SENATOR THE HON PENNY WONG

MINISTER FOR FINANCE AND DEREGULATION

TRANSCRIPT

30 January 2013

RADIO NATIONAL DRIVE WITH WALEED ALY

TOPICS: BUDGET, ELECTION, GONSKI REVIEW, NDIS

E&OE - PROOF ONLY

ALY: I’m joined in the RN Drive studio now by the Finance Minister Wong Ying-Yen, better known as Penny Wong. Thanks very much for coming in.

WONG: That’s the first time someone has introduced me with my Chinese name, other than around Chinese New Year.

ALY: That’s great, I just made radio history, this is fantastic. This is all very symbolic; the election is now going to be on Yom Kippur, the Day of Atonement. I know that’s angered some people who’ve suggested that this is not paying due respect to the Jewish community – it’s a very significant day for them. But nonetheless, does it feel like a day of atonement for you?

WONG: I think election days should be a day on which Australians cast their vote on the basis of a contest of plans and policies for the nation’s future. That’s what elections should be about and that’s what I hope this one will be about.

ALY: Did the announcement catch you by surprise?

WONG: Well, I was giving a speech at the time, so I was told while I was on my feet what the date was.

ALY: So you didn’t know before she gave the speech?

WONG: No, I’m not one of the people that the PM had a chat to, and it’s entirely the Prime Minister’s prerogative. But can I say this: if you talk to people around the country – and you talk to people on this show – people I think found last year not the most edifying year in politics and the constant refrain to me was, ‘Why aren’t, all of you, why isn’t politics, more focused on the things that are important to our lives, to our families, to our children’s future?’ I think what the Prime Minister has done is ensured there is certainty, there is clarity and there’s also the imposition of discipline. Because I think what this means is the Opposition, as well as the Government, will have to detail our plans for the future and how we’ll fund them.

ALY: Well, I want to get to some of those plans in a moment but it also guarantees doesn’t it that we are in campaign mode? I mean I know that the Prime Minister says that that’s not what this is about and she said she wants – let me get this quote right – ‘a year of cool and reasoned deliberation’. But surely this does exactly the opposite, doesn’t it?

WONG: I think it certainly avoids you asking me constantly what the election date will be, which I’m sure you would have done –

ALY: Yeah –

WONG: … so at least you’ve got a few more other questions you can ask me. But I think it does enable the Australian people to demand of all politicians that they are upfront with their policies and upfront with their plans for the future. I mean, Tony Abbott talks a lot about ‘real solutions’. Well, there is no real solution if you don’t have a plan to fund it. He has to get through this year now, not only on the basis of a few slogans and not fronting up to the detail, but telling Australians some of the hard decisions he says he’ll make in order to fund these so-called ‘solutions’.

ALY: Okay, I want to pick up that theme in a second but before I do, just to go back, you didn’t know about the announcement, but people outside your party did; the Greens were given some heads up – a moderate heads up. The Independents, the cross-benchers, were told about this. It seems strange to me that people outside the Labor Party would have more of an idea about it.

WONG: The Prime Minister has said that she consulted with some senior colleagues, and the facts are that –

ALY: You’re a senior colleague. You’re the Finance Minister.

WONG: This is true, but there are a lot of senior colleagues and she certainly consulted with the Treasurer, and the reality is this has always been a Prime Ministerial prerogative.

ALY: But normally the team’s in on it.

WONG: Well, no, I can tell you it’s always been the decision of the Prime Minister and it was on this occasion. And I think it’s both a brave decision, because obviously there is the element of surprise that tactically in politics we don’t have, but I think it’s the right decision, because it means there can be a focus on policy not process. In terms of what you said before that this will be a constant campaign, you know you have some agency in that and so do your listeners. Because what you demand of us also shapes the debate and I think you should demand of us and of the other side our clear plans for the future.

ALY: Okay, well let’s look at some of those. Your side of politics has spoken extensively about the NDIS. This is something that is a major part of the Labor story at the moment. You’ve had the Gonski Review and then a series of responses to it. We had Gonski legislation that didn’t detail anything last year and so all of this is to come and the funding is far from clear. At what point are we going to hear how you’re going to fund these big ticket items that are very expensive?

WONG: First, yes, they are expensive but they’re also the right thing to do and if I can just talk briefly about that then I’ll come to the funding question. I think Australians would agree that it’s time that we properly funded disability services in this country. That we should, as the Prime Minister said in her speech, that we should be sharing risk as we share opportunity and the current system – if you speak to any Australian with a disability or their family and friends – doesn’t deliver the sorts of support that people need.

ALY: Well, there’s agreement on that.

WONG: Yes, I think there’s agreement on that. So this is a very important reform. The second, on the Gonski or the education reforms: if you look at some of the statistics, and I know there’s always argument about this, but I think it’s true to say that Australia is not performing as well in terms of its school system and our outcomes as many of our competitors. Now, as we move into this Asian  century and as the global economy changes it’s our obligation to equip our children with a set of skills that enable them to grasp those opportunities and to ensure the nation’s prosperity into the future.

ALY: Which brings us to the question of money.

WONG: Which brings us to the question of funding. They are expensive. And difficult decisions will have to be made in terms of funding them. And what the Prime Minister said today is that we recognise that structural spends – that is spending that is locked into the budget for years to come – require structural saves. You get an inkling of the sorts of savings we would look at from the savings we’ve made, many of which have been opposed by the Opposition. The removal of various tax breaks, things like the Dependent Spouse Tax Offset, the changes to the Baby Bonus – also opposed by the Opposition, changes to the Private Health Insurance Rebate – also opposed by the Opposition; very important structural saves. So obviously we will have more to say about that.

