SENATOR THE HON PENNY WONG

MINISTER FOR FINANCE AND DEREGULATION

TRANSCRIPT

4 April 2012

ABC LATELINE WITH EMMA ALBERICI

TOPICS: BUDGET, CARBON PRICE, CHILDCARE, FWA INVESTIGATION

E&OE - PROOF ONLY

ALBERICI: Penny Wong, welcome.

WONG: Good to be with you.

ALBERICI: Now, your colleague Craig Thomson has been under investigation by Fair Work Australia for more than three years now. The report is now complete and has been directly handed to the Director of Public Prosecutions. Why isn’t that report being made public?

WONG: In relation to this matter I’ve consistently taken the view, as has the Government, these are matters for the independent statutory body, Fair Work Australia.

They’ve made a statement today which includes their decision to refer this matter, or the brief, to the Commonwealth DPP – also an independent body – and we do take the view, I take the view, very strongly that these are independent bodies and they should be allowed to conduct their investigations and considerations free from political advocacy, notwithstanding the fact that some people want to engage in it.

ALBERICI: Well, we now know that the union that was once headed by Labor MP Craig Thomson has been found to have breached 181 rules governing the union. Aren’t the Australian public entitled to know if a Government MP is being investigated by the Federal prosecutor?

WONG: I think what the public are entitled to have is a proper independent investigation by the independent statutory body and the independent prosecutorial authority.

There are some very important principles here. There’s the principle of prosecutorial independence and the principle of independent statutory bodies undertaking these sorts of investigations. We made clear as a government consistently they should be allowed to do their work.
ALBERICI: It’s often known … it’s often in the public realm whether somebody’s being investigated at least …

WONG: That’s a matter for Fair Work Australia, just as other decisions are matters for the DPP. These are not matters for Government, they are properly not the remit of politicians – and you wouldn’t want a situation, would you, where politicians were making decisions about who should be investigated and what should be made public. That’s not consistent with our system.

ALBERICI: I guess the speculation is that the Government has been involved in terms of … or tacitly that Fair Work Australia is trying to protect the Government in not making these issues public …

WONG: This Government, its Ministers, have repeatedly made clear that these processes are independent. End of story.

ALBERICI: Would you be comfortable remaining side by side with a Government MP who’s being investigated by the Director of Public Prosecutions? Is it proper that he remain in the Parliament while such an investigation is under way?

WONG: I was a lawyer before I came into Parliament, and I take very seriously principles such as the ones I’ve outlined to you – principles such as prosecutorial independence, principles such as the presumption of innocence. These are proper conventions and proper processes, and they should be allowed to run their course.

ALBERICI: Opposition Leader Tony Abbott says there are serious questions here about whether the Government has been relying on a “tainted vote” in the Parliament, what do you say to that?

WONG: That’s Mr Abbott running another slogan. Ultimately, as the Government, we’re focused on our agenda and the things that we want to do for the Australian people. These are matters that are properly within the remit of independent authorities.

ALBERICI: But it’s not a slogan, is it? He’s making the point that if this Government MP has a mark against his name then, potentially, in his view, in Tony Abbott’s view and the Opposition’s view, then your Government is relying on, I guess, in their view, an illegitimate vote?

WONG: Tony Abbott wants to be the Prime Minister, and that’s not a secret, and everything he says in relation to this issue or any other issue is about his political interests.

ALBERICI: Let’s move on. Labor’s primary vote we now know is at 27 per cent, near its lowest level. To what extent do you attribute that poor showing to the carbon tax?

WONG: There’s no doubt we’ve got a lot of work to do and there’s no doubt that putting a price on carbon is a pretty difficult reform, and it’s also the case that we’ve got a pretty shrill political debate at the moment.

We’ve got an Opposition that’s prepared to talk down the economy – you get the impression, if you listen to Mr Abbott or Joe Hockey, that the sky’s somehow going to fall in.
We understand we’ve got a lot of work to do, but I think putting a price on carbon, just as John Howard thought, is really important for the future of the Australian economy.

