TRANSCRIPT

THE HON PETER COSTELLO MP

TREASURER

Interview with Mike Carlton

2UE

Thursday, 30 September 2004

8.07am

 

CARLTON:

Peter Costello good morning.

TREASURER:

Good morning Mike.

CARLTON:

The Australian is saying this morning, I will quote here: ‘Mark

Latham has pulled off a potent strike into Howard’s heartland with this

Medicare Gold idea.’ What do you think?

TREASURER:

Oh you have got to look very carefully at the fine print and when you look

at the fine print you will find that this proposal for older Australians

going to hospitals, it doesn’t include private rooms, so that the promise

to put older Australians into the private hospital system may not be all

that it is cracked up to be. Of course they can already have free treatment

in public hospitals and if you can’t be guaranteed the private room and

the doctor of choice in a private hospital that is not going to be much

different really.

CARLTON:

But it does guarantee all of those Australians over 75 absolutely, you

would have thought, no more worry about the health bill.

TREASURER:

Well again, if there are hospital beds for everybody, that is one thing,

but if there are the same number of hospital beds and you are guaranteeing

places for people that are over 75 that will only be done at the expense

of somebody else in the community. So you have got to look at this very,

very carefully. You may well say to people over 75, well you can have that

bed at the expense of somebody else but somebody else could in fact be quite

worse off.

CARLTON:

That is the question doctors are raising this morning. They are saying,

where are you getting the doctors, where are you getting the nurses, where

are you getting the beds from? Do you see that as a big flaw in this idea?

TREASURER:

Oh I think that is a really big problem here and people should think about

that carefully. If you are guaranteeing beds to a certain sector of the

community, that is fine if you are in that sector, that is fine, that is

great for you, but if you are not in that sector, that bed could well be

coming at the expense of somebody else in the community. It doesn’t fix

the problem, what it does is it just shuffles around who gets access to

the beds. And as I understand their policy, Mr Latham no doubt will be asked

to clarify this today, it doesn’t even guarantee the over 75s private beds.

Many of these people take out private health insurance, Mike, because they

want a private bed in hospital and a doctor of choice. And to say to them

well, don’t take out your private health insurance, we will put you in a

shared ward isn’t going to be very appealing to them I don’t think.

CARLTON:

Have you done the sums on this one, does the maths stack up? He says it

will cost $2.8 billion, I think and he will pay for a lot of that in savings?

TREASURER:

Yes, we don’t think it does stack up Mike and I had a…

CARLTON:

You were always going to say that but why not?

TREASURER:

…well I haven’t been able to do it overnight but I will be doing

it over the course of today. Mr Latham could put it into the Treasury today

if he wanted it done independently and I would urge him to do so, but he

has been holding back his promises from independent scrutiny so far, so

I assume he is going to do the same on this. But no, in answer to your question,

no, I don’t believe it does add up.

CARLTON:

Alright. Would you match Labor’s quarterly indexation of pensions, pensions

are increased four times a year?

TREASURER:

Well pensions at the moment are increased twice a year to 25 per cent of

a wage index. So with quarterly indexation it wouldn’t be that you would

be giving more money it is just that instead of having a $6.40 increase

as we had in September you would have say a $3 increase in June…

CARLTON:

Oh hold on, that doesn’t say (inaudible) you’d be getting more money.

TREASURER:

Well I was just going to say the increase in September, the indexation

was $6.40 I believe, a fortnight. So, instead of doing that you would get

$3 in June and $3 in September.

CARLTON:

But you would have that in your pocket, that is better than what you are

offering.

TREASURER:

Well you know, you would get the same amount of money, you would just get

it over a different time frame.

CARLTON:

You would get it earlier, you would have it in your pocket, instead of

having to wait six months for your rise, you would get it every three.

TREASURER:

No, you wouldn’t get the six monthly rise, you would get half of the six

monthly rise and the other half at the time of the six monthly indexation.

All I am saying, is I am not making a big point of this, I am just saying

that people should understand it, it is not actually more money, it is the

same money, it is just paid on a different time frame.

CARLTON:

Yes, but it would be more money. Instead of it, you get one at the start

of the year say, and instead of having to wait six months you would get

an increase in three months…

TREASURER:

Well, that’s what I said…

CARLTON:

…you would get a smaller increase, but you would get it…

TREASURER:

…it is not actually more money.

CARLTON:

…in your pocket.

TREASURER:

It is not actually more money, it is just, it is the same money but it

is paid over a different time frame, that is the point I am making.

