TRANSCRIPT

THE HON PETER COSTELLO MP
Treasurer

Doorstop Interview

Patterson Cheney Holden

Ringwood, Melbourne

Wednesday, 21 January 2004
12.15 pm

SUBJECTS: Car Sales, Education, US Free Trade Agreement

TREASURER:

The Australian Bureau of Statistics figures which were released this morning showed that in the year 2003, there were 909,811 new vehicles sold in Australia which is an all time record. More vehicles were sold in Australia in the year just finished than ever before, and for the first time have broken the 900,000 mark. And to put that in perspective, that is nearly one new vehicle for every ten drivers in Australia who are in a new vehicle as a consequence of the all time bumper record sales for 2003.

Now in part the all time record is because the economy has been strong and more people are in work, but a big part of the story has been the reduction in taxes. The abolition of wholesale sales tax of 22 per cent on cars brought prices down for consumers by about 6 to 8 per cent and abolished tax effectively for business and fleet sales.

In addition tariffs have reduced which have made cars cheaper, a 10 per cent tariff reduction since 1996, and according to the CPI measures, cars are now 14 per cent cheaper than they were in 1996, a 14 per cent reduction even though price and quality have improved.

And in many respects, the best news out of all of this is that Australia’s exports of cars have tripled in the last 8 years and Australia is now exporting to places all over the world. And we see great opportunities for the Australian car industry to continue, its export performance led off the back of record breaking sales here in Australia.

That’s good of course for the manufacturers, it is good for the people who are employed in the retail end of the car industry, and best of all it is good for consumers who have bought more cars than have ever been sold in Australia before and that is the good news for the car industry from 2003.

JOURNALIST:

Treasurer, just to change the subject ever so subtly, are you of the view that government schools are failing or ignoring traditional values, teaching (inaudible)?

TREASURER:

I think many parents want to get strong discipline and strong values for their children, and there are government schools that provide it and there are a lot of independent schools that provide it. I think parents should have the choice, but in the parents that I deal with, they want to know that there is strong discipline, strong values and good academic standards, and if they have a choice, and if there is competition, they should be free to exercise it.

JOURNALIST:

Is there evidence out there that these values aren’t, these traditional

values aren’t being taught on the wide scale?

TREASURER:

Well, there is evidence out there that more parents are choosing to send their kids to independent schools, there is evidence of that, and you have got to ask yourself why? But that is not to say that all government schools are failing, of course they aren’t. There are some very good government schools, and particularly the selective government schools are doing extremely well academically.

JOURNALIST:

Could the enrolments be failing because they are being talked down perhaps…?

TREASURER:

No, look, to send your children to independent schools costs quite a lot of money, and I don’t think you would make the decision lightly, and you wouldn’t make it because somebody was talking things down, you would make it because you wanted to exercise a choice. I think frankly, all parents would like to have high academic standards, strong discipline, good values and cheaper prices.

JOURNALIST:

Is there too much political correctness in public schools?

TREASURER:

Look, when you have situations where in some pre-schools they start banning nativity plays, I think it has gone…

JOURNALIST:

Do you know if there has been a school where they have banned a nativity play?

TREASURER:

I know that there was a school in my electorate where there were complaints, yes.

JOURNALIST:

So, they actually banned a nativity play?

TREASURER:

Well, some of the parents complained, yes. And I don’t think it is harmful for kids to look at nativity plays.

JOURNALIST:

Exactly what are these traditional values that you believe should be expounded?

TREASURER:

The traditional values which I think are important are hard work, achievement by effort, excellence in learning, respect for other people, strong academic standards, I think that is what parents are looking for.

JOURNALIST:

The government schools sector say that they are, I mean amongst the values that they are trying to pursue are fairness and tolerance, I mean these are good values in themselves, aren’t they?

TREASURER:

I don’t think anybody is complaining about those values, are they?

