12 May 2017




PAUL CULLIVER: Senator for South Australia Penny Wong joins us this morning. Good morning.


CULLIVER: South Australia had no new infrastructure projects announced in the Federal Budget, and no mention by Bill Shorten last night. Should South Australia get used to being ignored by politicians in Canberra?

WONG: Certainly the Federal Liberal Government has really been at war with South Australia for a long time. I don’t think any of us will ever forget Joe Hockey standing on the floor of the Parliament and goading Holdens to leave and then they did. Then we had the Defence Minister saying that the Australian Submarine Corporation, which is located here in Adelaide, couldn’t build a canoe. And then we had Tony Abbott trying to send the submarine build to Japan, and only being stopped because Labor stood up and ran a campaign with the community to bring the submarines to South Australia.

I stood up with the whole Federal Labor Caucus from South Australia this week and made the very clear point there’s $70 billion of spending in this Budget, supposedly, on infrastructure, not a single new dollar for South Australia.

CULLIVER: There is, however, going to be a new regional growth fund, including $272 million for transformational projects in regions. What do you expect that might go towards in South Australia?

WONG: I think that’s a Barnaby Joyce fund, frankly. And I suspect there are probably many better ways for that money to be spent than for Barnaby Joyce and the National Party to put that into National Party electorates up and down the East Coast. I suspect that is precisely what will occur.

But look, let’s remember the major centrepieces of this Budget, the Liberals’ Budget, was a cut to schools, a cut to TAFE, a cut to Vocational Education, and of course a tax hike for middle Australia.

Bill Shorten last night outlined what a fair Budget really looks like. A much more progressive tax system – instead of giving people on high incomes a big tax cut, actually making sure they pay their fair share of tax – and saying very clearly we will put back every single dollar into Australia’s schools that Malcolm Turnbull has taken out.

CULLIVER: Part of that was the $100 million Building TAFE for the Future Fund that Bill Shorten did announce last night. Of course skills in the region being a really important aspect to building the regional economy. How do you expect to pay for that?

WONG: We outlined a range of savings last night and we outlined a different tax arrangement that actually, over the medium term – that’s over ten years – will generate more revenue to spend on things like skills and education, than the Government’s proposals.

What we said was the tax on high income earners, which the Government is reducing in this Budget, should continue. We can’t see why millionaires should get a $16,400 tax cut as a result of Malcolm Turnbull’s Budget.

But on TAFE and the Vocational Education, let’s make this point – there are now 130,000 fewer apprentices in this country than when we left Government. That says something pretty important about the Liberals’ commitment to trades, the Liberals’ commitment to apprenticeships. We want to reverse that, so one of the important announcements in last night’s Budget was that we will put money back into TAFE and Vocational Education. We’d also guarantee that two thirds of that funding will go to public Vocational Education, so that’s TAFE.

And in addition, as you said, the $100 million Building TAFE for the Future Fund to make sure that we upgrade TAFE in our regional communities.

CULLIVER: Last night Bill Shorten said that Labor would support the Medicare Levy hike, but only for those earning above $87,000, despite the fact that he said that the NDIS, which is what the Medicare Levy is meant to be covering, the hike it in anyway, is already fully funded. How do you justify a hike in the Medicare Levy if the NDIS is already paid for?

WONG: Because the Budget is in far worse condition than when we left office. That’s the reality. This Budget, this Liberal Budget predicts a deficit for the coming financial year that it is ten times what they predicted when they came to Government. We have gross debt which is going to hit in excess of $700 billion in the years ahead. That’s what this Liberal Government has delivered. So, of course the Budget needs more revenue. The Budget needs to be managed properly. We just want to do that in a fairer way.

CULLIVER: Wouldn’t that be better achieved through a general changes in income rather than a Medicare Levy which you would think would go to things like health services?

WONG: Let’s be clear what we are saying. We are saying we will continue what’s called the Budget Deficit Levy, so that’s a tax on high income earners that Malcolm Turnbull would take off. So, we’re not supporting his cut to the tax paid by millionaires and high income earners. So that’s improving the Budget.

We have said we will support the increase in the Medicare Levy for those earning over $87,000. But for the many millions of Australians who earn less than that, we are saying we don’t think it is fair that they should be paying more, more tax at this point in time. Especially when we found out yesterday this Government’s company tax cut, which still is one of the centrepieces of their economic growth plan, as they call it, but delivering lower growth, is in excess of $65 billion. So, you ask me why the Medicare Levy? Under Malcom Turnbull actually that levy isn’t going to the NDIS it is going to the Budget which will give a huge tax cut to big business

CULLIVER: I think it was Barrie Cassidy on Budget night on the ABC that made the point that for many successive years now, the Federal Treasurer’s got up and forecast a return to surplus in the fourth financial year from that Budget. But that’s continued on, every year we get a new Budget, it’s forecast for the next four years, and despite not returning to surplus, the Australian economy hasn’t fallen over. Should we stop making a return to surplus the goal in delivering these Budgets?

