TRANSCRIPT
THE HON PETER COSTELLO MP
Treasurer

Doorstop
Melbourne
Tuesday, 5 February 2002
12.10 pm

SUBJECTS: Retail Trade; Media Ownership; Jeff Kennett; Victorian politics;

Health Funds

TREASURER:

Today’s retail trade figures for the quarter, the last quarter of 2001, showed that retail trade went up by 0.5 per cent for the quarter and 4.8 per cent for the year. This is the first quarterly result since the events of September the 11^th and they show that Australia’s retail trade grew strongly through the last quarter. That’s good news, that consumers were out there and were buying and for the month of December the original sales of $17.8 billion was actually the highest retail sales ever in Australian history. The month of December, the original figures of $17.8 billion were the highest retail sales ever in Australian history which shows that retailers had a good Christmas. What the retail trade figures show is that consumers supported by low interest rates and rising business confidence continued to spend through the December quarter and whilst the rest of the world was going into recession, the Australian consumer was still confident enough to keep the Australian economy ticking over with some reasonable strength. In fact, probably stronger than any developed economy in the world. That’s the good news for consumers and for the economy. It’s good news for our retailers, that the Australian economy through the last quarter of last year, whilst the rest of the world was going into recession, appears to have ticked, ticked along, with some considerable growth.

JOURNALIST:

Treasurer, on another matter, can I ask you do you envisage that the current levels of foreign ownership of Australian newspapers will continue under the media re-jig?

TREASURER:

Well, it depends of course whether the media laws are changed. To change the media laws will require legislation. We put forward a proposal to ease foreign ownership restrictions and at the same time liberalise cross-media ownership laws. And that will require the passing of legislation by the Senate. Now, if that were to happen I would expect that you would find that there would be liberalisation in Australian ownership.

JOURNALIST:

And what would that (inaudible) listed from what to what in your proposal?

TREASURER:

Well, there may be no change. There may be no change at all.

JOURNALIST:

What do you envisage, what is your preferred position Treasurer?

TREASURER:

So what I am saying is if the laws were liberalised then it would be possible for other or new owners to come into the market. But none may come in.

JOURNALIST:

Have you had talks in recent months with representatives of Pearson Plc about foreign media ownership?

TREASURER:

No, I don’t think I have had them with Pearson. No, I haven’t.

JOURNALIST:

Any others?

TREASURER:

I think somebody from the Financial Times came to see me recently to discuss the arrangements in Australia.

JOURNALIST:

Mr Costello, what do you think of the suggestion that Jeff Kennett will be hosting his own radio show?

TREASURER:

Well, I don’t know that he is going to. But, you know, if he wants to go into radio, good luck to him. I hope he has a good time.

JOURNALIST:

And in your opinion what should his theme song be?

TREASURER:

Well, look I’ll make you this offer, if Jeffrey comes to see me and asks me to be his public relations adviser for a large fee I’ll tell you and I’ll give him a good one.

JOURNALIST:

A certain ABBA song comes to mind.

TREASURER:

A certain ABBA song? Which one? Money Money Money?

JOURNALIST:

Mr Costello, are you concerned about, with consumer confidence holding, about the impact on inflation?

TREASURER:

Look, I don’t see great inflationary pressures in the Australian economy at the moment. I made some comments after the most recent CPI were released on that. The great challenge for the Australian economy at the moment is the international environment. We are living through the worst international environment in three decades. The United States has been in recession. Japan is now in its third recession in a decade. Europe is slowing. Singapore has had three quarters of negative growth. Taiwan is going backwards. South-East Asia is looking shaky. And of all these economies, the one in the world that continues to grow stronger than other economies is Australia. Now, these retail trade figures shows that the Australian consumer continued to buy and to spend in the December quarter which showed a lot of confidence supported by low interest rates. That’s good. That’s kept our economy ticking over. House building has kept our economy ticking over. But we are in a very, very difficult world situation. And that is the problem that is facing the Australian economy – a weak United States, a weak Japan, a weak Europe, a weak South-East Asia. And I have said that the greatest threat to the Australian economy at the moment is not inflation, it is the international situation.

JOURNALIST:

Given that threat do you think we need further cuts in domestic interest rates?

TREASURER:

Well, I make this point. That interest rates today are the lowest they have been in 30 years and this has been one of the reasons why the Australian consumer has been able to keep spending. Our housing cycle has been strong. Our Budget position has been accommodative.

Income tax cuts have helped. And the consequence of that is that Australia grows the fastest of any economy in the industrialised world. And we have so far managed to shrug off recession which has engulfed most of the rest of the world. And we intend to keep it that way.

JOURNALIST:

But if the greatest threat is still from offshore is there anything the Reserve Bank can do?

TREASURER:

It can run suitable monetary policy.

JOURNALIST:

Treasurer, the Liberal Party’s preselections for the next State election close today. Do you think Denis Napthine and the new team that he’ll have after these preselections with any hope of closing the gap on the Bracks Government?

TREASURER:

Look, you would have to say at the moment that the Labor Party and Mr Bracks are, according to the polls, considerably in front. But I would make this point. That before the last State election Mr Kennett, according to the polls, was considerably in front. You want to learn this one lesson from the last State election. That Oppositions which are focussed and disciplined can make up huge ground. Bracks did it. And I think that the Victorian Liberal Party’s challenge is to try and do that in the lead up to the next State election. You are beginning to see touches of arrogance coming out in the Bracks Government – appointments for mates, Mr Bracks’ refusal to discipline his Minister for Community Services, his inability to make a tough decision. And I think the public is now beginning to realise that Bracks is okay in the good times but he is no good for a tough decision.

JOURNALIST:

Is Denis Napthine the right person?

TREASURER:

And, I think Denis and his team will be looking at that, and if they remain focussed, then the example before them is that you can make up a lot of ground. And I don’t want to underestimate the distance they have to make up but you can make up a lot of ground. You saw that in the last State election.

JOURNALIST:

Treasurer can you comment as to whether the Government has been informed about a potential merger between AXA and MBF and if so, would a potential deal like that require Government approval?

TREASURER:

I’m not sure to be frank whether it would. I imagine it would. I haven’t actually looked at it. But if there is to be any merger between any of those health funds it is a matter for those health funds to announce.

JOURNALIST:

But the Government hasn’t been briefed?

TREASURER:

It’s a matter for them. You’d better go and ask them.

JOURNALIST:

Treasurer, just on the State election. The Nationals and the Liberals haven’t decided whether there’ll be three…, whether they will compete against each other, they’re no longer Coalition partners. Do you think it’s healthy for them to run against each other in each other’s seats?

TREASURER:

Well, look I can’t, I won’t comment on the State situation. I don’t know enough about it. We have an agreement at the Federal level where we’re in Coalition, where we don’t run against incumbent Members. But that applies where you are in Coalition. And I imagine if you are not in Coalition those agreements don’t apply. But other than that I can’t advise you further.

Thanks very much.