well, I think youve got Greg Combet on later this morning you can ask him in more detail about this. But Id remind people of this: that the effect of carbon price for Australias most polluting companies is about $1.30 a tonne because of the assistance in place. But if I can come back to
GILBERT: But its still a further impost isnt it, when they dont need it?
WONG: But the point is something like the higher dollar is having a far more substantial effect on many sectors of the economy than a carbon price would be for the largest polluters at $1.30 a tonne.
But if I can come back to where you started which is the new economic reality: it is the new economic reality and it puts a greater responsibility, a greater obligation, upon all political parties to be upfront with Australians about the choices that were making. If you want a DisabilityCare scheme, if you want greater investments in schools, these are the choices we have to make.
Now, we will be upfront with those choices because we think these investments are important. Really, the onus is on Tony Abbott now to tell people what hed do. We know whats in his DNA because he likes to talk about it, and that is hed cut to the bone. Well, he ought to be up front with Australians about his choices.
GILBERT: But he supports the National Disability Insurance Scheme. He has said that very clearly...
WONG: And I look forward to him
GILBERT: So, to say hed cut to the bone is probably not fair given that, on that, hes been very clear that he supports a disability insurance scheme, which is one of the two pillars that you just referred to.
WONG: Oh, come on Kieran. Are you telling me that on
GILBERT: Hes said that numerous times.
WONG: Hang on. Are you telling me that by the election Australians will know what Tony Abbott will cut in order to fund the DisabilityCare scheme?
GILBERT: Well he he couldnt have been more unequivocal in backing it, though.
WONG: Yeah, and you and other members of the Press Gallery, I hope, will try and get out of him what his plan is to fund it. Because its very easy to make a promise, its much harder, much harder, to say to Australians if you want these things, this is what we have to do to fund them. The Government will do that.
GILBERT: You say youre not going to cut to the bone, but is there a middle ground here? Obviously theyre both worthy well, certainly the disability scheme is a very worthy initiative. The education scheme, more funding for schools, youre saying its needed. But is there a time when you need to say, okay lets pursue a middle ground here. Maybe delay some of the spending if the revenue hit has been so great.
WONG: Well, the middle ground, I think, is to make responsible savings decisions, to make wise investments. Thats the middle ground and thats the right ground for the nation. I mean, it would be very easy to say, oh, this is all too hard. We just want to push this off forever or for the next ten years. But lets understand what choice we are actually making were we to do that. We would be saying to Australians it is ok for the country to fall behind in terms of our competitiveness, if you compare our schooling systems to the rest of the world and it is ok for Australians, too many Australian children, to be left behind, which is what is happening people are up to three years behind their peers.
GILBERT: But do you need to rethink the budget reality though? Because youre talking about the economic reality The Grattan Institute, Macroeconomics, these organisations are warning theres a structural budget deficit, and a government, sooner or later, has got to deal with it, otherwise, we will face deficits as far as the eye can see.
WONG: And we will deal with the economic reality. And Im happy to come along after Budget and talk about that and talk about some of the difficult choices we have to make. The difference between us and the Opposition is we will be upfront about that.
GILBERT: I want to ask you about one last issue before we wrap up. The same-sex marriage referendum has been floated today by Tony Windsor, the Independent. What do you think of that idea?
WONG: Look, I would sound a note of caution. I dont think anybody would believe Im anything other than a very strong supporter of equality, including marriage equality. But lets remember what happened on the republic. The majority of Australians supported it and John Howard and Tony Abbott ran a very good fear campaign, and we lost that referendum in every state.
This is a very high bar to jump. We would have to make sure we had the campaign infrastructure in place. We would have to win in every state and every territory. And we would have to counter what would no doubt be a very organised campaign. So I would sound a note of caution.
My view is the Parliament has a responsibility and it will one day have to discharge that responsibility.
GILBERT: Minister, thanks for your time.
WONG: Good to be with you.
ENDS