KELLY: Senator Wong, good morning, welcome to Breakfast.
WONG: Good morning Fran, good to be with you.
KELLY: The size of the surplus; its always a closely guarded secret until the Budget is released, until the Treasurer is on his feet. Why has the Government put the figure out?
WONG: Weve said for a while that the surplus will be modest but it will build over time. Obviously in terms of confirming the figures particularly over the forward estimates, and what happens, youll have to wait until the Budget speech and the Budget lock-up.
KELLY: Its pretty unusual though, perhaps one reason to get the surplus out of the way is so that the focus on the headlines the day after the Budget is on the cash giveaways. Weve already heard of the Schoolkids Bonus, we know that theres carbon tax compo coming. And now we know about a cost of living bonus for pensioners and low-income earners.
WONG: I think theres always speculation, isnt there, in the lead-up to Budget and the morning of the Budget itself being handed down is no different. Its true that we have made clear that we have redesigned the Education Tax Refund, and we are putting in place the Schoolkids Bonus for the reasons outlined because we are serious about education and supporting families who are putting their kids through school. But on the broader issues you alluded to, Fran, I think youll have to wait until the Budget lock-up to have a look at those. The Treasurer will talk about it, as you know, in his speech.
KELLY: Are pensioners and low income earners in line for a bonus?
WONG: (laughs) Fran, you can ask it many times, including in a nice way, but unfortunately I cant answer it in a nice way, because these are matters for the Budget, and the Treasurer will be handing that down today.
KELLY: OK, lets assume the leak is right, there is that... weve heard theres tough cuts coming in this Budget to get to surplus. The Treasurer has been telling us for months this was a tough job, there will be cuts to spending programs and priorities. Yet there are still handouts. Its hard to escape the conclusion that this is designed to do one thing, which is to take the heat out of the carbon tax which is coming our way.
WONG: Thats what Tony Abbott wants you to say, and wants you to believe
KELLY: It makes sense, doesnt it?
WONG: No, I dont accept that. I think thats because Tony Abbott wants everything framed through the prism of the carbon price. The fact is were a Labor Government; budgets are about priorities and were clear about our priorities. Our priorities have been to ensure we look to the interests of low and middle income Australians. Our priority is to spread the benefits of the mining boom. Our priorities in the last Budget were about the drivers of productivity, things like the $3 billion investment in skills. Budgets are always about your priorities and this one will absolutely be about Labors priorities at this time.
KELLY: We thought the priority all this time was getting the Budget into surplus, and yet here you are handing out more cash.
WONG: The surplus is a very important objective. And the reason is that the surplus is what enables the Reserve Bank to move, should it wish to do so. And we think thats important. Everybody knows how welcome the most recent interest rates cut was. We also think, if you look internationally, that a surplus is an important buffer in an uncertain world. Surplus is not about some abstract concept, its about what are the right economic settings for Australia at this time.
KELLY: Well, let me ask it this way, do you believe as the Finance Minister of Australia that the cost of living pressures are so great at the moment, and with the carbon tax coming on-stream, that low income earners and pensioners deserve a bit more help?
WONG: Well, theres two parts to that question. The first is theres an assumption in that question that what is provided under the carbon price assistance package is not appropriate. I think its extremely appropriate its a package that focuses very much on low and middle income Australia. It increases pensions. We tripled the tax-free threshold, thats a tax cut for everyone earning under $80,000 a year, and theres increases to Family Tax Benefits. And for low and middle income Australians theres a very substantial amount of assistance.
More broadly, as Finance Minister, what Id say to you is that budgets are all about priorities. Its always about making decisions between different sorts of priorities. That is how weve approached the Expenditure Review Committee process this year, that is how this Budget has been put together.
KELLY: OK, youve come out with at $1.5 billion surplus. Lets face it, itll only take one or two measures picked apart by the Opposition or the Independents to sink this surplus ...
WONG: We always have to get our savings measures through Parliament. But this will be a test for Tony Abbott. This is the surplus year. He says he wants a surplus. If he opposes any Government savings measures, he will make it clear to the Australian people he is nothing more than a wrecker. He would be seeking to wreck the surplus...
KELLY: Well, he doesnt believe your surplus on faith, for starters.
WONG: A very convenient proposition for him, isnt it, to say I dont believe it, so I can therefore wreck it?
