Election, economy, petrol prices, ethanol, competition policy, water, health, schools, Labor Party – Interview with Alan Jones, Radio 2GB

2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | 1998
Release of Draft Inquiry Report into National Competition Policy Arrangements
October 27, 2004
Senate, Telstra, Great Barrier Reef, James Hardie, tax deductibility, aged pension, housing affordability, religion, Scoresby, Roads of National Importance – Interview with Jon Faine, ABC 3LO
October 29, 2004
Release of Draft Inquiry Report into National Competition Policy Arrangements
October 27, 2004
Senate, Telstra, Great Barrier Reef, James Hardie, tax deductibility, aged pension, housing affordability, religion, Scoresby, Roads of National Importance – Interview with Jon Faine, ABC 3LO
October 29, 2004

Election, economy, petrol prices, ethanol, competition policy, water, health, schools, Labor Party – Interview with Alan Jones, Radio 2GB


Interview with Alan Jones


Thursday, 28 October 2004
7.15 am

SUBJECTS: Election, economy, petrol prices, ethanol, competition policy,

water, health, schools, Labor Party


Treasurer good morning.


Good to be with you Alan.


Congratulations firstly on the election victory and your role in it. Can I

just ask you, what did you make of all of this business that a vote for Howard

was a vote for Costello and that the electorate ought to be frightened of Peter



Well, we were really puzzled by it Alan, because all of our research was showing

that the economy was the main issue and I have been Treasurer for the last eight

and a half years and people thought that the economy had been pretty well managed

over those last eight and half years so every time the Labor Party started advertising

in relation to me it brought the campaign back onto economic management and

our record and that was a big plus for us, so…


And it continued yesterday and you would be happy with the inflation figures



Well, the inflation figures yesterday confirmed that we continue as a low inflation

country, 2.3 per cent, most of the market thought that inflation would be much

higher because petrol has gone up obviously but fortunately that was offset

by some falls in the fruit area so inflation continues low…


So, that is good news for the people you are talking to now in relation to

interest rates?


Well the fact that we keep inflation low is consistent with a low inflation,

low interest rate climate and we have always said that we will target inflation

to keep it low. We have got an aim to keep it between 2 and 3 per cent over

the course of the economic cycle and our interest rate policy is directed towards

that objective so…


A quick word if you would to my listeners about oil and your take on it?


…well, this is bad news Alan, you can’t dress this up any other

way. This is bad news. The fact that the oil price is $55, that is US dollars

a barrel, and about this time last year it was down in the thirties, that means

that people are paying very high prices at the petrol pump, over $1 throughout

most of Australia, that is bad news for them, they have got to pay more money,

it restricts consumption, I wish it were otherwise, I really do, I really wish

that the oil price would return to more normal levels.


But why don’t we advance the ethanol debate, I mean it can’t get

past the Cabinet table? Here is a renewable energy source, mandated in America,

mandated in other countries, but when it gets round to the Cabinet table everyone

throws up their arms and says we are not going to do anything. Shouldn’t

this be the time when we start providing for the day when it could be worse?


Well we have discussed ethanol quite a lot…


Yeah, but mandating it.


…well Alan we don’t tax ethanol so that gives it a big tax advantage

against petrol…






…good for the consumer.


…marketplace if ethanol can be produced and sold at competitive prices

we would encourage people to buy it but we wouldn’t make them buy it at

prices which are even higher than the current petrol price. That wouldn’t

help people, that would make them pay more for their fuel than they are currently

paying which is already very high.


But you, but while the Government continues to do nothing about ethanol in

terms of mandating it the perception is that oh well, if we put ethanol in our

car it will fall apart. Now that just doesn’t happen in states in America

or in Brazil.


Well I think there was a very unfair campaign which was waged a year or two

ago, out of the Labor Party you will recall, saying that if you put ethanol

blends in cars that it would damage your car. We know that that is not right,

that up to certain levels if you have an ethanol mix it is quite safe in your

car and I would say to people that they can be sure of that. We thought that

at least 10 per cent was quite sure, that is what the manufacturers were saying.

