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Transcript of interview with Chris Kenny: Saturday Agenda, Sky News: 1 October 2011: Remuneration Tribunal; final budget outcome; tax forum; Andrew Bolt

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Parliament House, Canberra ACT 2600 Australia  Tel: (02) 6277 7400 Fax: (02) 6273 4110

PW 197/11 1 October 2011




KENNY: Joining us to talk about these today is the Finance Minister Penny Wong from Adelaide. Welcome, Minister.

WONG: Good morning, good to be with you.

KENNY: Minister, I wonder if we could start today by discussing a news story about politicians’ pay. Laurie Oakes in the News Limited papers today is suggesting that politicians could be in line for massive pay rise in the near future. It’s been taken out of the political world, if you like, and they’re waiting on a recommendation. But this recommendation could deliver a pay rise for backbenchers from $140,000 a year now up to perhaps $250,000 a year. Do you think that the time is right for this sort of initiative?

WONG: This is a difficult issue, politicians’ pay. And the way in which the Government has tried to deal with this, with the support of the Opposition, is to say look, let’s take it out of politicians’ hands, let’s give it to an independent tribunal, and they can resolve these matters, because we think that’s a more sensible way to deal with it.

KENNY: You’re certainly right in that this is a bipartisan issue, there’s no argument between Labor and Liberal on this issue, and you want to take it out of the political world. But it’s about the quantum, isn’t it? If there is such a massive increase in politicians’ pay, That will create a lot of angst in the community, and dare I say it, the Government might wear more of that than the Opposition.

WONG: I don’t know what the Remuneration Tribunal is proposing to do, that’s a matter for them, and I do think that’s as it should be. I think it’s much more sensible if these things are done independently rather than ending up in a sort of Parliamentary debate.

KENNY: Well, just your luck to be on television the morning that story breaks.


WONG: (laughs)

KENNY: We’ll get to issues that are your responsibility, and yesterday you and the Treasurer Wayne Swan announced the Budget Outcome, slightly better than you’d expected, but still a $47 billion deficit, the second biggest in the nation’s history. Now, with global growth slowing, aren’t you now looking at this political promise to deliver a surplus by 2012-13, and looking at that promise and saying it’s dead in the water? You cannot get the country back to surplus that quickly.

WONG: Let’s start with the first part of your question, Chris - why are we in deficit? Before the global financial crisis to where we are now, revenues in this year were written down by about $40 billion. $40 billion, so that’s a very significant reduction in the anticipated revenue to Government as a result of the global financial crisis. So whilst -

KENNY: Yeah, we understand that, but it’s about this promise that Wayne Swan has locked you into -

WONG: (laughs) I was getting there -

KENNY: Get to surplus, you know - will you get there?

WONG: We do remain determined to bring the budget back to surplus. You’re right Chris, it’s made it harder. We saw a couple of billion less on revenue than we anticipated just a short time ago in the Final Budget Outcome that we released yesterday. When you’ve got the global economy growing slower and being more volatile, that’s obviously going to affect our economy, even though we do face it from a position of strength, that affects Government revenues.

But why do we want to come back to surplus? You said it’s political. I don’t agree. This is good policy. This is the right policy.

KENNY: Let me just explain, I mean of course it’s good policy to get back to surplus. But I think what I’m suggesting is that Wayne Swan has locked you into a political promise to do it by 2012-13. Now whether the budget is just into surplus or just into deficit in that year isn’t really of great economical significance, is it? You’re now in a situation where politically you must be on one side of the ledger.

WONG: If you look at what’s happening in Europe, and what’s happening on markets, I think there’s a pretty clear message that comes out of that, Chris, and that’s that markets do care about credible, clear fiscal strategies. If Governments say they’re going to do things, Governments should do things.

So we have a very clear fiscal strategy, we’ve stuck to it, a set of rules that we’ve stuck to which haven’t involved increasing taxes but have restrained spending, so that as revenues increase, that flows through to the bottom line. I think a clear and credible fiscal strategy is even more important today, given the sort of volatility on world markets, than before. I think it’s even more important.


KENNY: You mentioned taxes, and of course next week is the Tax Summit. Now a lot of experts say of course that the Australian budget is in structural deficit, that is without our wonderful terms of trade at the moment, if we went back to sort of normal trading circumstances, the budget would be in deep strife. Do you concede that at this Tax Summit, what you really need to be doing over time is getting the budget into a structural surplus, and therefore looking very hard at what revenues you can raise over the next 5, 10, 15 years?