WONG: Bringing the Budget into balance and making sure that we can restore our Budget positon over the medium term is the right economic position to take, and it’s one that Labor is very focussed on, but you have to do it in a fair way. What Bill outlined last night was a much fairer way of repairing the Budget than the one Scott Morrison and Malcolm Turnbull want Australians to swallow.

CULLIVER: Looking at some changes to making housing more affordable, the Coalition has announced changes to the way you can put in contributions over and above the required minimum to superannuation and use those same funds to put money into your first home. This to me looks a lot like the first-home saver account introduced by Labor several years ago, and discontinued after it was not taken up by a significant number of people. Why is Labor not supporting this measure?

WONG: Because you’re not serious about housing affordability unless you deal with the tax breaks that investors get. That’s the reality. Why should taxpayers subsidise an investor buying their seventh or eighth house? What public policy purpose, what good does that do? The reality is unless you try to deal with a tax system geared towards advantaging investors over first-home buyers, unless you deal with that, you don’t actually have a housing affordability plan.

I think the lesson of the first-homeowners grant scheme, which was a previous Coalition policy, is all you do when you generate more funds, via whatever means, to first homeowners, without dealing with a tax system that’s skewed, is simply increase prices, which isn’t a housing affordability measure.

The reality is, a lot of young people today are not going to have the capacity to make the sorts of voluntary contributions that would actually generate a substantial deposit for a house.

CULLIVER: Well it’s only up to $30,000, and if you can’t save up $30,000, you’re probably not in the market to buy a house in the first place.

WONG: So therefore it’s a pointless policy. The reality is this was a Treasurer who told everybody in Australia months ago, housing affordability would be the centrepiece of this Budget. He’s come up with a joke of a policy that won’t do anything.

Everybody who looks at this issue recognises that unless you deal with Negative Gearing and Capital Gains Tax, and reform it in some way – we’ve outlined how we would do it – you’re not going to make housing more affordable for the next generation of Australians, who have the lowest proportion of entry into the housing market for many years.

CULLIVER: On Tuesday night Scott Morrison announced a trial for drug and alcohol testing for welfare recipients, does Labor support this?

WONG: I understand there are people in the community who think this is a good idea, but I think you really need to look through the detail and understand how it will work. One of the propositions in there is that somebody who has a drug dependency problem would have all of their income support measures removed. I guess we’d say to people, let’s have a think about what would actually happen as a result of that? What would probably happen is you’d get an uptick in crime.

So I think it’s important to work through the detail of this and make sure, for example, that you’re actually having rehabilitation and those sorts of measures, rather than simply trying to get a headline.

So we’ll look at the detail, Jenny Macklin and Brendan O’Connor are the Shadow Ministers engaged on this and I’m sure they’ll consider it carefully.

CULLIVER: Also, you are the Shadow Foreign Affairs Minister, are you concerned by a freeze in foreign aid budgets from next year?

WONG: I think it’s desperately sad, I really do. There was once a time we had a bipartisan agreement to lift aid. Why do we give development assistance to other countries? We do it because Australian values are generous, and we don’t want children unable to thrive, we don’t want people starving, we don’t want kids not having any access to education or sanitation, but also we have an interest in it.

We have an interest in alleviating poverty because more prosperous countries are more stable, and they’re more able to engage with us economically. If you have middle-income countries in your region that you can trade with, that’s good for Australian jobs. We once had a time where both parties agreed – like they do in Britain and have delivered – to increases in aid. Now what we see is this Government having presided over the lowest level of assistance ever recorded, as a proportion of national income – that is we give 23 cents, 0.23 per cent of what we call Gross National Income – is now presiding over further cuts. I think that’s desperately sad.

CULLIVER: Just looking closer to home on a non-budgetary issue, Labor Senator Alex Gallacher’s voted in a Senate Committee against Labor colleagues to support oil and gas drilling in the Great Australian Bight. What do you make of his vote?

WONG: There are times where Labor backbenchers do have different views on Senate and Parliamentary committees, so it’s not particularly unusual. I’ve had various Senate Committees where Labor Senators or Labor Members have taken a different view on a policy issue.

CULLIVER: And just finally, Senator, the ABC and indeed Australia lost a great journalist yesterday, Mark Colvin. I’m sure you had several tangles throughout your career, what did you make of the man?

WONG: Actually I didn’t have tangles, he was unfailingly courteous. He was one of the most erudite and well-read people I’ve ever encountered. He was a lovely man, and his voice is part of our culture and our history. Many of us grew up listening to Mark Colvin on the ABC reporting from far flung places and then obviously later in life, his work on radio.

It’s dreadfully sad, I’ll certainly miss him. He was one of the most interesting people on Twitter to follow because his interests were so diverse, and he will be missed by many people.

CULLIVER: Senator thanks so much for your time this morning.

WONG: Good to speak with you.