WONG: Thanks very much for coming. Today I am releasing a paper on the fiscal context in the lead up to the Tax Forum. We in the Government understand the importance of a clear and credible fiscal strategy, not just in the short and medium term, but also in the longer term. And we do think its important, as we head towards the Tax Forum, that there is a very clear understanding in the Australian community, and amongst those attending the Forum, of the fiscal context.
And that, of course, doesnt just meant the return to surplus, and the fiscal rules the Government has laid out. It also means understanding the longer term pressures: pressures in health, pressures in social security, pressures which will have to be dealt with by governments of all persuasions in the decades ahead. So, as we consider reforms at the tax forum, the Government does believe its very important that fiscal context be well understood. So, as part of contributing to that, I am releasing a paper, Tax Forum: The Fiscal Context, which sets out the fiscal context, not just as I said in the medium term, but also some of the longer term pressures.
If I can make a brief comment too about where we are in terms of the global economy and what that means for Australia. I think one of the things we can discern very clearly from whats occurring globally is that markets do demand clear fiscal strategies clear and credible fiscal strategies from governments. And that is why we have outlined in great detail, as we move to stimulate the economy, our fiscal strategy. That is why we have held to it, that is why we are releasing this paper today, to ensure that this is part of the backdrop and the framing of the discussion at the Tax Forum.
But in the face of that understanding of the importance of credible fiscal strategies and the turbulence we see in global markets, can I say this: it is extremely unfortunate that Mr Robb has decided to go out and, essentially, continue to talk down the Australian economy. This is a turbulent time, this is a volatile time on global markets. But what is important is that governments continue to adhere to credible strategies, and that we face this turbulent time soberly and carefully. It is not the time for Mr Robb to go out there, and effectively advocate uncertainty, and talk down the Australian economy
Happy to take questions.
JOURNALIST: Whats your response to the AFL and NRLs campaign against the gambling reforms? Is it just a footy tax?
WONG: No its not and lets remember what were talking about here. Were talking about reforms which are about trying to support some very vulnerable people in the Australian community people who are addicted to gambling. A very small proportion of people who play on the pokies and who gamble; people who are problem gamblers who spend, on average, $21,000 every year. Money thats not being spent on taking kids to footy, money thats not being spent on looking after families, money thats not being spent on things like sporting registration fees. Thats what these reforms are about.
JOURNALIST: Is it the mandatory pre-commitment technology that Labor is committed to here?
WONG: I understand the Minister will be making some further comments later today. But what I will say is this: we have set out our clear view about this. And there is a history to this which precedes minority government, its a history that includes investigation by the Productivity Commission.
And Id again say, lets just take a step back and remember what were talking about. We are not talking about a tax. We are talking about measures which are about supporting and assisting vulnerable Australians who are addicted to gambling, and who spend far more than any of us believe is sensible on gambling. Money thats not being spent on families, thats not being spent on rent, thats certainly not being spent on taking the kids to the footy.
JOURNALIST: The Productivity Commission recommended mandatory pre-commitment technology, so, has that been decided within Cabinet now?
WONG: I think Ill leave it to Ms Macklin to go through in detail our response today. I think weve been very clear about how we propose to deal with this, and the importance of working with the states on this, and thats the way that Jenny Macklins been dealing with this.
JOURNALIST: Can I get you to talk about the shorter-term fiscal context? Is spending under pressure at the moment?
WONG: As you would anticipate, we have a mid-year review, which is due by the end of the year, and Im sure you would be poring over that in great detail. I would make this broader point, which the Treasurer has also made: obviously we face the current turbulence from a position of significant strength. We have strong public finances, we have low debt. We have low unemployment, we have a strong pipeline of investment, and were in a growing region of the world. These are good things. Having said that, no country is immune. Weve learnt that and as the Treasurer has made clear, Australia is not immune from what we are seeing globally. But I do think it is important to re-emphasise that we do face this turbulence from a position of strength.
