TRANSCRIPT
of
THE HON PETER COSTELLO MP
Treasurer

Interview with Tony Jones
Lateline, ABC TV
Tuesday, 18 June 2002
Pre-recorded

 

SUBJECTS: Budget Measures; Double Dissolution; International Criminal Court

JONES:

Peter Costello, two of your key measures will not make it through the Senate

– changes to disability pensions and the Pharmaceutical Benefits Scheme. How

much of a hole is that going to leave in the Budget?

TREASURER:

Well, the changes to the Pharmaceutical Benefits Scheme, are about $300 million

per year, $1.1 billion across the forward estimates, so, if the Labor Party

is successful in sabotaging those measures, that would have a big impact on

the Budget. The disability support pension changes are not that great in financial

terms, in fact, we’re actually pumping more money in, in the first couple of

years. But you would expect that to have a very large effect down the track.

JONES:

Well, let’s assume you don’t make a deal with Labor, or indeed, the Democrats,

how do you get out of the Budget hole in the short term?

TREASURER:

Well, we’re going to argue our case on the Pharmaceutical Benefits, and our

case is this: the co-payment of $2.50 was introduced by the Labor Party. And

was voted through the Senate with our support. And when that was introduced,

the co-payment was raising a little over 20 per cent of the cost of the scheme.

Today, the co-payment is raising about 15.7 per cent of the cost of the scheme,

and if our measures are passed, it goes back to 19 per cent, still less than

under the Labor Party – still less than under the Labor Party. This will show

you how irresponsible Labor is being. All this does, is, gets it back within

the realm of where it was under Labor, it doesn’t even get it back to the percentage

of cost recovery, that occurred in the first year after the Labor Party introduced

the co-payment.

JONES:

Both Labor and the Democrats are absolutely set, it seems, on blocking both

of these measures. The Democrats at least are proposing a raft of cost-saving

measures they say they will pass, if you will do that. For example they want

a means test on the private health insurance rebate, and they say that alone

would save enough to offset both of these measures. Will you consider that?

TREASURER:

No. Look, let me just come to the Democrat proposals. There used to be a view

that the Senate was there to hold the Government to its election policies. Now

the Senate seems to take the view that it is there to make a Government break

its election policies. We go to the electorate with a proposal for a private

health insurance rebate of 30 per cent. We are elected. And the Democrats say,

after not winning a seat in the House of Representatives, they are going to

use their Senate numbers to force us to break our election policy. This is a

new doctrine in Australian politics. Well, let’s come to the Labor Party. It

is even more irresponsible. What you are seeing now Tony, is, you are seeing

a Labor Party which has the mindset of a permanent opposition. They have now

lost three elections. If they were ever to return to Government they would know

that the Pharmaceutical Benefits Scheme co-payment has to go up. If they had

a view, that they would one day be an alternative Government, they would be

voting these increases through, just as we voted them through in 1990 when we

were in Opposition. But what you are seeing under the Crean leadership, I am

afraid, is a permanent Oppositional mindset. Something very, very critical is

going on now in Canberra. The Labor Party is lapsing further into populism than

ever before, as the prospect of being an alternative Government recedes further

and further from its thinking. There is only one way it can portray itself as

an alternative Government, and that is to do the responsible thing. I think

there are people in the Labor Party who know that, and the critical thing is,

whether or not they are going to come out and say it.

JONES:

Let’s go back one step though to the Democrats. Do you absolutely rule out

making any kind of deal on the raft of proposals they have put forward there?

TREASURER:

We’re not going to agree to Democrat proposals for the Government to break

its policies. Now, we understand there is a Senate, the doctrine of the Senate

ought to be holding us to our policies, not holding us to breaking our policies.

So, why would we turn around and say, well we will break all of our policies

at the insistence of the Democrats? Tony can I make this point? The Democrats

had one of their worst electoral outcomes in recent memory. They won not a seat

in the House of Representatives, so they are not in a strong position to demand

that the Government break its election policies. Let’s put the Labor Party in

a different camp however. Once upon a time, they purported to be an alternative

Government. If they vote down these measures there is one clear message here,

Labor is now reverting to permanent Oppositional thinking and Mr Crean does

not see himself in any respect as an alternative Prime Minister.

