TRANSCRIPT

THE HON PETER COSTELLO MP

Treasurer

Windsor, Melbourne

Friday, 29 November 2002

Approx. 12.15 pm

SUBJECTS: Economy; Victorian election; Gun buy-back

JOURNALIST:

Okay, first can I just get your reaction to the Balance of Payments figures?

TREASURER:

Today’s Balance of Payments figures are $7.9 billion for the September quarter,

led by exports being down a little and imports up a little. So imports are up,

consistent with an economy which is growing with strong consumer demand and

business investment. Exports are down led principally by agricultural exports

falling by 4.7 per cent over the quarter. The impact of the drought is beginning

to take effect in relation to Australia’s exports, as we forecast in our Mid-Year

Review. We expect that that will continue in (inaudible) quarters until such

time as the drought breaks. So what you are seeing is, you are seeing the drought

story reflected in exports and in relation to the current account, but consistent

with strong demand both in the consumer and capital goods, with the economy

being led by domestic growth in the next year.

JOURNALIST:

How long can you keep going at this though? With our deficit increasing, how

long can this continue?

TREASURER:

The current account, we are forecasting a little over 4 per cent in the current

financial year, which compares pretty much as the average over the last decade,

certainly less than it was during the periods of stress in the 1980’s. But of

course what we need in order for agricultural exports to resume their growth

is an ending of the drought. And until such time as the drought ends rural exports,

agricultural exports, will be down.

JOURNALIST:

How long can the Australian economy survive though?

TREASURER:

Well, the Australian economy is growing faster than any of the developed economies

of the world. Our growth is leading the United States, the United Kingdom, Europe,

Japan, so the Australian economy, forecast to grow about 3 per cent this year

and probably more next year, will probably lead the world both this year and

next year.

JOURNALIST:

Despite the fact that our current account deficit continues to grow?

TREASURER:

Well, our current account deficit is a little over 4 per cent, that is our

forecast and that is led, at this stage, by a decline in agricultural exports

4 per cent is the forecast that we have actually had today, the figures are

consistent with it.

JOURNALIST:

And a little bit up on what we had forecast, though? 7.8, actually 7.9?

TREASURER:

No, it is what we forecast. The current account deficit forecast is in line

with what I put out in the Mid-Year forecast two days ago.

JOURNALIST:

Alrighty then, turning to the State election here, it is the last day. What

do you think is going to happen tomorrow?

TREASURER:

Oh look, there is still, what, another 24 hours, a little more to go. And down

here in Prahran we have had outstanding members Leonie Burke and Peter Katsambanis,

who are working for the election tomorrow and will be working till polls close.

Robert Doyle is giving the election everything he has got. You would have to

say that Labor expects to coast to a big victory tomorrow.

But I think if people focus on that, and they think and focus on local representatives,

that they are going to find that many of the local candidates, like Leonie and

Peter, will give them great representatives and they really do deserve to be

re-elected. And Robert Doyle deserves to have support to get Victoria on to

a sounder footing.

JOURNALIST:

So what do you think will happen, do you think he will get that support?

TREASURER:

Well, the polls say that Labor is the favourite. And Labor regards itself as

the favourite. But as people go into the ballot boxes and they think about their

future, they think about the fact that Victoria’s economic foundations are starting

to crumble, they have the opportunity to vote for Robert Doyle and the Liberal

team, to get a better investment climate and better jobs. And I hope that is

what they do.

JOURNALIST:

Righty then, the last issues – guns buy-back – if you can reach an agreement

with the States, who is going to fund the buy-back?

TREASURER:

Well, at the end of the day taxpayers will fund the buy-back…

JOURNALIST:

Will it be Federal or State though?

TREASURER:

Well, this is one of the things that we are negotiating about. But we are not

going to be fighting at the moment over funding. It is not an issue of money,

it is a matter of community safety. Let me make this point, there is no reason

why people in the community need to amass hand guns. We had an incident at Monash

University where it appears as if one of the alleged people involved had five

or six hand guns. Why would a person living in the suburbs of Melbourne need

five or six hand guns? Why can’t the States agree with the Commonwealth to do

something about increasing community safety. Let’s get the agreement to get

hand guns out of the community, and once we have got that agreement, then we

will start talking about financing it.