ALI MOORE: Listening to that interview was the Federal Finance Minister, Lindsay Tanner. Lindsay Tanner, good morning.
LINDSAY TANNER: Good morning, Ali.
ALI MOORE: It wasn't too long ago that I was actually saying, gosh, it must be nice to be Father Christmas when you're usually the person with the knife out there, and of course, talking about the stimulus packages and the one that's about to come at the beginning of December. But is Chris Richardson right? Are you going to have to really rethink spending yet again because of the budget situation in a slow-down?
LINDSAY TANNER: There's no doubt the job's got tougher, Ali. And some of the priority choices that we have to make, and governments make all the time, have become seriously tougher than they otherwise would have been. But we're prepared for that, and fortunately our election commitments are all bedded down and in train. And so we've just got some difficult choices to make. And the work is already underway, with the second stage of our razor gang exercise for cutting spending, finding inefficiencies and lower priority programs, but I suspect we'll certainly intensify that because, as Chris Richardson rightly says, the challenge has got bigger.
ALI MOORE: So where does that leave the next Council of Australian Governments meeting, which is just on Saturday, and that's all about healthcare, and every state wants a lot more money for healthcare.
LINDSAY TANNER: That's correct. The states have put forward some rather substantial bids, as is invariably the case in these negotiations. They were always going to be difficult negotiations, but they've just got tougher as a result of the fallout of the financial crisis internationally. That's had an impact on the federal Budget; it's also had a big impact on state budgets. So there's a much greater imperative there to squeeze as much money as possible, and that's always going to be a difficult negotiation.
ALI MOORE: But would you say to the states, particularly - well, even thought it's health, but you're going to have to wind back some of your expectations?
LINDSAY TANNER: That was always the case, Ali, that inevitably, the states will put forward their ambit bids in these processes, and that's fair enough; they want to get the best outcomes for the people they represent. The Commonwealth, of course, doesn't have limitless money. Even when the economy and the global financial circumstances were much stronger, the Commonwealth's still only got finite resources. So the states are always going to be bidding high; we have to get an outcome that's agreed, and that's going to involve a lot of arm wrestling and difficult negotiation.
ALI MOORE: You haven't got limited - sorry, you haven't got limitless funds, but as we were just hearing from Chris Richardson, there's nothing wrong with a deficit if it's difficult economic times and the money goes to a worthy cause.
LINDSAY TANNER: We're still projecting the Budgets will remain in modest surplus, and nobody can predict just how powerful the downward pressures are going to be from the global financial crisis. They are clearly affecting Australia's economy already. We're projecting a significant slow-down, but the Treasury projections still have the Budget remaining in modest surplus, and that's what we...
ALI MOORE: But do you think they're right, because as - again, as we just heard from Access Economics, they did in fact have to revise down their forecast for company tax just recently. I mean, what do you say to what Chris Richardson is saying in terms of the drop that you're going to get in company tax from things like lower commodity prices and that sort of thing?
LINDSAY TANNER: Well, those revisions have been made, and the end result of those revisions is a Budget in modest surplus rather than very, very large surpluses. So the projections have gone down from about 17 to $19 billion, for example, in one or two of the forthcoming years down to $3 billion, $5 billion. So those revisions have already been made. Whether things will get worse than what are - than the predictions from Treasury suggest is something that ultimately depends on how the rest of the world goes, not just the United States, which has got very serious problems, but also Europe, Japan, China. I'm an optimist on that front. But forecasting's an inexact science, and if we went back over the years over Treasury's forecasts and Access Economics' forecast, you'd find that there have been some that have been pretty accurate and others that have been a bit, a little bit off.
ALI MOORE: Equal cases of being wrong, possibly.
LINDSAY TANNER: [Laughs] Possibly, that's right.
ALI MOORE: I should say happy anniversary.
LINDSAY TANNER: Thank you.
ALI MOORE: Would you like to give yourselves a mark out of 10 for the first year?
LINDSAY TANNER: Definitely not. That's for commentators. I'm a player, as John Howard used to say. But I'm pleased that we've managed to stick to our election promises in increasingly challenging circumstances. I think that's really important to restore some degree of faith and credibility in the political process, and I'm really committed to holding to that. And I think we've made a good start in implementing some of the key changes that were needed, but it's early days still, Ali. There's a lot of work to be done.
ALI MOORE: One of the comments that is often made, and you would have read it in the weekend papers, and certainly we spoke on it, about this - on this program last week with the former Senator Robert Rae. The one criticism of Kevin Rudd is that he controls everything, that everything has to go through his office, that he needs to need to, indeed as Bob Hawke said, he needs to delegate a bit more. Do you agree?
LINDSAY TANNER: Look, I don't agree with that, Ali. Inevitably in a young government where you've got people who are relatively inexperienced - there's not many of us who've been ministers before we took office - it's important that you have the reins pretty tight. I think there's been plenty of leeway for ministers, but it's important that you've got the central agencies in particular, but the Prime Minister and his office and his department pretty heavily involved in everything. I doubt whether it's ever been that much different in recent times. I'd suspect that you'll find that one way or another, the Prime Minister's always been pretty heavily involved.
ALI MOORE: Thank you for joining us, and are you celebrating today? Like, what is there, a cake or something? [Laughs]
LINDSAY TANNER: [Laughs] I'm not sure, Ali. I think my main celebration is to go down to have a meeting with my department about the razor gang process this morning. So as Chris Richardson's suggestion, already actually being acted on, and we're there with the sleeves rolled up working away looking for efficiencies and cutting lower priority programs, that'll be our [laughs] celebration, unfortunately.
ALI MOORE: Thank you for joining us.
LINDSAY TANNER: Thanks very much.
ALI MOORE: Lindsay Tanner there, the Federal Finance Minister.
-ends-
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