Transcript No. 2000/37

TRANSCRIPT

of

Hon. Peter Costello MP

Treasurer

Doorstop

1.00 pm

SUBJECTS: Budget, Beer

Well, tomorrow’s Budget will continue the Government’s good economic

management. It’s important that we make decisions that can secure Australia’s

future, and that’s what we intend to do. We intend to build on the runs of the last

couple of years, and we intend to take them further. And it’ll be a Budget which will

continue good economic management, and it will also give the Government the opportunity to

address some priority areas which have been needing some measures, which will be careful

measures, targetted measures, consistent with good economic management, but still show the

priorities of this Government.

Will you be sticking with the spirit of the Budget Honesty Charter, which is that

one-off asset sales or the auction of licensed agreements should be kept below the line?

The Budget will comply with the Charter of Budget Honesty, which this Government

introduced. And, as you know, in the days of Labor, what the Labor Party used to do was,

it used to sell off assets, spend the proceeds and go and borrow on financial markets. And

I’m sure, as you all know, the Labor Party sold the Commonwealth Bank, expended the

total proceeds and still went into deficit . . .

So . . .

. . . total, total proceeds . . .

. . . (inaudible) is not an asset?

So, I can assure you that we will be complying in totality with the Charter of Budget

Honesty. And the argument that somehow we would act like the Labor Party, you know, is a

pretty serious charge to put against us.

Any thoughts Treasurer, on Access Economics’ worrying figure about a $5.6 billion

structural deficit?

Well, I think they’ll probably claim in due course that they’ve been

misinterpreted. As I had a look, and it’s a heavily qualified report, and I could do

a deconstruction of it, other than to say it’s wrong. But I noticed, for example, one

of the things that it was premised on was that NAIRU, the non-accelerating inflation rate

of unemployment was 6.7 per cent. So Access says, that structural unemployment in this

country is 6.7 per cent, something I would never agree with. I would never . . .

Mr Treasurer . . .

. . . I would never agree with the proposition that unemployment in this country

can’t go lower than 6.7 per cent, particularly, when in the last couple of months

it’s been at 6.7 per cent in a low inflation economy. So you’d have to make some

pretty fair assumptions to get to that wrong conclusion.

Treasurer, the well-heeled brewers today say the Government is breaking its word on

beer excise, that by ramping up the excises, you’re really using an excuse to grab

money because it’s got nothing to do with the GST.

I’m sure the brewers would have also have told you this. The current wholesale

sales tax on beer is 37 per cent, which is being abolished on 1 July, and which is being

replaced with a 10 per cent GST. And a 10 per cent GST is an awful lot less than a 37 per

cent wholesale sales tax . . .

But why is beer . . .

. . . and in order to equalise . . .

. . . (inaudible).

. . . in order to equalise the price, as the Government said, we would move prices of

packaged beer by 1.9 per cent. And the brewers admit that’s what the policy does.

That’s what the policy does. And try as they might, as they thumb through the New Tax

System, and all of the written policy, they cannot find there was ever a suggestion to the

contrary. Never a suggestion to the contrary. What we said, it’s there, it’s in

black and white, and the brewers know it, and they’ve known it now for a very long

period of time, is that we would move the price of packaged beer by 1.9 per cent, and

that’s what we’ll do.

Treasurer, the Democrats are siding with the brewers, how then do you propose to get

your legislation or regulation through the Senate? And doesn’t that leave you open to

claims that there’s a massive revenue shortfall in the Budget?

Well, listen. Every one of my Budgets has been attacked in the Senate. Bear that in

mind. Every single . . .

Meg Lees said . . .

Hang on, hang on, let’s go through it . . .

. . . (inaudible).

. . . every single one of my Budgets has been attacked in the Senate. The Labor Party

voted against every single savings measure which was designed to drive this Budget into

surplus. It voted against every single one of them. And I’m sure that you in the

press will, of course, be asking the Labor Party, how it could possibly be that these days

they support surplus Budgets, when they voted against every single measure which was

designed to get it there. Now, when you have an opportunist Opposition, I assume that it

will continue to punch holes in this Budget . . .

Meg Lees . . .

. . . but it won’t be any different to every single Budget which I’ve brought

down. The good news is, that we’ve been able to steer, not as well as we

would’ve liked, but we’ve been able to steer enough of those measures through

the Senate to get the Budget into surplus. And they’ll try it again, of course they

will. It’s a campaign by the Labor Party which, as you know, is cheap and

opportunist, to attack every Budget measure and then to say, oh, the Budget should be

stronger . . .

Treasurer, (inaudible) . . .

. . . but the good news is, the good news to date – they’ve only inflicted

marginal damage, and we intend to keep on running good economic policy. And no doubt, the

press of Australia will be asking the Labor Party . . .

So if it doesn’t get through there’ll be cuts elsewhere (inaudible) . . .

. . . how . . .

. . . fiscal integrity (inaudible)?

Look, look Jim. We put down a Budget of all of our measures, and we go into the Senate

and we argue for them. And although we haven’t got 100 per cent through of what we

would’ve liked, and the Budget position could’ve been bigger if we hadn’t

faced the obstruction that we’ve been facing, we’ll go through the process

again, we’ll lay down our measures, and we’ll fight for them in the Senate. But

we won’t take the criticism from people who have done everything they could, to try

and sabotage those measures by voting against every single savings measure, that somehow,

that somehow the position should’ve been stronger. We won’t take that. Thanks

very much.