TRANSCRIPT
THE HON PETER COSTELLO MP
Treasurer

Interview with Sally Loane

2BL

Friday, 27 June 2003
9.05 am

 

SUBJECTS: Newspoll, faith, charity, drugs, child custody, tax fraud,

leadership

LOANE:

Peter Costello good morning.

TREASURER:

Good morning.

LOANE:

Welcome.

TREASURER:

Thank you.

LOANE:

Welcome to Sydney.

TREASURER:

Great to be here.

LOANE:

Firstly, that Newspoll in the Australian today showing that John Howard

is more popular than Simon Crean by 3 to one, in safe Labor seats, the

Prime Minister is pretty invincible, isn’t he?

TREASURER:

I think that people recognise that the Government has been assiduous

in working on a strong economy in difficult times, that we have taken

the defence issue very seriously in the wake of Iraq and the Bali bombing

and people recognise the contribution that has been made in relation

to that.

LOANE:

So it is a whole government thing rather than a John Howard popularity?

TREASURER:

Well John Howard is the leader of the Government, there is no doubt about

that, but I think when you look at the way in which the Government has

been travelling, its two strengths, economic management, defence and

security. And I think Labor’s problem, people say Labor’s problem is

Mr Crean, I think it is deeper than that. I think that Labor’s problem

is, it doesn’t know what it stands for and it won’t be responsible with

policy. I have watched it in the Parliament. They are against every tough

decision they oppose is on the grounds of opportunism. They use the Senate

to oppose every Government measure or policy. And I think the public

is getting a little bit sophisticated, they believe you just can’t oppose

that, if you are going to be an alternative government, you have to be

prepared to make tough decisions and explain why and put your priorities

down and that is what Mr Crean hasn’t done.

LOANE:

He hasn’t got any traction here in NSW now, a week or a couple of weeks

ago, your Melbourne newspapers were saying, look this is a Sydney Melbourne

thing. Melbourne people just aren’t accepted in Sydney, I wonder if you

feel that sometimes? If you, I mean there is as much made of the Liberal

Party Sydney-Melbourne split too, isn’t there?

TREASURER:

I don’t think that is a big factor. I think more and more we are moving

to national media, national issues, particularly in relation to federal

politics. Take Bob Hawke for example, from Melbourne, Labor’s most successful

Prime Minister and very popular in Sydney.

LOANE:

He lives on the Harbour of course.

TREASURER:

Now lives in Sydney. He is so popular he bought a house here. So I don’t

think that is the problem. I honestly think that the problem with Simon

Crean, is, that having been in politics for a very long time, he has

never really been prepared to make tough calls and to be honest with

himself and the public. Let me make, let me give you the illustration

that comes to mind. He was my opposite number during tax reform and GST.

LOANE:

He was pretty tough wasn’t he?

TREASURER:

He used to…

LOANE:

(inaudible).

TREASURER:

…every sort of populist issue, he would of come into Parliament, you

know with a lettuce or a chicken or pyjamas, and he would say, how is

the GST going to apply to this that and the other. He tried to build

this populist head of steam against tax reform. Then, when we got to

the election and it was time for him to put down a policy, we found out

that his policy all along had been to keep 98 per cent of the GST. And

people thought to themselves what was the last three years all about?

If you ask him today he would say his policy is to keep the whole tax

system as it is currently set, so he spent three years trying to get

cheap political votes out of a policy that he now supports.

LOANE:

John Howard clawed his way back though from being Mr 18 per cent, do

you think that it is possible with Simon Crean, I mean politics is a

long time, John Howard has stuck in there hasn’t he, and ridden a lot

of pretty low polls?

TREASURER:

John Howard was first leader in I think 1985, and that is the period

that you are talking about, and I think after another ten years, or so

in Opposition, he won the 1996 election. I don’t know if Simon is proposing

a ten year strategy here for the Labor Party, but I would be pretty sure

that the Labor Party won’t give him ten years. I don’t even know that

they will give him the next eighteen months.