JONES:

Now, but one of the points that both Labor and the Democrats are making, is,

that neither of these major changes did you flag before the last election, unlike

the GST, you don’t have a mandate for them, that’s their argument.

TREASURER:

Well hang on Tony, even when we won an election on the GST they tried to vote

that down too, with all due respect. That is the argument that I put after the

1998 election, was it not, that we won an election on the GST and they voted

against it, the Labor Party voted against it. It was only after it was introduced,

that Labor turned around and said well, actually, they are not against it any

longer they are now in favour of it. Let me make this prediction, if we get

the Pharmaceutical Benefits Scheme changes in place, the Labor Party obviously

would turn around, as they have on GST, and accept it. But if we don’t, and

Labor were ever to come to Government, the rises in the Pharmaceutical Benefits

Scheme, which they would put to the Parliament will be far in excess of this.

Why? Let me tell you why. This scheme is becoming unsustainable and will break.

Unless you take the steps now to put it on a financially sustainable basis,

what will happen to it in the future will be very much worse.

JONES:

Are you prepared though to let the Budget slip back into deficit if you can’t

make a deal with either of those parties and these sort of measures get stopped,

you will have to wear this large hole in your Budget?

TREASURER:

Well, that is part of the Labor Party campaign. You see, the Labor Party votes

against all Budget measures…

JONES:

Yes but if you…

TREASURER:

Well hang on, hang on…

JONES:

Yes, but it’s your problem now…

TREASURER:

…hang on, hang on…

JONES:

…it’s your problem now…

TREASURER:

No, no, Tony, Tony…

JONES:

…what are you going to do about it?

TREASURER:

…let’s just expose their policy. They vote against all measures and then

they will turn around and say, oh the Budget is not in as strong a position

as it should have been. They hope that interest rates will go up and then they

will say, oh it’s all the Government’s fault. Conveniently leaving aside their

total oppositionism in the Senate. No, what I said in the Parliament today,

is what will happen in relation to the Pharmaceutical Benefits Scheme. If you

don’t get this on to a sustainable basis, if you don’t get it back where the

Labor Party had it in 1990, with co-payments raising about 20 per cent of the

costs, what will happen is this: new medicines which have the potential to treat

painful diseases will not come on to this scheme at the rate they otherwise

would have. And people will miss out on treatments. And when people miss out

on treatments, they will know that it was the political opportunism of the Australian

Labor Party that brought that situation about.

JONES:

All right, let me ask you this. It is two key Budget measures that are being

blocked. Now the Senate is going to disallow the excision regulation and your

changes to the superannuation surcharges are being blocked. If your attempts

to govern, as you say, are being constantly thwarted, will you consider, at

what point will you consider a double dissolution?

TREASURER:

Well, you couldn’t consider that until they have blocked them on two occasions

in accordance with the Constitution, and they haven’t done that yet. But, the

Senate ought to bear this in mind…

JONES:

You could force one, you could make (inaudible) a double dissolution to happen?

TREASURER:

Tony, we are going to put our Budget into the Senate. If the Australian Labor

Party, which lost the last election, and the Australian Democrats, which won

not a seat in the House of Representatives, reserve the right to defeat the

Government’s Budget measures, well we will keep all of our options on the table,

but…

JONES:

Including a double dissolution?

TREASURER:

Well, well, you’ve asked me what we would do, we can’t do that unless there

are measures which have been defeated twice, but I will tell you in the interim,

we will be fighting for our Budget because we want to fight for good economic

policy.

JONES:

All right, the other big issue of the day, where do you stand on the International

Criminal Court?

TREASURER:

Well, the Government’s had a position of support for the International Criminal

Court and we have been taking soundings in our Party Room as the Prime Minister

said, to give all of the members of the Party Room a say, that will go back

to the Cabinet, the Cabinet will consider it. As a member of the Cabinet I have

been involved in those discussions which have given support to the ICC.

JONES:

(inaudible) for one day, an International Criminal Court, out of the jurisdiction

of Australia?

TREASURER:

Well, that doesn’t seem to be the view of the Australian Defence Force. The

Australian Defence Force has obviously looked at that, and they have taken advice

in relation to that, and whatever the merits of the ICC, that doesn’t seem to

be their view.

JONES:

All right Peter Costello. We will have to leave it there. Thanks for joining

us tonight on Lateline.

TREASURER:

Thank you Tony.