TONY EASTLEY: The subject of the budget is firmly front and centre in Lindsay Tanner's mind. The Federal Finance Minister says the Government is sticking firm to its forecasts for economic growth over the next few years, while acknowledging that forecasting is a difficult business. The Treasury Secretary, Ken Henry, strongly defended the budget predictions yesterday, and the Reserve Bank Governor also described them as not crazily optimistic. But problems are opening up on other fronts, with the unions joining a list of those concerned by changes to the Employee Share Ownership Scheme, and a renewed focus on politicians' pay and entitlements. To discuss these issues, the Finance Minister, Lindsay Tanner, spoke to chief political correspondent, Lyndal Curtis.
LYNDAL CURTIS: Lindsay Tanner, are you crazily optimistic?
LINDSAY TANNER: I don't think I'm crazily optimistic, but I think that the figures that are set out in the budget, chart reasonable assessment of where the economy is likely to head over the next few years. Forecasting is a difficult business, but we stand by the assessments the Treasury's made about the prospects for recovery, and we're committed to doing everything we can to sustain growth and jobs, and to ensure that that recovery happens, and we get the budget back into surplus as quickly as possible.
LYNDAL CURTIS: Well, the Reserve Bank Governor agreed that growth above average would occur, he says forecasts three or more years out have a wide margin of error, what's the margin of error you've factored into your forecasts?
LINDSAY TANNER: Well ultimately it's Treasury's forecasts, and I can't give you details of the technicalities involved in their forecasts, but we stand by them, they're the best available forecasts with all of the information and professionalism that Treasury can bring to bear, and they have to guide us in our decision-making for the future.
LYNDAL CURTIS: The Prime Minister has had some difficulty explaining the debt figure on Lateline the other night, the Government has had to acknowledge that - on Channel Seven, that part of its budget was clumsily worded, and both the Treasurer and the Prime Minister have seemed reluctant to say the word billion, are you having as much trouble explaining this budget as the Treasury Secretary thinks people have, in understanding it?
LINDSAY TANNER: I don't believe anybody's had any trouble explaining the budget, it's a complex budget, because we've had to do a number of things all in one go, and that is to nation-build for the recovery, to sustain jobs now, but also to invest for the longer term, and chart a course back to surplus, so that means that we're trying to do several things all at once within the budget.
LYNDAL CURTIS: But does the reluctance on the part of some to say the word billion, show that you have some worries about the questions of debt and deficit?
LINDSAY TANNER: Well look, I can't comment on alleged reluctance of anybody to say things, I haven't even seen the interviews, so I can't even necessarily engage in any commentary about any of that, I don't think that's a fair assessment. The Government's committed to getting the budget back to surplus, to getting Australia back into debt-free status as quickly as possible. But we face a challenge that hasn't been seen in this country for many, many years.
LYNDAL CURTIS: Unions have added their voice to calls for you to rethink the changes to the Employee Share Ownership Scheme, will you consider recasting the scheme, to better target it?
LINDSAY TANNER: We're committed to the initiative in the budget, it's fairly strange that you've got a situation where some people in the workforce, mostly higher income earners, and mostly people on very, very generous salaries, have in effect the choice of determining what level of income tax they pay on part of their salary, that's in effect the old arrangements.
LYNDAL CURTIS: But the people the unions are representing are earning either under $60,000 or really between $60,000 and $100,000, they're not really wealthy individuals, are they?
LINDSAY TANNER: For the people earning under $60,000, we've maintained the first $1000 tax break threshold, so I think that's a reasonable position, but ultimately, individual unions are entitled to put their point of view, but there is no question that the bulk of use of this particular arrangement was by people at the upper end of the income scale, primarily focused on minimising their tax.
LYNDAL CURTIS: Politicians' entitlements are again in the public eye, following the scandals in Britain, would you like to see more transparency in the system?
LINDSAY TANNER: The system is very transparent now, we have details of travel allowance payments made to members of Parliament, tabled in Parliament regularly, I believe that's the appropriate system, people are then responsible for how they manage their own affairs.
LYNDAL CURTIS: The Remuneration Tribunal has extended a pay freeze for politicians, is there ever a good time for an MP to get a pay rise?
LINDSAY TANNER: Members of Parliament have their salaries set by an independent tribunal, and in this case, the tribunal's made a decision to extend what has already been a reasonably prolonged pay freeze, and they will, I assume, return to the question of members' pay later in the year. Ultimately there will always be some in the community who don't believe MPs should get a pay freeze at any point, that's going to be a matter of debate at any time, but the important thing is there is an independent tribunal to determine these things, and the Government abides by that process.
TONY EASTLEY: The Federal Finance Minister, Lindsay Tanner, speaking there with Lyndal Curtis.
- ENDS -
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