LOANE:

It is eleven past nine, I am talking to Peter Costello, the Federal Treasurer.

Mr Costello today at the Anglicare lunch you are talking about faith.

Now will you be talking about your own personal faith, we know that you

were raised a Baptist, and your brother of course is still a leading

minister in the Church, or are you talking about the faith in other things?

Spiritual faith, or human faith in institutions…

TREASURER:

Well I am talking more about in that second sense, in the general sense,

because I have been asked to launch this appeal, and it is a good appeal,

and any if you can support it and of your listeners out there, I urge

you to do so. But, it seems to me one of the problems that agencies like

Anglicare, and other agencies are facing at the moment, to some degree

there has been a shaking of confidence and trust in them. If you think

of the trouble that the Anglican church has had with the sex abuse issue

in Queensland, you think of the problems that have arisen over the Red

Cross Bali appeal, and it strikes me, that there is a bit of a crisis

of confidence in the voluntary and charity agencies, and what I want

to do is address those issues today and try and give some reasons why

we need these agencies and why, what they can do for the public to rediscover

trust and faith in the agencies.

LOANE:

I suppose they are important too aren’t they in our society because they

do fill in a lot of the gaps that Government use to do, they are picking

up an awful lot of that and if we lose faith in those institutions and

don’t give our money anymore, don’t you know, don’t be philanthropic

then the Government is going to be in more demand, more tax, more money.

TREASURER:

Absolutely. That is another side of it from the Government’s point of

view. But if you are a member of the public and you are paying tax, and

you are therefore making a contribution to welfare, you have got to have

a reason to go back again and make a voluntary contribution. And a lot

of people will not go back and make a voluntary contribution if they

feel they can’t trust the institution, or if they feel that the institution

isn’t giving something that the ordinary income support and pension system

can’t give. And this is were the agencies, I think, have got to reconnect

with the public and explain to the public what they give, that the ordinary

welfare system can’t give. Now you have put your finger right on one

of those issues, which is when we design income support for a country

of 20 million people, we have laws, we try and test eligibility, we have

appeal processes, it is very legalistic, very cumbersome, very slow.

And a person of need on a street, if they waited for government to intervene,

could wait weeks or months. A voluntary agency can hit that need immediately.

They can see it and it can respond. That is one of the areas that they

can add to those in need in the community which the Government can’t.

But there have got be a whole lot of other areas and they are some of

the things, I am thinking about saying today.

LOANE:

Are you going to encourage Sydneysiders to be as philanthropic as Melbourne

people?

TREASURER:

Absolutely. Well I am…

LOANE:

Do you think that they are?

TREASURER:

Well it’s funny you know in my experience some of the older families,

particularly the generation that came out from Eastern Europe have been

very philanthropic, you have seen a lot more, you have seen Frank Lowy

for example, has just set up a charitable institution. We have tried

to change the law a bit to make it easier to set up these philanthropic

institutions, but we still don’t have anything of the dimension of the

United States. This is where they are actually very good in relation

to their philanthropic and charitable institutions. They seem to feel

it is a duty, well not a duty perhaps, perhaps more of a contribution

back…

LOANE:

They do have more religious faith than us too.

TREASURER:

That’s true, that’s true. Whether that is a cause or not. It may well

be a cause. I think also the fact that they have more limited government,

means that the private citizen feels that they have a bigger obligation

to step in.

LOANE:

Is that they way that you would like to see Australia move?

TREASURER:

I think in a sense we would be richer, if the meeting of human need was

done on a more individual basis, rather than on a governmental basis

I think because it would engage people face to face as individuals, more

than engage them through the mechanism of the government. And I think

actually, we would be a better society for that.

LOANE:

Peter Costello, can I ask you about some personal issues, some private

issues. Fatherhood. Your own children. They are still young, I think

they are still in Primary School…

TREASURER:

Well one is.

LOANE:

One is. They are growing up. How do you teach them to be good people.