WONG: You know what I really welcome in the debate at the moment, because it’s something I’ve been talking about for some time, I welcome that we are looking more at the longer term. And I think that’s extremely important. Both of the reasons you raise, but also more broadly. We know that the population is ageing, we know that we’re going to need more health services particularly, and as well as a range of other services. And we need to make sure when we talk about tax reform, when we talk about policy changes, when we talk about how we deliver services more efficiently, when we talk about growing in the economy, all of these things need to be informed by that long term perspective. So I really welcome the contribution of the Business Council of Australia and others in terms of looking ahead.

KENNY: It would be a good idea if it was a fair dinkum Tax Summit, wouldn’t it? I mean the GST’s excluded, the mining tax is excluded, the carbon tax is excluded - surely all these issues need to be discussed if we’re looking at the long term revenue future.

WONG: Chris, it is fair dinkum. But it’s also fair dinkum for a Government to say, this is our policy. It’s not our policy to increase nor extend the GST. It’s not our policy to change the mining tax that we’ve already agreed with the mining sector, despite the fact that the Opposition still oppose it. We’re taking a very sensible approach to this - if I may say, an approach that’s very different to the Opposition, who are still running around with their $70 billion black hole.

KENNY: Minister, I ask you to stay with us for a moment, I just want to go to our regular segment where we look for outsiders’ views, that is views of people outside the political media fishbowl. And this week we’re going to do something slightly different and just revisit some work that David Speers did this week talking to some young school children who happened to be dressed up as Tony Abbott and Julia Gillard.


KENNY: There we have it, the perceptions of our political leaders run deep. (laughs) I particularly like the girl who said that Julia Gillard doesn’t have much fun, and happy birthday to the Prime Minister for this week, a significant milestone. But she certainly doesn’t have much fun, Penny Wong, and the leadership talk keeps rearing its head in Australian politics at the moment. I know you’re going to say that you’re solidly behind the Prime Minister, of course, but I just wanted to ask you, when you look at the Prime Ministership of Kevin Rudd and then Julia Gillard, can you say that Julia Gillard has been a better Prime Minister than Kevin Rudd?

WONG: (laughs) Chris, can I first say that I think asking a politician to respond after all the children have spoken puts me at a real disadvantage. I can’t top some of those comments.


KENNY: (laughs)

WONG: I particularly like the one about Tony Abbott leaving the carbon tax meetings to go and do triathlons. I thought it was very funny. But anyway. (laughs) So you’ve got me at a disadvantage.

What I’d say is this. I was Climate Change Minister in the last Government, and I see this debate now, a really difficult debate, a debate that’s dogged Australia for nearly half a decade and more. Let’s remember, 2006 was when John Howard first said he would put in place a price on carbon. And I look at what the Prime Minister is doing, and what she is prepared to do, and that is to be really tough in a debate that is really hard. I don’t think anybody looking at this debate would think that this is anything other than one of the hardest political debates this country has seen in many, many years.

But she’s doing it, and prepared to take up the fight for it, because she believes it’s right. And because someone has to be prepared to look to the long term, to think about the benefits, the opportunities, for future generations of Australians, and be prepared to look over the short term fear campaign. And I have enormous regard for Julia, for the Prime Minister, because that is what she is doing.

KENNY: Minister, I do need to let you go, but just briefly, I wonder if you could tell me your thoughts on the Andrew Bolt case. You’ve spoken out about racism in the past, but you would also advocate free speech. Have we not seen a case here where the laws and the judgment have gone too far in silencing someone who’s trying to have a very serious debate about issues of racial preference?

WONG: I feel reluctant to comment on the detail of that case, because I understand an appeal is being considered, so obviously that will have to be considered on its merits. But can I just respond briefly on the principles. I think the principle of free speech is extraordinarily important. But it’s never been open slather in our country. We’ve always accepted that in a civilised society it has to be exercised responsibly. We’ve also, as a Government, believed that we shouldn’t be in the business of vilifying people on the basis of their race, and I think those principles are sound, Chris. And I know you may not agree with that, but I think there is a sensible balance here that has to be struck. As the Government said, we’ll be retaining the provisions as they are.

KENNY: Minister, thanks very much for your time today.

WONG: Really good to be with you on Grand Final morning.

KENNY: (laughs) Indeed.