Transcript No. 21

Hon Peter Costello MP

3AW with Dean Banks and Ross Stevenson

Wednesday, 13 May 1998

8.05 am

SUBJECTS: Federal Budget

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STEVENSON:

Now this is absolute nonsense that you can tell us by recitation every

plot of Get Smart is it not?

TREASURER:

I asked you not to tell me that. (laughter)

STEVENSON:

Getting to your Budget. Now listen, I used to think it was amusing

when Paul Keating who only ever had one job in his life which was

a trade union official, used to get up there and he fell in love with

economic jargon and became an expert in the big picture. And I guess

you, as a barrister, are now finding yourself in a position where

you’re the expert in all this stuff. Do you find it a cause for

some wonderment sometimes when you’re standing there in the House?

Do you think: hang on, I’m a barrister, what am I doing this

for?

TREASURER:

Well there are two things. One is, of course you’ve got the assistance

of the top experts in the country and that makes a big difference,

the Reserve Bank, the Treasury, the Finance Department.

STEVENSON:

They’re the same experts the last mob had.

TREASURER:

The second is that part of your job is to try and explain it in terms

that people can understand in simplified terms, and I guess it helps

if you can get out of the jargon. I try and do that as much as I can.

BANKS:

So we’re going to count today how many times you say “back

on track” “back in black”.

TREASURER:

Well, you see that’s a pretty straight-forward analogy isn’t

it? You could say that the Budget is in surplus but another way of

saying is “we’re back in black”, and that means as

a country we are back on track. It means that instead of the Commonwealth

running up further debts we’re now starting to pay them off,

which is great news. That means low interest rates which is the great

news for home buyers and small business.

STEVENSON:

You, this may well be a problem with the media. The opening paragraph

of the report in the Herald Sun this morning says: “Peter

Costello last night handed John Howard a 6 billion dollar election

war chest for tax cuts. Does that, sort of, make you think: no wonder

people get cynical about politics when a Budget is automatically interpreted

in political terms?

TREASURER:

It does actually, because we had a good story to tell about the Australian

economy last night. It’s how we took an economy which was running

in the red and turned it into the black, and kept inflation low and

got people’s interest rates down, and how this would give us

a lot of opportunities which we haven’t had for a decade, or

more. And of course the press say, oh well, okay that one’s in

the bag, let’s look for the next one. It’s like we’ve

won this football match, can he win the grand final?

STEVENSON:

Are you like the artificially-inseminated cow that Fred Daly used

to refer to, that something wonderful has happened to you but you’re

not sure how?

TREASURER:

I don’t know about cow, more the bull I think.

BANKS:

It could be cash cow. Treasurer, Ross mentioned the opening par in

the Herald Sun this morning at 6.7 billion. And I picked up

The Australian newspaper and I’m terribly confused, help

me here, it’s a 14 billion dollar tax cut war chest.

TREASURER:

What you’re doing is you’re, sort of, comparing and contrasting

different journalists aren’t you? The figure in The Australian

is the figure that shows where Australia would be in 2002 on current

economic settings. Now, some of the journalists are saying: oh, oh,

think of what they’re going to do in 2002. Let me remind you,

this is a Budget for 1998-99, we are four or more years away from

there. Before people start getting too excited about 2002, let’s

just think about step by step. We’ve done the first leg of the

journey. We set the aim of getting into the black, we’ve done

it. The second leg is to start getting rid of Labor’s debts,

and the third leg, once you’ve done all that, is to think about

how we can improve services or reduce taxes. But that’s a long

a way off.

STEVENSON:

Paul Keating referred to the Treasury, when given the job as the Treasurer,

as being handed the poisoned chalice. But I guess that you’ve

found that when you raise the glass to your lips you got the Cottees

lime cordial and it’s Peter Reith who got the arsenic.

TREASURER:

Well look, it’s one of those bitter sweets there. Perhaps a lemon,

lime and bitters, I think, there’s a bit of sweet, there’s

a bit of bitter.

STEVENSON:

Do you think of him, by the way, Peter Reith as the cone of silence?

TREASURER:

No, no, no, he’s a friend of mine and a colleague and we work

together. I’m sort of amused by the way again in which all of

this is painted. We’re working on the same team here, and he’s

got his job to do and I’ve got mine. As I said, look…

STEVENSON:

He’s playing on “plugger” and you’re at the other

end of the ground kicking ‘em out of your freckle.

BANKS:

Ross did say “arsenic” by the way before, Treasurer too.

TREASURER:

Look, what do they say in football, it’s a week-by-week proposition

fellows.

