Auditor-General report; interest rates; Inter-generational Report; asylum seekers

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Auditor-General report; interest rates; Inter-generational Report; asylum seekers


Tuesday, 16 April 2002


SUBJECTS: Auditor-General report; interest rates; Inter-generational Report;

asylum seekers


The Auditor-General has revealed another bungle in the Government’s own financial

management schemes. Is that in any way an embarrassment?


This is, I understand Senator Minchin has already responded to this, that this

is a payment between one area of Government and another.


So you are saying it is not a loss in real terms at all?


No. It is a payment from area of Government to another, so it is just a transfer.


The Opposition, though, is calling it a scandal and saying there is in fact,

and will be $150 million (inaudible) loss?


Well, if you were the Opposition and you had no policies you would probably

try and mount that argument too. But I think Senator Minchin has already commented

on this.


As Treasurer, there is no inefficiency in this system?


The Commonwealth Government probably in its arrangements has been devolving

responsibility down to agencies to make sure that they operate more efficiently.

That was the policy of agency banking and as I think has been made clear, this

is a transfer from one area of the Government to another.


Is the Auditor-General wrong, is that what you are saying?


No, as I said it is a transfer from one area of Government to another. Instead

of paying the Government money, the Government is paying money to itself. It

is actually a payment for agency banking in relation to interest.


Treasurer, if it is not a failure, as the Opposition are saying, is it a success?


Agency banking was a way of giving agencies more responsibility in relation

to managing their own affairs. I think in many respects that has helped them

to be more responsible, probably ensured that they have been more efficient

with the devolution of their money.


So there is no need for a review or…


Look, we always keep all areas of Government administration under review. I

think agency banking was introduced to try and make sure that agencies were

kept efficient. And you always make sure that you are doing things in the best

way possible.


Treasurer, yesterday the, a boss of Woolworths, Roger Corbett, came out and

said that he didn’t see any price or wage pressures, at least within the retail

sector and basically inferring that the Reserve Bank doesn’t need to raise rates

next month. Is his argument valid as far as the retail sector is concerned?


Well, we will be getting the Consumer Price Index shortly and that will give

us the best fix on consumer prices. But at the moment we think that wages, notwithstanding

good employment outcomes, are still relatively moderate – the evidence that

we have to date. But we will watch the Consumer Price Index with interest. We

know that there is going to be some factors in there, such as oil and petrol,

which are external factors but we will be stripping those out and trying to

look at the underlying price pressures.


The Inter-generational Report that was presented to Cabinet yesterday, can

you give us any details of that at this stage about what sort of trends it outlined?


What we are going to do in this year’s Budget is, we are going to release for

the first time ever in Australia’s history, an Inter-generational Report which

is designed to look at how this generation is treating future generations. That

is, what would Australia look like in 2042, in 40 years time, on current policies,

what would the shape of our Budget be? What can we learn about the shape of

our Budget in 2042 which can inform us for policy now and can give us some kind

of long-term picture of how we want to build Australia? I think it is going

to be one of the most exciting documents that we have ever seen. And we know

that there are big demographic changes going on in Australia. The population

is aging and we have got to think about how we are going to cope with that.

And I think this is going to be a visionary, long-term, structural change to

the way we think about our Government. Fancy looking out in 40 years time, nobody

has ever tried to do that before, and to just try and get a snap-shot of what

Australia will look like.


How concerned are you about the future burden to future taxpayers on the rising

cost of drugs and medical treatment?


Well, this is something that an inter-generational report will have to look

at. It will have to look at how are we going to fund services in 40 years time.

This is not for tomorrow, it is not for next week, it is not for a months time,

but it probably is one of the most significant developments in Australian budgetary

management. The fact that it has never been done before and that we are now

going to do it and look out 40 years time. And I would say to everybody, look,

this is a chance for long-term planning and long-term vision in our country

and I think it is incumbent on all people who want to see good policy to get

behind this and to support it, and to ensure that it is a long-range, visionary



How big a challenge is the age and health care funding, in terms of that?


Well, that is what our report will be showing. It will be showing what the

challenges are and what the situation will be like in 40 years time.


Can you say as the expected Prime Minister then, how would you say governments

of that day are going to meet the challenge?


Well I don’t think I will be around in 2042, but medical science may do wonders,

you never know, but I think the important thing is to look out and to see what

is going to happen, and see where it goes and we will get the first fix on this,

ever. This has never been done before. Nothing as visionary has ever been done

before by a Federal Government and it will come out with the Budget and I think

it will provide a basis for long-term policy.


How soon will it affect budgetary policy?


Well I think as we run through this decade we have got to start taking decisions

now for 2042. We have probably got a window during the course of this decade

but we have to start planning a long-term basis.


As prospective Prime Minister (inaudible)…


This is the last question.


…are you concerned at all about revelations last night on the Four Corners

report that asylum seekers may have actually died after being turned back?


I didn’t see the Four Corners report but I can tell you, I can tell you this,

that the Australian Government operates the second highest per capita intake

of refugees in the world, in the world. And we have an intake which is administered

in accordance with rules that assesses genuine refugees and gives a priority

to those that are in need. And I would say to anybody that the proper way to

have a refugee claim assessed in Australia is to make an application. It is

not to pay money to people smugglers. Paying money to people smugglers is not

the way to get in to Australia. We operate a programme and genuine refugees

can be assured that their claims will be heard in accordance with that and that

is the way to make a refugee claim in Australia.