And let me make this point that the ethanol has no excise on it so it has a

tax advantage as opposed to petrol and if people can bring it to market at competitive

prices they are very free to do so.


In relation to the Productivity Commission, may I express surprise that a person

of Peter Costello’s disposition towards economic management takes his

cues from a public sector think-tank which seems to have a monopoly which we

don’t tend to enjoy on advice to the Government on these issues of competition?


Well can I go right back a stage Alan, the competition agreement is an agreement

between the Commonwealth and all of the States and Territories. As you said

it is coming up for review after 10 years. The Council of Australian Governments

which consists of the Commonwealth and all of the States and Territories said

it is now time to have a review of competition policy. And that review was tasked

to the Productivity Commission. So, let’s get this point clear, this is

a review which has been done on behalf of all of the signatories which is the

Commonwealth and all of the States and the Territories. It came out with the

draft report yesterday, it is out there for public discussion. Anybody who has

any views on this should now put their views back in and it will go away and

probably early in the new year will come back with a final report.


But what business experience do these people have when they are talking about

health and water? They are unelected, no one knows who they are and they are

themselves a monopoly, they don’t seem to address the real monopolies.

I mean Sydney water for example, I am just wondering, today we learn that infrastructure

in New South Wales is billions of dollars behind in terms of maintenance. Why

wouldn’t you as the Treasurer, issue some infrastructure bonds and start

re-building the country, whether it was water, hospitals, bridges, roads or



Well, actually one of the things that they have been looking at it allowing

some competition to Sydney water, to allow some new players to come in and actually

do treatment which might actually improve some of the services that are available

in terms of recycling and so on. You know, Sydney water if you ask me is a classic

example of something that has got a monopoly. It could well have been managed

by the State Government in order to make revenue to the State Government and

could actually do with a big shake up.


But couldn’t you, I mean water is so critical to Australia and you and

I have talked about this before, couldn’t you take that agenda and as

I said, we need money, all of this superannuation money, instead of sticking

it into HIH and Enron, why couldn’t those superannuation funds stick their

money, buy some infrastructure bonds and away you go, and re-build the country

which every where is falling apart in terms of essential infrastructure, electricity

and water? It is no different in other States from New South Wales.


Well, let me tell you what the Commonwealth is going to do. We are going to

put together a $2 billion fund to develop better water resources, to improve

recycling, to look at ways of conserving, even in big cities, some of the water

which we currently waste, and you will be interested to know this, we have taken

money that was previously being used as competition payments to help fund that

$2 billion fund and I think it is actually going to be one of the most exciting

initiatives in relation to water that we have seen in this country for a very

long time. Now the point here is that we are moving down that path, we have

decided that competition payments which were going to the States and I think

we weren’t getting any great value for, can now be much better harnessed

to improved water outcomes in Australia which after all as you say, is one of

our most pressing issues for the whole of the country.


$2 billion is a piddling amount to do the job.


Well $2 billion is two thousand millions of dollars…


We know what it is, we know what it is, but there is hundreds and hundreds

and billions of dollars in superannuation money which is our money which could

be used to re-build our country.


Well, let me say in relation to superannuation that the first thing you have

got to ask in relation to superannuation is that it is invested in productive

assets which will be there to give people secure retirement. Now, if there are

good productive assets in the water area that people can invest in, knowing

that when they come to retire the money is still there and has earned a return,

of course superannuation funds should be investing in it. But I certainly wouldn’t

recommend that superannuation funds put their money into any investment which

isn’t there when people are ready to retire and doesn’t give them

a good rate of return. But if there are water ones, then of course they should…


A pretty ready market, I can’t envisage the day when people won’t

be using water or electricity, so it is a pretty ready market…




…there is going to be no variation is use, there is going to be an increase

in use, so an increase in return to anyone who invests in it.


…sure, and if there are those good investments then I would recommend

that superannuation fund managers and trustees look at them. The only thing

I would say in relation to superannuation money and funds is that they shouldn’t

be investing in anything where they are either going to do their dough or not

going to get a rate of return because at the end of the day when people come

to retire they are going to need money to live and it is going to be no consolation

to say to them, oh we thought this was a good investment but unfortunately it

went bust and your money is gone.


