Doorstop Interview
The Henry Jones Art Hotel

Hobart

Monday, 3 October 2005

1.00 pm

(12noon AEST)

SUBJECTS: Bali bombing, terrorism, petrol prices, GST, gambling

JOURNALIST:

Treasurer you placed a strong emphasis on the importance of security in that

address to the AHA, domestic security, what do you think – in the wake of the

latest attacks – this is going to mean for the domestic economy, particularly

tourism?

TREASURER:

Well first of all our hearts go out to the family members of people who have

been killed, injured, some maimed in Bali. It re-emphasises again that the scourge

of terror has to be confronted and defeated and that the Government can leave

no step that is necessary to actually secure safety for Australians. And the

Government will be ensuring that where we can assist bringing those to justice

that we do so. And Australian Federal Police will be actually cooperating with

their Indonesian counterparts to bring to justice the people responsible for

this despicable act. Unfortunately this will reflect on the tourist industry

and affect the Indonesian economy. That is not good for Indonesia. Indonesia

has been struggling to attract new foreign investment and this will be a step

backwards. But we believe it is important for Indonesia over the medium term

to actually get new foreign investment and to develop its economy. For Australia

of course it re-emphasises again the importance of security not just to the

life and limb of our citizens but also for our economy. We have had two big

shocks in the Australian tourist industry in recent years. We had a big shock

after September the 11^th, 2001 when short term visitor arrivals dropped

by about 16 per cent. We had another big shock with the SARS virus when short

term arrivals dropped by about 15 per cent and security is not just about protecting

life and limb and human life it is also about protecting a way of life and an

economy in which people can prosper and find work and living standards to care

for themselves and their families.

JOURNALIST:

Would it be sensible to revise the domestic security arrangements that were

agreed upon last week?

TREASURER:

Well they were agreed on last week. The important thing I think is to implement

them. That is the important thing here. I don’t think it makes much sense

to change what was agreed last week. The steps that were agreed on last week

I think will be very, very important steps and the important thing now is to

actually implement them.

JOURNALIST:

There are reports today that Australian tourists in Bali heard rumours of a

threat in Kuta and were told to stay away. Mr Downer says there was no specific

information. Was Australian intelligence good enough?

TREASURER:

Australian intelligence is working actively to ensure that we know as far as

is possible, as far as it is possible to know of any credible threat. And our

warnings have been given, people should heed those warnings, the Australian

intelligence services have been beefed up, they have certainly got much more

in the way of resources than they had several years ago. But the important thing

really is to bring to justice those who organise this and in particular, to

bring to justice bombers who actually make bombs and sometimes recruit people

to carry them. That it is the important thing and to wind up those networks.

And this will be long and hard to bring to justice all of the people that are

involved. And it will be costly, but it is something that the Government will

have to do.

JOURNALIST:

Family First Senator Steven Fielding has called for a 10 cent reduction in

the fuel excise. How do you respond to that?

TREASURER:

Well fuel prices have gone up because the world oil price has gone up. Petrol

prices are now higher in Britain and France and Germany and the United States

and Japan and every other country in the world. And until you deal with the

reason why petrol prices are higher then you won’t deal with the underlying

problem. Petrol prices haven’t moved because there has been any change

in tax. There is no change in tax, none whatsoever. There hasn’t been

an increase in excise since 2001, not even an indexation, in fact, as a consequence

of that, in real terms excise is falling.

JOURNALIST:

But with your large Budget surplus will you consider this call?

TREASURER:

Petrol prices have risen because the world oil price has gone up. It has got

nothing to do with Australian taxation. And you can’t fix the world oil

price by changes to the Australian taxation system.

JOURNALIST:

But the tax take has gone up. Surely it is only fair…

TREASURER:

No. I am sorry the tax take hasn’t gone up.

JOURNALIST:

Well the GST?

TREASURER:

The federal excise is 38 cents a litre, the same as it was in 2001. If there

has been any increase in the GST on petrol, if there has, then it has been totally

received by each of the State Governments including the Tasmanian State Government.

