TRANSCRIPT

THE HON PETER COSTELLO MP

TREASURER

Interview with Ross Stevenson & John Burns

3AW

Wednesday, 12 May 2004

8.05 am

SUBJECTS: Budget

JOURNALIST:

Treasurer, good morning.

TREASURER:

Good morning Ross.

JOURNALIST:

How come Kerry Packer gets a tax cut and your brother doesn’t?

TREASURER:

Well, my brother would.

JOURNALIST:

Would he? What, you reckon that Baptist preachers earn over fifty grand a year,

or is that the grog allowance?

TREASURER:

Well I am not going to go into it, but don’t worry. Don’t worry

about him, he’ll be all right.

JOURNALIST:

All right, then let me rephrase it – how come Kerry Packer gets a tax cut and

Les Twentyman doesn’t?

TREASURER:

Ah well I don’t know that, that is right either, but let me say what

we are doing here. In 2000 we cut income tax rates for low-income earners by

reducing rates and changing thresholds. Part of the deal was that middle-income

earners would also get a tax break, and the Senate rejected that part of the

package, and in a sense then, middle-income earners have not got the tax relief

that was part of the arrangement in 2000, so, this is unfinished business. Ah,

and we’ve got to come back and we’ve got to finish it.

JOURNALIST:

So, there are no hurdles to yesterday’s announcement also making it to

the barrier?

TREASURER:

Well, we don’t know. It’s got to be passed by the Senate in the

next couple of weeks so that people can get tax cuts on 1 July. If they muck

around with it, people will miss out on their tax cuts. I notice that some of

the minor parties are already saying they are going to vote it down and the

Labor party is not entirely clear what to do. But there would be a lot of policemen,

firemen, who would be earning $52,000.

JOURNALIST:

Last night on the …

TREASURER:

Let me say, and they shouldn’t be going on to top rates of tax. There

would be a lot of people who would be doing overtime work who shouldn’t

be going on to top rates of tax. Our top rate of tax cuts in too low and it

is a proposal which we put down last night to let the threshold for the top

rate of tax to $80,000. I don’t think if you are on $50,000 or $60,000

you’re rich, frankly.

JOURNALIST:

It was said last night on the Channel 9 news that this was a Budget to win

an election. Do you know how many people there are who earn $50,000 a year plus

who have a child under the age of five and reside in marginal seats?

TREASURER:

I couldn’t give you those figures (inaudible).

JOURNALIST:

You’ve probably got the names and addresses!

TREASURER:

Well, well …

JOURNALIST:

You probably have lunch with them.

TREASURER:

I don’t know them, but I’m sure that they are listeners of yours.

JOURNALIST:

So I’m, having made a mental note as to find out about Tim Costello the

millionaire priest the moment the program is over, (inaudible) in the family

in the context of getting the particular allowances that you have provided.

I’m trying to look it up in the newspapers this morning, and have I come

to the wrong conclusion if, in order to be a family, do you have to have a child

under five?

TREASURER:

Well look, the payments that we make are in respect of children.

JOURNALIST:

Do you have to have a child under five to qualify?

TREASURER:

Oh no, no. It’s in respect of children up until I think it’s 18

and then, if they are dependents, up until 24, so if they are still students,

you can still qualify as children of whatever age and the increase in the family

payment in respect of each child is $600 a year. So $600 for one child, $1,200

for two children, $1,800 for three children, etc. Now, high income earners are

means tested out of that. I think if you’ve got three children you don’t

get the benefit once your salary goes above $105,000, or something like that.

JOURNALIST:

Front pages of the papers here, you won’t have seen them you’re

in Canberra. The Age says ‘Costello goes vote shopping’. The Herald

Sun says ‘Money galore, Costello’s great election splurge’.

Do you think your Budget is going to make the greater electorate want to rub

up against your leg?

TREASURER:

I think, people are going to look and say, well, in a strong economy. And,

nothing can happen without a strong economy. If, you can’t manage the

economy, you can’t do any of these things. But in a strong economy, particularly

where business is so profitable and company tax is so strong, our businesses

are more profitable than they have ever been in Australian history.

JOURNALIST:

What’s the philosophy…?

TREASURER:

You should try and return to families, and you should have lower taxes, and

that’s what we’ve tried to do in this Budget.

JOURNALIST:

Treasurer, what is the philosophy behind paying new mothers the on-road costs

of three grand for the child? Now are you seriously trying to convince us that

you really want more Australians to be born in the near future? Is this the

Peter Costello’s answer reverse China of the three-child policy?

TREASURER:

Well, well, let me say, and I’ve said this quite a bit, from the national

point of view it would be helpful if the birth rate was higher, yes. Because

the number of people of working age in Australia is not going to grow.

JOURNALIST:

Off you go, then.

TREASURER:

And the number of people over 65 is going to double over the next forty years

and that is why we talk about the ageing population. But, having said that,

I don’t think people will go out and have children for the sake of these

payments. The idea of the payment is that when you have a child, Mum’s

got to leave the workforce. At least for a time, and this is to give her income

while she is out of the workforce and we’ve got a new benefit which will

allow her, when she comes back into part-time work, to have some assistance

with the children. This is good family tax policy.

JOURNALIST:

Michael, let’s make ’em snappy. Michael, your question?

CALLER:

Yeah, I had a couple, but the first one is, Mr Costello have you increased

the pharamaceutical benefits scheme at all?

TREASURER:

Well the Pharmaceutical Benefits Scheme is a scheme by which pensioners and

concession holders are given subsidised pharmaceuticals I think it’s about

$3.70 – $3.80, per pharmaceutical. That hasn’t been changed in this Budget.

