TRANSCRIPT

THE HON PETER COSTELLO MP

Doorstop

Senate Alcove Courtyard

Parliament House

Thursday, 9 October 2003

11.45 am

SUBJECTS: Jobs Growth, Economy, Wentworth Pre-selection, Medical Indemnity

TREASURER:

Today’s unemployment figures show that unemployment remains at 5.8 per

cent which is the lowest since January of 1990, and even better news today was

the fact that for the month of September, 14,000 new jobs were created in Australia

and 43,000 new full-time jobs. When you think of all of the challenges we have

been through over the course of the year – American downturn, SARS, war, drought

– the fact that the economy kept growing and has produced more jobs is really

remarkable. But it is great news for Australians that there were more job opportunities

than ever before in September, and the object of economic policy is to provide

opportunity for people, job opportunities, and those job opportunities are now

better than they have been since 1990. This is the end result of strong economic

policy, and this is the benefit – more job opportunities for more Australians

with the lowest unemployment rate for 13 years.

JOURNALIST:

How much lower can it go?

TREASURER:

Well, I said last month that when it dipped below 6 per cent, that you could

have a statistical factor in there, and you could still have statistical factors

in there. I think unemployment is around 6 per cent, but it could go lower if

we can continue to grow the Australian economy, if we have measures passed in

the Senate to change our welfare system and our labour force system, we could

bring it down, yes we could. And this is my message to the Opposition, start

passing changes to industrial relations, start changing, start passing those

changes to welfare reform, because if we could do that and keep the economy

growing, we could take unemployment lower. It is the lowest in 13 years, and

we could take it lower still.

JOURNALIST:

By how much? How low could it go?

TREASURER:

That just depends how much of the Government’s program can we get through

the Senate. The more of the program, if Labor would cease its obstructionism,

the lower it would go.

JOURNALIST:

Will the economy rebound in the third quarter Treasurer?

TREASURER:

Well, the third quarter is finished, and as you know it was a difficult quarter.

It was a difficult quarter on the trade front, because we are still suffering

from drought, the world economy was weak, but I expect that the trade performance

will pick up into the fourth quarter, and into early next year, and that will

strengthen our external situation. The story of the Australian economy has really

been a story of strong domestic economy, buffeted by a weak world economy, and

I think as the world starts to pick up in the fourth quarter of this year and

the first quarter of next year, that will swing back in our favour.

JOURNALIST:

Is the unemployment level getting to the stage now where it is going to start

to put upward pressure on wages, do you think?

TREASURER:

I don’t think so. Look, one of the successes about getting more people

into jobs is that wage demands have been moderate because inflation has been

low. People don’t have to chase wages to keep up with inflation. Inflation

is low, we have entrenched low inflation. Wage growth has been moderate, and

therefore with the growing economy we have had more job opportunities. If wage

demands were to be set off now, all it would do would be cost those job opportunities.

We want the job opportunities to continue.

JOURNALIST:

Do you think that interest rates will be brought forward, interest rate rises

will be brought forward with the evidence of a strong employment market?

TREASURER:

Well, I think that this is the object of economic policy, to create more job

opportunities for Australians, and I don’t think we should try and focus

on negatives. Our monetary policy, our budget policy, our tax policy, our structural

policy, all created towards this end, directed towards this end, and that is

creating jobs.

JOURNALIST:

We are creeping up on a 70 cent dollar though, aren’t we?

TREASURER:

Well, the Australian dollar over the course of this year, has appreciated

by about 20 per cent against the US dollar, and about 14 per cent on a trade

weighted basis. That’s a very steep rise, and that is one of the factors

that has worked against our exporters. We don’t have as competitive a

position for our exporters as we had say, a year or two years ago. Part of the

story, of course, is that the US dollar is falling, but the Australian dollar

has also appreciated on a trade weighted basis, and that is making things less

competitive for our exporters.

JOURNALIST:

Can I ask you whether 800 members in the branch of Wentworth is within the

spirit of Liberal Party rules?

TREASURER:

I am not about to give rulings here, and it is not my job to give rulings,

but I always think that in relation to party affairs, it is not just the letter

of the law, it is the spirit of the law. And you don’t want people to

think that large influxes have led to different outcomes. I think the letter

and the spirit is that amongst the party members who have been party members,

with rules the same for everybody, it is merit that determines these things,

and that is the outcome that you want.

JOURNALIST:

On medical indemnity, would the Government consider assuming liability for

negligence claims after a 6 year statute of limitation?

TREASURER:

Well, let me make this clear, the Government has assumed liability for claims

against the doctors. When the doctors’ insurance company couldn’t

meet the claims, the Commonwealth stepped in on behalf of the doctors and took

over their liability. Now, we have put in place a proposal which over time,

will give the doctors the ability to, through the levy, to make good the taxpayer

rescue. Now, there has been a lot of discussion about amounts, but as Tony Abbott

said the other day, he has given a moratorium in relation to that recovery.

But I want to make this point, that the Government didn’t create this

problem, the doctors had an insurance company, their insurance company was unable

to meet its financial obligations, and it was owned by the doctors. The Government

stepped in to help the doctors because their insurance company couldn’t

meet its just obligations. We have also engaged in a very large effort to get

the States to change the laws to make it easier for doctors in future, so the

Commonwealth Government has really acted quite significantly in relation to

this matter.

JOURNALIST:

And has done enough?

TREASURER:

Well, it is very, very significantly, and I think that from time to time you

hear the AMA say that they have been subject to a tax. This is not a tax, this

is their insurance company which the taxpayer has bailed out. It was run by

doctors, for doctors, to make provision for claims against doctors, and the

taxpayer bailed it out. And over a period of time we have put in place an orderly

workout for that particular insurer.

JOURNALIST:

Will the economy grow in the third quarter at a stronger pace than we saw

in the second quarter?

TREASURER:

Well, I will tell you when I get the National Accounts. Thank you very much.