Press Conference

1. 30 pm

SUBJECTS: Labor’s costings, global financial risks, economic management, election, industrial relations, FOI, claims by Labor candidate for La Trobe

TREASURER:

There are three more working days before the election to be held this Saturday and it is plain that Labor has now engaged in an elaborate ruse to prevent its policies being properly costed. The cut-off date for Labor’s policies to be put in for costing was Thursday of last week. They did not put their policies in by the cut-off date and they have still not submitted all of their costings, knowing that the Secretaries of the Treasury Department and the Department of Finance said that the cut-off date was Thursday and they could not guarantee costing unless all of those policies were put in last Thursday. They deliberately withheld them so there could not be scrutiny. And even if they were to put them in today, it could not be guaranteed that there would be any costing before Saturday and any such costing that comes on the eve of the election, of course, would not be of any use in submitting Labor to scrutiny.

The promises that Labor have made over and above the items contained in the Pre-Election Fiscal Outlook are around $12 billion. Mr Swan habitually claims and claimed as recently as this morning that Labor was promising to spend $6 or $7 billion. To do that he needs to find $6 billion of savings. Labor has not even submitted $3 billion of savings that Kevin Rudd has been talking about but has never produced.

And so I want to say very directly, this has been an elaborate ruse by Kevin Rudd and the Labor Party to prevent scrutiny.

Does it matter? Well it does matter, because attention to economic detail is very important in managing the Australian economy. There are big risks developing around the world and you have seen even today volatility on the world stock markets, including the Australian stockmarket, arising out of more fears of sub-prime default in the United States.

In fact, a warning from Goldman Sachs in the United States of more credit downgrades for Citigroup and a sell order on shares and a warning from the CEO of Wells Fargo, the bank Wells Fargo, John Stumpf, who claimed we have not seen a ‘nationwide decline in housing like this since the great depression’, were the words that he used of the US sub-prime crisis.

So there are considerable risks in the global economy – the US sub-prime risk, world record oil prices, the lingering effects of the drought. Economic management does not run itself, it takes a lot of hard work.

We haven’t seen any of the hard work from Mr Rudd or Mr Swan, nor any of the experience nor the policy that is required to manage a trillion dollar economy. And my message to the Australian public before Saturday is this: that an inexperienced team with bad policy running a trillion dollar economy is a risk to business, to jobs, it is a risk to mortgage interest rates and it is a risk that could have profound and bad consequences for Australian families.

JOURNALIST:

Treasurer, you mentioned the risks developing in the world economy. The present settings, macro settings of economic policy, I presume you might have to change to accommodate those risks if a return of the Coalition Government, would you be able to flag where you might be able to tighten all of this and various signs of policy (inaudible) accommodate the change to the world scene?

TREASURER:

Well I think the principal responses that Australia will need is it will need strong budget position; it will need a low debt position; it will need more competitive tax system; it will need to have structural policy directed at allowing adjustment through the economy; it will need flexible industrial relations and it will need experienced management. Now, all of these things we have been working at putting in place over the last ten years. The Australian economy is much stronger today than it was when Labor were running it but you have got to continue to work on these things. You have got to continue to make our tax system more effective. Can I say another thing. You have got to have, in the wake of these issues, a strong corporate regulator. One of the things that I don’t think people realise is that Labor wants to cut funding for corporate regulation in this country. That will mean that it will be harder to police and bring to justice people who breach our corporations law. Why would you be doing that at a time where there is instability around the world? And this government remains very, very focussed on cleaning up corporations’ bad conduct in this country.

JOURNALIST:

Mr Costello, there was a question about costings and capital gains changes that were announced in relation to the housing affordability policy at the launch, has that been submitted for costing? Do you have a firm figure on how much that will be, what the implications of those changes would be?

TREASURER:

Yes, what we said when we announced it was that the cost would be negligible over the forward estimates. And the reason for that of course is that over the forward estimates, it is not anticipated that there would be wide sale of shared equity over the next four years. We actually costed that and we have submitted it. And of course, if the Treasury disagrees with that and believes that there would be wide sale of shared equity at a cost to revenue over the next four years, it will report that. I don’t think it will though.

