Labour force, GST, Commonwealth Games, Victorian High Country, Housing market, Chinese diplomat – Press Conference, Treasury Place, Melbourne

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Labour force, GST, Commonwealth Games, Victorian High Country, Housing market, Chinese diplomat – Press Conference, Treasury Place, Melbourne


Press Conference

Treasury Place, Melbourne

Thursday, 9 June 2005

12.00 noon

SUBJECTS: Labour force, GST, Commonwealth Games, Victorian High Country,

Housing market, Chinese diplomat


Today’s labour force figures show that unemployment in the month of May

remains at a 29 year low at 5.1 per cent. And in the month, around about another

14,000 jobs were created, nearly all of them part-time, but if we look back

over the past year, 330,000 new jobs have been created in the Australian economy

and nearly 70 per cent of those have been full-time jobs.

The thing that is the most striking about today’s labour force figures

is that the participation rate rose to an all time high. That is, more people

than ever before participating in the workforce and a larger proportion of those

of workforce age participating than ever before. And notwithstanding more people

participating, unemployment is still at 29 year lows.

This is what the Government has been focussing on in recent years, to lift

that participation rate, to get as many people as possible of workforce age

participating in the workforce, looking for work and hopefully finding it. Our

reforms in relation to disability support pensions, sole parent’s pension

are all designed to lift these participation rates. And you can see from today’s

figures they are at all time highs and unemployment at 29 year lows.

We would like to lift the participation rate even higher over the decades to

come because as the Australian population ages we need a higher and higher proportion

of those of workforce age participating in the labour market and looking for

work. So, this is good news for Australia – unemployment remains low and

our participation rate at record highs. It indicates that the economy has still

got some strength in it. The chances of getting a job today are better than

they have been for 29 years and the participation rate is higher than it has

ever been recorded.


I have got a question on a non-labour force issue.


Sure, whatever you would like.


Okay, well Peter Beattie today, or yesterday, was boasting about Queensland

driving the nation and offering a hand to other States if they needed a hand-up.

With a billion dollar surplus should he be offering to, his agreement for a

different carve up of GST revenue and if he doesn’t, should there be a

different carve up of GST revenue?


Well I think with the strong revenues that Queensland has and the windfall

that they get from GST they should be using that windfall to cut other indirect

taxes, and we would urge them to do that in accordance with the Intergovernmental

Agreement. Queensland has indicated that it is going to proceed with cutting

those other taxes but you would have to look at it and say, they have got the

capacity to move faster than they have hitherto indicated. But at least they

are prepared to move. We still have two other States that are refusing to use

their GST windfalls to cut indirect taxes at all. We will be encouraging those

other States to do so.


What’s the status of that letter of offer from the majority of States

and New South Wales and WA standing outside of it? Where are you up to in the



Well, six of the States have made an offer and two are yet to make their offer.

So, I think what we will do is we will deal with the two that have not yet made

an offer and we will engage with the six that have.


Will you take punitive action against those States though? Or are you saying

negotiate (inaudible)?


Well we will announce our response in due course.


The 14,000 jobs created – they are nearly all of them part-time –

are you concerned there might be a bit of a tip towards part-time rather than

full-time jobs?


Well, as I said, over the past year there have been 330,000 new jobs in the

Australian economy and 70 per cent, nearly 70 per cent, of them have been full-time,

that is extraordinary – 330,000 that is more than three “MCG fulls”

– 330,000 jobs in the last year, nearly 70 per cent. Now in this month

the job creation was principally in the part-time area, you are quite right.

But when you look back over the year that is because in previous months the

job creation has been principally in the full-time area. This is a very, very

strong labour market which is now at 29 year lows with more people participating,

looking for work, than ever before. That is the extraordinary thing –

the participation rate of 64.6 per cent.


Given other evidence of economic slow-down, did the figures surprise you?


I think most people were thinking that the unemployment rate would go up this

month. So this is stronger than was expected and not only did the rate not go

up but the participation rate went up and the unemployment rate remained the

same which tells you more people started looking for work in the month of May

and what is more, they were able to find it because the unemployment rate did

not go up. So, this is a strong result, yes.


What does it say about the economy to you?