ALBERICI: But you’re not doing a very good job of selling that point though, are you, given that one in two people in the Australian public think they’re going to be worse off under a carbon tax, and 60 per cent of voters oppose it altogether?

WONG: What I’d say is this: we put in place a very substantial set of assistance, increase to pensions, increase to disability support pensions, increase to family tax benefit and tax cuts – a tripling of the tax free threshold.

These are all things about ensuring that we provide appropriate assistance to Australians in the context of a price on carbon. And remember, these are all things that Tony Abbott’s going to have to take away if he, were he, to be elected Prime Minister and were he to repeal the carbon tax. That’s the reality.

ALBERICI: Voters in Queensland made it crystal clear that the cost of living was front-of-mind when they went into the polling booths. On your own estimates the carbon tax will increase the cost of living …

WONG: When it comes to cost of living, first, I don’t think anybody is unaware of the cost of living pressures that Australians face … and that’s why we’ve put in place things such as tax cuts, we’ve put in place things such as increases to the aged pension, increases to family tax benefits for teenagers, the support for education expenses for families, increases to childcare support.

These are all about recognising the importance of properly assisting families in this context.

ALBERICI: Will every household be compensated?

WONG: We’ve made that clear, we’ve made clear, we as a Labor Government have prioritised low and middle income Australians rather than high income Australians, and I think that’s not unreasonable. That isn’t unreasonable.

Let’s remember this: the impact of the carbon price is being massively overstated by Tony Abbott because he wants to achieve a political purpose with that. He’s massively exaggerating it. He’s talking down the economy and he’s suggesting to people that the sky will fall in.

Now, we do have a lot of work to do but what I’d say is this: the carbon price will come into place, people will start to receive the benefit of the tax cuts and the other assistance, and people will also see that the world will go on. The sort of disaster that Tony Abbott is talking about is not going to eventuate.

ALBERICI: The ACTU is demanding a $26 a week pay rise. Doesn’t that suggest that even your keenest supporters don’t believe the compensation will be enough?

WONG: I think it suggests that trade unions want to advocate for more pay rises for their members, and that’s what they’re supposed to do. That’s the job of unions. To advocate for better wages and conditions for their members and that’s what they’re doing.
ALBERICI: But they’ve also asked Fair Work Australia to look through the Government’s carbon tax compensation; it suggests they don’t necessarily trust your own estimates as far as compensation …

WONG: I don’t agree with that. I think what it suggests is that unions are doing what unions are supposed to do, which is to advocate, as I said, for better wages and conditions for their members.

ALBERICI: But the point is they’re asking for higher wages because they think the carbon tax is going to whack households …

WONG: They’re asking for higher wages because unions are there to advocate for better wages and conditions for working people. That’s what they should do.

What we are saying is we have relied on Treasury – the same people who did the modelling on the GST – and, utilising their modelling, we put in place a very robust assistance package. But let’s come back to why we’re doing this, because this gets lost in the shrillness of the debate today.

We’re doing this because we cannot maintain our position as a competitive economy in the decades ahead if we remain one of the most highly polluting economies – highly polluting advanced economies – on Earth. We can’t.

And the reality is we have to ensure we shift our economy over time so that we are less polluting, so that we compete in a world where clean energy jobs and low pollution goods and services will take a premium.

ALBERICI: How much of the billions you make from the carbon tax will actually be spent on providing renewable energy, or indeed moving in that direction?

WONG: We laid out in the clean energy futures package a lot of policy. We talked about what would be provided to households, we talked about what would be provided in terms of investment in energy and in clean energy, and as you recall there’s more funding for renewable energy … as been part of this Government’s mandate for some time. We put in place the renewable energy target which has been led to a very substantial increase in clean energy.

ALBERICI: Now, Treasury modelling, which you mentioned, also shows that consumer prices will rise roughly, by roughly around 0.7 per cent in the 2012/2013 financial year.

