HOST: Prime Minister Julia Gillard joins me now. Good morning to you.
PM: Good morning Kochie.
HOST: It is a remarkable effort to turn a $44 billion deficit into a $1.5 billion surplus. Tony Abbott says you're cooking the books, where's the money coming from?
PM: Well I'm not surprised by Mr Abbott's relentless negativity, because he doesn't want to acknowledge what is a remarkable achievement for our nation. We have been through the global financial crisis, we protected jobs, and now we have done this turnaround in the budget.
We built this on savings, we've done $100 billion of savings in the past, $11.5 billion at the mid-year update, and then of course in this budget $34 billion of savings to bring the Budget to surplus, but we've done that by protecting frontline services and actually making choices to give families more money in their hands.
HOST: On this day last year you were telling us we could expect a $22 billion deficit, it came in at 44 - double. Why should we believe you can deliver a surplus? Your track record hasn't been good in the last 12 months?
PM: Well the figures in this budget show how determined we are to deliver a surplus. Since we delivered last year's Budget, the revenues for the year in which we're delivering a surplus, the next financial year, have gone backwards by almost $10 billion.
So to keep delivering a surplus in that year, we've been swimming strongly against the tide, finding savings, that's how determined we've been. And this financial year, Kochie, has had some very unusual factors in it.
HOST: But they could still occur in the next 12 months and those revenues could continue coming down.
PM: No, but the unusual factors this year, Kochie. It's not every year you're dealing with the aftermath of the most expensive natural disasters the nation's ever seen.
Yes, continued volatility in the global economy made a difference too, but the impact of natural disasters was still showing.
HOST: Alright, the benefits of the mining tax, you're switching away from business to families. Is that an attempt to buy back your traditional Labor voter, who has been spooked by the carbon tax? This carbon tax bogey is hanging over every Australian family.
PM: This is about one thing and spreading the benefits of the mining boom to the Australian community. Out there there are many families who understand our economy's strong in its fundamentals, who know we came out of the global financial crisis better than the US and better than nations in Europe, but they sit at home and they say ‘It doesn't feel like my boom. I'm still struggling to make ends meet. I'm still worrying about the bills.'
So here is some help for families, through the Schoolkids Bonus, because having the kids at school is an expensive thing, all of the things that they need and then through extra payments for families through our family payment system.
HOST: Business is a bit narky, not getting the tax cut, because that tax cut was meant to compensate them for the increase in compulsory superannuation. So they're saying alright, we're not getting the cut, so will you delay the compulsory superannuation until we get some cut in the future?
PM: I want to deliver a company tax cut, what's stopped me doing that is I knew I wouldn't be able to get the legislation through the Parliament behind us.
HOST: So you're blaming Tony Abbott and the Greens for that?
PM: Well the numbers in the Parliament, Mr Abbott was going to vote against the company tax cut, the Greens were going to vote against the company tax cut. It was doomed to fail. So I wasn't going to let Mr Abbott's negativity stop our nation sharing the benefits of the mining boom, so we're flowing that to families.
But for businesses we're going to keep working with them on a company tax cut, we've got a business tax working group, we've got identified savings there to work on, we haven't taken any of those savings and they can help back in a company tax cut.
HOST: Can you guarantee them they will not have to increase superannuation payments to their staff until they get a company tax cut? Like your promise this time last year.
PM: I can guarantee them that we will work this year with them, through the Business Tax Working Group to try to get a better system of business taxation, which means we can reduce the company tax rate.
What I can also say about superannuation is it's being phased in very, very slowly, to the end of the decade.
HOST: A lot of singles are saying ‘There's nothing in it for me. Why should I keep working, paying my tax to support families with kids?'
PM: Well there's things in it for young people and singles. We've got a new allowance for the young and the needy, particularly unemployed people, students and young people who tend to work part time are going to benefit from the tripling of the tax free threshold, which means you can earn $18,200 and not pay any tax. And many kids who are balancing up uni, or a bit of work, bit of study, apprentices, are in that kind of bracket of income.
HOST: It has the smell of an election budget. It could be, it could come quicker than you expect. Rob Oakeshott, Tony Windsor, wavering with their support, given Craig Thomson affair, are you concerned about that? Have you talked to Windsor and Oakeshott?
PM: Look, we saw all of this stuff dealt with in Parliament yesterday, but our focus has been on the Budget and on making sure we deliver the surplus because it's the right thing for our economy-
HOST: -But if they push for Mr Thomson to leave, an election comes on.
PM: Well, I'm not anticipating that happening, Kochie. I don't think that is going to happen, but what's driven us in the budget is the economic need to have a surplus, to have a buffer, in case the global economy turns down, to take pressure off the Reserve Bank to give them the maximum room to move on interest rates, whilst spreading the benefits of the mining boom to families. That's what it's all about.
HOST: OK, thank you for joining us Prime Minister.
PM: Thanks Kochie.