TRANSCRIPT
THE HON PETER COSTELLO MP
Treasurer

Doorstop Interview

Minsterial Entrance

Parliament House, Canberra

Monday, 24 February, 2003

9.55 am

SUBJECTS: Budget; Defence spending; health; petrol

JOURNALIST:

…the Cabinet today. How tight is spending in other areas going to be considering

the outlays on defence that you are planning?

TREASURER:

Well, the biggest new expenditure that we’ll be having in the next year is

obviously the forward deployment of troops, the aircraft, the ships in the Gulf,

and that of course will be a very significant deployment with considerable costs.

So, that will be the biggest call on funds in the forthcoming year and we will

be discussing today the way in which that will work into our budget strategy

and the economic situation generally.

JOURNALIST:

But there will still be room for spending on education, higher education reform?

TREASURER:

Well, the first call on funds in this budget, as you would expect, will be

in relation to our defence forces and our servicemen. And that will be a very

considerable expense and its obviously going to take some work to figure out

the level, but we already know the level of the cost in relation to the pre-deployment,

which has taken place to date, and that is quite a considerable sum.

JOURNALIST:

Can you be more specific than hundreds of millions?

TREASURER:

No.

JOURNALIST:

But is a $116 billion too high?

TREASURER:

Billion? Yes, $116 billion is too high.

JOURNALIST:

That has been suggested by some economists?

TREASURER:

Billion?

JOURNALIST:

Overall, the cost to the economy, the slowing world economy…

JOURNALIST:

Up to $120 billion has been suggested.

TREASURER:

I can suggest that that is too high.

JOURNALIST:

(inaudible)…downgrading of the Christmas Island detention centre for example,

a sign that the Budget this year is going to be seriously stretched?

TREASURER:

Look, it will be a very difficult year. We have come through a significant

drought – our worst in a hundred years. The international economy is weak. The

United States economy has been through a recession and we now have a commitment

to the forward deployment of our troops, and aircraft, and ships which will

be expensive, very expensive. So, this will be a very difficult year. And we

all hope, don’t we, that the drought will break fully, we all hope that action

in the Middle East will be something that won’t be draining in relation to the

Budget but there are obviously several imponderables there.

JOURNALIST:

As well as international politics is it perhaps time for Cabinet to focus on

some domestic issues, such as the cost of petrol hitting families hard now?

TREASURER:

We are very focussed on domestic issues and it is very important that we keep

going on the domestic issues like reforming the welfare system. We have measures

in the Parliament that have now been stalled for 2 years. Basing the Pharmaceutical

Benefits Scheme so that that is sustainable – measures in the Parliament which

the Opposition has been delaying now for twelve months – and it is very important

that we remain absolutely focussed in relation to that, and we will.

JOURNALIST:

The Health Minister, Kay Patterson, has said, when asked about how to arrest

the slide in Medicare bulk-billing, that there are all sorts of pressures on

the Budget – the drought, war, that sort of thing – can you afford to address

the slide in Medicare bulk-billing in the present economic and international

circumstances?

TREASURER:

Well, the Commonwealth funding on medical treatment for Australians has been

increasing year by year, quite dramatically, and in addition to that there has

been an increased assistance for private health insurance. So, the Commonwealth

contribution to health has been a very substantive one and has been increasing.

Now we think that is important to ensure good health outcomes but it is not

limitless, there is not a limitless bucket there. At the end of the day you

have got to be careful with taxpayers resources.

JOURNALIST:

So nothing new on that front?

TREASURER:

Well, we’ll be careful with taxpayers resources.

JOURNALIST:

Can the Government do anything about the increasing cost of petrol? I mean

there is a suggestion that it could go as high as a $1.15, a $1.20 a litre?

TREASURER:

Well, I hope that it doesn’t obviously, but the price of petrol is a consequence

of the price of oil. And the price of oil has gone up dramatically because of

fears of war in Iraq coupled with strikes in Venezuela. This is not something

that the Australian Government controls any more than it is controlled by any

other government around the world. This is a world-wide phenomena and it is

affecting all of the countries of the world and until we have a situation where

there is more stability in relation to Iraq you are going to have high oil pries

and unfortunately that reflects itself at the bowser.

Thanks.