Now, given that just today the Reserve Bank has said it has an eye to inflation in terms of whether or not it will lower interest rates in the coming months, it would appear that your carbon tax may well undermine the bank’s ability to deliver an interest rate cut to households, putting further pressure on household budgets …

WONG: I don’t accept that. I make the first point that the effect on the CPI inflation of the carbon price is a fraction of what the goods and services tax effect was – a fraction – so let’s remember that – that this will have less of an inflationary impact than GST.

ALBERICI: But we’re in a different economic environment today than we were then, certainly.

WONG: You can’t have it both ways, you can’t say this is going to be a dreadful impost …

ALBERICI: The world is a very different world than it was …

WONG: Yes, and we’re very conscious of price pressures and we’re very conscious of inflation, and that’s one of the reasons why the Government has made a commitment to return the budget to surplus.

We understand when you’ve got a strengthening economy, when you’ve got a mining boom of the sort we’re seeing, we’re seeing investment continuing to rise to unprecedented levels then the right thing to do, if you are concerned about things such as price pressures is to return the budget to surplus.

ALBERICI: Let’s look at the budget. You’ve come out and said that you’ve costed Tony Abbott’s suggestion of bringing nannies into the remit of the childcare rebate. Now you’ve said that’s going to cost $2 billion or thereabouts over four years. Now, where are the assumptions behind that?

WONG: We’ve spoken about that. We made assumptions looking at ABS statistics about the use of these nanny services and we asked the departments to give us a costing. Look, there’s no …

What’s happening here is Tony Abbott wants to float an idea, apparently, and according to his Liberal Party colleagues who, one of whom is quoted in the papers as saying that they don’t actually intend to do this, it’s just about appealing to women – which is a pretty cynical manoeuvre to float this idea not because you want to do it, but just because you want to somehow appeal to women voters.

ALBERICI: Is it a good idea to bring nannies into the net?

WONG: I think you’ve got to make judgments as a government about what you subsidise and you’ve got to work out what is the best use of taxpayers’ money. Now, I have no issue with families making personal choices about what sort of care arrangements they want for their kids. That’s fair enough.

ALBERICI: Can I just interrupt you for a second, because it’s not always a matter of choice though is it, and that’s what he says underlies his suggestion that it’s not about choice, that some people don’t have a choice because at the moment the arrangements are so inflexible – it only applies to people who put their children in childcare between business hours, but not all people work those hours.

WONG: Tony Abbott’s words that you just quoted to me are entirely empty, are entirely empty, because he has said, he has said that if he were to fund this it would come out of the existing envelope.

That would mean over 600,000 Australian families would get less childcare support than they currently get, and that actually is my point.

There is a finite amount of resources in the Federal budget. Just as Tony Abbott keeps going on about the importance of fiscal discipline, fiscal discipline means you’ve got to make choices about what you subsidise and what you assist people with.

So this is not a question about whether or not it’s a good idea for families to have nannies or not, it’s a question about where do we think we should best use taxpayers’ money.

And we have put more money into childcare than Tony Abbott, when he was in John Howard’s Cabinet ever did, ever did and I think that really shows where the true commitment to supporting Australian families lies.

ALBERICI: Is the childcare benefit, the childcare rebate, vulnerable to cuts in the Government’s next Budget?

WONG: We’re having this rule in, rule out thing already, and I’m not going to get into that. What I would say is our track record, when it comes to childcare, is a track record of a Government that has prioritised supporting Australian families in the childcare that they choose. That has been our track record.

ALBERICI: Are you still guaranteeing that your budget will be in surplus?

WONG: Emma, we are … we have said many times we’re committed to returning the budget to surplus, and we’re in the process of going through a very difficult process, as all budget processes are, for now but also for the future, and that’s the important thing here.

The surplus is not just about one year. It’s also about setting up the nation for the future. It’s about ensuring a strong economy – not just today but in the years to come.

ALBERICI: Penny Wong, thank you very much.

WONG: Good to speak with you.

ENDS