Doorstop Interview

Mural Hall

1 pm

SUBJECTS:

Indigenous Affairs, BHP, Iraq, Senate Committees, independent schools, FIRB, US economy, Qantas

JOURNALIST:

What do you think of Tony Abbott’s call for paternalism in Aboriginal communities?

TREASURER:

Well, I certainly think it is important that we get stronger focus on accountability for finance, I think it is important that we have a strong focus on law and order, nothing could be more important I think than the physical safety of people in Aboriginal communities and personally I believe that family assistance should be used to encourage school attendance. I believe that for the Aboriginal community and I believe that in addition for the white community. Now we might try and stop this I think. Does somebody just want to go and, I know it is rude to the girls but, it is very rude of us I know, I am sorry.

JOURNALIST:

Mr Abbott also says that there is plenty of money going into government services and health services in Indigenous communities but there is a cultural disconnect between those services and health outcomes. Is that something that you would agree with?

TREASURER:

Look, I think the taxpayer wants us to get the best outcome for taxpayer money and that is our responsibility. There has been a lot of money that has gone into Aboriginal health, Aboriginal education and of course family support. Now, I think it is important that we use that assistance to tie to particular outcomes. For example, I think we ought to say that family assistance is conditional upon school attendance. I think we ought to be using our money to actually boost educational outcomes. I think in relation to health spending, preventative health programmes are obviously going to be much more important in treating diseases once they have emerged. So, I think we have a long way to go to ensure that we get the best outcomes for our money, I don’t think there has been a shortage of money, I think we have got to look at new ways of getting better outcomes for that money.

JOURNALIST:

But isn’t the idea of having an administrator essentially a return to the past?

TREASURER:

I am not going into particular governance in Aboriginal communities because I think the more important issue is outcomes and I think we have got to look for outcomes. What do Aboriginal people want? Good health, good education, a chance to work. The same as people in the white community, that is what we have got to ensure that we can produce for them.

JOURNALIST:

Speaking of outcomes, are you pleased that BHP has been able to win a 19 per cent price rise in China for iron ore and will that do anything to the trade deficit?

TREASURER:

Look, I welcome increased prices for Australian exporters – of course I do – that is good for Australian companies, it is good for our national income and it means that shareholders will get the benefit of it. So I welcome it, in answer to the second part of your question, yes, it will boost national income but bear this in mind, the Australian mining industry contributes 4 per cent to GDP, it is an important sector but there are some people that think it is an overwhelming sector. It is one part of the Australian economy, an important sector but by no means the dominant part of the Australian economy.

JOURNALIST:

Your colleague Brendan Nelson indicated today that we might be able to later this year start thinking about getting Australian troops out of Iraq. That would be good for the Budget wouldn’t it?

TREASURER:

Well this is not a Budgetary question, this is a question of ensuring that our military objectives are accomplished and there won’t be any withdrawal until such time as they have been accomplished. Now, do we hope that they will be accomplished in the near future? Yes, of course we do, but nothing will happen until they have been accomplished.

JOURNALIST:

Labor seems to think that the troop withdrawal is going to come at such a time to give political cover to George W Bush in mid-terms, do you have a comment on that?

TREASURER:

They come up with more and more entertaining theories on a daily basis and I don’t think they are in the business of putting forward a serious proposition, I regard that as light entertainment.

JOURNALIST:

Another view of theirs is that the changes to Senate Committees is in fact an act of evil, what is your response to that?

TREASURER:

Well look, this is just the hyperbole that the Labor Party goes on with. They have got a new outrage on a daily basis. They work themselves into a lather by trying to scare each other but I think the language is getting a bit out of control.

JOURNALIST:

Mr Costello, you were saying some independent schools are great value to the taxpayer, there are some calls for their sort of funding maintain to lose that status and to have their funding reflect their socio-economic condition of their community. What do you think about that, should their funding maintain status be continued or…?

TREASURER:

I think the SES system has worked pretty well. What that means is that the schools that have a greater proportion of parents from a lower economic background get more funding than the schools that have a greater proportion of parents from a higher socio-economic background. I think it has worked well. Now, this question of cutting some schools is the Labor policy of cutting some schools is just envy politics. The schools that have a higher proportion of parents from a higher economic background get much lower government funding. This is already built into the SES model and the Labor Party has just been running base envy politics suggesting that they should be punished in some way, the reality is that punishing those schools would not in fact make any major difference to the balance of non-government or government schools. It is envy politics at its worst, it should be thoroughly repudiated, the electorate didn’t buy it from Mr Latham, they won’t buy it from the Labor Party the next time around.

JOURNALIST:

Mr Costello, do you support A to E report cards?

TREASURER:

Yes, I think that parents should be given information that they can readily understand and I think that parents can understand A to E report cards and I think it is important that the parents actually get the information here. Now you have seen some of these reports and I have seen some of them because I am a parent myself, they go on for pages and pages but you have got to ask yourself at the end of it, whether the student has done well or badly, it is not entirely clear.

JOURNALIST:

Mr Costello, are you any closer to a decision on Thales, the FIRB application for ADI? Are you concerned about a European company owning…?

TREASURER:

Look, these matters go to the Foreign Investment Review Board. After the Foreign Investment Review Board has made its decision they will make a recommendation to me and I will deal with it then.

JOURNALIST:

There has been concerns expressed by Ben Bernanke and other members of the US Fed in the last week over inflationary pressures in the US and how they are building up, how do you see that playing out domestically, US, impact here if there is any further movement on interest rates in the US?

TREASURER:

Look, the United States has had a very significant increase in official interest rates and that is because their economy is recovering from recession and also now inflationary pressures are starting to emerge. And the Fed will deal with that, they will deal with conditions in the United States. Conditions in the United States will affect the global economy and to the degree that the global economy affects Australia, we take that into account but you have got to understand this – our monetary policy is set to Australian objectives and the Australian objectives is underlying inflation, over the course of the cycle, 2 to 3 per cent. We are in that range at the moment and that is the direction we are setting our interest rate policy.

JOURNALIST:

Treasurer…

TREASURER:

Last question.

JOURNALIST:

Treasurer, the 27 per cent downgrade for profit in Qantas today, what does that mean for the company and do you think it will translate into higher prices as they try and stem the flow from higher fuel charges?

TREASURER:

Look, Qantas is a good airline which has some significant advantages. Qantas for example will be one of the companies that because it has a big capital fleet will take great advantage from the new depreciation measures I announced in the Budget. So Qantas has a lot of advantages, it is a very difficult market, it has got to compete but I have every confidence in the management of Qantas to be able to offer a good service and I think it is one of the world’s great airlines.

JOURNALIST:

Treasurer, should they be allowed to cooperate so closely with Air New Zealand on the trans-Tasman route however?

TREASURER:

Look, this is a matter which will go to the competition authorities probably on both sides of the Tasman, so I will leave it to them to work out.

JOURNALIST:

Are you concerned about the impact on prices, consumer welfare?

TREASURER:

Well it has got to be considered yes, because people forget, the purpose of competition policy is to get lower prices, the purpose of competition policy is not to protect companies, it is not to regulate the economy, the purpose of competition is to get consumers lower prices, that is why we are interested in competition, that is why we have our competition bodies look at these things, if they can be convinced that it won’t work to the detriment of consumers then they will get a clearance. If the competition bodies can’t be convinced of that then they won’t. Thank you all very much for your time.