TRANSCRIPT
THE HON PETER COSTELLO MP
Treasurer

Interview with Annie Warburton

7ZR/ABC

Thursday, 22 May 2003

8.45am

SUBJECTS: Budget; Wheat Freight Subsidy; Ferries; Australian

dollar

JOURNALIST:

Good morning Treasurer.

TREASURER:

Good morning Annie, great to be with you.

JOURNALIST:

You have essentially being accused of giving with one hand and taking with

the other over this Budget, in all sorts of areas, education, health, and we

haven’t got time to canvas everything, all the Budget reaction that has come

out, even in this (inaudible). Just to take one case in point, if I may, the

health Budget, the State Treasurer here says that the Commonwealth is reducing

its funding commitment to public hospitals in Tasmania, at a time when the pressures

on them continue to mount and the cost increases continue to outstrip general

inflation levels. He says that Tasmania will be $30 million worse off under

this year’s Budget, than it would have been had the current agreement with the

Commonwealth continued, the last agreement.

TREASURER:

Well that is absolutely false, of course, because if the current agreement

had continued, then we wouldn’t be increasing Commonwealth commitment to health

care agreements by $10 billion. Under the new Commonwealth offer there is $10

billion additional funding, that’s a 17 per cent increase. Now, what they argue,

of course, is they want more than a 17 per cent increase, but the base increase

is 17 per cent. That is 17 per cent over and above the last agreement.

JOURNALIST:

Well, what Mr Crean argues along with other State Treasurers is that costs

have gone up and the money you provide is not accounting for those costs.

TREASURER:

Yes. Well that’s a different argument you see. You firstly said that we were

cutting expenditures, we are not. We are increasing them by 17 per cent. That’s

agreed. They are the figures. That’s $10 billion. Now, I said to you earlier

you can argue oh, well it’s only a 17 per cent increase, we would like an 18

per cent or something more, but this is a 17 per cent increase and we have said

to the States of course that we want them to match it. Now, we are looking very

carefully at health spending in the Tasmanian State Budget today to see whether

there is a 17 per cent increase because we would like the State government of

course to match Commonwealth expenditures so that both the States and the Commonwealth

are increasing by the same amount.

JOURNALIST:

Alright, the new Parliamentary Secretary for Family and Community Services,

Ross Cameron, has said that baby boomers who expect free medical care and education

quote “make me want to throw up.” Now, do you agree with him on that,

that Australians prefer to live in a fools paradise and not face facts about

the cost of health and education.

TREASURER:

Well the costs of health are rising quite considerably as I said, that’s why

we are increasing expenditures by 17 per cent and in this Budget we actually

increased spending in relation to higher education by $1.5 billion. Now, there

are just these drivers of costs which we are meeting, but in the Budget, the

Commonwealth Budget, we were able to meet those increased costs and reduce taxes

at the same time…

JOURNALIST:

Alright, but just the principle of the thing. He said, he is prepared to risk

his marginal seat of Parramatta to say, to be straight with his electorate is

the way he puts it. Is that the way to go I wonder, do you think, rather than

hide what appears to other people to be effective spending reduction under apparent,

spending expansion?

TREASURER:

Well there is no spending reductions, health spending, Commonwealth health

spending is increasing by 17 per cent and the Commonwealth announced an additional

$1.5 billion in relation to higher education, so in both of those areas the

Commonwealth has actually increased its expenditure in the forward years. At

the same time of course we had the legitimate expense in relation to the Iraq

war and the drought. Now when we are able to bring all of those things together

because the economy has been strong in the last year would have been one of

the strongest performing economies…

JOURNALIST:

Yes, this is very much the message.

TREASURER:

…we’ve also, reduced tax. Now as much…

JOURNALIST:

Treasurer, this is the message you were giving out on Budget night and I am

sorry to interrupt but we are running out of time. But can I ask something specific,

Tasmanian Senator Kerry O’Brien says that you have risked hundreds of jobs in

agriculture in the State by not extending the wheat freight subsidy beyond 2005.

Now the government is in fact going down that path isn’t it?

TREASURER:

The wheat freight subsidy has been in place for a number of years and it still

is in place. The wheat freight subsidy is in place.

JOURNALIST:

But the government is considering bring it in line with the freight equalisation

scheme which would leave Tasmania worse off.

TREASURER:

In relation to Tasmania, the Commonwealth operates wheat freight subsidy, freight

equalisation subsidy, you will recall that the Commonwealth also introduced

for the first time ever a subsidy in relation to the ferries because Tasmania

has never had that opportunity before and that was one of the things that we

were pleased to do, so…

JOURNALIST:

Is the scheme going to extend beyond 2005?

TREASURER:

Well I don’t know what he is talking about but the wheat subsidy is still there,

it is still being paid, now, as is the equalisation freight scheme, as is the

subsidy in relation to the ferry which the Commonwealth was able to introduce

for the first time.

JOURNALIST:

Just a very quick one to finish with. There is talk of the Aussie dollar going

to 70 or 75 cents. Will that throw your Budget forecasts out at all?

TREASURER:

Well the dollar moves on a pretty regular basis and of course when you are

doing your forecast you have to take various historical levels to put them in

place. I will just say this in relation to the dollar – obviously if the dollar

goes higher that makes it harder for Australia’s exporters, but you do have

to take a long view in relation to this. The long view is that when the dollar

was down at about 50 cents, that was historical lows. I said at the time that

we would expect a recovery in relation to that…

JOURNALIST:

Treasurer, we have got to leave it there…

TREASURER:

…recovery in relation to that which we are pleased to see.

JOURNALIST:

Thanks very much for your time.

TREASURER:

It was a great pleasure to be with you.