We have admitted some new drugs to the scheme, including some life-saving drugs,

and we have also extended benefits to consumables for insulin pumps which I

announced last night.

JOURNALIST:

Mark Latham has cancelled his trip to Washington because he thinks there is

going to be an early election, so a few questions there. One, is there going

to be an early election? And, two have you left anything up the spout for the

election or have you spent it all?

TREASURER:

Well, the Budget is still in surplus.

JOURNALIST:

A little bit left, hey? A little bit of sugar left?

TREASURER:

No, no. It is a prudent surplus. We don’t like deficit Budgets. This

is a prudent surplus, and I don’t think there is room for any great spending

there actually, because it is a moderate amount in terms of the proportion to

the economy. I think Mr Latham has probably cancelled his trip for other reasons.

JOURNALIST:

Such as what? Because he is going to be shown the back door of the White House?

TREASURER:

Well, well, I don’t think it was shaping up too well, was it.

JOURNALIST:

What! He couldn’t get a taxi to the airport?

Stay with us, we’ll come back with more questions. Did you ever think

that you would make, you were all over the papers this morning, but you are

used to that, did you every think you would end up in the paper the same day

as your old school mate – the working class hero Craig Johnston?

TREASURER:

I didn’t even know that he was a school mate until you informed me that

he was one of your school mates, Ross. I think you knew him before I did so

you can take responsibility.

JOURNALIST:

The Carey Grammar boys have made it into the papers this morning. The blue

blood from Higgins, and the working class hero. Stay with me Treasurer, if you

would be so kind … I’ve got the Treasurer on the line, we know you

have to go at some stage, so you just give us, give us a Tarzan call when you

have to go, Mr Costello… Anne! You’ve got a question?

CALLER:

Yes, I’m seventy and I’m still working. I don’t receive any

pension, but since I reached the age of seventy in January they stopped my superannuation.

They don’t pay it, and I’m …

JOURNALIST:

What’s your question?

CALLER:

Why don’t I get paid super when I’m seventy and I’m still

working?

JOURNALIST:

Treasurer?

TREASURER:

Well, we actually announced, I made a statement a couple of months ago, to

allow people who remain in the work force part time to draw on their superannuation

whilst they are still working part-time. That hasn’t been legislated yet.

But the Government is moving in this area to encourage people who want to stay

in the workforce longer.

JOURNALIST:

Jake, what have you got?

CALLER:

Hello, hello, Mr Costello?

TREASURER:

Jake.

CALLER:

Dual income, a child five to twelve, under $80,000, what am I entitled to?

TREASURER:

Well you would be entitled, it depends on how much your wife is working. I

assume she’s working part-time?

CALLER:

No, full-time.

TREASURER:

You’d be entitled to, I can’t give you the precise amount, but

I’d say thirty or forty bucks a week.

JOURNALIST:

How are the numbers going with the leadership? Have they improved at all? Or…?

I’m obliged to ask. You could give me some (inaudible)

TREASURER:

I’ve been trying to look up Jake, what did he say? Dual income, eighty

thousand? I’m trying to get him a more precise figure.

JOURNALIST:

Terrific. I’m trying. Are you going to give me the code answer? Are you

going to give me the code answer which means I’m not going to tell you.

Is this, ah, is this Budget your own idea, or did Alan Jones order you to release

it?

TREASURER:

You know I only take my instructions from you, Ross. When I walked into my

office, and they said there is a Mr Stevenson, he would like the following.

I said, show Mr Stevenson in, whatever he wants.

JOURNALIST:

Who decides how much of the Budget is leaked prior to you delivering it? And

who decides how much is kept back for the big surprise, on Budget eve? I mean

you got a think tank, or something there? Or do you do it off your own back,

or what?

TREASURER:

Mostly who decides the leaks are the public service, because they have these

documents that sometimes mysteriously appear in the papers. But most of them

were out of date actually, so that a lot of the speculation that was going on,

pre-budget was wrong. As you can see now.

JOURNALIST:

Julie’s got a question for you, make it quick, Julie.

CALLER:

Yeah, hi Mr Costello. I just wanted to say thank you very much for this Budget.

At least you are looking after middle income earners for a change.

TREASURER:

Well thanks for that Julie. I think that middle-income earners have done it

tough. I think that these are the people who need relief. I think middle-income

earners who are working, juggling kids, mothers who are doing part-time work

and trying to race home to pick up the children from school. I’ve had

to do it myself when my wife has been away and I have had to try and work, and

juggle kids and look after them, and I have got to say, sometimes I think it

is a much harder job than being Treasurer.

JOURNALIST:

We’ll let you go, final question, will you be Prime Minister by the

time you’re fifty?

TREASURER:

Well I’m not going anywhere near those things, because as you know …

JOURNALIST:

Just say …

TREASURER:

(inaudible) The important thing Ross is the next election. The Australian

people decide who’s in Government, and who’s out of Government.

We don’t decide it, it is up to them.

JOURNALIST:

Do we know when the next election is, or has Alan Jones not made up his mind

yet?

TREASURER:

Well, have you got any instructions?

JOURNALIST:

Yep, well I’m trying to think – and fit it in while I’m on holidays.

Yeah, the second half of June if you wouldn’t mind.

TREASURER:

Is that right? No, no you can’t have the second half of June. You can’t

have it before 30 June. So could you and Alan get together and decide the outcome?

JOURNALIST:

A really good last Budget it was too, Mr Costello. Thank you. Good on you,

thanks for your time.

TREASURER:

Great to be with you.