27 November 2011




BONGIORNO: And it’s welcome back to the program, Finance Minister Penny Wong. Good morning, Minister.

WONG: Good morning, good to be with you.

BONGIORNO: And joining us on the panel, Michelle Grattan of The Age and Marius Benson from ABC NewsRadio. Good morning Michelle and Marius

GRATTAN: Senator Wong, in the budget update that we see this week, will the Government show that it is clearly on the road to achieving its promise of being back in surplus next financial year?

WONG: Michelle the mid-year review, which will be released this week as you said, will be one where we chart the right course. And we are driven in terms of the mid-year review by the same things that drove us in the context of the GFC. How do we ensure we keep our economy strong, how do we support jobs? We have to chart the right course, a course that recognises the global uncertainty, the weaknesses in the global economy. But at the same time, the continued strength in mining investment.

Our judgment is that what we need to do is continue to return the budget to surplus. But equally we need to also recognise that it would be counter-productive to take an axe to the budget in light of global uncertainty. So we will chart the right course in the context of that data -

GRATTAN: Does that mean that it will show that we are on track to surplus in the next financial year?

WONG: We remain determined to bring the budget back to surplus as we have outlined. But there is no doubt the current global economy has made it harder.

GRATTAN: What has that done for revenue?

WONG: It’s a very good question. You should anticipate seeing that there will be a reduction in revenue. You should anticipate seeing the sort of pattern that we saw in the context of the GFC. Where we still – in the five years to 2012-13 – have seen about $130 billion worth of reduction in revenue as a result of the global financial crisis. That is one of the ways in which the current circumstances make it harder. But we remain to do what is right for the economy and we believe that is bringing the budget back to surplus.

BENSON: Senator you mentioned the global financial crisis a few times there. We just heard Paul Keating saying that the crisis in Europe at the moment is the worst crisis of his lifetime. Would you have the same reading?

WONG: I certainly think that the European circumstances have worsened in the last period. We saw for example, a German bond auction in which demand was less than anticipated. That is not a good sign. What we continue to say to the Europeans is: ‘You do need to get your House in order’. I think that markets are making a very clear judgement about Europe’s failure to do what it said it would do – which is to get its house in order.

BENSON: How do you read it? Do you read it as severely as Paul Keating does? Is it worse than the GFC just a couple of years ago?

WONG: I think the GFC was an extraordinarily difficult economic time and an extraordinarily difficult thing for the global economy. There are things the Europeans can do to resolve this. And they need to do that, because it is affecting not just them but it has the potential to affect not just our economy, but other economies around the world. It’s why we have to continue to show the budget discipline that we’ve shown to date. We have made about $100 billion worth of savings in our last four budgets. And there are no easy saves left to take. You should anticipate – in response to Michelle’s earlier question – some difficult decisions in the mid-year Budget update in the coming week.

GRATTAN: Could I just take you back to your point about a reduction in revenue? What are you meaning exactly here? A reduction on what – the forward estimates or previous year and can you give us any idea of magnitude?

WONG: I think in terms of magnitude, I will leave that to the numbers that we will release this week. But I think it is reasonably self-evident. If you have got, for example, the share market is some 15 per cent down since the May budget. As a matter of logic that will flow through for example, to Capital Gains Tax.

We are in a situation where our economy is being affected. Our budget is being affected, by the international circumstances. It is very important that the Government continues to show discipline and makes the right calls as we chart a course through what is a complex and challenging economic environment.

BENSON: Senator, you say no easy saves are available but savings will be made. Who is going to feel the pain? There are specific reports this morning that you are targeting executives and foreign workers who are understating their income for tax purposes?

WONG: There is always a lot of speculation ahead of a budget update and I will not get into detail but I would say that is a particular measure that was raised in the context of the Tax Forum as being problematic. Obviously, those issues are issues that the Government is having a very close look at.

BONGIORNO: But working people will not be left behind, according to the Treasurer, is that still the case?

