EMBARGO

TRANSCRIPT

of

THE HON PETER COSTELLO MP
Treasurer

Interview with
Glen Milne
7 Network

Pre-record
Tuesday, 14 May 2002
8.50 pm

SUBJECTS: Budget

MILNE:

Treasurer thanks for joining us. Big spending on defence and security but $1.9 billion in savings from the Pharmaceutical Benefits Scheme. How do you respond to the claim that the sick are paying for national defence?

TREASURER:

Well that’s not the case Glen because we’ve been building up defence now for two years. In the past year, in the next year. The Pharmaceutical Benefits changes are in the future. What they’re designed to do is they are designed to allow expensive new drugs come on to the scheme at concessional rates. Some of these drugs can cost $200.00 some can cost $1,000.00. And even if it costs $1,000.00 it will still be available to a pensioner for $4.60. But if you want to keep bringing new medicines, new prescriptions on to that scheme you’ve got to have the capacity to fund it otherwise it will break under it’s own weight.

MILNE:

All of the $330 million in savings on disability pensions, aren’t they the most vulnerable people in our society?

TREASURER:

Nobody who is incapable of work will be affected by this. This is a proposal that says if you can work part time we’re going to try and encourage you to get into part time work. At the moment you can go on a disability support pension if you’re assessed as being unable to work a 30 hour week. You might have a bad back or something. You stay on a disability pension until you go on the age pension. What we want to say to those people is maybe you can’t work a 30 hour week with a bad back but maybe you can do a desk job for say 15 hours if you can, let’s try and encourage you back into the workforce. We’ll have more training, more rehabilitation rather than just sit you on the disability pension for the rest of your life. And I think it will be good and it will be a good reform and it will get a control on the increase in numbers that we’ve seen over the last few years.

MILNE:

Okay, you’re forecasting a $2.1 billion surplus, you promised us a surplus during the election campaign but you failed to deliver and in fact tonight we find it’s $1.2 billion in deficit. Why should we believe that we’re going to have a surplus in this out year?

TREASURER:

Well, over the course of last year as we’ve made clear, we had heavy expenditures on the commitment to Afghanistan, on the commitment in relation to security matters and the global economy turned down. You had an American recession, a Japanese recession, a German recession, the fact that Australia came through it so well I think is testament to the strength of the Australian economy. Next year we expect that the global economy will recover. We’ll lead the world again and we’ll be in a very strong Budget position. I don’t think there is an advanced economy in the world which is in nearly as strong financial position as Australia. We’re at the head of the pack amongst the major industrial economies and we want to stay there.

MILNE:

Treasurer let’s hope that turns out to be true. Thanks for being with us.

TREASURER:

Thanks Glen.