Interview with David Speers

Agenda, Sky News

Monday, 21 May 2007

4.15 pm

SUBJECTS: Economic management, Federal Budget, Labors lack of tax policy, Senate Estimates, AFL drugs policy

SPEERS:

Mr Costello, thanks for your time.  We do hear a lot about the growth of China and the mining boom.  Are you just ‘lucky’ as Wayne Swan suggests?

TREASURER:

I think a comment like that illustrates that he really doesn’t understand the Australian economy.  For some sectors of the Australian economy things have hardly been worse.  For example, our farmers are in the worst drought in over 100 years, farm production cut by 22 per cent.  For some of our manufacturers times are quite tough, because the Australian dollar is high and that is making their exports hard.  And to see somebody walk in and say things are, you know, just all conspiring our way and it is all just a stroke of luck tells you, here is someone who hasn’t thought deeply about the Australian economy, doesn’t know the sources of our wealth and certainly wouldn’t know how to manage them.  He would say to you, quite rightly, that the mining industry for example is profitable and yet that is the industry which Labor wants to clobber.  They want to get rid of AWAs.  A big part of the mining industry’s success has been Australian Workplace Agreements and the Labor Party wants to abolish them and clobber the industry which is profitable because of many of the changes which we have put in place.  And that is why I say, Labor doesn’t understand the Australian economy.  They haven’t done the hard work, they haven’t done the hard yards and they can’t be trusted with it. 

SPEERS:

Well, your record shows that unemployment at the moment is at a 32 year low, consumer confidence at a 32 year high.  Why aren’t voters rewarding you in the polls for such a strong economy?

TREASURER:

Well, everybody says: ‘oh well, the Budget should produce this outcome or that outcome in the polls.’  When I bring down a Budget I don’t think about producing outcomes in the polls, I think about producing outcomes in the economy.  What I am thinking about is how do we keep people in work, how do we save their homes, how do we make sure their businesses are profitable.  A Budget isn’t an election policy speech, it is not a US Presidential State of the Union address, it is the economic plan for our future.  And I think when you understand that, and when you measure that economic plan on all of the relevant indicators, it has been very successful.

SPEERS:

Nonetheless your business is politics and the polls aren’t good for the Government, would you agree with the Prime Minister’s suggestion that this could be the electorate’s sense of humour?

TREASURER:

I think that as people think about political issues over the course of the months ahead in the lead up to the election – and particularly as they think about who are they going to trust with their homes, their mortgages, their jobs, their businesses – as they get the issues and the risks at stake in the frame, then you will see that people will instinctively give the benefit to the Coalition as economic managers.  And that is because of our record, and it is because of Labor’s record.  But that is a process which will happen over months, it is not something that you see happen over hours or days, you will see that contest going on over months as we…

SPEERS:

But that is inevitable in your view, that the gap will narrow the closer we get to the election?

TREASURER:

Well David, the Coalition record is there for all to see and I think over the weeks and the months that lie ahead you will get a better feeling for what Labor wants to do with the economy.  You had a classic example there of a bloke who wants to be Treasurer but doesn’t understand the economy.  He says it is just luck.  That is why he thinks he can run the economy because he says: ‘you have just got to be there, you don’t have to do anything.’  If you knew what was involved in economic management, you would say this bloke is so far off the pace that he couldn’t possibly be trusted.  Now, we had another example last week:  Labor is not going to have a tax policy, they say, at the election.  No tax policy.  They are going to go to an election without a tax policy – which I think will be the first Opposition since the war without a tax policy.

SPEERS:

Well I think they are saying that you have now embraced the tax policy they put forward two years ago, so they have no argument anymore.

TREASURER:

Well, let’s leave the spin out, David, Labor is not going to have a tax policy.  So, they are going to go to an election and they won’t tell you what their policy is before an election.

SPEERS:

Well Wayne Swan says he will.

TREASURER:

Now why would you…

SPEERS:

He says he will. 

TREASURER:

Well, did he not say at the Press Club he would not be putting out a tax policy as part of his election manifesto?  Did he not say that?

SPEERS:

I think he said that he agrees with the tax cuts that you have now produced in this year’s Budget.

TREASURER:

Well everybody agrees with that David, because why wouldn’t you?  Everybody has had a tax cut.  The economy is running well.  You know, it doesn’t take much to agree with the outcome of government policy, but if you are running to an election, you are presumably running to change policy.  Wayne Swan is not going to the next election with proposals to leave the Coalition in place and leave the Coalition managing tax.  He is going to going to the next election with a proposal to put him in charge of tax.  But he won’t actually have a policy to say what he will do if he gets there.  And why would you do that?  Well, obviously you wouldn’t want to tell the public before in the circumstances where that would put them off voting for you.  You will tell them about that afterwards.  He is asking for a blank cheque on tax policy. 

SPEERS:

Look, I think he was arguing that you have been dragged to these tax cuts because there is an election around the corner but, look, I am just wondering…

TREASURER:

Well David, let me stop you there…

SPEERS:

Sure.

TREASURER:

Dragged?  This is a government that cut tax in 2003, 2004, 2005, 2006, 2007 and we have now got a proposal for a tax cut in 2008.  Dragged?  Dragged by whom?

SPEERS:

Well Kim Beazley a couple of years ago did propose tax cuts for those further down in the income scale…

TREASURER:

But David, we cut tax.