KELLY: He also says that we cant trust it because, as the Coalition points out rightly, just a year ago the deficit was predicted to be tens of billions of dollars less than what its actually going to be when the Treasurer announces it tonight. Therefore, how can we believe a tiny surplus of $1.5 billion?
WONG: What Id say is, lets look at the figures today in the Budget. Id remind Tony Abbott that this Government has had to deal with a $150 billion writedown in revenue since the global financial crisis. If he believes he somehow could have predicted the global financial crisis and its effect on the Australian economy, and on the Budget and the Governments tax take, hes the only person in Australia.
That is what weve had to deal with. And we have had to, as a result, protect surpluses in past budgets and in the mid-year review, weve had to not only offset new spending but also put in place more savings. And that is the disciplined approach we are taking into this Budget.
KELLY: Yesterday the Treasurer wouldnt confirm that the Government is committed still to that company tax rate, that one per cent tax cut thats supposed to be there as part of the mining tax deal. Will the Government introduce this tax cut, and fight for it?
WONG: We have, and I think weve made our position very clear. The person whos fighting against it is Tony Abbott. Its quite an extraordinary position in Australian politics, Fran. Weve got the party of Robert Menzies lining up with the Australian Greens to oppose a tax cut for companies. This is how combative and negative Tony Abbott is, he wants to vote with Christine Milne and Bob Brown to knock off a company tax cut.
KELLY: Will companies get a tax cut?
WONG: Company tax relief is very important. Thats why weve already announced the loss carryback, which is, as you know, a tax measure which is all about the patchwork economy, and giving businesses the flexibility.
KELLY: Lets go to Fair Work Australia now, and the report on the HSU and Craig Thomson. More than $500,000 in union funds spent by your former colleague on prostitution services, personal expenses like fancy meals, travel, even his bid to win Dobell back in 2007. Would you be happy to welcome Craig Thomson back to the Labor caucus?
WONG: Hes not in the Labor caucus
KELLY: Well, would you be happy to welcome him back? He definitely has plans to come back.
WONG: Hes not in the Labor caucus as a result of the decision of the Prime Minister. Id make a few points, obviously its the day before Budget so I havent read the report all 1100 pages...
KELLY: None of us not many of us have
WONG: Well I think someone has.
KELLY: but let me prcis it for you.
WONG: What Id say is this: as a matter of principle, union members funds being used for the sorts of purposes that are alleged is manifestly inappropriate. Manifestly. And no one will defend that. I am not the person making the decision about whether any of these allegations are true. I note various comments have been made and those matters will be dealt with, I presume, through the proper litigation processes.
But as a matter of principle, as someone who worked for a trade union, and who worked for members who earned very little money and paid dues to the union and expected us to use those monies appropriately, I think it is obviously unacceptable what is being alleged here if it is true.
KELLY: If its proven to be true
WONG: Its not up to me to determine if its true, Fran.
KELLY: If its proven to be true, would you be uncomfortable having him in the caucus room?
WONG: Im not going to go through that, its not a question that is to be answered now because he is not a member of the Labor caucus as a result of the actions of the Prime Minister
KELLY: OK, hes not a member of the Labor caucus, thats true. But the Government does rely on his vote to basically stay in power. 156 of the contraventions in this report relate to Mr Thomson; Fair Work Australia says his evidence was false and misleading. Are you comfortable with the Government relying on his vote to stay in power?
WONG: This comes back to where I started. These allegations are extremely serious, but ultimately I, and you, are not the people who make a decision about whether theyre true. Hes indicated he intends to defend himself, and under our system hes entitled to do that, whatever anybody might think about the allegations which have been made.
KELLY: With the allegations hanging over him though? This has been a three year investigation, and as Ive said the finding is that his evidence was false and misleading. The finding is disturbing, $6000 spent on prostitutes. $6000 of low-paid union members funds spent on prostitutes. Should the Government even be relying on his vote with these charges hanging over him?
WONG: The problem is youre conflating two things, Fran. Are you asking me if its appropriate for union members funds to be used in this way? Absolutely not. Absolutely not, but
KELLY: Im asking you if you think its appropriate for the Government to be relying on the vote of someone accused of that charge?
WONG: He is entitled to defend himself, and that is the system we have in this country. Whatever any of us might think about the material thats been made public, whatever personal reaction we may have to it, under the system of this country he is entitled to defend himself. My views, and I think your views, and the views of the great majority of Australians would be as I outlined in my first answer.
KELLY: Senator Wong, thank you very much for joining us.
WONG: Good to speak with you.
ENDS