STEVENSON:

I noticed that the photograph of yourself on the front page of The

Age the other day which had the Sherrin, which I assume is a different

Sherrin than the one the Prime Minister has on his, that the only

book on your library shelf of law books that I could read the title

of was: McKenzie’s “Trade Union Law”. (laughter).

TREASURER:

Yes, and what to do about them? Subtitled, no the football has got

the signs of, signed by most of the 1993 premiership team, so that’s

quite a special item which was given to me by the club. It just, sort

of, sits…

STEVENSON:

What year?

TREASURER:

Well, it was 1993 wasn’t it?

STEVENSON:

1993, yes it was. I thought you were saying ’83 for a moment.

TREASURER:

I think it was ’84 and ’85. Well, how many would you like

me to go back?

STEVENSON:

No, no, you’ve had enough.

BANKS:

Treasurer, there’s a note in the Fin Review as we’ve

trawled all the papers this morning, looking for all the stuff. It

says, “This may have been Peter Costello’s last Budget”.

TREASURER:

Well, I’m going to be around for some time, and we’re going

to legislate this Budget and then we have an election. And I want

us to be re-elected so we can continue the good policy going, so we

can do even better (inaudible)

STEVENSON:

I don’t think that can approximate an answer to the question.

BANKS:

I don’t think that meant your last Budget as an encumbent of

the front bench.

STEVENSON:

We can’t get (inaudible).

TREASURER:

Three score years ago and ten, Ross.

STEVENSON:

What are you going to be after the next election?

TREASURER:

I’ll be, I hope, the Treasurer.

STEVENSON:

Do you want to be the Treasurer?

TREASURER:

Yes, as I said, I want to make sure that we can continue to deliver

on good policy. The job of the Treasurer after the next election in

another Coalition Government is going to be to reform Australia’s

tax system.

STEVENSON:

Well, we’re not going to get a straight answer out of…

TREASURER:

That’s a once-in-a-generation opportunity. And I want to be around

for it.

STEVENSON:

What does the genius in the paper suggest that Peter’s going

to be?

BANKS:

Doesn’t, full stop. Wait for the next instalment.

STEVENSON:

Well, he’s talking Prime Minister or Foreign Affairs or…maybe

the wharves. Maybe McKenzie’s “Trade Union Law” will

have to go to the top shelf.

TREASURER:

Maybe script writer for Get Smart.

STEVENSON:

Do you see, there are a number of, I guess, I think…

TREASURER:

You fellows got a vacancy on your show?

STEVENSON:

Sure, sure. But I’m thinking of your mate, your friend Michael

Costello, Michael Kroger, who no one knows what he’s going to

do, whether he’s got his eye on a federal parliamentary career

or not. But he has obviously been concerned at some stage of his life,

for example, to make some money. Are you, you know, are you in for

the long haul or do you think, look I’ll give it , you know,

another five years, another ten years, and then I want to get out

and make some real dough?

TREASURER:

Look, I’m here for a substantial time but I don’t think

I’ll do it for the rest of my life. I’d like to have the

opportunity to do something after politics. It takes a big part out

of your life, particularly being Treasurer. You know, I live in Melbourne,

I have to leave Melbourne Sunday night mostly, and I get home on Friday

night. It’s a big part out of your life, and you’re travelling

nearly all the time and, you know, I had a career before I went into

Parliament, I’d like to have one when I come out.

BANKS:

Why haven’t you taken the Prime Minister’s advice, Treasurer,

in the sense that he advised Paul Keating when he became Treasurer

that he needed to live in Canberra, for the sake of his family and

kids.

TREASURER:

Yes.

BANKS:

What a choice.

TREASURER:

Well, yes, the Prime Minister gave me the same advice. But I love

Melbourne actually. I love Melbourne. You know, my family is in Melbourne,

I love everything about it. I like living in my electorate, I like

going down to the football, I think Melbourne’s a great town.

I think it’s a much better town than, oh, I’d better not

say – than others.

BANKS:

Fun city, a swear word.

STEVENSON:

Now, how are you shaping up? I’m trying, I haven’t got any

“before” or “afterwards”, but you look like you’re

shaping up all right. You haven’t noticed Tony Blair of recent

times have you? Have you seen him on your television screen?

TREASURER:

Yes, it’s an amazing thing isn’t it, how you age, yes.

STEVENSON:

I was absolute shocked.

TREASURER:

It is an amazing thing. And I remember the same with Malcolm Fraser.

STEVENSON:

That is one year for him, one year in the job. He looks just terrible.

