TRANSCRIPT
of
THE HON PETER COSTELLO MP
Treasurer

Interview with Catherine McGrath

AM Radio

Canberra
Wednesday, 13 November 2002
8.10am

SUBJECTS: Graeme Samuel; Telstra; Mid-Year Review; Economy

McGRATH:

Treasurer, good morning.

TREASURER:

Good morning.

McGRATH:

This is the first time the States have combined to block your choice, how do

you respond to it?

TREASURER:

Well let’s go through it. Some of the States have voted for Mr Samuel and support

him very strongly. Some of the States have opposed him and he was unable to

get a majority of States. So it is the first time that a majority vote of the

States have been exercised by way of a veto. Now that is disappointing because

Mr Samuel is exceptionally well qualified for this job and every State more

or less says that, and different States have different reasons for exercising

their vote against. Different reasons when you add them up come to more than

four.

McGRATH:

Well, you heard there from Mr Egan saying that it is not petulance. He says

he bears no ill will to Mr Samuel but he says it is not a gift of the Commonwealth

alone?

TREASURER:

Of course it is not, that is why we refer it for a vote. We write to the States

and we ask them for nominations, we go through the nominations and then we have

the responsibility under the agreement of putting someone up for a vote. Now,

in New South Wales we wrote to Premier Bob Carr. We wrote as far back as the

31^st of May and asked him for a nomination. He made no nomination.

I wrote back to him in September of 2000 saying we still haven’t got a nomination

for you, could you give us one? And this is handled by the Premier. When the

Acting Premier Refshauge was in the job in 2001 he made a nomination, it was

a woman, it wasn’t Mr Tom Parry, it was a woman. And as recently as this week

I asked Mr Carr whether he wanted that nomination to proceed and he said he

didn’t. So, in the course of two and a half years we had one nomination from

New South Wales which was eventually withdrawn. So, I went through all of the

nominations that had come to me from States, from other people. I discussed

them with Professor Fels who strongly recommended Graeme Samuel, as did a number

of the other Governments. And as far as I can tell nobody believes he is not

well suited for this job.

McGRATH:

So where is it left now? The States have said no, you have no-one now to succeed

Alan Fels?

TREASURER:

Where it is left now is we have put Mr Samuel up. The States by a majority,

not all the States, some States support him strongly, but a majority of States

have vetoed him but they have no other nominee.

McGRATH:

So where does it go? Are you going to put someone else forward?

TREASURER:

Well, we have been waiting for two years for an alternative nominee…

McGRATH:

But this became more urgent obviously once Alan Fels announced…

TREASURER:

That’s right, absolutely…

McGRATH:

But will you (inaudible)…

TREASURER:

…we were sitting around waiting for the States to come in with nominees.

We gave them two and a half years, right, and when Professor Fels indicated

that he wants to wind down his involvement it became more urgent to put forward

a nominee which we did for a vote.

McGRATH:

So, no fresh candidate you’re saying at the moment?

TREASURER:

Well there is no other candidate that has been put forward. So we will have

to see if the States want to put forward a candidate, they have no agreed candidate.

We will probably take submissions from other groups in the community that would

probably want to put submissions to us. And it will be very difficult to find

someone of the calibre of Graeme Samuel, everyone admits that, but we will just

have to do our best and it will be a big loss for the ACCC.

McGRATH:

If we can move on to other issues, on Telstra there has been much discussion

in Parliament this week, both from yourself and the Prime Minister about, under

what conditions Telstra would be sold, a lot of discussion now about receiving

the right price. But the signs that are coming out seem to be, being interpreted

as though the sale is off the agenda for this term?

TREASURER:

Well first of all we have to fix the rural and regional services and be satisfied

about that. Secondly, once satisfied with that you have to put legislation through

the Parliament. Now how long would that take? Would it be successful at all,

that is the critical question. And then once the legislation goes through you

would then take commercial advice about the best time to sell. As I said yesterday,

if the legislation went through on the 1^st January you would not

sell on the 2^nd January anyway, it takes you months to get it ready.

But you may also have commercial reasons because the price of Telstra has come

off quite a lot over recent years to hold back anyway. So, three stage process

and I can indicate from all of that…

McGRATH:

So sorry…

TREASURER:

…particularly with the Senate vote nothing appears to be imminent at the

moment.

McGRATH:

Just finally in the small amount of time we have left the Mid-Year Economic

Review will be out on the 27^th November. The Prime Minister has already

indicated that growth will be revised downwards towards 3 per cent. Access Economics

are saying the same today. How is growth looking?

TREASURER:

Well, we forecast at Budget time 3¾ per cent growth through the financial

year, and two factors, two down-side factors have occurred since then. The first

is the international economy is worse, particularly the United States which

was in recession in 2001 and is now facing major trouble. Secondly, the drought.

The drought has been a very severe drought and it will take some growth out

of the Autralian economy. So two down side factors and we will be updating our

forecasts on the 27^th November.

McGRATH:

Treasurer we are out of time, thanks for joining AM this morning.

TREASURER:

Great to be here. Thanks