JOURNALIST:

Mr Costello, whose idea was it to do a joint press conference, a joint appearance on Today Tonight? Yours, or John Howard’s?

TREASURER:

It was a joint idea, both of us.

JOURNALIST:

And Mr Howard says that you will be, if you win government again and the transition happens, that you will be elected unopposed. How can he guarantee you will be elected unopposed? Do you really think that would happen?

TREASURER:

Well that is his view.

JOURNALIST:

But what is your view?

TREASURER:

Well look, we will face that at the time.

JOURNALIST:

What about on Sunday if the Coalition isn’t successful at keeping power, then are you still willing to lead the Coalition as an Opposition Leader?

TREASURER:

Well I am focussing on the next three working days and election day on Saturday. That is my total focus. Can I say to you, on Sunday morning, if the government in Australia changes you will then have wall-to-wall Labor. Six States, two Territories and federally. You will have no accountability, you will have no checks. You will have the most inexperienced team running the Australian economy, ever. And we know there are significant risks in the international economy. It is a big risk for people with families, for their jobs, for their mortgages. And you can’t take it back on Sunday. That is it. That team runs Australia and the Australian economy. And I would just say to people – think carefully about this between now and Saturday.

JOURNALIST:

Just wondering why the decision has been made to block the release of information on possible ramping up of WorkChoices laws if there is nothing to hide there?

TREASURER:

This is a decision that was made by the Secretary of Prime Minister and Cabinet. These are documents that go to the Cabinet and therefore they are exempt under FOI. That is the decision that has been taken. By the way, I might point out that in most of the states of Australia including this one here in Victoria, these documents are routinely exempt from FOI. In fact, I think in Queensland they used to route all documents through the Cabinet.

JOURNALIST:

Does that make it any better though? I mean if another government is worse, that is hardly a defence, is it?

TREASURER:

No, no. The documents that go to Cabinet for the purposes of Cabinet discussion are exempt. Now I am just making this point, that our government has never engaged in the kind of pretences that Labor has. Of pretending that all documents are Cabinet documents. You see, that is the point I am making. This falls squarely within the FOI Act and the Secretary of the Department. The Secretary of the Department made the decision.

JOURNALIST:

So you would be happy to release documents that didn’t go to Cabinet then?

TREASURER:

Oh yes, we release, we are in my Department subject to routine FOIs…

JOURNALIST:

(inaudible)?

TREASURER:

I would say at one point one of the national newspaper chains had an FOI editor who was putting in requests on almost a daily basis and all of those documents, which are not Cabinet documents or otherwise exempted under the Act, are released. We had occasions when there were inches and inches, hundreds being released.

JOURNALIST:

But in the interest of transparency would you now be happy on the eve of the election, given the controversy that surrounds these documents to release any and all other documents that didn’t go to Cabinet in relation to this WorkChoices issue?

TREASURER:

Any document that should be released under the FOI laws will be released upon a proper request, as it has been. There’s a law there that says what has to be released and what doesn’t and anything that should be released under that law will be, upon a request.

JOURNALIST:

Treasurer, if WorkChoices does need to be changed any further, and you’ve made this point a number of times during the campaign, what is that Cabinet have felt it needed to discuss?

TREASURER:

Well, look, I don’t administer the PM & C FOIs so this is not a matter where I have made a decision or perused the documents, okay. This would have been done by the Secretary of the Department so there is no point in asking me what’s in these documents. The Departmental Secretary has made his decision. It’s been upheld by the courts. But if you want to get on to the bigger issue:Was there a proposal in relation to WorkChoices different to the one we enacted? No. The Government’s policy is what was enacted. Flexibility and the fairness test. And under the WorkChoices laws we’ve now had 400,000 new jobs, wages are higher than they were in real terms and unit labour costs have fallen because productivity has gone up. I want to make this point over and over again. The object of our economic policy is to put more people into work at higher wages. How can you get more people in work at higher wages? You can get more people in work at higher wages if you increase productivity, because notwithstanding the fact that they’re paid more because they’re producing more, the real unit labour cost is less. And that has been what has been happening under our Government.

