TRANSCRIPT
THE HON PETER COSTELLO MP
Treasurer

Doorstop Interview

Gary Humphries’ Electorate Office
Canberra City

Tuesday, 4 May 2004
1.40 pm

SUBJECTS: Budget, tax, Access Economics, trade, housing, Canberra

JOURNALIST:

Mr Costello, how family friendly will next week’s Budget be?

TREASURER:

Well, from the Government’s point of view, we try and make sure that all of our policies support Australian families, whether it be policies to create jobs for families, to keep interest rates low for families, to help families with their bills, and this will be a Budget which builds on what we have done in the past and takes it further to help Australian families, particularly families that are rearing children and to make Australia a stronger place because we have stronger families in place.

JOURNALIST:

Will the Baby Bonus be scrapped and replaced by a single payment?

TREASURER:

I am not going into measures that will be announced next Tuesday obviously, but I can assure you that families are the forefront of our thinking, and in creating jobs, in lowering interest rates and in helping with financial assistance, we always try and help Australian families.

JOURNALIST:

How accurate are Access Economic predictions of tax cuts around $15 a head?

TREASURER:

Not very…

JOURNALIST:

How is that?

TREASURER:

…you know, Access Economics is doing work for the Labor Party at the moment and I call on them to release it…

JOURNALIST:

What does this mornings…

TREASURER:

…they have taken I think $160 thousand to do work for the Australian Labor Party and in the interests of transparency, they should actually release it…

JOURNALIST:

So what…

TREASURER:

…and then I will look very carefully at their figures and their handiwork.

JOURNALIST:

Mr Costello do you think the trade figures today show that there is no need for higher interest rates?

TREASURER:

Well, today’s trade figures show a deficit for the month of around $2 billion, they showed that exports rose, but imports rose more. Unfortunately, rural exports seemed to have come back a bit in the month and it would be really a worrying thing if some parts of Australia were to slip back into drought. And there is not much we can do about that. Having said that, rural exports are higher than they were a year ago, but they have slipped back. The good news was that non-rural exports increased quite significantly and that shows that particularly in areas such as metals and minerals that with global growth picking up, demand for those exports from Australia will pick up. So, it is important that we assist the rural community at this difficult time particularly in relation to drought, and it is also important that we work on keeping our export industries as competitive as possible.

JOURNALIST:

How would you describe the economy today, Treasurer?

TREASURER:

The Australian economy is a growth economy, on low inflation with unemployment which is as low as it has been in a quarter of a century. And in the next year there are going to be some difficult challenges and we can’t afford to relax. It is a finely balanced economy I would say, I would say it is finely balanced and if any tinkering mechanics come along and knock that balance off, it could be a problem.

JOURNALIST:

(inaudible) housing affordability and when will you release the Productivity Commission’s report?

TREASURER:

Well, the Productivity Commission’s report will be considered by Cabinet and when it is considered by Cabinet it will be released, we have got some other things on our mind at the moment, we are trying to do a Budget. In relation to the housing market, let me say that I think there are signs that house prices are cooling, I think there are signs that particularly in the unit and apartment market that demand is coming off, I have been saying probably for 12 or 18 months that prices would come off and saying that particularly in relation to investment should, people should factor into their thinking that prices can come off, they don’t always go up, and I think we are starting to see the first signs of that.

JOURNALIST:

Treasurer, what is your reaction to surveys seeming to suggest that a majority of voters prefer more spending on services than on tax cuts?

TREASURER:

Well, I think Australians want good services, and I think they want good services as far as are consistent with lower taxation…

JOURNALIST:

Treasurer…

TREASURER:

…and that is the business of politics, isn’t it?

JOURNALIST:

(inaudible) expectations of big tax breaks inflated?

TREASURER:

Well, all, look the only point I would make is this: people speculate, newspapers speculate but you wouldn’t want to assume that just because it has been speculated about in a newspaper it is reality.

JOURNALIST:

When you say that Access Economics is inaccurate in predicting a $15 a week tax cut, what is wrong? Is it the scope of the tax cut Access is speculating on, or is it the fact that there will be a tax cut, at all?

TREASURER:

I will just say that Access Economics as we know, is on a retainer from the Australian Labor Party to produce a tax policy and I have released the correspondence where they were commissioned and Access says in this letter that it is going to release its research, well I call on it to do so. If they are such experts on everything, which they seem to hold themselves out as, perhaps they could release their research, we would all be interested to see it, wouldn’t we?

JOURNALIST:

Will there be tax relief on Tuesday?

TREASURER:

So…

JOURNALIST:

Are you listening to those community groups that are asking for more money to be put into education and health rather than the tax cuts?

TREASURER:

The principle is this, that if we can fund good services in health, in education, if we can secure Australia’s defence and look after our security, and if at the end of the day we can still balance our Budget, I would like to return to the taxpayers, that is what we did last year, we returned to the tax payers, and if you could do that again, I reckon we ought to try and do it. Now, that is a big tall order. It involves funding services to a standard which we want in our society, we have security challenges going on, I don’t need to tell you what they are, we have got to try and keep the Budget in balance, there are very few developed economies in the world that have balanced budgets. The United States is nowhere near it, and if at the end of all of that, you can reduce the tax burden as well, then I think you ought to aim to do that and that is what we are aiming to do. Whether or not you can do all of that on Tuesday night, remains to be seen.

JOURNALIST:

Treasurer, this is your ninth Budget, why should (inaudible) see the sudden discovery of work and family issues are just too little too late?

TREASURER:

Well, we have out in place measures to assist families over the course of the last several years, we dramatically increased the Family Tax Benefit on 1 July, we changed the taper rates, we cut taxation, we introduced a new benefit, the Family Tax Payment Part B, so this is something that has been, the Government has been working on for years and I imagine will continue to work on for years. You have always got to make sure that you are trying to help families, it doesn’t start on a particular date and stop on a particular date, this will be ongoing for those Governments that want to support families for a very period long time.

JOURNALIST:

You have just raved about Canberra, will Canberra be a winner come next week?

TREASURER:

I think Canberra will be, yes, yes I think Canberra will be a winner in the Budget, I think there will be more work opportunities for Canberra and I think as far as our Government is concerned we won’t be engaging in some of the ill thought out anti-Canberra initiatives that have been announced by Mr Latham. Ill thought out, anti-Canberra. And in fact as I said earlier, under this Government, over the last eight years, unemployment in Canberra has substantially fallen, more jobs in Canberra than ever before. But this is an important point, not just public service jobs, a very large proportion of those jobs are in the private sector because there is now such a vibrant private sector in the ACT and that is what we want to continue. Thank you.