Interview with Philip Clark

2GB

Tuesday, 7 February 2006

4.10 pm

SUBJECTS: Bill Heffernan, Latham, surplus, tax, Islamic cartoons, RU-486, AWB

CLARK:

Mr Costello, good afternoon to you.

TREASURER:

Philip, good to be with you.

CLARK:

I know you love to be back and you have just been champing at the bit to get into the House, haven’t you?

TREASURER:

Well I can take Canberra or leave it.

CLARK:

Yes, right.

TREASURER:

Over summer we don’t stop working but what we do is we go back to our electorates and our homes

CLARK:

Where real people are.

TREASURER:

where real people are, and of course when Parliament resumes we come to Canberra and you know, Canberra is a long way from home and the electorate. So, as I said, I can take or leave Canberra.

CLARK:

Anyway, it is your lot.

TREASURER:

Yes

CLARK:

(inaudible) for the rest of the year.

TREASURER:

you can’t complain about it.

CLARK:

True. Look, onto the issues, it is going to be a big year for you and this coming Budget is going to be a big year, I guess you would like to be focussing on some other issues, you would be upset with Bill Heffernan today, a lot of the focus there instead of Mark Latham perhaps?

TREASURER:

Well, I think it is important that colleagues are courteous to each other, I think they should be polite, the comments that Bill made have got a lot of publicity and it would be better if they hadn’t have been made, if the truth is known, and I think he probably realises that now, it is one of the things of public life that you can’t afford to really say anything in a public place without it being reported.

CLARK:

We have the Chief Justice of New South Wales, Jim Spigelman the other day calling for a greater level of manners and politeness in society, I mean it needs to start at home, doesn’t it? I mean the words that were used to that female Senator, Fiona Nash, by Bill Heffernan were offensive whenever they were said, weren’t they?

TREASURER:

Yes well as I said, I think it would be better if he hadn’t had said that, yes, and I think as he looks back on it he probably feels the same way. I must say though, Philip, she gave as good as she got, did you see her reply?

CLARK:

Yes I did, it shows no reflection

TREASURER:

(inaudible) when somebody says something to you I think you are probably entitled to give one back and she did but it would be better if it had never occurred in the first place.

CLARK:

On the Latham issue, do you feel any sympathy for him?

TREASURER:

Yes I think he is probably somebody who had great aspirations and they didn’t come about and he probably feels disappointed and he has got a lot of his life left to live so in that sense I can understand that he would have great disappointment, but that doesn’t justify you grabbing someone’s camera and smashing it.

CLARK:

No. He was a slow moving target for you today in the House.

TREASURER:

Well I said at the time of the last election that the Australian economy and it is an $800 billion plus economy – $800 billion and it is like a performance car it is engineered and you want to change it here, you change it there, you can knock it off balance and it will end up a wreck. And I said at the time of the last election that Labor wasn’t ready to manage this high performance vehicle and patently they weren’t. And you have seen the wreck that Mr Latham made of the Telegraph’s camera, imagine the wreck he would have made of the Australian economy. And if you make a wreck of the Australian economy people’s jobs are on the line, their mortgages are on the line and that is point I was making.

CLARK:

Turning to the economy, I mean there is a huge budget surplus, callers to this programme and elsewhere around the country have been saying look, we have got all of this money by way of Government surplus and we ought to be doing something with it. Business groups today getting into you over tax reform, do you really think given what the Government has done that we have ended up now with a simpler, more understandable, more efficient tax system than we had and when are we going to see a substantial overhaul to the system?

TREASURER:

Well, first of all when you say huge budget surplus, it is about 1 per cent of the economy. You know, it sounds a lot of money because the economy as I just said is now an $800 billion plus economy. But in percentage terms which is what counts for economic policy, it is about 1 per cent. And so it has got to be put in perspective and the important thing about balancing your budget and having a bit left over is it adds to savings and it helps to keep pressure off interest rates. And so at a time like this the Government should have a budget balance and it should be in the black and that is what we are aiming for. So, this idea that this is unforeseen or unnecessary, it is not right. It was deliberately targeted, this kind of outcome and it is important for other macro-economic policy reasons.

CLARK:

Yes, at the same time there is room for substantial tax cuts and therefore in a sense related tax reform, isn’t there? Shouldn’t we be getting into it?

TREASURER:

Well we have laid down substantial tax cuts. The first part took effect on 1 July last year and the next part is to take effect on 1 July this year. So you know, consistent with running a Budget which builds savings and keeps pressure off interest rates we have already factored in some tax cuts.

CLARK:

Okay, the Reserve Bank Board met today, there is pressure say in some quarters because of figures released yesterday for an interest rate rise at some point. I know you can’t speculate this and neither should you as Treasurer, but would you concede with property prices and mortgages being where they are it is hardly going to be welcome thing for many Australians if there is?

TREASURER:

Well I think we have lived through a period of low interest rates since our Government was elected in 1996 and as a consequence of that people have borrowed it is one of the reasons why you have low interest rates by the way so people can afford to borrow and they wouldn’t look forward to increases in interest rates and that is why it is important that economic policy be directed towards keeping inflation low and keeping pressure off interest rates. And you know, I keep on making the point about the Budget your Budget policy has got to fit in with all sorts of other objectives you have in relation to savings, inflation, interest rates and it has got to be framed properly because if you lose sight of all of the goals – this comes back the racing car analogy you know, you want to modify it over here, it can have effects over there and you have got to be very careful about that kind of thing.