JOURNALIST:

…Cabinet document, you’re confirming that there were discussions at a Cabinet level about further changes…

TREASURER:

No, I’m not confirming that at all. I am saying precisely the opposite. I am saying that the Cabinet discussed this matter, announced its decision, legislated it and it is what you see. That’s what I am saying.

JOURNALIST:

But clearly other options were put to Cabinet though?

TREASURER:

Well, look to be frank with you, what the Cabinet decided upon was legislated and is the law.

JOURNALIST:

If the Prime Minister (inaudible) hand over to you at an early enough time, do you rule out a challenge and do you rule out a challenge under any circumstances (inaudible)?

TREASURER:

Look, I’ve done that so often, I’ve lost count.

JOURNALIST:

But there are different scenarios aren’t there, I mean, surely if you were to win on Saturday, you could not rule out that you would then allow the Prime Minister to continue on his merry way for 18months to two years without some further discussion of the leadership?

TREASURER:

Sam, I think the answer is the same as I’ve probably given the last 100 times. Last question.

JOURNALIST:

There have been some questions in the media today about Labor’s candidate for La Trobe, Mr Rodney Cocks, about his claims. Are you concerned about that he is making claims and that he’s not who he says he is?

TREASURER:

Well, Rodney Cocks has written to the families of La Trobe, the residents of La Trobe, the voters of La Trobe saying that as a father with a mortgage he understands various issues. It turns out he’s not a father. I don’t know if he has a mortgage, but he’s certainly not a father. Why would a candidate write out to 100,000 people claiming to be a family man, a father, and he’s not? Now, there was a first explanation from his campaign director saying it was a typo. It’s not your normal typo – ‘as a father with a mortgage’, when it’s not the case. You know, if a ‘not’ has been left out or something else, it could be a typo. I’ve heard another explanation given by ALP Headquarters that this was actually a letter on behalf of the candidate in Deakin, although why you would be writing to the electors of La Trobe with a letter from your candidate in Deakin, I don’t know. But whatever way you look at it, Mr Cocks doesn’t seem to have been very interested in the correspondence he was sending out, he doesn’t appear to have read it. He doesn’t appear to have taken any interest in it. He has allowed other people to claim he’s a father when he’s not and it doesn’t show great respect for the electors of La Trobe. And I would say to the electors of La Trobe if the Labor candidate who wants your vote doesn’t know who he is, then it is not a very good start for him to become someone who is interested in representing you in the Federal Parliament.

JOURNALIST:

Mr Costello, Alexander Downer and the Environment Minister, Malcolm Turnbull, have come out today to say they accept that you’ll be the next leader of the Liberal Party. No one is going to stand in your way of that happening. Should all the other Ministers now come out and say the same thing as Malcolm has been forced to?

TREASURER:

Look, you know, it would be a long afternoon if you asked them all to do that. I don’t think it would be the most entertaining afternoon we’ve ever had. Let’s think about the next three days and the choice that’s before the Australian people.

JOURNALIST:

Mr Costello…

TREASURER:

This is the last one and then I saw Andrew Robb somewhere and Andrew’s going to come and talk to you in a moment, so please don’t go.

JOURNALIST:

He’s not challenging you either.

TREASURER:

I’m going to bring them in one by one after Andrew Robb.

JOURNALIST:

If you do become Prime Minsiter, Mr Costello, can you give a guarantee of no changes to the WorkChoices legislation?

TREASURER:

Absolutely. Absolutely. There will be no changes. The Government has put in place the industrial relations changes, complete with the fairness test. Under those changes 400,000 Australians have got work who didn’t have jobs before and real wages have increased. Those changes have been a positive for the Australian economy and they are the changes we want to keep. They are the changes which will give people more jobs at higher wages. And I can absolutely say we won’t be changing them because they have been positive for the Australian economy. Thank you very much.