ALY: So what you are saying now, just to be clear, is that there are more of these structural saves to come and that is what will fund the NDIS and whatever your response to Gonski is.

WONG: I think the Prime Minister made clear today that we recognise the importance of showing a credible funding strategy for those reforms and that –

ALY: Is that the strategy?

WONG:… and we will need to bring forward for the Australian peoples’ consideration some of the sorts of savings measures that we’ve already seen to date.

ALY: So, what’s left? What are we looking at that you’re going to be –

WONG: Well, that’s not a question we’re going to go into in this interview is it Waleed? I’m not going to talk about what might or might not be in upcoming decisions or in the May Budget.

ALY: Superannuation?

WONG: We’re into the rule in, rule out and Finance Ministers never do that.

ALY: But you must have in your head –

WONG: Well, I do.

ALY: Okay, well, tell me this then –

WONG: I’m just not going to talk to you about them … (laughs)

ALY: (laughs) Alright, not telling.

WONG: I think that’s not unreasonable. We will detail these decisions when they are finalised. We will detail them and account for them in the usual way in the May Budget.

ALY: How close to finalised are they?

WONG: We will detail them in the May Budget.

ALY: You’re not even going to tell me that?

WONG: Well, you know, Waleed … there are things I won’t talk about.

ALY: Okay, but it’s a tricky thing because on the one hand the discourse from your Government and not just you speaking to me now but repeatedly has been the Abbott Opposition will not tell us anything about their costings, they won’t release their policy, they won’t detail… These are two massive things that as yet we don’t know how you’re going to fund, and you’re not detailing that for us. You’ve sort of said this is what we’re going to do –

WONG: - But we’ve committed to ensuring there is a funding strategy that’s transparent to the Australian people. But can I just come back to the Opposition and your comment there. I don’t think its right to say there’s some sort of equivalence. We have consistently put forward our budget and budget updates. We’ve managed a substantial write-down in revenues; we’re getting a lot less tax and we’ve been upfront with people about that. We’ve made some hard savings decisions, many of which have been opposed by Tony Abbott and by Joe Hockey. I mean, Joe Hockey talked about the Baby Bonus decision and likened it to the one child policy in China. This is the sort of level of debate. Tony Abbott is promising greater investment in infrastructure, more spending, lower taxes and higher surpluses. Now that is not possible.

ALY: I understand that –

WONG: That is not possible.

ALY: I understand that critique, but I’m making the point in respect of the NDIS and the Gonski Review.

WONG: Sure.

ALY: I mean simply saying we’ve done some structural cuts before, we’re going to do a bit more of the same and that will fund it –

WONG: The structural saves I’m talking about would yield over $200 billion by 2020, so these are not –

ALY: The logic of cutting, as you’ve discovered when you eventually gave up on the pledge of a surplus, is that once you’ve started cutting subsequent cuts get harder and harder and harder which is why there’s a perfectly legitimate question to be asked about what the next ones are going to be.

WONG: Yes, it is an absolutely legitimate question and we will answer it.

ALY: When?

WONG: We will detail it in the Budget.

ALY: So we won’t hear before May?

WONG: We will detail an account for these policies in the Federal Budget.

ALY: Okay. Just one more on the timing of the election. Joe Hockey has been critical of it which has not really surprised anyone. But one of his criticisms was interesting, and that was that the timing of the election now falls before the full accounts of the current financial year come out so that we won’t actually have a sense of what the state of the economy is and precisely how big our deficit was in this current financial year at that time. Is he correct on the facts, first of all?

WONG: Well, I’ve got to say Joe Hockey is running out of excuses when it comes to releasing his costings. He really is. I mean this is a bloke who released a set of costings in the last election which had an $11 billion black hole – not my assessment, this is Treasury and Finance’s assessment.

ALY: But this –

WONG: Well, hang on. And since then has he refused to do -

ALY: … is about your own –

WONG: I can tell you this. You do not need a budget update to know that you have to find savings to fund policies. You don’t need a budget update for that.

ALY: But you do need a budget update to know precisely what the state of the budget is.

WONG: Well, it will be interesting to see if Joe Hockey ever announces a save, because he hasn’t to date.

ALY: They’re questions –

WONG: And so he keeps saying, ‘I can’t any announce savings measures because they haven’t told me what’s in the budget.’

ALY: They’re questions for him, but the question for you is –

WONG: I look forward to you asking that because as yet I haven’t heard a non-bluster answer from Joe.

ALY: Is the timing though of the election campaign convenient?

WONG: The Final Budget Outcome is usually released later than that. But let’s remember there are two things that are released before that: the Budget, the annual federal Budget –

ALY: But we’ve seen how that changes…

WONG: Well, that is what we all have to deal with, whether it’s the Opposition or the Government. And let’s remember this Opposition has access to a Parliamentary Budget Office, greater resources around costings than any Opposition previously in Australia’s history. And there’s also what we call the PEFO – the Pre-Election Economic and Fiscal Outlook – which also is made public. So, Joe will have plenty of opportunities. He keeps grasping for excuses; as yet we haven’t seen any credible savings or funding package from him.

ALY: I’ll be speaking to Christopher Pyne in the next hour so some of these things I can raise with him. It’s going to be -
WONG: I’ll make you a bet that you won’t get an answer on the savings policies from the Coalition.

ALY: I’m not a betting man Penny (laughs). It’s tempting to take you up on that. Thank you very much for coming into the studio. I appreciate your time and for speaking to us as well.

WONG: Good to be with you.

ENDS