TRANSCRIPT
THE HON PETER COSTELLO MP
Treasurer

Interview with Steve Liebmann
Today Show

Wednesday, 14 May 2003

7.10 am

SUBJECTS: Budget

TREASURER:

Good Morning Steve.

LIEBMANN:

I’m sure you are reasonably pleased with the headlines this morning but I vaguely

recall the Prime Minister saying that most people don’t need tax cuts. Why have

you given tax cuts this time?

TREASURER:

Well after we funded the war in Iraq and after we funded the drought, and after

we upgraded security the budget was in surplus. We could have repaid more Labor

debt but we have already paid $63 billion of the Labor debt so, we thought it

was the time to give something back to taxpayers, as you said, it’s a modest

return to taxpayers, but it establishes the principle I think, that after a

Government has met the important expenditures, if it can still keep its budget

in balance – as we did, then taxpayers should get some return as well.

LIEBMANN:

But you are still Australia’s highest taxing Government by an increased (inaudible),

and all your’re doing is giving back is some bracket creep. Labor is going to

exploit that aren’t they?

TREASURER:

Well, one of the things they do is they make that false claim and they try

and get people to repeat it. Of course that is not the case. This is a Government

which has cut tax very significantly. When we introduced the New Tax System

in July of 2000, and we cut tax again and it’s a contrast to of course all of

the Labor states who are increasing their taxes. The Federal Government is not

increasing its taxes and in fact it is cutting them, and it’s because we think

that taxes should be as low as possible consistent with a balanced budget and

consistent with meeting important expenditure.

LIEBMANN:

But you would have to acknowledge, wouldn’t you that individuals and companies

have bank rolled these tax cuts. I mean the total tax cut take, is going to

rise by at least $7 billion this financial year alone.

TREASURER:

Well Steve, as more people are in work of course, more tax is paid. Somebody

who is on unemployment benefits they pay no tax. But we have been able to get

240,000 new jobs going in Australia in the last year, of course, that means

that as you get people off unemployment benefits and into the work force, and

paying tax, those taxpayers that are already in the tax system can get a bit

of a return. That’s what good economic policy is all about. Trying to give them

a bit of a return getting more people into work. That’s one of the advantages.

LIEBMANN:

Treasurer, what do you say to Labor’s claim that this budget slugs families,

and that the modest tax cuts are going to be swallowed up by the growing cost

in health and education, Medicare and university?

TREASURER:

Well, the first thing I would say to Labor is they should pass the budget.

They are still trying to block last years budget, so I think there is a big

challenge here for Mr Crean, and I hope he gives away his negative whining and

corping and passes the budget.

LIEBMANN:

Are you confident you will get it through the Senate, Treasurer?

TREASURER:

Well, well, you know Mr Crean has established himself as a negative leader,

here is a chance for him to do something positive. We are introducing tax cuts,

we have probably got the biggest defence build up that we’ve seen, we have got

a security command increase, we’re adding commando company, we are putting a

special operation command. This is a budget which is of Australia. I just hope

he gives away his whining and his corping and he passes it.

LIEBMANN:

You said last night you don’t pretend things are going to be easy in the next

year. If, to quote you, the world remains a dangerous place, how tough might

next year get, and if that is the downside, you’ve only got a tissue thin surplus

to cushion any problems, haven’t you?

TREASURER:

Sure, I think the world is a dangerous place, we have had a terrorist attack

over night, we have got troops which have been serving in Afghanistan and Iraq,

we had the Bali bombing only six months ago, we have had an outbreak of SARS

up through Asia, so it is a dangerous place. So what are we are doing in this

budget? New special operations command, upgrade for our frigates, upgrade for

our submarines I should say, upgrade for our hornets, upgrade of our special

operations and commando companies, increased quarantine around the borders,

increase funding for our intelligence agencies to cope with terrorism. This

is the big part of the spending of this budget to make Australia safer and secure

and it’s because the world is a dangerous place and I don’t see that improving

very significantly in the next twelve months.

LIEBMANN:

Alright, we will leave it there for this morning. Thank you for your time.

TREASURER:

Good to be with you Steve, thanks.