CURTIS: Penny Wong, welcome to ABC News 24.
WONG: Good to be with you, Lyndal.
CURTIS: Your Governments criticised John Howard a lot for giving away money to people when the Government was raking in money. Aren't you doing exactly the same thing?
WONG: Not at all. This is a Budget which recognises a number of things. It is prioritising the strong economy that's why we have the surplus but also fair community. And it does ensure that we provide targeted assistance to low and middle income Australia, low and middle income families. They've been very much the priority in the Budget, as well as ensuring we give business a tax break to give businesses more flexibility to adjust in this time of economic change.
CURTIS: But this is not structural budget reform to cope with the changing structure in the economy. Most of the tax reforms you proposed from the mining tax, which you said would boost productivity, have gone.
WONG: Lets remember a few things in terms of productivity. What are some of the things we have made sure we protected through this Budget? The very substantial investments in infrastructure. The very substantial investments in education.
This is a Government that's almost doubled schools funding, which is increasing the amount of higher education funding, we are seeing more people in universities these are areas of expenditure which we did not cut and the reason is they are the drivers of productivity.
But what we have done is, we have said, we do think it's a good thing that more Australians should share in the benefits of the boom and that's why we put in place this assistance.
CURTIS: But youve scrapped the company tax cut, scrapped even the part you could have got through the Parliament, which is that for small business. Doesn't it look like you're giving money to people who can vote and not to companies who can't?
WONG: Lets remember who said no to the company tax cut...
CURTIS: But the Greens would have said yes to the small business part.
WONG: Lets remember who said no to the company tax cut. It was Tony Abbott. The party of Menzies said we will vote down a company tax cut. And that's why the Government was unable to see any prospect of this getting through the Parliament.
CURTIS: But you would have got part of it through the Parliament.
WONG: If you think it's a good idea to have different levels of tax rates, permanently, for companies. Our view was we were not going to allow the political gridlock caused by Tony Abbott's negativity to prevent us from sharing the benefits of the boom with more Australians.
And so we have chosen to provide this assistance in the form of additional payments to low and middle income Australia, people bringing up children. These are good things to be providing assistance for.
Can I say on the company tax cut, we have not taken any of the savings measures which have been identified in the Business Tax Working Group and what we have said to the business community, what the Treasurer has said in his Budget speech is, we are open and willing to work with the business community to deliver a company tax cut that is funded by savings in the business tax area and that will pass the Parliament.
CURTIS: Youve announced a surplus, but it's vulnerable on a number of fronts. You were expecting a deficit last year of $22 billion, it's now $44 billion because of unforeseen events. You could have unforeseen events in the next year before youre able to bring this surplus in ...
WONG: And what Id say is look at what we've done. We've made nearly $34 billion worth of cuts in order to ensure that we not only have a surplus in the 2012-13 year, but surpluses growing every year of the forward estimates. That demonstrates our determination. Thats a very substantial amount of savings.
CURTIS: But it relies, doesnt it, on another one of the vulnerabilities, on getting it through Parliament and Independents and Greens who might see a Government vulnerable and push you as hard as they can as they can for what they want?
WONG: The surplus is good for Australia. The surplus is good for those, particularly businesses and households, who are on the wrong side of the mining boom. A surplus is good because it gives the RBA is flexibility to move. A surplus is good because it gives us a buffer against uncertainty. So I think there is a point in this debate where it's important for to us say this is not just about the argy-bargy, it is about what's in the best interests of the country: strong economy, fair community, budget surplus.
CURTIS: How do you give the RBA room to move in the short term when you're bringing forward nearly a half billion dollars worth of spending, thats nearly half of the first stimulus package, through carbon tax compensation, Schoolkids Bonus, and local Government spending?
WONG: Youve raised three things. In the carbon price we were very upfront that we wanted to give families, households and pensioners upfront assistance ahead of the carbon price being put into place. We explained that all when we announced the Clean Energy package.
In terms of the other bring forwards that you speak about, such as the Schoolkids Bonus, that's a redesign of policy. We're paying that upfront as opposed to as a tax refund, that's very sensible. But again, the Opposition will flail around trying to criticise this or that decision and I again come back to say this: $34 billion worth of savings, surpluses growing across the forwards, tax take less than Peter Costello. We are taxing less than Peter Costello and John Howard were when we came to Government.
CURTIS: You've written down said that there will be less GST collected, I think its $11 billion less collected over the next four years. That's a problem that is passed directly on to the States. Won't there be a second round of pain that may be targeted to those you've sought to protect in this Budget? You may be protecting them now where the States may hit them later?
WONG: I can be Finance Minister for the Federal budget, I can't be Finance Minister for the Victorian budget or the NSW budget. Weve laid out our priorities and our priorities have been to protect low and middle income Australia and to provide them with assistance...
CURTIS: But do you think the States may have to cut their own budgets to make up for the GST shortfall?
WONG: Theyre dealing with the same issue were dealing with, which is that revenues are falling compared to what people anticipated. And that's the challenge this Government's been dealing with and has had to deal with in this Budget. We've done that and were still coming back to surplus.
CURTIS: A final quick question on the carbon price. Treasury seemed to send some caution on the carbon price of $23 a tonne, saying theres uncertainty about future carbon prices because of global uncertainty. If Rob Oakeshott gets his way and ditches the floor price, is there a chance you will have to move to lower that $23 a tonne?
WONG: Theres a lot of ifs there. Treasury in the Budget papers has laid out the uncertainty. That does exist, I think everybodys upfront about that. We know where the European economy is at regrettably and that affects a number of things and the carbon price is one of them. But again it comes back to the numbers and going forward we see surpluses growing across the forward estimates.
ENDS