WONG: We are a Labor Government. Whether it’s how we handle the Budget, how we handled the global financial crisis, where we intervened to support jobs, or putting forward the Minerals Tax, where it is about ensuring more superannuation for working people, more superannuation particularly for low-income Australians. Our values do underpin our economic decisions.


BENSON: Senator, you want to see a binding vote by the ALP Conference enforced on MPs to back same-sex marriage. The numbers are not there at the conference to do that and Julia Gillard has made it clear that if anything gets to Parliament, the Government is not going to wear it – you’re wasting your time.

WONG: We’re going to have an interesting National Conference I’m sure and this will be one of the issues that would take a lot of attention of delegates, I suspect. I have made my position clear on it. I don’t propose to add to it today. I certainly will be having more to say at National Conference.

There are two issues of course to be dealt with by the conference – the first is whether or not there is a conscience vote and the second is whether or not there is a change to the platform. Both of those issues, I suspect, will be the subject of a lot of discussion and no doubt, some debate within the party.

GRATTAN: Senator, what about on the uranium issue which is equally contentious. Will you stick with the Left position of opposing uranium sales to India?

WONG: Uranium has been a contested issue inside our party for a very long time. As a South Australian, I am particularly aware of that because we have had a range of different views as a state branch on this issue. What I would say is that I think there is a lot of merit in the Prime Minister’s position. I think there are issues of non-proliferation that are clearly strongly felt by members of the party and that will be debated on the floor of conference.

BENSON: Senator, Kevin Rudd has issued a critique of the party – he says the public has had a gutful of what passes for political debate right now and Labor must reform or become a minor party. Do you take a warning like that seriously?

WONG: First in terms of the political debate, I so think that people are a little bit tired of the political debate with an Opposition Leader who is completely negative and refuses to be upfront about anything whatsoever, other than he wants to say ‘no’. An Opposition Leader who has to make $70 billion worth of savings, cuts to things like health, education, social security and defence, in order to make his Budget add up. I think people are sick of that.

In terms of the Labor Party, of course – we need to do more as a party to engage members, to bring people into the party and to engage our membership more fully and there are a number of different views about how to do that. But I think that people are consistent in the importance of better engaging with Labor Party membership.

GRATTAN: Senator if I could turn to the issue of the moment, can you really say, hand on heart, that Peter Slipper was the best man for the job of Speaker?

WONG: Peter Slipper was the Deputy Speaker. I assume as Deputy Speaker – I am obviously a Senator, not a House of Representatives member – he has the qualifications to be the Speaker. The context of Mr Slipper is this: Mr Slipper was pre-selected eight or nine times by Tony Abbott and his colleagues. Mr Slipper was the subject of Tony Abbott saying that he was satisfied, for example, that Mr Slipper was a good man, he backed him in terms of his entitlements and a range of other issues.

We have had a change of Speaker on the floor of the House of Representatives, in accordance with the rules there. A majority of the Parliament supported him. And if Mr Abbott has an issue with that, maybe he ought to look at his own internals.

GRATTAN: Is Mr Slipper currently still being investigated by your department and if so, when will that finish?

WONG: I do not understand that there is a current audit underway. I understand that there has been a petition seeking an audit that is being tabled. And the relevant Minister, who is the Special Minister of State Gary Gray, will make a decision after he receives a recommendation from the department.

BONGIORNO: Do you think that the change of Speakership, the change of numbers in the House of Representatives, gives Labor a better chance of regrouping and even winning the next election?

WONG: What I think it does enable us to do is to continue to prosecute the legislative agenda for some of the key reforms that we do need to get through the Parliament. That is obviously an important thing and that is what we will continue to do.

But it should be recalled that the Speaker, who is Speaker, would not matter if Tony Abbott had not broken his agreement, the agreement that was struck with Mr Oakeshott and others about an Independent Speaker, a better Parliament – an agreement that both Mr Abbott and Mr Pyne walked away from after the Labor Party formed a Government. I think that is an important factor.

BONGIORNO: Thank you very much for being with us today, Finance Minister Senator Penny Wong.