Friday, September 24, 2010

No compromise on surplus: Wong

FINANCE Minister Penny Wong has warned that whatever policies the government has to compromise on to get bills through Parliament, it will not compromise on getting the budget back into surplus by 2012-13.

In her first interview since taking the finance portfolio, Senator Wong said while the new minority government would have to negotiate every piece of legislation with the crossbenches and the Senate, any extra costs would have to be offset by savings.

"We remain committed to our election policies. But the reality is that we are a minority government, and we will have to negotiate our policies through the Parliament," she said. "Our absolute priority is to return the budget to surplus. We will negotiate on everything, but we're not able to negotiate on returning the budget to surplus."

Her warning comes as she and Treasurer Wayne Swan are expected to reveal today that last year's budget deficit came in significantly smaller than forecast.

In May, Treasury forecast a 2009-10 deficit of $57.1 billion. But in July, Mr Swan and former finance minister Lindsay Tanner said it would be more like $55 billion. The final figure today is expected to be smaller again.

A spokesman for Mr Swan said yesterday the figures would show Australia's budget position is far better than that of comparable countries.

"Our No. 1 commitment is to get the budget back into surplus in 2012-13, and the final budget outcome will show we're on track to meet that commitment," he said.

Senator Wong said the independents had taken "a reasonably responsible approach" in their negotiations with the government, but anything given away would have to be paid for by savings elsewhere. "There's an overriding savings objective that will have to be met," she said.

While the government planned to offset most of the cost of the pledges to the independents by postponing the tax break for bank savings, she said, "there's more work to do".

All of Labor's election commitments, including the widely criticised "cash for clunkers" program which would take funds from renewable energy programs to give $2000 each to car owners trading in old cars for new ones will have to go through the expenditure review committee, she said. And the committee would need to be "very disciplined" for the government to reach its target of a $3.5 billion surplus by 2012-13.

After a torrid term in a high-profile role as minister for climate change and water, Senator Wong is clearly delighted to have been given the low-profile but influential role as Minister for Finance. "It's a great job to have," she said. "It puts you at the centre of decision-making: what is spent, where it's spent, and how you spend it and also what, where and how you save. It's fundamentally about the government's strategic priorities.

"This job gives you the opportunity to be in the room when the decisions are made. So that's a privilege."

In private life, Penny Wong is no big spender. She could call on the VIP fleet to fly her between Canberra and her Adelaide home, but prefers to manage her timetable around the one daily Qantas flight.

So, we ask, is she instinctively a frugal person?

She considers it, then laughs loudly. "I always try to be. I am the eldest daughter of a Chinese family. We are very responsible people!"