CARLTON:

That is not a bad idea, is it?

TREASURER:

Well look, I am not going to say that the world will move on this particular

issue, but I am just making the point that at the end of that day, you have

still got 25 per cent of the wage index, it is just paid over a different

time frame.

CARLTON:

Yes, alright, but you sound hesitant about that.

TREASURER:

I am not hesitant about it, I am just making the point that at the end

of the day, it is the same amount of money. Sure it is paid over a different

time frame. That is the only point I am making.

CARLTON:

I just wanted to ask you one more question about this Medicare Gold idea.

OK, we know how many people we have at the age of 75 and over now, down

the track there are going to be a lot more elderly Australians, is this

going to get more and more expensive as time rolls by?

TREASURER:

Oh, obviously it will as the population ages. We also know that people

draw down on health and hospital services much more heavily as they get

older. A very large proportion of your health costs and of your hospital

costs will be drawn down in the last years of your life for obvious reasons.

So as the population ages, of course, the promise that has been made will

dramatically grow. But as I said, the way in which I imagine Mr Latham wants

to ration this is if he keeps the number of beds as they are, the way he

will contain costs is just by putting other sectors of the community out

of hospital beds. So that, I imagine that is the way in which he would be

intending to fund this, but putting other people out and clearing those

beds for older people.

CARLTON:

How much are you, the Government, actually spending at this election?

TREASURER:

Well over four years, the promises that the Government has made is around

$7 billion.

CARLTON:

The Financial Review is saying it is about $12.7 when you take

into account tax cuts and so on, $12.7 off the bottom line.

TREASURER:

Well look, I don’t know where they get their figures from, but these are

the accurate figures over four years, and we are forecasting surpluses over

the same four years of about $17 billion.

CARLTON:

And I see Mr Latham this morning saying that his surplus will be $4 billion

better off than your surplus.

TREASURER:

Mr Latham was part of an Australian Labor Party that said that the Budget

was balanced when we were elected and it was $10 billion in the red. Mr

Latham was part of an Australian Labor Party that produced five deficit

Budgets totalling $80 billion between 1991 and 1996. Mr Latham has no capacity

to understand fiscal management and when I hear these words being trotted

out by Mr Latham, it just confirms to me that he has no real understanding

of economic policy. He doesn’t know the numbers, he hasn’t managed the Federal

Budget, his last day out was on the Liverpool Council and if you want to

believe that kind of thing you would be as silly as Mr Latham is.

CARLTON:

Apart from that why don’t you tell us what you really think.

TREASURER:

Well I must say, here is the failed Mayor of the Liverpool Council, now

giving us lectures about financial management. I have done nine Federal

Budgets, seven surplus Federal Budgets, we have reduced net debt by $73

billion and I am not in a mood to take lectures from the failed Mayor of

a failed Council on financial management, Mike.

CARLTON:

OK, but you are the ones with a spending spree, aren’t you? You are the

ones throwing the money around.

TREASURER:

Mr Latham has now got $24 billion of promises out there, he refuses to

submit his policies to the Treasury…

CARLTON:

Where do you get $24 billion from?

TREASURER:

…well I have got the list here. He says he can set many of them off,

his gross promises are $24 billion, he refuses to put them into the Treasury

for costing. We have got an absolute sham overnight – get a load of

this – he says he is putting in his tax policy, right? Mike, this

is a very important point, he says he is putting in his tax policy, but

he quarantined from analysis the so-called ‘savings’ which are supposed

to pay for it. He quarantined from analysis his claim that he could get

a participation dividend. He quarantined from analysis his reversal of the

GST concession for small business. This is the biggest fraud I have ever

seen. We are now what, nine, ten days out from a Budget…

CARLTON:

From an election.

TREASURER:

…oh, I’m sorry, ten days, you are quite right Mike, I must have been

getting worked up, we are now nine days out from an election and he is quarantining

parts of policy from scrutiny.

CARLTON:

How do you think it is going at the moment, is it about line-ball? The

Prime Minister said the other day it is still very tight.

TREASURER:

I think it is very tight, yes, I think either side could win this election,

yes.

CARLTON:

That close?

TREASURER:

Yes I do, look, it is nine days to go, the polls are very tight and either

side could win it. Much depends I think, on how much scrutiny is put on

the Labor Party policy over the next nine days.

CARLTON:

Alright, good to talk to you.

TREASURER:

Good to speak to you Mike.

CARLTON:

Thanks very much indeed.