Well, employment normally is a lagging indicator. What it tells you is we have

had terrifically strong, consistent growth and that is still working its way

into good jobs growth. We have said over the course of the next year we would

expect the economy to slow a bit and therefore the employment growth to slow

a bit but what this tells you is that there is still strength in the employment



The Commonwealth Games, what was discussed in the meeting this morning with

Ron Walker?


Well, we discussed some of the programme that the Commonwealth Games is putting

on and we also discussed finances. As you know the Commonwealth Government,

the Australian Government, is putting a very large sum of money into the Commonwealth

Games and there was a discussion as to the amounts that are involved.


Was this memo discussed – the secret memo?




The secret memo that surfaced in the Herald Sun this morning? Was that…


There is no secret memo. There is nothing secret. No it was not discussed.

But there is nothing secret.


Is there bad blood between the State and Federal Government in regards to this?


No, I do not believe so, no. The Federal Government was asked to make available

money – we are making over $100 million available and the Federal Government

was asked to sponsor the baton relay. There is nothing secret about this. The

Prime Minister has launched it, I have launched it, we keep on launching it

on a regular basis. So, we were asked to sponsor the baton relay and we are.

That is part of the commitment that we made when we were asked for money –

we were asked for money and one of the things we were asked to do was to sponsor

the baton relay. It is not secret. We only wish we could get more coverage.


Justin Madden says you are using it as a propaganda exercise and what do you

say to that – demanding that MPs get on-stage every night with the baton?


Well hang on, if you want the Commonwealth Games to be a success it has got

to be more than Victoria, it has got to be Australia. You have got to make this

a national thing so that people in New South Wales and Queensland and WA and

South Australia and Tasmania feel part of it. And if you want to engage those

people, one of the ways of doing it is to get the baton going through all of

these other States. The Victorian Government cannot run a baton through South

Australia or Western Australia or Queensland or Tasmania – it is only in Victoria

– and so the Commonwealth Government was asked, could we sponsor the baton and

arrange for it to go through other States. And we can and we will. We were asked

to do that and we will. And that is a way of getting people outside of Victoria

engaged in the Commonwealth Games and if you want this to be a big event, a

national event, and an international event, you have got to get people throughout

Australia engaged in it.


But wouldn’t normal people, community contributors, be better off on-stage

rather than Federal MPs and Senators?


Well, I am sure they will be on-stage, of course they will be. The idea is

to get as many people engaged as possible. But somebody has got to organise



I am not talking about organising it, I am talking about the actual on stage





Are you still going ahead with that a very prominent role for the Federal MPs?


No, no, no the MPs are going to organise all runners, who will be members of

the community, through their electorates. And they will be community people,

sporting people and local leaders and all the rest of it. The idea is to engage

the community.


But will they still be on stage?




The Federal MPs and Senators?


Well I don’t know how it is going to be organised. I imagine the runners

will be the people who will get the coverage – they are carrying the baton.


Can I ask a question Treasurer just about…?


What stage are you talking about?


I am talking about the nightly celebrations where there was a demand that the

local, sorry the Federal MPs or Senators will be the ones who receive the baton

at the end of the day at the main celebration.


What major celebration?


Well, every night of the baton relay there is a major celebration in whatever

town it stops.


Well who is organising that? I do not know anything about it, and I do not

know who is organising it.


Well it is a demand from the Department, from Senator Kemp’s Department.


I do not anything about it.


What do you have to say to Justin Madden then who has the belief that the Federal

Government is attempting to hijack the event?


Well I would say this, can Justin Madden organise a baton in Queensland, or

South Australia, or New South Wales or Tasmanian? Patently he can not. And that

is why the Games’ organisers asked the Commonwealth Government to do it,

and to pay for it. You know, if somebody wants to say that they do not want

our money and they will organise it themselves, we would have said fine. But

if they say we cannot do it, will you pay for it and will you organise it, I

think it is only fair that we do, and that we do it in the interests of Australia.

You have got to understand this point. This has got to be bigger than one city

and just one State, this has got to be something for Australia and for the whole

of the Commonwealth.


Has Ron Walker or the Government, State Government, asked for any extra money

over and above what you have already promised?


Well my experience is that these are always ongoing negotiations.


Can I just ask you a question about your legislation re the tax cuts? Parliament

resumes next week, what is the Government going to do? Do you just push ahead

with it and then see if Labor blocks it, or how is it going to be played out?


