Transcript

of

THE HON PETER COSTELLO MP

FEDERAL MEMBER FOR HIGGINS

Interview with Neil Mitchell, 3AW

Monday, 11 May 2009, 11.15 am

E & OE

SUBJECTS:  Budget

NEIL MITCHELL:

Budget day tomorrow.  I spoke to Federal Treasurer Wayne Swan earlier about parental leave and about the headline on the Australian newspaper based on his comments ‘Swan makes Howard the fall guy’ the argument from Wayne Swan as he put it to me as well on air was that there had been unsustainable spending by the Howard Government, the Howard/Costello Government and that was one of the reasons we were in all sorts of trouble now.  He’s not blaming them for the world economic crisis but unsustainable spending, behaving as if the mining boom was never going to end.  On the line is one of the people responsible for that, now the Member for Higgins, Peter Costello, good morning.

MR COSTELLO:

Good morning Neil.

NEIL MITCHELL:

Your answer?

MR COSTELLO:

It’s desperation isn’t it?  Here is Wayne Swan, he inherits a Budget which is in surplus and I don’t think he will ever produce a surplus Budget.  He inherits a financial position which has no debt and we are now looking at putting the Commonwealth $200 billion into debt.  So don’t blame him for the deficit and the debt.  The people who are responsible are the people who left the Budget in surplus and reduced the debt to zero.

NEIL MITCHELL:

You could quote your book, your memoirs, as evidence of it he’s saying that you said in the book that you were concerned about the level of spending and attempted to convince John Howard not to do that.

MR COSTELLO:

Of course if you read the book and I hope Wayne does – I hope he takes it to heart – you will see that over a period of 10 years I actually eliminated Commonwealth debt.  We paid back over $100 billion.  And the great tragedy Neil is that they will have reborrowed the lot.  In fact they will have reborrowed probably double.

NEIL MITCHELL:

But did you attempt to rein in spending at any stage?

MR COSTELLO:

Obviously yes. 

NEIL MITCHELL:

And what?  Nobody listened?

MR COSTELLO:

We were successful.  I inherited a Budget that was in deficit right.  It was $10 billion in deficit, I reined in spending and I put it into surplus.

NEIL MITCHELL:

But did you say that you didn’t want John Howard to spend as much as he did?

MR COSTELLO:

No, what I believed we should do is I believed we should cut taxes.  And that actually I think if I look back on it we should have cut taxes, I would rather have cut taxes by more.  But of course I reined in spending.  In 1996 when the Budget was in deficit I reined in spending and put it into surplus.  Now Mr Swan inherited a Budget  which was in surplus Neil.  And he is, I think the only Treasurer that I remember of certainly in the last 30 years that inherited a Budget in surplus and what has he managed to do with it?  Put it into deficit. Who’s responsible?

NEIL MITCHELL:

But even you’d be going into deficit in these times wouldn’t you?

MR COSTELLO:

Well I make this point.  Mr Swan spent $10 billion before Christmas giving out $1,000 cheques to people and another $10 billion after Christmas giving out $900 cheques to people and he says oh all my problems are the spending of the Howard Government?  I have got to say to you Neil I would like to hear him explain that.

NEIL MITCHELL:

Would you be operating in the deficit in this environment?

MR COSTELLO:

Well Neil the thing I would say to Mr Swan is this, come clean.  You know he has got this stupid story out there today that having put the Budget into deficit and run up all this debt that it is all somebody else’s fault.  I would say to Mr Swan, come clean, be honest with the Australian people.  He will not in this term of Government deliver a single balanced Budget.  And I think this is the point that the commentators haven’t got on to: last year he said he would build a surplus of $20 billion.  That is what he said in May of last year.  He wasn’t able to deliver it.  The Budget is in deep deficit.  Tomorrow night he is going to stand up and he is going to say oh the Budget is in deep deficit but I will get it out in 2012 or 2013 or 2014.  If he couldn’t make his forecasts stick between May of last year and May of this year why should anybody believe him when he says he is going to make a forecast between May of this year and May of 2012 or 2013 or 2014 or 2015.

NEIL MITCHELL:

I will try once more.  If you were Treasurer now would you be going into deficit?

MR COSTELLO:

Neil what I have said to you is if I were Treasurer now I would be looking after the position of the Australian taxpayer not just in relation to this Budget but in Budgets in the future.

NEIL MITCHELL:

So what does that mean?  Would you be going into deficit?

MR COSTELLO:

Well what it would mean is I have delivered 10 surplus Budgets.  I wouldn’t have wasted $20 billion as Mr Swan did in the last year.

NEIL MITCHELL:

So what is your tip in this Budget?

MR COSTELLO:

Well here’s the question that people ought to ask Mr Swan on Budget night.  When will we repay the $200 billion of debt?  He is now saying that he will get the Budget back in balance by maybe 2012, 2013, 2014 or 2015.  But that is just for one year.  When will be repay the debt?

NEIL MITCHELL:

And what’s the answer?

MR COSTELLO:

Well I would think the earliest would be 20 years.  And I think possibly the answer will be not in our lifetimes.  I think you have got to get a grip on the dimension of this.  It is quite possible that Mr Swan has put this country into a debt which will not be repaid in our lifetimes.  But the thing I will be going to first tomorrow and I would ask the journalists to do this, go to the debt statement, find out when the debt will be repaid.  Because that won’t be 2012, 2013, 2014, 2015, the earliest I would think would be 20 years and it is quite possible not in our lifetime.  So young people have got to know this that they have been put into hock for a very long period of time by this Government.  And they will be paying for it in their taxes probably for generations.

NEIL MITCHELL:

Thank you for talking to us.  Hopefully we can speak to you after the Budget.  Peter Costello, the Member for Higgins, former Treasurer.