The role of fathers is very much in the news at the moment. It was brought

up a few days ago by John Howard, he is looking at the position of divorced

dads and access to kids. Are you with him on this, and how do you teach

your own children about values?

TREASURER:

Well look, I absolutely believe in the importance of fatherhood. Absolutely.

And the more I see of family breakdown, the more I am convinced that

good fathers make a contribution to preventing it. Am I good example,

well I am not sure that I am a good example in the sense that I am away

from home so much. I more or less go away from home on Monday and come

back on Saturday.

LOANE:

How do you then make it up to your children?

TREASURER:

Well you try, and I always try to spend at least one day on the weekend

at home, which is hard with the demands of a seven day a week job and

just try and do ordinary things. My oldest son is, he is sixteen now,

he plays football so on Saturday morning I go down with all the other

dads and I stand there and I try and cheer them on…

LOANE:

Does anyone come up to you and say come on what about the GST, or do

they leave you alone?

TREASURER:

No what they do is they come up and say what is the score, Treasurer,

and you give the score and they say but you can’t add up, can you?

LOANE:

The old joke.

TREASURER:

Old joke, which I always laugh at as if I have never heard it before.

LOANE:

You have to. Drugs. You have got a sixteen year old son, I mean how do

you talk to him about this? Drinking, that is probably a bigger problem.

TREASURER:

Well on the subject of drugs, I try and express my horror about drugs

and try and explain I mean why I think they are bad things, and I think

it is every parents’ worst nightmare, would be a child on drugs. It strikes

shivers down my spine like I imagine every other parent out there. You

try and talk to them about it…

LOANE:

But do they ask you, but dad did you try it?

TREASURER:

Not yet.

LOANE:

What will your answer be when they say?

TREASURER:

Well I didn’t take drugs, so I can give a fair answer to that. But I

think the thing that worries parents, is that you can talk to you kids

but you can’t supervise them, and they go out at night of course, with

friends and unless they have the right values and unless they have that

same view that drugs are bad, then they will be prey.

LOANE:

How much extra pressure is there on your own children. I know that there

is a lot of pressure on children of politicians, particularly high profile

politicians, so it is perceived by some people to be giving them a hard

time, like the Treasurer. Is that an issue that comes up with your own

family?

TREASURER:

It can happen when they are studying stuff at school, they might be studying

a decision that the Government has made and you are responsible, so,

the Treasurer did this in the Federal Budget, please discuss, and they

are sitting in the class. I imagine that is quite hard, but the way I

look at it, is, that it is the slings and arrows of life isn’t it. I

wish it wasn’t the case but there are probably worse things that could

happen to kids in life.

LOANE:

I want to ask you about children in detention centres. Are you in full

agreement with Phillip Ruddock and generally your Government, that

you should fight this Family Court decision to, that it is illegal, that

you should take this to the High Court and fight it tooth and nail. You

are a lawyer, you are also a father, you…

TREASURER:

Let me make this point, that a child in detention, nobody likes having

a child in detention. Nobody.

LOANE:

So it is uncomfortable for you?

TREASURER:

Well…

LOANE:

That notion.

TREASURER:

…nobody would do it if there were a better alternative. But the way

it occurs, is, that mum and dad, or mum or dad, a parent anyway, will

have been found not to have been a genuine refugee. They will be waiting

to be sent back to wherever they came from, wherever they are a citizen

of. And they will be appealing. Now if they didn’t appeal and the family

could be reunited back in their homeland, but these appeals can go on

and on and on. Now, you say to yourself, well, should we let the child

out, all of us would hope that you could, but what does that mean? Separating

the child from the parent. Would that be a better alternative?

LOANE:

What about just having the mothers out with them in the community?

TREASURER:

We have got a program, we had a program over at Woomera, which I now

think that we have moved to Baxter to allow that to happen with the mothers.

