SENATOR THE HON PENNY WONG

MINISTER FOR FINANCE AND DEREGULATION

TRANSCRIPT

7 May 2013

SKY NEWS WITH KIERAN GILBERT

TOPICS: BUDGET, NDIS

E&OE - PROOF ONLY

GILBERT: Finance Minister, thanks for your time. I want to ask you about that Newspoll in a moment, on the NDIS. But first of all, on the revenue hole in the Budget, can you confirm that the Government is looking at a revenue shortfall of between $60 and $80 billion by 2016?

WONG: Well, what I can say to you is what I’ve told you before and that is because we are seeing a combination of circumstances – a very high dollar and the prices of things we sell to the rest of the world coming off, that that’s obviously having an impact on company profits which is affecting government revenues. That will have an impact across the budget period. And what I can confirm is that the impact in the current financial year, between last year’s Budget and this year’s Budget, looks to be in the order of $17 billion. So that is a very substantial write down of $17 billion.

GILBERT: And can you also confirm that the Government can’t go ahead with the increase in the Family Tax Benefit Part A? Because that’s the report this morning – that you’re going to save nearly $2 billion by not going ahead with that, which was promised as part of the mining tax.

WONG: I can confirm to you that we are not in a position to proceed with the boost to the Family Tax Benefit as a result of the revenue challenge the Government is facing and the nation is facing. This is a difficult decision, but a responsible decision given what’s happened to revenue. I do want to emphasise this is not money that is currently being received by families. Families will continue to receive the benefits they currently receive in the family tax area. This is about not proceeding with the additional boost the Government had previously considered.

GILBERT: This puts the Government in a fairly awkward position, doesn’t it, because this was attached to the mining tax. The Coalition has repeatedly said the mining tax isn’t generating any revenue so they’re going to scrap everything associated with it, except the increase in the superannuation guarantee. So this basically validates what they’ve been saying for a fair while now.

WONG: Well, let’s remember there are many other things Tony Abbott will take away and would take away. It’s quite clear he would cut to the bone. We’ve seen Joe Hockey out there beating his chest again talking about the ending of the ‘age of entitlement’. The difference between Joe Hockey and the Government is that we will be upfront with Australians about the difficult decisions we have to make; the responsible savings decisions in order to make the right investments for the future. Joe Hockey wants to coast to an election, bang on about ending universal entitlement, but never actually tell Australians what he would do.

GILBERT: … They will though. They’ve said they will once they see the Budget.

WONG: No, he said in yesterday’s speech that a lot of the detail of this would be after the election. Now, you know what that is? That is a recipe for cuts to the bone that the Opposition refuses to detail now. I don’t think that’s democratic.

GILBERT: Is the Treasury now being ultra cautious because it’s been stung by criticism that they’ve been too optimistic and been proven to be wrong too many times?

WONG: Certainly the Treasury and the Government are facing the challenge of a situation which has not really happened before, and that is the dollar staying stubbornly high despite what we call the terms of trade – that is, the prices of the things we sell to the rest of the world – coming off. And that rather unusual set of circumstances is driving this very large shift in profits, the downward shift in profits. So firms are earning less profits and therefore a reduction in revenues to government.

GILBERT: You say that the Coalition is going to cut to the bone. One thing they haven’t cut to the bone and are promising that they will sustain, is DisabilityCare. They’ve backed this right throughout – Tony Abbott’s supported it. The poll today suggests there’s been no boost for the Government even though it’s a Government-driven policy. That must be a concern?

WONG: You know, when you do something like work on providing care for people who are disabled, providing a better system of support for Australians with a disability, you don’t think about the polls. We have worked on this for years and years and years, through a succession of people, particularly Jenny Macklin and of course the Prime Minister whose finally ensured that there is a stable funding stream… We haven’t worked on this for years because we’re thinking about the opinion polls. We do it because we care about Australians with a disability.

GILBERT: You keep saying he’s cutting to the bone though. He’s not though, is he? This is a big, big initiative and he’s supported it the whole way along.

WONG: Hang on, let’s remember Joe Hockey said some pretty hard things against the Levy before Mr Abbott changed his mind. But if you want to talk about what the position of the Coalition really is, why doesn’t Joe Hockey come out and tell people exactly what he’s going to cut when he says he’s going to end the age of entitlement.

GILBERT: Alright, let’s look at some other issues that you’ve got on your plate. I want to ask you – is foreign aid safe in the Budget? Because the Government has promised to increase foreign aid to half a percent of Gross National Income by 2016/17 is that still on track?

WONG: These are issues that will be clear on Budget night …

GILBERT: So it’s still … it’s on the table?

WONG: I think the problem is if I get into ‘yes’ this will or won’t happen, then we just move onto the next thing. I’m not in a position to do that across the board. So, those are things you’ll have to talk to us about after.

GILBERT: Finally, on the Paid Parental Leave debate, prominent feminist Eva Cox is a strong advocate for Tony Abbott’s generous Paid Parental Leave scheme. There are others that say it will be a productivity increase; a boost in terms of productivity. What do you say to it because surely if you’re giving that incentive more women would go back?

WONG: Increasing female participation is a good thing. That’s why we’ve introduced the first Paid Parental Leave scheme. That’s why we’ve increased assistance for childcare and it’s why the tax free threshold change – which Tony Abbott would take away – is a good thing particularly for low income and second income earners. So people keep more of every dollar they earn. It is not sensible policy, nor is it fair, to say we will have a scheme that is open even to millionaires, funded through the tax system through a tax on companies. I don’t think that’s good policy.

GILBERT: Finance Minister, thanks for your time.

WONG: Good to speak with you.

ENDS