OECD Report, economy, bulk billing, Reserve Bank, Reserve Bank Governor

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OECD Survey of the Australian Economy
March 3, 2003
December Quarter National Accounts; OECD Report; drought; bulk billing; leadership
March 5, 2003
OECD Survey of the Australian Economy
March 3, 2003
December Quarter National Accounts; OECD Report; drought; bulk billing; leadership
March 5, 2003

OECD Report, economy, bulk billing, Reserve Bank, Reserve Bank Governor




Doorstop Interview

Tuesday, 4 March 2003

8.25 am


SUBJECTS: OECD Report, economy, bulk billing, Reserve Bank, Reserve Bank



Well overnight the OECD, which is an organisation based in Paris, and which

looks at the economies of the developed world, released its report. The OECD

says that Australia is better placed than nearly all of the other countries

of the world to withstand international downturns. And that the Government’s

commitment to reform and the building of constituencies for reform is very important

to making sure that Australia remains amongst the front row of the developed

economies of the world. And it is important that we continue the business of

economic reform to strengthen Australia at a time of international difficulty.

The reforms that we announced in last year’s Budget, which the Senate still

refuses to pass, our welfare reforms, our reforms to Pharmaceutical Benefits

Schemes, these are the things that are important for Australia’s future. And

as the OECD has noticed it is the reforms that we have been putting in place

over the years that have strengthened Australia and made it one of the leading

economies of the world. Those reforms must continue.


Are you prepared to go to a double dissolution election to get those reforms



Look, we are arguing our case as the elected Government to implement the reforms

which are important for Australia’s future.

Now, those reforms have been put to the Senate, they have not yet been, some

of them have not been voted on, and they have not yet been rejected twice. So

we call on the Senate to pass those reforms. The Labor Party can look at the

OECD Report. What it says is that the Government’s willingness to try and use

solutions and its commitment to economic reform has made Australia one of the

leading economies of the world. If we want to stay there we have to continue

the process.


Isn’t it curious though that the OECD Report doesn’t reflect yesterday’s results?


Yesterday’s results in relation to exports were as a result, principally, of

drought which, and I think the Australian public has been well aware of, in

fact the world has been well aware of for a while. The effects of drought will

continue to be felt in relation to exports, probably for at least another two

quarters. In relation to imports, what yesterday’s figures show is that the

Australian economy continues to run stronger than the other economies of the

world. That is why we have capital imports, particularly in the aviation sector

because the company that imports them, Qantas, is one of the most profitable

airlines, and other businesses are importing capital equipment which will provide

income for years to come.


Won’t the Current Account Deficit strip growth when the figures are released



The net export position feeds into the growth figures, along with employment,

incomes, consumption, it feeds in all of those things and you get a growth outcome.

Now, the Australian economy has continued growing now for the last 7 years,

but the other economies of the world haven’t. We avoided recession, America

had recession, Japan had recession, France and Germany have been sluggish and

stopped growing, but Australia continues to grow. And it continues to grow and

it continues to grow because when you take all of those things into account,

consumption, when you take into account the 1.25 million new jobs, rising incomes,

and you allow for exports, it continues to grow.


So the Reserve Bank today should just be maintaining a neutral position?


I never advise the Reserve Bank.


Mr Costello, does the Government have any intention of excluding high income

earners from access to bulk billing?


The Government’s view on bulk billing is that bulk billing is important for

people who are on pensions or who are on low income. But bulk billing was never,

and was never intended to be, universal to everybody including those on high

incomes. So we think it is important to ensure that people on low incomes continue

to have access but we have not argued, the Labor Party has never argued, the

founders of Medicare have never argued that it needs to be universal, a 100



Are you saying that average Australian families should not have access to bulk



No. I am saying that bulk billing should be made available for those that are

on pensions, low income earners, and that’s the focus of the Government’s attention

to ensure that they continue to have access.






Will you be making an announcement on bulk billing in the Budget?


Not necessarily, no.


Has the Reserve Bank Governor indicated to you whether he wants another term

when his first term expires in September?


I don’t discuss my conversations with the Reserve Bank Governor.


How would you assess his performance?


I think the Reserve Bank Governor has performed very well. He has been part

of the arrangements which we put in place in 1996. He and I entered into an

agreement to target inflation. I think the Bank has focussed itself on that.

We have had very good outcomes in relation to inflation and I think he has discharged

his duties very, very admirably.