TRANSCRIPT

THE HON PETER COSTELLO MP

TREASURER

Interview with Jeremy Cordeaux 

5DN

Monday, 20 September 2004

9.35 am

 

CORDEAUX:

Now the Treasurer is with us. Sir, how are you?

TREASURER:

I am very well thanks Jeremy.

CORDEAUX:

Campaigning obviously suits you. You look like you’re running and enjoying

it.

TREASURER:

Absolutely. Good thing is you don’t have to go to Canberra so much.

CORDEAUX:

Oh, I suppose not. Not short tempered are you?

TREASURER:

Not like some Jeremy.

CORDEAUX:

Yeah. I can understand that though. I can understand the pressure that

you would be under at this time and journalists who are constantly provoking

and prodding…

TREASURER:

Hmm.

CORDEAUX:

…and ultimately I think if you do that too much you are going to

get a response.

TREASURER:

Hmm. Well, that is part of being in political life and you have got to

keep your cool. And if you want to be involved in running a country or a

Government it is important that you can.

CORDEAUX:

Yeah. I can’t see why Mark Latham got upset at being asked about his son’s

schooling when he has made such a thing, one of his family, and two of this

schooling issue.

TREASURER:

Oh absolutely. You know, he has invited cameras around to his house to

film his children…

CORDEAUX:

And why not?

TREASURER:

…he, you will recall also brought his children to his press conference

when he was elected Leader. So, he has made them very much a part of his

story and he gets a few questions about it, and we have all had questions

about where our kids go to school. But no need to get uptight about it.

CORDEAUX:

The campaign, the television campaign that I saw on the weekend, at least

the first stage of it focuses in very much on the time he spent, Mark Latham

spent, as the Mayor of Liverpool.

TREASURER:

Hmm.

CORDEAUX:

What I can’t understand is, surely he says that this is not true, you guys

say that it is true, that there is a record there of mismanagement or financial

incompetence or something. I would have thought that it would be, it is

not a long time ago…

TREASURER:

No.

CORDEAUX:

Would it not be possible to definitively go back there and put all the

stuff from those years on the table and prove it one way or the other?

TREASURER:

That is what we have done. There is no doubt about it. There is no doubt

at all that when Mr Latham was the Mayor of the Liverpool Council he increased

taxes, then he drove the Budget into deficit, there is just no question

about it. And five Mayors or ten Deputy Mayors have all put out a statement.

The accounts are there. The auditor has reported. There is no doubt about

it. Now he could, if he wanted to, go through these one by one and say,

oh I didn’t put up taxes by as much as you say, I only put them up by this

amount, or he could go back and say that the Council was left in surplus.

But it wasn’t. There is no question about it.

CORDEAUX:

Hmm.

TREASURER:

He doesn’t deal with the facts one by one and anyone who wants to can see

them, they’re there.

CORDEAUX:

Are you surprised the polls are indeed indicating as tight a race as they

are? I think the Morgan Poll this morning is giving Labor the clear advantage.

Here we are in the fourteenth year, consecutive year of expansion.

TREASURER:

Hmm.

CORDEAUX:

I don’t think that has ever happened before. And by the way, can we keep

that going do you think?

TREASURER:

I hope so.

CORDEAUX:

Is it possible?

TREASURER:

I hope so. Look the period in Australia, the late nineties, early part

of this century, it has been one of the most economically prosperous, probably

rivals the late sixties. These will be the two great growth times of the

Australian economy.

CORDEAUX:

Hmm.

TREASURER:

The late sixties ended in financial trouble. You will remember the Whitlam

Government, interest rates went up and inflation went up and there is a

big lesson for us that if we take our eye off the ball…

CORDEAUX:

Hmm.

TREASURER:

…yes, the economy can decline.

CORDEAUX:

Hmm.

TREASURER:

Yes, interest rates can go up. Yes, inflation can go up. Yes, unemployment

can go up. If you take your eye off the economic ball you can lose it all

very quickly. And so I would say to people, we have had a good period through

the late 90’s, early 2000, but it is not a given. It is not pre-ordained.

It is not our faith. It can all be reversed and bad decisions can cost us.

CORDEAUX:

But why do you think it looks as tight as it is when you have delivered

so magnificently in the face of other countries not doing as well by comparison?