But you have to remember that in some of these cases, the parents actually

do want to keep the family together…

LOANE:

And they would rather have their children…

TREASURER:

…even though it is a terrible situation, they would prefer to be with

their children than to have the mother separated from, the father and

the children separated from the father.

LOANE:

The issue that I mentioned before, this issue of equal access to fathers

after divorce, have you, are you right up there with the Prime Minister

on this?

TREASURER:

Well look, I think this is going to be a tricky one, actually.

LOANE:

In what way?

TREASURER:

Well, what the Parliamentary Committee is going to look at is the idea

of joint custody. So, when a family breaks up, the parents, although

separated and divorced, will be jointly responsible for custody. And

as we know, the child can only be in one place at one time, and where

you get a lot of the arguments, is when the child has to be moved from

one to the other…

LOANE:

Week in, week out?

TREASURER:

…the handover. A very common problem is, suppose the child is going

off to see dad on a Saturday afternoon, but they get invited to a party.

Well, mum says that you can’t have access. Why not? Well, we are going

to a party. You are not going to deny your child the right to go to a

party. But it is my access day. And you get these sorts of arguments

that go on. So we haven’t actually decided we are going to do it. What

we have decided is to ask a committee to look at it, and look I hope

that the current situation can be improved because I don’t think the

current situation is working very, very well at all.

LOANE:

Because there a lot of fathers out there, and we have tested this, that

are really very distressed, it is a sleeper, it is one of those sleeper

issues.

TREASURER:

The problem is this. If a family breaks up, and the father, mostly is

ordered to pay child support, and he gets access. And what drives the

fathers’ mad, is, they feel they have got to keep paying child support,

and if they don’t pay they get whacked over the head with fines, as they

should I suppose, because it is to support the kids, but if the access

is denied, nobody seems to show as great an interest in enforcing the

letter of the law on the access. They feel that the law is good at enforcing

the financial aspects, but bad at enforcing the relational aspects.

LOANE:

And do you think that is right? That is a bit of an ideological thing?

TREASURER:

I think it is probably true. The law is good at working on money, but

the law is bad at working on relationships. This is the problem with

the law. We can make good laws on money, we can calculate to the precise

cent what has got to be paid, and if it is not paid you can impose fines

and all the rest of it. We do that through tax laws and fines, but law

is a very blunt instrument when you are working on relationships. You

know a law that says people have to cooperate, well how do you enforce

a law like that. Very difficult.

LOANE:

Incredibly hard. The wisdom of a Solomon I think will be needed, won’t

it, (inaudible)?

TREASURER:

I think so. Well it will be, as I said it is going off to the committee,

the committee will take evidence, and what I would say to people, is,

please give evidence. One of the good things that could come out of this

is, if the whole thing is just aired out there, and if it becomes a release

valve for all of these people that are upset. But I tell you, the conclusions

will be quite tricky.

LOANE:

I’m talking to Peter Costello, the Federal Treasurer. I wonder if you

feel you’ve changed from your early days as a politician? I remember

interviewing you for the Age when you were a fresh, young politician,

I think you’d just come from the bar, you’d had some big wins behind

you – Dollar Sweets, Mudginberri – you were right in there, you had a

great career ahead of you; you seem a patient man, your brother, Tim,

tells me you’re a patient man, you’ve shared a lot of bedrooms together–

TREASURER:

All above board.

LOANE:

Yeah absolutely. I mean are you patient and have you changed?

TREASURER:

Well I’m probably less of a tearaway that I was then because then because

I’m older.

LOANE:

Hmm. Less of an ideological tearaway because you were part of the `New

Right’ in those days?

TREASURER:

Well I, I guess when you’re younger you want to do everything immediately

I guess this is, everybody who’s young, you’ve got a short lifespan and

a short attention span and you feel you should do something tomorrow.

As life goes on, perhaps you get more patient, generally, in life so

perhaps I’ve changed slightly in that respect and, of course, having

been Treasurer now for the last seven years has meant an incredible amount

of work and diligence.

LOANE:

Well, Tim mentioned that, he said that the grind has been huge.