JOURNALIST: Is the surplus guaranteed as promised?
WONG: Weve made very clear we have a plan to return the budget to surplus in 2012-13 and thats what were working towards.
JOURNALIST: And nothing were seeing in the world at the moment is likely to change that?
WONG: I think it is as the Treasurer has said, far too early to be making those sorts of predictions. I think it is very important that we again emphasise to all Australians that we do face this turbulence from a position of real strength. And it is unfortunate that the Opposition Mr Robb and Mr Hockey and others are so focused on political gain that they are prepared to talk down the Australian economy and undermine confidence at this volatile time. Thats not leadership.
JOURNALIST: Are you able to give us an idea of what the turbulence in the market is doing to Government revenues at the moment?
WONG: Ive said previously, the Treasurer has said previously, obviously were not immune from the effects of turbulence, the effects on global growth. But we will update our figures in the usual way in the mid-year review.
JOURNALIST: Senator have you received advice from your Department on the ramifications of the Greek default?
WONG: I think everyone globally and certainly the Government is monitoring very closely what is occurring, particularly in Europe and theres no doubt that sovereign debt concerns in Europe are at the core of the volatility were seeing.
The Government will continue to monitor the situation very closely, but Id again say this. We do face this turbulence from a position of relative strength. And in terms of our financial sector, Id point you to some recent publications, including by the RBA and the FSB which point to the strength of Australias financial sector - a very important pillar in our economy.
JOURNALIST: But are you resigned to or is the Department resigned to say what Alistair Darling said overnight, that Greece will default, its inevitable?
WONG: You wouldnt expect me to make those sorts of predictions -
JOURNALIST: Oh well
WONG: (laughs) You can ask but you wouldnt expect me to make those sorts of predictions. But what I would say is this, as the Prime Minister said in her letter, as the Treasurer has said over the weekend, we would obviously urge European policy makers to implement a credible effective strategy as soon as possible. The worst position we could be in is one of uncertainty.
JOURNALIST: What is the fiscal context for the Tax Forum? You speak about decades ahead, rising social security expenses and all that stuff that goes with an ageing population. I mean it seems the only way you can manage that is by raising taxes to meet the extra costs. Is it that the long term prospects for Australia is actually more tax?
WONG: Not at all, I think the issue here is to make sure we clearly understand that we have both a short and medium term fiscal strategy, but we also need to look to long term fiscal pressures and that tax reform does have to occur within the context of those fiscal pressures.
I think this Government has had a very good record on tax reform. Weve implemented some 30 odd recommendations from the Henry Review, weve implemented a range of tax reform measures, personal tax measures, and as part of the Clean Energy Package theres a tripling of the tax-free threshold. These are all good things. But as the Treasurer has said, tax reform is never finished, its something you have to keep continuing and its very important when one does that that to make sure the fiscal context is very clear.
JOURNALIST: Minister, does the Government accept the proposition that real tax reform means a broader base but a lower rate?
WONG: I think the tax forum will talk through a great many issues. The view you have expressed Im sure is one view that will be expressed but I am sure not the only view. And I certainly look forward to the Tax Forum to having that discussion.
JOURNALIST: Do you have an idea of one area where the tax system is most in need of reform?
WONG: I think these are some of the issues that need, that will be ventilated at the Forum and Im sure that will be a very useful discussion. But I think if you want to characterise much of the focus of tax reform to date, there certainly has been a great focus on this Government on participation and measures which encourage participation.
JOURNALIST: Tony Abbott wants his ministers to be prepared for a December election with Kevin Rudd as the Labor leader. Is that likely?
WONG: Youre asking me to comment Tony Abbotts strategies? As far as I can see, Tony Abbott has got one strategy and thats to be relentlessly negative.
JOURNALIST: But is there a chance that could happen?
WONG: No theres not. The Prime Minister is very secure and the Prime Minister will lead us to the next election.
ENDS