TREASURER:

It’s totally reversible you know. I remember with Malcolm Fraser

how he aged and then when he got out of Parliament how much younger

he looked again. It was almost as if life began again for him, but

it does age you, it’s non-stop, it’s eighteen hours a day,

and they never get a break. But, of course, let me say one of the

fun parts of the job is talking on radio.

STEVENSON:

Well, having said that do you feel like taking some calls? (laughter)

Are you up to taking some calls?

TREASURER:

Sure.

STEVENSON:

All right, well, I’ll tell you what. It’s 17 after 8. We’ll

take a break. 96, 96, 12, 78. If you want to have a chat to the Federal

Treasurer, Peter Costello, who as I noticed Barry Humphreys said the

other day in an article from London, the only form of media that he

truly enjoys is radio.

BANKS:

(music) That’s for the kids, Treasurer. We have the Treasurer

with us this morning, from Canberra, and meet Enzo, Treasurer.

TREASURER:

Hello Enzo.

CALLER 1:

Good morning. As an accountant, and you’ll have to excuse the

cynicism, but every time an Australian Government has a surplus we’ve

seen it blown for political purposes. Are we going to have it again?

TREASURER:

Well, Enzo, we’ve put down a programme not just to get Australia

back into black this year but into black for the next three or four

years. And we can deliver on that. We said two years ago that our

economic path would get us into the black this year. In fact we said

we’d get us into the black by 1.6 billion dollars. We bettered

it. The outcome was 2.7 billion dollars. We’ve put down the targets

for the next four years, and we will make sure that we deliver on

them.

STEVENSON:

All right, let’s meet Nathan, Treasurer.

TREASURER:

Hello Nathan.

CALLER 2:

Good morning, Mr Treasurer. Like you, I’m a barrister. I want

to know what did you do for Legal Aid in the Budget?

TREASURER:

Well, Legal Aid funding that has been in place is continuing to make

sure that it’s available for those that are in greatest need,

and the Commonwealth will be ensuring that it’s done on a needs

basis, so that people who need taxpayers’ money for defences

will have it available. Those that can afford to pay for lawyers themselves

will continue to do so.

STEVENSON:

Nathan, are you Nathan Crafti?

CALLER 2:

I am indeed. And is it more or less money, that’s what I want

to know?

STEVENSON:

We only get one crack, Nathan Crafti. As old Brian Clothier said,

his aim in life as a magistrate was to have a case where he had Mr

Crafti on one side and Mr Settle on the other.

STEVENSON:

Tony speak to the Treasurer.

BANKS:

And Tony I bet you’re a doctor.

CALLER 3:

I wish I was. Mr Treasurer, in the upcoming tax reform, are you going

to reform the trust system or is that too hard ‘cause they’re

employed by too many politicians to avoid tax?

TREASURER:

Well, we’ve already made a major change in relation to the taxation

of trusts. We passed the trafficking in trust loss legislation, which

means that people outside families can’t utilize losses to off-set

their taxes. And I’ve also said that if there are other undesirable

practices that relate to trusts we’ll be dealing with them as

well. This government, let me, one of the things this government has

been very tight on has been unfair tax minimization practices. We’ve

wiped out R&D syndicates, we’ve wiped out the infrastructure

bonds, we dealt with the unfair tax concessions throughout superannuation.

STEVENSON:

Just on that, The Age ,Treasurer reports in its little dinka

setting out in summary your Budget says “Big crackdown signalled

on drug trafficking, visa cheats and some rich tax avoiders”.

Which particular rich tax avoider will you not be…

TREASURER:

I think we’ve kept you out of that one, Ross, have we?

STEVENSON:

We also had a call yesterday, Treasurer, to, crystal ball…

TREASURER:

I notice he went off that one quickly, Dean.

BANKS:

He went picking up the stumps.

BANKS:

We had a caller yesterday, Treasurer, that suggested 30-30-10 were

the set of figures that Treasury were looking at…

STEVENSON:

…for corporate tax rate, personal income tax rate and GST.

TREASURER:

Well that’s a story that was in The Financial Review, I

think, Saturday week ago, and..

STEVENSON:

We’ll have to get our prize back off him.

TREASURER:

…written by Alan Kohler as I recall, but I wouldn’t waste

too much time on the rumour file with that one.

BANKS:

Gee, beautiful set of numbers though, Treasurer.

TREASURER:

(laughter) A bit like your ratings.

STEVENSON:

Thanks, Treasurer, we appreciate your time and we know that you’ve

got another commitment, so thanks for your time this morning.

TREASURER:

Great to be with you. Thanks fellows.