TRANSCRIPT
THE HON PETER COSTELLO MP
Treasurer

Doorstop Interview

The International of Brighton

Sunday, 20 June 2004
12.15 pm

SUBJECTS: Jim Bacon; Interest Rates; Bank Disclosure to Customers; Centenary

House

JOURNALIST:

(inaudible) Jim Bacon’s death?

TREASURER:

Well it is a very sad day with Jim Bacon’s death and I send my condolences

to his wife and his family. I knew Jim reasonably well, I dealt with him on

numbers of occasions at Premiers Conference and when we were doing financial

affairs. I send my deepest regards to his family and it is a very sad day for

Tasmania and for Australia generally.

JOURNALIST:

What do you think he gave to Tasmania?

TREASURER:

I think Jim was somebody who gave Tasmania everything he had. He was somebody

who I think was always bright and cheery. Somebody who presided over a period

when Tasmania actually lifted its economic performance quite considerably. It

is a tragic way to die. I think he himself talked of the risks that were involved

and if any good can come out of that maybe it will stand as a warning for people

to be careful about the health risks.

JOURNALIST:

Can I ask about Mark Latham’s health warnings for banks (inaudible)?

TREASURER:

Well, I think it is important that people do very carefully consider the amount

of credit that they take out. And bear in mind that we are in a low interest

rate regime and the biggest health warning that banks can give on their statements

would be to warn people of the possibility of a Labor Government being elected,

because that would put interest rates up. So if Mr Latham is really interested

about health warnings for people that are borrowing, perhaps he could suggest

that we put a warning that they not vote Labor at the next election because

undoubtedly as night follows day, interest rates will rise if Latham-Labor is

elected.

JOURNALIST:

How do you figure that?

TREASURER:

Well, you have only got to have a look at Labor’s record on interest

rates, home mortgage interest rates 17 per cent. When this Government came to

office they were over 10 per cent and it is only out of this Government that

you have seen interest rates come back to single figures. And in addition to

that of course Labor has billions of dollars of unfunded promises that they

will therefore have to borrow to pay for and they will drive interest rates

up. So the biggest health risk for borrowers is a Labor Government.

JOURNALIST:

But surely, in all seriousness there’s nothing wrong with the banks advising

customers of high levels of credit and how long it would take to pay back?

TREASURER:

I think it is very important as I said earlier that people when they borrow

bear in mind that interest rates are at historical lows and they could go up

and will go up if Labor is elected. So you have got to keep that in mind.

JOURNALIST:

What about that notion of greater disclosure about forcing the banks to disclose

more?

TREASURER:

I think that banks should engage in open transparent disclosure to their customers

and one of the reasons why they post their fees now is that previously banks

were able to get away with hiding the costs of banking with increased interest

rates. As we forced interest rates down, banks have had to be much more transparent

about their disclosure. And I think it is important that they continue to be

open about their disclosure and I think that anyone who deals with banks today

will realise that they is quite a deal of disclosure goes on, and the amount

of information that comes from banks is quite extraordinary actually.

JOURNALIST:

Couldn’t they go further?

TREASURER:

Well, I think actually, it is important now to get some of the disclosure in

a more comprehensible form. I think the amount of information that the banks

are now putting out to their customers is so long, their disclosure is so exhaustive,

that perhaps people can’t properly understand. And I think it is better

actually if it was shorter and made simpler, that the critical things are there

but it is done in a shorter way. Let me say, this Government has a policy of

reducing the cost of banking for customers. That is why we abolished the financial

institutions duty at over a billion dollars per annum and by July of next year

we will have completely abolished the banking account debits tax – the BAD tax

on bank accounts – it wouldn’t have happened if this Government hadn’t

reformed the taxation system.

JOURNALIST:

Would the Government consider taking it further by forcing the banks to give

further warnings to consumers especially if they are in a fair bit of credit

card debt?

TREASURER:

Well, under this Government’s policy, banks are required to make very

extensive disclosure, very extensive disclosure, and it is greater than it has

ever been before. And as I said earlier, some people have criticised the fact

that it is probably too extensive, that the longer it has got the less people

that have been able to understand it. So I think there is a case for simplifying

it but I don’t understand how you could actually extend the requirements

because the requirements are more exhaustive than they have ever been.

JOURNALIST:

(inaudible) the next election?

TREASURER:

I don’t know.

JOURNALIST:

Would the Government be prepared for that?

TREASURER:

Well, there will be an election at some stage in Australia, I would think in

the second half of this year. When that is, I can’t tell you, I am not

privy to those discussions.

JOURNALIST:

Sorry maybe you have said this before, I came a bit late, have you got anything

to say about Jim Bacon?

TREASURER:

Well, let me just say again, the death of Jim Bacon is tragic for his family

for his friends. He was a good servant of Tasmania, I dealt with him quite a

bit. He presided over a time when the Tasmanian economy strengthened and I think

Tasmania recovered a great deal of confidence about its prospects and it is

a tragic death and it is a tragic way to die and we pay our respects to Jim

and to his family.

JOURNALIST:

What is today’s speech about?

TREASURER:

It is the 60^th anniversary of the Liberal Party, and the achievements

of the Liberal Party have been important for the re-election of the Liberal

Party.

JOURNALIST:

The judicial inquiry into Centenary House, is this an election stunt?

TREASURER:

Oh no, the lease of Centenary House by the Audit Office from the Australian

Labor Party has now made some of the highest rents in the world. The Labor Party

as a lessor gets paid more for renting space than you get in mid-town Manhattan,

central London or any other prime real estate in the world. This is an absolute

financial scandal, and you have got to remember this, it is tax payers that

are paying for it. Tax payers are paying the highest rents in the world to the

Australian Labor Party, because the Australian Labor Party will not re-negotiate

the lease and give a fair deal. And this is a scandal, this is a scandal of

major proportions, and if we have a judicial inquiry we have got to get to the

bottom of this, how the tax payers are being ripped off by Latham-Labor.

JOURNALIST:

But why now?

TREASURER:

Why now? Because it should have been fixed years ago…

JOURNALIST:

Why didn’t you fix it years ago…

TREASURER:

…well, we can’t…

JOURNALIST:

…inquiry earlier (inaudible)?

TREASURER:

…we can’t fix it. Only the Australian Labor Party can fix this

corrupt lease deal and for years now we have been demanding that the Australian

Labor Party fix it. This has become a great test of Mr Latham’s leadership.

If he can’t fix this corrupt deal which is causing tax payers to pay highest

rents in the world, I am not talking about rents higher than Melbourne and Sydney,

tax payers are paying the Labor Party rents which are higher than mid-town Manhattan,

Wall Street, central London, the city of London, and Park Avenue. It is one

of the great scandals of our time, and now Mr Latham wants to prove that he

has got some leadership, he would break this deal, he would break it immediately

and the fact that he hasn’t done it already is a matter of great shame.

Thanks.