GLEN BARTHOLOMEW: Well, let's look at fiscal measures of a different kind, financial measures, that is, Labor's third budget brought down by the Treasurer last night has brought some positive headlines this morning, with the early return to surplus attracting most of the attention. To look at the budget's impacts, Marius Benson is speaking here to the Finance Minister, Lindsay Tanner.
MARIUS BENSON: Lindsay Tanner, good morning. Tell me, what's more fun, drawing up a budget, or selling it?
LINDSAY TANNER: [Laughs] I wouldn't describe either of them as fun, Marius, but it's certainly hard work putting a budget together, it goes on over a number of months, and then of course you have to hit the airwaves and talk about the issues that are involved, so it's all central to the work that I do, but there are other things in life that I'd probably consider to be more fun.
MARIUS BENSON: But you'd be a pretty happy many this morning with the immediate reception to the budget, the broad view seems to be that the surplus is being applauded, the early return to the surplus?
LINDSAY TANNER: I think it's a workman-like budget that really delivers on the things that matter, and I've only caught some of the response of course, but ultimately it's whether or not we get the right things in place that really count, and I think it has done that. I think we pretty much put to bed the scare campaign about debt and deficit, we'll be back in surplus much quicker than anybody expected, we'll be paying off the debt that's come from the global financial crisis much quicker than it's expected, and of course there's a number of things that are about investing for Australia's long term prosperity, for long term sustainable growth, so I'm pretty happy with the broad thrust of what the budget's about.
MARIUS BENSON: Now you will be back in surplus earlier than predicted, but you're going deeper into the red on the budget figures for this year, you're spending $355 billion, while you're only getting in, in revenue, $322 billion.
LINDSAY TANNER: Well, we were always expecting a big deficit this year, the global financial crisis did punch a giant hole in the Government's revenues, and in fact what isn't widely known is that a fair bit of that hole remains, even though we've had a big bounce back as a result of better economic conditions, and the stimulus that the Government put in place, we're still short about $110 billion of revenue that was expected to be there prior to the global financial crisis , and that's the key reason why we've got a couple of years of pretty big deficits.
MARIUS BENSON: Okay, now one criticism of the budget is that it's basically a punt, that you need for the numbers to work out, and to head back to a surplus, you need a resources boom, and you need booming resources prices. If they don't work, the return to the surplus won't happen, and you've hammered the resources sector with a new tax.
LINDSAY TANNER: Look, I reject these facile statements from the Liberal Party absolutely, Marius, there's no basis for these claims, the projections that are put forward, the forecasts that are put forward are using basically the same kind of approach the Treasury used when John Howard was in office, they're done independently of the Government, we don't interfere in them, we don't get involved in putting those numbers together, they're done on a conservative basis, with a range of assumptions that do take into account the fact that things like the terms of trade and mineral prices, do fluctuate. So there's absolutely no basis for these claims, they come from a desperate Opposition, that's really got nothing else to throw at the budget, and therefore it's just making these assertions out of thin air, with no evidence.
MARIUS BENSON: But it's pretty true that the official projections are hopelessly wrong, quite often, and the world is a very uncertain place, Greece is looking particularly wobbly, the whole of Europe is looking a bit iffy, another global financial crisis, and these calculations will look far too optimistic.
LINDSAY TANNER: Well, nobody can predict something of the magnitude and nature of the global financial crisis, and it's just the sort of thing that no forecaster can ever realistically put into their numbers. I don't believe that's going to happen, obviously there are concerns about the state of the European economy in particular, we're not directly likely to be affected by problems there, but certainly if they reach a certain level, there will be some knock-on consequences for Australia, but ultimately, Marius, you can't factor in highly improbable possibilities into a set of budget forecasts.
MARIUS BENSON: Now the Financial Review this morning is making the point that you're well under your own self-imposed two per cent spending cap ceiling, and that there's plenty of scope there for a lot of goodies to be handed out between now and the election, will there be goodies between now and then?
LINDSAY TANNER: There isn't much scope for that, Marius, because the Financial Review must be forgetting one key thing, and that is, we've got a self-imposed rule of offsetting new spending with savings, and that rule will continue to apply, so that by definition, restricts anything that we can do, that's one of the key things about the budget, that we have actually got more savings in overall total terms over the years involved, than we've actually got in new spending.
MARIUS BENSON: So this is it, no more goodies between now and the election?
LINDSAY TANNER: Oh look, I'm not in a position to say that obviously, because as I've just said, if we find savings, then that enables us to deliver new initiatives.
MARIUS BENSON: Lindsay Tanner, thank you very much.
LINDSAY TANNER: Thank you very much, Marius.
GLEN BARTHOLOMEW: The Finance Minister, Lindsay Tanner, speaking to Marius Benson.
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