Press Conference

Treasury Place, Melbourne

Thursday, 9 November 2006

12 noon

SUBJECTS: Labour Force figures, stem cell legislation, James Hardie, Victorian election,AWB, allegations involving State Ministers

TREASURER:

In the month of October unemployment in Australia fell to 4.6 per cent, a rate which we haven’t seen in this country for over 30 years. The way in which the unemployment rate fell was that jobs eased off but unemployment fell as well. Jobs eased off in the month by 32,100, the number of unemployed fell by 16,200. The consequence of that is that the unemployment rate fell to 4.6 per cent, a rate which we haven’t seen in Australia for 30 years and a rate which I think all Australians would consider to be great news. Although employment in the month fell, it has increased by 245,000 over the course of the year and there have been 1.9 million new jobs created since the Howard Government came to office in 1996.

Now these monthly figures will bounce around a bit for statistical reasons, but we have now had unemployment under 5 per cent for six months and what that shows you is that it has never been a better time for a job seeker in our generation. There are better opportunities for young people than there have been for over 30 years. The Australian economy is providing opportunity for our young people and essentially all of those people who want to work have a very good chance of getting it.

It indicates that the hard work of economic reform is paying results. And it is important that we continue that hard work into the future. With our changes to industrial relations reform, our changes to increased participation in the workforce, the groups that are under representative and our changes to ensure that the Australian economy continues its growth, a growth period which has now proved to be the longest recorded in Australian history. Questions?

JOURNALIST:

Treasurer, do you think that this will put paid to the ACTU’s campaign (inaudible) election against WorkChoices?

TREASURER:

I don’t think anything would put paid to the ACTU campaign because it is a political campaign, they are trying to get Labor elected. The ACTU controls the Labor Party and they are trying to get their political party elected. But what it does is it demolishes the ACTU’s intellectual justification. The ACTU said that WorkChoices would lose jobs. The ACTU was wrong. We have now had 245,000 new jobs created this year, I am not saying that were all created because of WorkChoices but it is clear that WorkChoices didn’t interrupt the creation of jobs. Jobs are created in a growing economy, and more jobs are created in a growing economy when you have a better industrial relations system.

JOURNALIST:

Even though you said this month there was an actual loss of jobs (inaudible)?

TREASURER:

Well, in this month, employment itself was down but that is after exceptionally strong growth. We were always expecting a correction, and you had a correction in this month and the better way of looking at things is to take a number of months to get it. When you take the year together what, 245,000 new jobs. This is exceptionally strong job creation over the course of the year. Now, you had a correction in the employment market, you had a correction in the unemployment market, the outcome of that was a lower unemployment rate. As I said to you, this will bounce around from month to month but if you look back over six months, we have been below 5 per cent for 6 months. Ten years ago, people wouldn’t have believed that outcomes like this were possible. And here we are, we are now experiencing it, we are in them. And the great thing is for young people, there has never been a better chance of getting a job, ever.

JOURNALIST:

What about the older market though, you mentioned younger people three times, what about the mature aged workforce?

TREASURER:

Well, I should have said, never a better chance of getting a job, at least in the last 30 years, in our generation. For the older Australians, we are encouraging older Australians to continue in the workforce. And their chances are better than they have been for a generation too. We encourage them to maintain work because we want to encourage more people into the labour force. We are changing the superannuation rules from 1 July next year which will allow them to get superannuation tax free and if they maintain part-time work that will give them a lower marginal tax rate. We have got the mature aged workers offset which is also designed to encourage older Australians to remain in the workforce. And I think attitudes are changing, attitudes should change and mature aged workers have a lot of skills and we want to keep them engaged in giving those skills in the workplace.

JOURNALIST:

These figures are quite low, can they go any lower?

TREASURER:

You know, ten years ago it was thought that the lowest unemployment could go in Australia would be 6 or 7 per cent. We are now at 4.6. I think we should be ambitious. We should always be ambitious.

JOURNALIST:

So if you are the Roger Bannister of economics, go under 4?

TREASURER:

We are always looking for a new record. Just when you think you have reached the end there might be a better outcome waiting around the corner.

JOURNALIST:

Treasurer, would you exercise your conscience vote to support the stem cell legislation?

TREASURER:

I have carefully read all of the arguments, I have looked at the Bill and this is not an easy issue. This is a very difficult issue. There are strong arguments on both sides and I will be making my position known in the House of Representatives. I accept that everybody, even though they come to different outcomes does so in good conscience. I respect the views of my colleagues and I have carefully consulted with the scientific community and tried to bring my own judgement to bear on the issue.

JOURNALIST:

Are you still grappling about this issue or have you privately…?

TREASURER:

I have a fair idea what the shape of my speech will be but I will wait to give it.

JOURNALIST:

On another issue, the ATO have given a (inaudible) Hardies asbestos fund, is that good news or bad?

TREASURER:

Well the good news is that the James Hardie settlement with the victims of asbestos can now be completed. I pay tribute to the victims advocates such as Bernie Banton who worked hard and long for this. The matter should be wrapped up and settled straight away. There are now no outstanding issues. My only regret is it has taken so long. This was a company which tried to avoid its obligations, its liabilities to victims who were stricken with a fatal disease. It should never, ever have tried to walk out of those responsibilities. The good news is it has been forced to observe them. James Hardie then tried to walk out of its tax obligations by moving offshore to the Netherlands. Again, it should never have tried to have done that. And now, it has been forced to comply with Australian tax law which it could have done on day 1. But it has had favourable rulings under laws which the Federal Government introduced, not just for James Hardie but for every other company. It will observe the law that is applicable to every other company, it will get a tax deduction for doing so and it should pay those victims immediately. My only regret is it took so long.

JOURNALIST:

Treasurer would you have an official role at Sunday’s Liberal campaign launch? Will you be speaking at that?

TREASURER:

Well if I am asked to I will, of course.

JOURNALIST:

Have you been asked to by Ted Baillieu?

TREASURER:

Well I haven’t been asked to, no, not at this stage.

JOURNALIST:

How do you rate how he is going so far?

TREASURER:

He is doing well.

JOURNALIST:

Treasurer, on another matter, do you think that the AWB exercising its veto powers is actually fair to the growers in WA?

TREASURER:

How would you feel if you had a wheat crop that you could sell at a higher price but you are being forced to sell at a lower price? How would you feel? I think Western Australian wheat growers who have the option to get the best price would feel pretty hard done by. I thought that their request was quite a reasonable request. They want to be able to sell their wheat at the international price and not have to sell it, be forced to sell it, by law, below the international price. And my sympathy is with wheat growers in relation to this.

JOURNALIST:

Mr Costello, on the crisis involving the New South Wales government Mr Orkopoulos’ charges bringing another MP into disgrace in New South Wales and then you have got Western Australia and you have had them in Tasmania as well with various misdemeanors and alleged corruption. What do you think that says about the state of Labor Governments nationwide?

TREASURER:

Well, the allegations against the New South Wales former Minister are extremely serious. They will go to court but if they were to be proven of course people would be rightly shocked and I think there is a big message here that nobody has above the law, it doesn’t matter who you are, you might be an MP, you might be a Minister, that doesn’t excuse your behaviour. It is regrettable that in some of the State governments it appears that people have engaged in morally reprehensible behaviour and I am talking about different states here, that is regrettable. And I think the public wants to know that its MPs are observing the law and observing moral standards and they are entitled to know that and governments have got to move against people who don’t adhere to those standards. Okay, thank you.