Well it is a damn sight better than HIH or anything else. Can I ask you about





Because everywhere it is a mess, hospital specialists are by and large funded

by the States, they shift the costs of tests and prescriptions onto General

Practitioners which are funded federally, you have got the responsibility for

educating nurses but we are short of nurses, you control the PBS, you control

private health insurance, you pick up half the cost of public hospitals, you

are supposed to care for the aged but people are whinging about the fact that

there are not enough beds for aged people and so it goes on. There is a suggestion

from Premier Carr that you actually should take over the responsibility for

healthcare and you will cede to the States responsibility for education and

training, solely to the States. Can any of this be solved while you have got

a flawed ideology which suggests that basically healthcare should be for free?


Well, let me say at the outset, we won’t be handing over control of the

school system completely to State Governments because we wouldn’t trust

State Governments with giving even handed help to both public and independent

schools. We saw that in the last election campaign, you can’t trust Labor

in relation to that so we won’t be accepting Premier Carr’s offer

to give him control of independent schools because we think he is too much the

creature of teacher unions which are not sympathetic to independent schools

and parents’ choice so we won’t be accepting that offer.


Alright, health?


Well, in relation to health we think that it is possible to get better coordination.

We have set up a group which is going to report to the Australian Government

early next year on ways of getting better coordination. But I will make this

point Alan, that the State Governments can’t expect to keep handing over

areas of expenditure to the Commonwealth…


Without giving back some of the revenue.


…and keeping all of their revenue.


But I am just wondering to you, I mean as a person that could be our national

leader and you may inherit an even greater mess, because we have had 30 years

of Medicare, this is Medicare, this is what everyone has voted for and the notion

is that it is free and you as a politician are frightened to say publicly, you

can’t have anything for free but Brian Howard put in a co-payment all

of those years ago when he was a left-wing Deputy Prime Minister. Surely somewhere

along the line someone has got to say the ideology is flawed and until you get

it right you won’t get the structure right?


Well that is really a different question to running the hospitals. Running

the hospitals is a question of who is going to manage these hospitals and ensure

that the money is used to get the most number of beds and the best…


Let’s take the ideology of free healthcare.


…well the only thing I would say just to finish that point, if Premier

Carr wants to get out of the hospital business he can’t expect to keep

all of the GST revenue…


That is quite right, yes.


…which we put in place, GST revenue for the New South Wales Government

so the New South Wales Government could run its proper hospitals.


But you see while everything is free you will always be short of money. As

I keep saying, if I want to give out free pies in Martin Place at 12 o’clock

today, I will run out of pies by 1 o’clock.


But you might have a good time until you run out.


One final question, I can’t get anywhere with you on that. Final question,

Mark Latham as Leader of the Labor Party, how long will he last?


Well obviously they are looking at alternatives at the moment and they will

have a close look at all of the alternatives before they make a decision on

him, so I imagine that the Labor Party will go through all of that business

of looking at the contenders and assessing them probably over the next year

or so.


And Wayne Swan, you are ready to line up against Wayne Swan?


Well we take our opponents as we find them but the only point I would make

is this, it’s policy Alan. You can’t say, oh we lost the election

on economic credibility as Labor now admits it did, and then come out and say,

we will keep all of the policies that undermined our economic credibility, you

can’t say that. If Mr Swan wants to say, well look, I am leaving behind

the mistakes of the past, I admit that we weren’t economically credible,

he ought to come out and junk his Medicare Gold policy, that is an absolute

dud, he ought to come out and junk that nonsense he was going on about with

the $600 payment which he said didn’t exist, he ought to junk Labor’s

national payroll tax, the superannuation surcharge increase, their increase

for diesel excise on the mining industry…


With that articulation of Labor policy, I might have to leave you because we

have got to go to the news.


…well that is what he ought to do and he ought to do it quickly.


Nice to talk to you, thank you for your time.


Thank you Alan.