Doorstop Interview
Australian Embassy, Jakarta

Monday, 5 September 2005
12.15pm

(Indonesian time)

SUBJECTS: Australian Embassy in Indonesia, Telstra, oil prices

TREASURER:

On Friday we have the anniversary of the bombing of the Australian Embassy

here in Jakarta, tragically where some people lost their lives. But as you can

see the Embassy is being re-built and re-secured. This is a programme the Government

has in place to secure Australian missions overseas, a very expensive body of

work as you can see and together with other Embassies and other strategic assets

around Australia we have made an announcement to secure them and to ensure that

Australian staff are not put at risk. We welcome the steps that have been taken

by the Indonesian Government to bring justice to people associated with that

bombing and Australia will stand very strongly in the fight against terrorism

together with our Indonesian partners. This is something that is not just important

for Australians but important as well for Indonesia and Indonesians. Our two

countries can assist each other in the fight against terrorism – and we will

and we have – and we will continue to cooperate in those areas.

JOURNALIST:

Will you be talking about cooperation in these areas during your meetings this

week?

TREASURER:

Well I hope so. I hope during the week we will be talking about cooperation

on the economic front in relation to aid and particularly Australia’s

$1 billion programme for aid to Indonesia, principally Aceh – but not totally

in relation to Aceh – and we will be talking about economic developments which

are going on here in Indonesia at the moment, share experiences and some of

the common problems and approaches that we can take in relation to them.

JOURNALIST:

On a domestic matter Mr Costello, the suggestions are that the new profit outlook

for Telstra are much lower and a possibility of going below $3, any comment

on that?

TREASURER:

Well, the only thing I would say is this, Telstra is a good company which has

been very profitable over the years, it has paid substantial dividends and the

directors have an obligation to preserve an increased value. The Government

has an obligation to ensure there is a properly considered (inaudible) regime

and provided people focus on their areas of responsibility I think that Telstra

will continue to have a good future.

JOURNALIST:

(inaudible) assessed as (inaudible)?

TREASURER:

Well I am not going to go into the ins and outs of the management of Telstra

except to say this. A director’s obligation is to their shareholders,

a director’s obligation is to preserve and maximise value to shareholders

and I am sure that directors will be focussing on that in the months to come.

JOURNALIST:

Is it also director’s obligation to tell the truth in the way they see

it?

TREASURER:

Well, a director has the obligation of course to keep the market informed.

That is the director’s duty to keep the market informed but to make decisions

and to put down a strategy which will give a return to shareholders. At the

end of the day, directors are appointed by shareholders to act in the interests

of shareholders, that is the point, and the interest of shareholders consist

of preserving an increasing value.

JOURNALIST:

Do you agree with Helen Coonan that they can’t legitimately blame regulation

for their problems?

TREASURER:

Look, anybody can make more money if they run a monopoly, that is the easiest

way to make money. But in a competitive society, real skill lies in beating

competitors and increasing value and that is what we have in Australia, we have

a competitive economy.

JOURNALIST:

Treasurer, (inaudible) talking to the Indonesians about oil, what measures

do you have for the Indonesians as a major oil exporter or producer (inaudible)

oil prices following Hurricane Katrina?

TREASURER:

Well, surging oil prices are in no one’s interests. They are not in the

interests of consumers, they are not in the interest of our economy because

they will dampen consumer spending in other areas of the economy and ultimately

I don’t believe they are in the interests of oil producing nations because

huge fluctuations in prices will not be good for long term stability in the

oil industry. My view would be for oil producing nations – all oil producing

nations – to increase their supply now which would reduce prices and stabilise

the market and stabilise the economies which rely on oil and petrol would be

in their interests as much as it would be in the interests of oil importing

nations like Australia.

JOURNALIST:

Treasurer, what do you hope to see when you get to Aceh and can we expect some

announcement (inaudible)?

TREASURER:

Well, what we want to see in Aceh is, the Australian people and their government

have put together an enormous package of assistance for the people of Aceh.

But not just government money but individual Australians opened their hearts

and their wallets and what we want to see is that the money is now getting through

into practical projects – re-building schools, re-building hospitals – and to

see whether there are some other areas where we can support projects and get

assistance directly out to the people who have suffered so much.

JOURNALIST:

Does this mean more money or doing things differently?

TREASURER:

Well, it means that we the Government have allocated a very large sum of money,

not all of which has yet been committed to specific projects and so out of that

pool I hope that we can find additional projects which will help the people

in need in Aceh.

JOURNALIST:

Treasurer, Labor says you should have made this leg of your tour out of session,

that you are avoiding accountability.

TREASURER:

Labor can say what they like, usually they are wrong and on this occasion it

is no different. Okay, thanks.