TREASURER:

Well it’s a big workload, outside of the Prime Ministership itself, it’s

the biggest workload in the Government and particularly doing the financials

and Budgets. Budgets are incredible. In fact, we just enacted the Budget

Bills last night in the Senate and in about four months we’ll start working

up next year’s Budget again.

LOANE:

Hmm. I wanted to ask you about the media laws, too, just before the headline

news, you must be very disappointed, are you, that they didn’t get through

or were they flawed from the start?

TREASURER:

Oh look, obviously I would have liked them to have gone through, but

with the current composition of the Senate, and the Government doesn’t

have a majority in the Senate, it’s no surprise that another piece of

legislation has been defeated, there have been quite a few.

LOANE:

Are these going to line up, I think they’re stacking up now?

TREASURER:

There’s a lot of them.

LOANE:

Double dissolution next year?

TREASURER:

I’m not speculating on a double dissolution but take my own area, I am

still trying to get enacted measures that I announced not in this May’s

Budget but in the preceding May’s Budget – not in May 2003, May 2002.

LOANE:

Well, you’re a patient man?

TREASURER:

Well, please Senators don’t try my patience anymore. For the sake of

the public, we’ve got to bring finality to some of these things. We bring

down a Budget, we say what we’re going to do, the whole of society moves

in accordance with the Budget and then 18 months later we still haven’t

got laws to back it up and I get so frustrated, and I think people that

are dealing with the tax system get frustrated by this, too.

LOANE:

Can I ask you about the ATO, it’s about to unleash this flying squad

of investigators into the black economy? Now when we were doing all these

GST stories a couple of years ago, the word was the GST is going to reduce

tax fraud, it’s going to reduce the black economy – that hasn’t been

the case, has it?

TREASURER:

No, it has and there are various estimates as to how much of the black

economy was brought in, generally we think probably two, three billion

dollars-

LOANE:

But there’s more out there obviously?

TREASURER:

But we think there is now more out there and in the early phase of GST,

the idea was to get people educated to work the system. The GST turns

three on Tuesday, it’s been in place for three years, so we think there’s

been enough time for people to be educated and…

LOANE:

They’ve worked out those BAS forms?

TREASURER:

…and we’re now going to step up the enforcement and look, it’s paid

great results. Let me give you one of the great results that it paid

here in Sydney. When you had to get a GST number, barristers found that

the solicitors wouldn’t deal with them without GST numbers and some of

these barristers had never had tax file numbers.

LOANE:

Did that warm the cockles of your heart?

TREASURER:

Absolutely. And it transpired that there were people who had not been

paying tax for a very long period of time and they were flushed out by

the GST and some of them have now been bankrupted and cleaned up. But

if you hadn’t put in place these mechanisms, they’d have gone on as they

were going on for the last 10 or 15 years. And what it’s given us, it’s

given us a series of tools, the Tax Office can now go back and look

for black economy, not just in GST, but in income tax as well.

LOANE:

Just finally, Peter Costello, that day after John Howard announced that

he would be staying on as Prime Minister, it was a different Peter Costello

we saw; it was somebody who had their heart on their sleeve, you wore

your disappointment out there, we could see it. Do you regret that or

not?

TREASURER:

No. Look–

LOANE:

There wasn’t ill discipline on your part?

TREASURER:

Oh no. No. Look, I thought it was the right thing to do to call an all-in

press conference and I stood there for an hour and I took questions from

every journalist in the country and I tried to answer them as honestly

as I could. And I don’t regret that for a moment. And you know, the next

day, I got up and I returned to doing what I’ve been doing for the last

seven years. The National Accounts were out, we picked up the pace in

relation to economic reform and we’ve been going flat-out ever since.

But I don’t think it’s a- some people say, oh it’s a mistake to be honest

about your feelings or your aspirations, I don’t agree with that.

LOANE:

Peter Costello. Thanks for your time.

TREASURER:

Thanks very much.