Finance minister leaves Rudd on a limb over NT tax cut

Penny Wong has refused to endorse Kevin Rudd’s controversial Northern Territory tax cut. AAP/Lukas Coch

Finance Minister Penny Wong has pointedly refused to endorse Kevin Rudd’s declaration that he would like to see company tax drop by one third in the Northern Territory.

Asked repeatedly on Sky about the PM’s “personal objective” of having the rate about a third lower, Wong said “I’m not going to be drawn on that.”

She said the government had said it wanted a tax benefit for the NT and Rudd had indicated his preference for a cut by a third. There would be a five-year-process to consider the issue. “I’m not going to pre-empt those discussions”.

The reduction would not come in before 2018, beyond the forward estimates, so was not costed.

Wong’s comment is damaging for Rudd. She was one of the few ministers he involved in working up the policy, which has been controversial because of its lack of costing and its long time frame. Resources minister Gary Gray was one of those left out of the loop.

Wong contacted The Conversation tonight to clarify her remarks. “The Prime Minister’s objective is a worthy one and I support the Northern Australia policy”, she said.

Earlier on ABC radio Wong was put on the spot over her last-minute switch to Rudd in the leadership battle.

Asked if she regretted her decision and whether she still believed Rudd would deliver a better election result than Julia Gillard would have, she said: “Look, I’m looking ahead, I’m not looking backwards and the reason I’m doing that is that’s what your listeners and the people of Australia want from us”.

She said there was always a lot of commentary inside the beltway, “but ultimately we do what we do because we want to do the right thing for the country”.

Opposition finance spokesman Andrew Robb said tonight that Wong had thrown Rudd’s Northern Australia “frolic” into further chaos by refusing to back his nominated one third tax cut. “Despite Mr Rudd’s claims that this proposal was weeks in the making, and had the input of the Finance Minister, it is obvious that Penny Wong does not back her Prime Minister”.