So you might like to put that question to the Tasmanian Government.

JOURNALIST:

Do you think the States should be reducing…

TREASURER:

But the Federal Government receives 38 cents excise whether the price is 90

cents, whether it is $1.20 or whether it is $1.30. It does not receive any increase

at all in excise whatever the price is.

JOURNALIST:

Is it correct that the Government is not doing anything to alleviate the cost

because it doesn’t anticipate petrol going back down?

TREASURER:

Well I think every Australian would hope that petrol prices will come down.

I certainly do.

JOURNALIST:

Does the Government anticipate petrol prices coming down?

TREASURER:

High petrol prices are not in the interests of consumers, they are not in the

interests of the economy, they are not in the interests of the Government; they

are not in the interests of Australians. And I hope that they do come down,

yes, of course I do. Like every other Australian consumer I hope they do come

down. Petrol prices will come down when the world oil price comes down. And

the world oil price will come down at the point when production is increased

to meet demand.

JOURNALIST:

Is the Government prepared to offer any other kind of measures to help businesses

with the flow on costs of increased petrol?

TREASURER:

Well businesses in Australia at the moment are trading profitably; the profit

share is higher than it has ever been in Australian history. Company profits

are very strong at the moment. Now we have got to keep them there. And keeping

business profitable is about keeping good business conditions, improving industrial

relations, keeping interest rates low, ensuring that we have good taxation,

keeping consumer confidence strong. That is why businesses are as profitable

as they are at the moment. I would like to see it stay that way.

JOURNALIST:

Mr Costello, the State Liberals have promised to fund hundreds of millions

of dollars in election promises with unexpected rises in the GST. Do you have

any information that indicates GST will rise significantly higher than your

expectations?

TREASURER:

Well everybody knows how GST works. All GST revenue goes to State Governments.

Not a dollar of GST is received by the Federal Government. All GST ends up in

Hobart, in Melbourne, in Sydney, in Brisbane, in Adelaide, in Perth. And it

is 10 per cent on the goods and services which are sold in the economy. If the

economy is strong then the State Governments get higher GST. And the State Governments

are now receiving record collections, higher than was anticipated. All of them

are now receiving windfalls. The Tasmanian State Government is now getting a

windfall of GST, much more than it was ever promised. And it is accountable

for its expenditure. It is a matter for it. It is accountable to the people

of Tasmania. The Tasmanian Government is now getting more GST than was ever

envisaged, ever forecast at the time that it was brought in. So it has got to

be accountable to the people of Tasmania for those record amounts of GST.

JOURNALIST:

Your Commonwealth Treasury predictions do not cover the State Liberals’

hundreds of millions of dollars in promises. Are you expecting that the GST

revenue is going to be other than what your Treasury Officials have forecasted

so that it can cover hundreds of millions of dollars in election promises by

your State counterparts?

TREASURER:

Oh as I said, GST goes to State Governments, it is 10 per cent of goods and

services, the Tasmanian State Government is now getting more than was ever expected;

it is in a windfall position. And it is a matter for these State Governments

to account to the people of their state.

JOURNALIST:

Treasurer can I ask you a question about Betfair?

TREASURER:

Last question.

JOURNALIST:

About Betfair, if you have heard of the Tasmanian Government’s plans

to introduce the online international online gaming Betfair – other States have

rejected it – what’s your view of online gaming and its role in our country?

TREASURER:

Well look, these are matters for State Governments to regulate. The Commonwealth

doesn’t regulate gaming, let me say that. The only thing that I would

say is I am concerned about the people who suffer from gaming addictions and

I had a Productivity Commission Report some years ago that looked at the suffering,

the human suffering that is caused by people who have gaming addictions –

homes that are broken, jobs that are lost, suffering that families go through.

And the only thing I would say is I think our Governments, when they are looking

at regulating gaming, should also be looking at minimising the cost to families

through gaming addictions because families can suffer so much. So I won’t

engage in the detail of these things because we don’t regulate it. But

I would recommend that the victims of gaming be considered in all of these decisions.

Thank you very much.