TRANSCRIPT
THE HON PETER COSTELLO MP
Treasurer

The Today Show

Thursday, 28 November 2002
7.09 am

SUBJECTS: MYEFO, economy, Budget, homeland security, Iraq

LIEBMANN:

Treasurer, good morning to you.

TREASURER:

Good morning Steve.

LIEBMANN:

What does this Mid-Year forecast and all these numbers mean to Joe Citizen?

How are they going to impact on his or her budgeting?

TREASURER:

Well what it says is despite enormous international difficulties, and economies

around the world slowing, and despite the worst drought at least in 20 years,

possibly more, that Australia still continues to be one of the strongest growing

economies of the world.

That we still have good job opportunities and that our unemployment is still,

by historical standards, quite low, and if we can get through this difficult

period of world weakness and drought, then in the years to come we should have

continuing good job opportunities for young people and for families. And that

is what their family budgets rely upon.

LIEBMANN:

So people out there this morning have reason to feel fairly comfortable with

the way we are travelling?

TREASURER:

People out there should feel that we have faced enormous difficulties, the

American recession, you think of the confidence effects spilling over from Bali,

from the World Trade Centre, you add into that mix a drought which is the worst

in at least 20 years, and normally by this stage the Australian economy would

be rocketing with unemployment. But unemployment is really now at 20 year lows

and that means good job opportunities. And if we have disciplined economic policy

then we can keep people in jobs in the years to come.

LIEBMANN:

And are you reasonably comfortable as you look down the track to your next Budget?

I mean I have seen suggestions this morning that it will be one of the toughest

in years and that you are headed for your second Budget deficit as Treasurer?

TREASURER:

Well, it will be hard to put together a Budget in a very difficult international

situation. But we have now repaid, I think, $60 billion of the Labor debt through

good budgeting. And I think next year we will probably be able to re-pay a little

more. If we keep the economy on track, we keep Australia growing and we keep

inflation low, that will keep interest rates low and it will keep business ticking

over.

LIEBMANN:

This mid-year report card makes no provision for any increases in security and

defence spending. If we go to war and if the drought drags on, how much of that

can be covered in your projected $2.1 billion surplus?

TREASURER:

Well Steve, I hope we don’t go to war. The Government policy is that we will

comply and – urge Iraq to comply I should say – with the UN resolutions in relation

to weapons of mass destruction. The international community has spoken with

one voice and it is now up to Iraq to allow inspection and to destroy its weapons

of mass destruction. And if Iraq does comply with the international community’s

demand then the world will be a safer place. You say to me, well what will happen

if Iraq doesn’t comply? Well, we are not speculating on that at the moment.

We are putting the onus right back on Iraq, compliance with the United Nations.

We hope it doesn’t come to that. We hope it complies and we hope that those

weapons are destroyed for good.

LIEBMANN:

But have you factored in to your budgeting philosophy a war tax?

TREASURER:

Oh no, no not at all. We haven’t in fact factored in war. What we hope will

happen is that Iraq will comply with the UN resolutions. There are inspectors

there in Iraq at the moment. They should be allowed to engage unhindered in

relation to those inspections. But more than that, the weapons should be destroyed.

People say, well, what happens if they are not? Well, let’s wait and see what

happens if they are not. But bear this in mind, Steve, Australia’s contribution

to the War Against Terror has been quite substantial already. We have had SAS

soldiers in Afghanistan, we had Hornets on alert, we had re-fuellers, we have

two ships in the Gulf. These area very substantial commitments that we have

already made and fully accounted for and fully budgeted, and it has been a great

commitment.

LIEBMANN:

What about the cost of homeland security? I mean today we wake up to pictures

of the Sydney Harbour Bridge under armed guard, 24 hour guard.

TREASURER:

Yes, well homeland security is going to cost Australians a lot more in the

Budget. We lifted homeland security by $1.4 billion; sky marshals on the planes,

security at airports, increased resources for our intelligence agencies, increased

protective services. Now, I think that the public understands – and we have

had this terrible experience in Bali – that there is nothing more important

than ensuring the security of your citizens. That comes with a cost. And the

Government has already gone to great lengths to increase security and it will

be necessary, I think, probably to increase it further. We have had an announcement

in relation to embassies overseas. You have got the guards on the Sydney Harbour

Bridge, the Government at the moment is putting in place an insurance scheme

against terrorism against our buildings, and all of this is going to come with

a cost. It is another reason why we need careful budgeting to ensure that our

community can pay for that cost.

LIEBMANN:

Just one final question, what is your position on going to war? Do you support

an Australian commitment if the United Nations does not give a move against

Saddam Hussein the green light?

TREASURER:

Look, my position is the Government’s position, which is that the UN has spoken

with a very clear voice and now it is up to Iraq to comply. And we believe that

Iraq must comply with that resolution and give full access for the inspectors

and we are not letting any outs in relation to that. The ball is squarely in

that court and they ought to meet that challenge.

LIEBMANN:

Okay. Treasurer, thanks for your time today.

TREASURER:

Thanks very much Steve.