JOURNALIST:

Your colleague, the Health Minister was suggesting that what they are doing is tolerating, in some cases, tolerating the intolerable. What sort of intolerable things do you think schools tolerate?

TREASURER:

Well, look we can have a long philosophical discussion on the day when motor car sales have exceeded all Australian records about those issues, but I suggest, maybe it is better to pursue those issues with him.

JOURNALIST:

Is it the case, just once again on the school issue, is it the case that maybe that perhaps the unions involved in government schools are exerting too much say over the curriculum of those schools?

TREASURER:

Well, look I think one of the things that concerns parents for example is when they see strikes in schools, and if there are stoppages or strikes in schools, that is something that parents don’t want. So you can speak to the unions about that, but I imagine that if that were the case, that would worry parents, but you know the good thing is, on the day when Australia’s motor vehicle sales beat all records, more kids in those schools are going to have more job opportunities than they have ever had before. And that is the good news.

JOURNALIST:

And they might even buy a new car.

TREASURER:

And when they have job opportunities, because you have more people in work, than have ever been in work in Australia before, you get the chance to buy cars, and when you get that, and the tax system has been changed to reduce the price of cars, you get record sales. And I think all of us would say that that is a good news story, wouldn’t we?

JOURNALIST:

Is that the sort of thing that we should be teaching our schools about the economic philosophy?

TREASURER:

I wouldn’t presume to lecture the ABC on what we should be teaching anybody.

JOURNALIST:

But just on the philosophical…

TREASURER:

Are there any other questions other than the ABC?

JOURNALIST:

Are you expecting the negotiations with the US on the free trade agreement to wrap up in the next two weeks?

TREASURER:

I hope they do, I think it will be important for Australia, if we can get a free trade agreement, this is the world’s strongest economy, if we can get our goods into the world’s strongest economy, then there will be more job opportunities for Australia. If we can wrap it up in the next two weeks, then maybe we can do the deal, but it is going to be a hard deal to do, it shouldn’t be taken for granted and I imagine there is going to be some very hard bargaining over the next two weeks.

JOURNALIST:

If it is not wrapped up in the next two weeks, does that mean that it won’t succeed? Everyone was talking about it having to be done by Christmas to succeed given US politics, is there a deadline?

TREASURER:

Well, there is in this sense, that the US is going into a Presidential election, you have seen that, the first Democrat primary has just finished, and it is harder to get policy ratified by the Congress during an election year. Now, there is no particular cut-off, the Congress doesn’t say we won’t consider it on the 1^st of February, or any date thereafter, but it is harder to get difficult agreements through the Congress when it’s closer to an election.

JOURNALIST:

And given the three months that is needed between the agreement and Congress considering it, does that mean you are playing down expectations?

TREASURER:

I wouldn’t play them down, I would just say that it is going to be a tough negotiation, if we can pull it off, it will be a fantastic thing, but it can’t be taken for granted.

JOURNALIST:

What sectors of the Australian economy do you think the will benefit the most from a free trade agreement?

TREASURER:

One of the areas that we would like to boost with exports to the US would be cars, we are exporting as I understand Monaros, there is difficulty in exporting what they call pick-up trucks; ships, ship building; if we get progress on agricultural produce, that would be good for Australia; and the other area which I wouldn’t overlook would be recognition of some of our service providers, so that we can export services much more to the United States. We are good in some of these areas, and I would like to see service exports also boosted.

JOURNALIST:

On the negotiations, do you think it might be necessary for either you or the Prime Minister to go over in the closing stage of the negotiations and try and finish the deal?

TREASURER:

It might be necessary at the very end for it to be discussed between heads of government, that would not be unprecedented. I hope it can be done without that obviously, but that would not be unprecedented.

JOURNALIST:

And would that require a meeting or…

TREASURER:

Well, it might not necessarily require a meeting, but sometimes if you get close and there are sticking issues, heads of government have to become involved, but hopefully that will not be necessary except as a very final last step.