Monday 5 August 2013

Senator Penny Wong, TOPICS: BETTER SCHOOLS PLAN, ECONOMIC STATEMENT, ELECTION, LIBERAL PARTY COSTINGS, NATIONAL DISABILITY INSURANCE SCHEME


SENATOR THE HON PENNY WONG

LEADER OF THE GOVERNMENT IN THE SENATE

MINISTER FOR FINANCE AND DEREGULATION



TRANSCRIPT


4 August 2013

INSIDERS WITH BARRIE CASSIDY


E&OE - PROOF ONLY

CASSIDY: Penny Wong, good morning.
WONG: Good morning, good to be with you.
CASSIDY: What do you say to people who clearly don’t want to pay any more for their cigarettes?
WONG: Well, look I can understand their views, but ultimately let’s remember smoking costs the economy. It has a human cost. And this is a measure that will benefit not only the budget, which funds hospitals, health and education, but also acts as a disincentive, particularly for young people, in taking up smoking.
CASSIDY: Before I go and talk more about Friday’s statement, what do you make of the fact, first of all, that Western Australia has signed up to the NDIS?
WONG: We welcome this. Obviously this is very new news – the Prime Minister has only indicated that this morning. But we’ve been pressing for some time to make sure that we can roll this out across the country and make sure that Australians with a permanent and significant disability get the support that they deserve.
CASSIDY: And Victoria signing up to the education reforms? Would that be a result of Tony Abbott coming on board?
WONG: Well, we’re very pleased that Victoria has gone down the path that Barry O’Farrell did some time ago. This is a really important reform, the Better Schools plan. It’s about making sure every child gets the best education they can, and can be the best of who they are. It’s all about opportunity. But it’s also critical to Australia’s competitiveness in the decades ahead. It’s a key aspect of our economic policy, as well as a policy that is all about Labor values.
CASSIDY: But can Tony Abbott take credit for that, because he came on board on Friday and Victoria signed up last night?
WONG: How can Tony Abbott take credit for a policy that until, I think it was Friday, he has criticised up hill and down dale. He’s told us that the existing system, which ensures inequity, that is broken and that does not serve Australia well in the 21st century, has been the one he’s supported. He’s now changed his position. This is a Labor policy; we’re very pleased Victoria has come on board.
CASSIDY: Alright, we go back to Friday and things like the bank levy and the cigarette tax; some have suggested that’s just tinkering at the edges. You’ve got major structural faults in terms of revenue raising. Does this even begin to address those faults?
WONG: Well, let’s understand what we’re facing as a nation. The economic challenge we’re facing is what’s happening in the resources sector, so the end of the investment phase of the mining boom; we’re seeing more moderate growth in our major trading partner China. Now, that’s having an effect, the global economy is having an effect on the Australian economy.
We’re going through a series of transitions, that’s an economic challenge we have to face, and the Government is facing that. That’s why we’ve taken the decisions we’ve taken in the Economic Statement. Not to cut harder, because that would mean higher unemployment and lower growth, and to make sure we have a clear path to surplus and continuing to make savings.
And I have to say, Barrie, some of the people who complain about the lack of structural savings are often the same people who then oppose structural savings we’ve made in the past. I mean, Joe Hockey, on the one hand said: we have to have the end of the age of entitlement, but on the other hand, described our plans on the baby bonus as being akin to the One China [Child] policy. Now, that’s not a consistent position, and it’s not an economic plan.
CASSIDY: When Treasury give you forecasts for the next four years and then ten weeks later they say they’re out by $33 billion, how do they explain that?
WONG: Well, can I make this point: Treasury has the best set of economic advisers and forecasters in the country. They’re the same people –
CASSIDY: This is as good as it gets?
WONG: They’re the same people who advised Peter Costello, and they’re the same people who would advise Joe Hockey were he ever to become Treasurer.
Now, we are in a very volatile environment. We’re in a volatile global economy; we’ve seen post the global financial crisis much more volatility in the global economy than we’ve seen in the decade previously. And of course, that’s having an effect on our economy. Now, it’s true that we’ve seen a lot of movement in forecasts. But that is as a result of the volatility that we’re seeing.
CASSIDY: But $33 billion in ten weeks is – it does raise questions about how useful these forecasts are and whether there’s a better way.
WONG: Well, it raises questions about what your plan is and how you respond to it. And we’ve laid out our plan. We’ve said this is how we will respond, these are the choices we will make; some of them have been criticised, such as the tax on cigarettes that you’ve just described. It puts us in stark contrast, I have to say Barrie, to the Opposition who are refusing to tell people what their plan is.
Now I’ve released -
CASSIDY: We’ll get to that, but -
WONG: We’ll get to that but I’m making the point that the economic circumstances demand that any politician stand up and say to Australians ‘this is how we would handle this situation, this is what we would do’. Now, the Government’s done that – the Opposition is refusing to.
CASSIDY: But this is such a wide variation, and it raises questions about when you come up with a forecast that there’ll be a $4 billion surplus in four years. That’s a very finite figure, surely it’s meaningless in the context of what we’ve just seen?
WONG: It’s not meaningless to lay out your economic plan and your strategy. That’s critical and that’s why we did it. It hasn’t been easy, as you know, we’ve -
CASSIDY: What it’s based on is the problem, isn’t it?
WONG: And what I’d say to you is that a Government – political leaders – have to manage economic circumstances that we’re confronted by. We don’t manage the global economy. And we have to manage the consequences of it for Australia in a way that preserves employment and preserves growth. And that’s what the Labor Government has done and that’s what we’ll continue to do.