Should you not be miles ahead?

TREASURER:

Well, some people do take all this for granted. And they say, oh well,

yes the economy has been managed well and yes it…

CORDEAUX:

But we have seen it when it has been managed unwell in recent, we know

what it is like.

TREASURER:

A lot of young people don’t Jeremy. There are, if you are 30 or below you

probably can’t remember a recession. There are, if you are 30 or below,

you can’t remember 17 per cent interest rates. When I talk to younger people

about, you know, be careful with interest rates they can go really high.

They say, oh no, no, no, you know, we know that a 7 per cent interest rate

is here and it has always been here. You have got to be as old as us to

actually remember some of these events now because, as you say, it has been

a positive period.

CORDEAUX:

A week in politics is a long time. Telephone number is 8305 1323 and the

Treasurer, Peter Costello, has got to go in the next 45 seconds. I guess

we are not going to fit in many calls in 45 seconds. Now superannuation,

let me ask you quickly about that. I see in the Financial Review this morning,

the cost of paying the age pension will triple in less than 20 years, despite

rising superannuation savings. This is according to a study, obviously the

GST is a good idea…

TREASURER:

Hmm.

CORDEAUX:

…but there are fewer and fewer of us going to be contributing to

PAYE. Superannuation is obviously a good thing for the Government because

we’re all going to look after ourselves and be less of a burden on you guys.

Why do you want to tax superannuation three times?

TREASURER:

Well our policy is actually to reduce taxes and to promote superannuation

in two areas. One is our policy to reduce the Superannuation Surcharge…

CORDEAUX:

Hmm.

TREASURER:

…which we have now got down from 15 per cent to 10 per cent from

July of next year. And secondly we want a, what we call a co-contribution

scheme for lower income earners. If you put a dollar into superannuation

the Government will match it with $1.50. That is for people who are earning

less than $58,000 to help them grow their superannuation. Now Labor opposes

both of those policies. Don’t ask me why. But particularly that co-contribution

scheme is going to be very, very important for people who otherwise would

have to rely on the aged pension for the whole of their retirement income.

CORDEAUX:

So that’s not good for them and it’s not good for the Government either?

TREASURER:

Well, we want to encourage those people to save, because if you can encourage

them to save they will have better retirement incomes, that should be better

for the Government. Why you would take that away I don’t know. I mean, it

is beyond me. I just think it is a big error in Labor policy.

CORDEAUX:

Are you going to win?

TREASURER:

It will be tight. The polls say it will be tight. It could be any result.

It could be Labor, it could be Liberal or it is quite possible you could

get a draw with Greens and Independents holding the balance of power.

CORDEAUX:

And would that be the worst scenario?

TREASURER:

It would be a shocker. It would be an absolute shocker. Because then you

would have a couple of Independents or Greens…

CORDEAUX:

Yeah.

TREASURER:

…with wacky ideas determining what the Government did.

CORDEAUX:

You have got to run but I want to ask you one last question. And this is

something that occurred to me some time ago, you remember with the Asian

meltdown?

TREASURER:

Yes.

CORDEAUX:

And we put our hand up as a country and we helped our neighbours?

TREASURER:

Yes.

CORDEAUX:

I think we handed out billions of dollars?

TREASURER:

Yes, we did, (inaudible).

CORDEAUX:

Did we ever get it back?

TREASURER:

Yes, I can inform you that we have been repaid I think in its

entirety or nearly in its entirety. I think in its entirety, certainly by

Indonesia, Korea there are no outstanding loans and in Thailand I think

in its entirety or its certainly on track.

CORDEAUX:

(inaudible) get it all back. It is amazing that we were sort of in the

eye of that storm…

TREASURER:

Yes.

CORDEAUX:

…and we were able to help people…

TREASURER:

Yes.

CORDEAUX:

…and we were not drawn into that.

TREASURER:

No we weren’t. We were one of the few economies in east Asia that survived

the Asian financial crisis and we helped our neighbours and the good thing

is they are now mostly back on top, not entirely Jeremy. Indonesia has still

got its problems. But Korea and Thailand are, you know, back on track which

is good for us.

CORDEAUX:

Treasurer, have a good day and thank you for coming by.

TREASURER:

Thanks very much.