Well the tax cuts legislation has passed the House of Representatives. To become

a law it has to pass the Senate. It will pass the Senate. The only question

is does it pass the Senate before the 30th of June, and allow everybody

to get their tax cut in three weeks time, or does Labor delay the tax cut, so

that it can only come into effect when it passes the new Senate. Labor cannot

defeat this tax cut. This is the absurdity of Kim Beazley’s position,

he cannot stop the tax cut. All he can do is delay the tax cut. Now the Commissioner

of Taxation gave him a lifeline. The Commissioner of Taxation said even if you

vote the legislation down, it can still go ahead as long as you say you will

allow the schedules. But he cannot even say that. As of today, nobody in Australia

– and apparently not even Mr Beazley – knows whether he will allow the schedules.

It is a very simple proposition. I say to Kim Beazley, just answer this question

– will you allow the schedules? If you will, everyone gets a tax cut on

the 1st of July. If you won’t, no-one gets a tax cut on the

1st of July. Millions of Australians need to know – 850,000

employers need to know – will you allow the schedules? He has had since

the 10th of May, and what are we now, the 9th of June,

he has now had thirty days to say yes or no, and he still flip-flops, cannot

tell you, he cannot tell you the answer, cannot make up his mind, does not know

what is going to happen. Ten million people cannot be assured, 850,000 employers

are put into confusion. I say to Mr Beazley stop the stunts, you will not defeat

these tax cuts. Just allow people to know where they stand.


Just on something else, as a Victorian MP, do you have any thoughts on the

high country cattlemen who are rallying just a block away in the city?


Well I have got a lot of sympathy for the high country cattlemen. I think the

high country cattlemen are part of our history and our legacy, and I think they

do care for the high country, and I just cannot believe we are ending what has

been a wonderful chapter in Victorian history. Cattlemen and horsemen caring

for the high country. Wonderful, beautiful country, in the way they have been

doing for a century, and now are having their livelihoods stripped away from

them. It is a sad day I think. A very sad day, and I say to the mountain cattlemen

you have been a big part of Australia’s history, and I hope you will be

for a long time.


Do you dispute the scientific evidence that it is bad for the environment in

the high country?


Well look, it has been going on for a long time and the high country is still



Mr Costello, what do you make of Petro Georgiou’s speech last night?


I did not hear it.


I think he was highly critical of the immigration department.


Well I did not hear his speech, sorry.


Do you have any views on the Chinese diplomat who is trying to seek asylum

in Australia? What is your view on that Treasurer?


Well my view is that if the man concerned faces persecution, then he would

be eligible for protection, and we would not want to see anybody that would

be subject to persecution, and so this is a matter to be assessed by the relevant

authorities. If he faces persecution, he would now be entitled to protection,

and he ought to be given protection. That is a question that will have to be

determined by the relevant officials in the way they determine all of these

claims. But as I say, we would not want to see anybody face persecution.


What about the claim for political asylum?


Well that is different, and as I understand it, he is now being considered

on the grounds of persecution, is now being handled as a claim under the refugee

convention, and it should be handled in that way, and a proper determination

should be made on this case as it should be in the case of all others.


You don’t think he has got a claim for political asylum?


Well it is not up to me to decide these things. Those applications go to the

Foreign Minister and as I understand it he has made a statement on how that,

on whether that claim was made and he has already made a statement in relation

to that.


There is evidence this morning that housing prices could stagnate for up to

a decade with potentially dire consequences presumably for spending in the economy.

Do you have view on that potential?


We will make this the last question. There is no doubt in my mind that the

housing market is plateauing, that prices are no longer rising at the unsustainable

rates they were, that approvals have come off, and credit (inaudible) come off,

that auction clearance rates have risen. This is no bad thing. Prices were rising

too fast, and they were rising in an unsustainable way, so we can have an orderly

slow down in the housing market. That is actually a good thing. It is a good

thing for the economy, and to date it has been quite orderly, and I would expect

that to continue on for a while, until the market prices and the supply get

back into some kind of equilibrium. We have been expecting that, and I think

that the sources of growth in the Australian economy will increasingly switch

from domestic sources to international sources. We are beginning to see that

on the export front, and if that happens in an orderly way that will be a good

rebalancing of the Australian economy. Thanks.