CLARK:

Just a couple of other issues, the Islamic cartoon issue which has caused such a fuss around the world and indeed here in Australia with calls for things to be published and inflammatory calls by some Islamic leaders warning of the consequences if they were published and so on. It is a free and open society, I mean as many have said, these calls should be resisted, shouldn’t they?

TREASURER:

My view is that freedom of the press in Australia means that newspapers can publish material, they have every right to publish material and by the same token if you don’t like what they publish it is not an excuse to have a riot or to burn premises or to injure people. I think we should all be very clear about that, gee there is a lot that the newspapers publish that I don’t like

CLARK:

Correct.

TREASURER:

it doesn’t justify in me having

CLARK:

A lot about you, (inaudible) about you.

TREASURER:

there is a lot that the newspapers publish that Christians wouldn’t like but that doesn’t justify them having a riot. By the same token, there is no point in going out and offending people just for the sake of it and I would say that in relation to Christians. You know, my view is, do you remember there was, oh there was an object of art, some time ago, which was quite offensive to Christians

CLARK:

You are talking about the Andre Serrano

TREASURER:

yes.

CLARK:

of art in Melbourne called Piss Christ

TREASURER:

That is right.

CLARK:

apologies for the language, I will use it but that is the name of the thing

TREASURER:

Yes.

CLARK:

it was highly offensive to Christians and yet

TREASURER:

Highly offensive.

CLARK:

at the time of course, the media was, it wasn’t self-censoring, reported the thing in extensively and indeed published images of the thing extensively.

TREASURER:

Yes, absolutely.

CLARK:

Which as to Christians I would have thought there is possibly nothing more offensive.

TREASURER:

Well absolutely, I didn’t even want to use the name but you did and it was absolutely offensive to Christians and the media told us that they had every right to do it and they were going to do it and they did it quite a bit and I think Christians found that offensive. Now, you know, the newspapers could have considered there are feelings and I think you should consider the feelings of people before you publish these things but if you don’t and they are offended it still doesn’t justify a riot. And Christians didn’t have a riot you know, they voiced their protest and just as the newspapers have the right of free speech to publish these things, so you have the right of free speech to condemn it.

CLARK:

It just seems to me that there is a bit of self-censorship going on in the media in relation to this issue which there wasn’t in relation to the Andre Serrano issue.

TREASURER:

Yes well the

CLARK:

Do you agree with that?

TREASURER:

I think you are absolutely right. The newspapers didn’t seem to show any great sensitivity to the feeling of the many, many millions of Christians that live in this country.

CLARK:

Correct, correct. On the RU-486 abortion drug, there is, I understand a conscience vote in the Parliament on Thursday as to whether or not approval for this drug to be used should be held in the hands of the Minister for Health or the Therapeutic Goods Administration, what is your view about it? Which way are you doing to vote?

TREASURER:

To be frank I haven’t announced my position on this yet, the Senate Inquiry is going to report I believe tomorrow, once it reports I am going to read it very carefully, I will take into account all of the findings and then I will announce my position. So I am one of those people who wants the information I want to know what the medical advice is I really want to know whether there are dangers and I will base my views accordingly.

CLARK:

Alright, the Wheat Board or the AWB Inquiry continues, the Cole Inquiry, it seems pretty plain from what has been revealed so far that there were executives at AWB who knew perfectly well what they were doing. I just wonder whether you are concerned – and this is of course an exporting issue here whether you are concerned that in punishing those who may have committed wrong in relation to the UN Oil For Food Programme at AWB, the executives there, we ought to be careful that we don’t clear Australia’s prospects in the international wheat market because I note today that US wheat interests are surprise, surprise, right up there in saying well, Australian wheat interests in the United States should be prosecuted and of course by implication Australia will suffer in export markets. We have got to be careful about that, haven’t we?

TREASURER:

Well look, it is very important that we do whatever we can to get Australian wheat onto world markets, let’s be clear about that. We are Australians, our loyalty lies to Australian wheat producers, we want to see them able to export their product around the world. But that doesn’t justify the breaking of UN sanctions or the payment of bribes. We have a law that says you are not allowed to pay bribes in foreign countries and we have the law because like other developed economies we have all decided that if we all ban bribery than our companies can compete on an equal basis but if some of us ban bribery and others don’t, then bribery will flourish and

CLARK:

But realistically in a lot of these markets that is the way that business gets done otherwise it doesn’t get done.

TREASURER:

well you know, there has been a coordinated response from the developed economies of the world to try and prevent bribery and we are part of that, we have a criminal offence of bribery and all you can say to these guys is you can do everything you can to get Australian wheat into these markets but you can’t engage in bribery, that breaks our law. And you know, here is the proof, if you get caught doing it then it is not going to help the Australian wheat grower for a minute and you know, in these situations you are a monty to get found out eventually and if you are rather then having helped wheat growers you are more likely to have hindered them.

CLARK:

Alright, Mr Costello, good to talk with you.

TREASURER:

It is great to be with you.

CLARK:

And I bet you are busting to get through the year.

TREASURER:

Okay, thanks very much.