CASSIDY: But then you rely on forecasts and you talk about unemployment – it will go up to 6.25 per cent next year, but then 5 per cent in each of the next two years after that, based on what?
WONG: Well, this is Treasury advice. And the advice is that we anticipate a softening in the economy in the current financial year but a return to trend growth beyond that. That’s why we’ve taken the decisions in relation to the budget that we have. Because cutting harder earlier – and this is what Mr Abbott should be clear about – cutting harder earlier is a recipe for more Australians out of work. That’s the Opposition’s plan.
CASSIDY: So unemployment’s going up, growth is slowing, the deficit is growing; you can’t be comfortable with that situation going into an election campaign?
WONG: Look, these are the economic challenges we’re faced with. And what I know is that we have applied, and will apply ourselves, with discipline, to these challenges. I know that we’ve made the right decisions when it comes to the budget to make sure we don’t add to the softening in the economy by chasing revenue down and cutting to the bone – cutting health and education, which is what the Liberal Party would do. I believe we’ve made the right calls.
Now, you know, obviously you’d like the global economy to be growing much more strongly. You’d like economic circumstances internationally to be very different. But you don’t choose the circumstances, you have to choose your plan as to how to manage them and that’s what we’ve done.
CASSIDY: Nevertheless, your forecasts were well out, and now you turn your attention to the Opposition and you make an assessment about how much … to the extent that they need to cut. How much credibility does that have?
WONG: Well, I don’t think Joe Hockey has any credibility on this. I mean, what I’ve put out yesterday was our assessment of how much the Opposition would have to cut into things like health and education just to get the budget back to the position of the Government’s bottom line. That’s all. And we’ve based it on Joe Hockey’s and Tony Abbott’s own statements.
Now, I’m not in Joe Hockey’s mind, nor is any Australian. If he’s got a different view about what he’s previously promised, he should be upfront and tell people about them.
But the point is, the Opposition continues to say: ‘we oppose certain savings measures but we want to bring the budget back to surplus earlier and more strongly’. Well, the only way you can do that, Barrie, is to cut harder. And I think Australians deserve to know just which services in health, in education, Tony Abbott would cut to make good his promises that he’s made.
CASSIDY: Joe Hockey’s response to that is the Coalition is doing a meticulous job of costing its policies, using the independent Parliamentary Budgetary Office and sources.
WONG: Well, I would say to him, share it with Australians.
CASSIDY: Well, he will. He went on to say all be revealed – the fully funded set of policies – before the election.
WONG: All I can say is it doesn’t add up, and I’d refer you to what we released yesterday. What we’ve done is gone through all the savings measures that they’re not supporting, all the promises they’ve made, and they’d have to find $70 billion of cuts over the budget period in order to get to the bottom line that the Government put out on Friday.
Now, it doesn’t add up. Or, the only way it adds up is you massively cut into health and you massively cut into education.
CASSIDY: What’s the nature of these items that are in the budget, ‘decisions taken but not yet announced’. What’s that about?
WONG: Well, precisely what it says. In every budget update there’s a line item which is ‘decisions taken not yet announced’. The Contingency Reserve, which is what that includes, is made up of a number of things. One is decisions yet to be announced and will be announced.
CASSIDY: During the campaign?
WONG: But also things like items which can’t be disclosed for such as national security or for commercial in confidence reasons.
CASSIDY: And the money that seems to be headed for the car industry, some $200 million or so – that would be from that fund?
WONG: We’ve made no secret of our support for the car industry, Barrie. I mean, we are the party that is continuing to support the car industry. It’s Tony Abbott who wants to take out $500 million between now and 2015, and then withdraw all assistance post that, which will be the end of the car industry in Australia.
Now, Minister Carr is in negotiations with the industry, and we’ll make further announcements when those are resolved.
CASSIDY: So that’s yet to be finalised?
WONG: We’ll make further announcements when those negotiations are complete.
CASSIDY: Now these reports that Rupert Murdoch is out to get Kevin Rudd and the NBN. Do you fear what might be around the corner in the election campaign?
WONG: Well, look, I did note those reports today. I have to say this is not a new thing. I mean, I follow Rupert Murdoch on Twitter and it was quite clear during the US elections that Mr Murdoch made his views opposing President Obama very clear, and his media outlets in the US really were consistent with that.
Now, obviously, it’s a free press, he’s entitled to put his views, and he can do so very effectively with very large numbers of papers in Australia.
But what I would say is a couple of things. First, the Government fundamentally disagrees with his support for Tony Abbott. He’s entitled to put it, but we obviously fundamentally disagree with it. And finally, I think it’s ultimately a matter for the Australian people. They can make their judgment about what they read.
CASSIDY: On elections, you seem to have everybody’s attention. I think few people would complain if you called it on now.
WONG: Well, ultimately the PM makes that call as every Prime Minister always has.
CASSIDY: And do you know whether he’s made up his mind?
WONG: That’s entirely a matter for him.
CASSIDY: Thanks for your time this morning.
WONG: Good to be with you.
ENDS


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