SPEERS:

…you happily criticised him for those and now you…

TREASURER:

But hang on, no, no, no.  We have cut tax since then, in 2004, 05, 06, 07 and 08.  I mean – dragged?  If you want to see people who have to be dragged to cut taxes, go and have a look at the Labor Party and Labor governments.  How many State Governments, now let me ask this rhetorically, I don’t expect you to answer it…

SPEERS:

Sure.

TREASURER:

…how many state Labor governments have cut tax at all let along in 2003, 2004, 2005, 2006, 2007 with a prospective tax cut in 2008?

SPEERS:

Well I don’t think I will have a stab at that answer.

TREASURER:

I think it is pretty easy.  None of the above. 

SPEERS:

Well I am just wondering if your strength on the economy has been undermined somewhat by the industrial relations policy, that voters feel that their hip pockets are going to be hurt on IR even though you delivered strength on the economy?

TREASURER:

Well David, the Government has recently announced that it will be introducing in the fairness test in relation to industrial relations, to make sure that people can be guaranteed that particularly in relation to penalty rates and the like, that they are adequately compensated.  And that is a significant change which the Government has now introduced.  And it is designed to address any concerns that people may have had in relation to industrial relations.  I think as you see that work out, that people will get a lot more confidence that the fairness test will protect anybody who otherwise may not have got adequate compensation. 

SPEERS:

If economic management is going to be as important as you say in this election, can you give us a guarantee that you will actually promise to spend less than Labor during the campaign?

TREASURER:

My guarantee is my record.  Not only do we spend less than Labor, when Labor is in office it produces Budget deficits.  You know, I came to Canberra in 1990, I think I watched Labor introduce six Budget deficits.  One of them I think was about 4 per cent of GDP which is today’s terms would be a $40 billion deficit.  Since we got the Budget into surplus, I have delivered 10 surplus Budgets.  That is my record.  The record speaks for itself.

SPEERS:

Is Kevin Rudd saying he will spend less than you would, so are we going to see a bit of a negative campaign auction, who can spend the least?

TREASURER:

Well, Kevin…what Kevin says is mildly interesting.  What Kevin does is much more important.  Kevin says, for example, that he is an economic conservative.  Kevin hasn’t voted for any of the measures which got us to where we now are.  And to come out and say: ‘well I am actually an economic conservative’ again shows lack of depth in my view because if you were you would have been voting for all of these measures.  Now, Kevin Rudd will come out no doubt and say: ‘I spent less,’ but it just PR Kevin, it is just an advertising agent’s slogan.  The important thing is their record.

SPEERS:

Well Treasurer, a few issues before we go, the Dalai Lama, would you be prepared to meet with him next month?  We have heard the Prime Minister and the Opposition Leader quibbling about this, would you be prepared to meet him?

TREASURER:

Well I don’t know that he has asked to see me but if he is going to see the PM and Mr Rudd and he wanted to see me in addition, of course (inaudible).

SPEERS:

The Senate Estimates today heard that the Prime Minister’s renovations on his private dining room in Canberra is going to cost more than half a million dollars of taxpayers’ money.  Is that too much for a dining room renovation?

TREASURER:

Well I haven’t seen those figures.  But bear this in mind: that that is an official residence, which is not owned by the PM, it is owned by the Australian people and the asset will always be there and you have got to look after these assets some time.  I don’t know the figures that are involved but I do know this – that will be an official house, housing Prime Ministers for a very long period of time. 

SPEERS:

And I note you have been very critical of the AFL’s drugs policy, that ‘three strikes and you’re out,’ I think you are suggesting that if a player is caught, if they test positive, they should be suspended.  How serious are you about this?  Can you put pressure on your own club – Essendon – to try and you know, drive some change in the AFL on this? 

TREASURER:

Well it is not a matter for my club, it is a matter for the AFL Commission.  Now, let me go through this.  The AFL tests players and they have a policy that is a player tests positive for cocaine they don’t tell the club, they don’t tell the police, they tell the doctor and the doctor is suppose to counsel the player.  And then if the player tests positive for cocaine a second time, they don’t tell the club and they don’t tell the police and they don’t take any action, they tell the doctor again.  It is only if they pick up that player a third time using cocaine or having cocaine in their system that they will look at suspension.  Now, plainly what that is saying – and remember they are not tested everyday, they might be only tested a few times over a long period of time.  So, by this stage a player you know, with infrequent tests might have been picked up using cocaine twice with no sanction.  And that is no zero tolerance.  Whatever it is, it is not zero tolerance.  The AFL says it is in favour of zero tolerance but its policy is not a policy of zero tolerance.  Now, we have seen problems with one of the clubs and one of the players – a very high profile player – who has gone into rehabilitation and I wish him well.  But the fact that you can have star players who have developed habits and apparently been playing in the competition all through the period where they have had a habit indicates that the AFL has got a problem and I think their problem is their policy.  I think it is too soft.

SPEERS:

And Treasurer just finally, I note you have been getting fit, running up the hill of Parliament House to the flag poll up the top.  I heard in the Senate Estimates today they said that this is actually a breach of security.  Were you aware of that?  Do you think you might have some guards chasing you up there tomorrow?

TREASURER:

Well I have got to say, of all of the things that are on the minds of the Australian public, to think that the Opposition concerns itself with my morning run.  I am flattered but I do think there are issues of a bit more substance which might be concerning the Australian public.

SPEERS:

I think we would probably agree with that.  Peter Costello, thanks for your time. 

TREASURER:

Thanks very much David.