TRANSCRIPT
THE HON PETER COSTELLO MP
Treasurer

Interview with Neil Mitchell, 3AW

Thursday, 23 October 2003

SUBJECTS: Presidential Visits, Free Trade Agreements, Dollar

MITCHELL:

Federal Treasurer, Peter Costello good morning.

TREASURER:

Good morning Neil.

MITCHELL:

Now, you will be at the barbecue today, is it BYO? Do I have to take

any tinnies?

TREASURER:

I don’t know. I read in the paper that they have got a menu, but just

in case, you could try. I suspect that your tinnies will be x-rayed though,

Neil.

MITCHELL:

How do you think Australians will react to this visit, react to George

Bush?

TREASURER:

I think that they are interested in seeing President Bush up close. Obviously

he is the President of the world’s most powerful nation, its largest

economy, its greatest military power. So they will be interested to see

him up close, they will be interested in what he has to say, they will

be interested in what the outcomes are for Australia, particularly in

terms of trade and economic linkages. And apart from all that, I think

they will see it as two friends, Australia and America, in a spirit of

openness and honesty exchanging views.

MITCHELL:

Are you concerned there could be a protest in the Parliament during his

speech? I mean they are talking about shouting out at the President.

TREASURER:

My view Neil, is that if they do that it will be totally counterproductive.

I don’t think the public would support it for a moment. And if they do

it they might be playing to the far left of Australian politics, but

I think the general public won’t think much of the Members of Parliament

that try stuff like that.

MITCHELL:

Will you have a private meeting with the President?

TREASURER:

Senior Ministers are having a meeting with him this morning.

MITCHELL:

What do you hope to achieve? What will come out of it?

TREASURER:

Well I will have an exchange on economic issues.

MITCHELL:

And what do you want, what do you want from it?

TREASURER:

We will talk about some of the world economic problems, particularly

the state of the world’s economy and other matters that are effecting

our economy and the world. Of course, you heard the expression that if

America sneezes, the world catches a cold. It is the world’s largest

economy, what happens in America influences the globe, and what influences

the globe affects Australia and so, we will probably be discussing some

of the economic issues.

MITCHELL:

Is there a chance he wants money out of it?

TREASURER:

No, I don’t think the American President would want money out of us.

MITCHELL:

No, (inaudible) discussion they might want more aid in Iraq in particular.

TREASURER:

Oh, well, there is a conference going on at the moment in Madrid, to

pledge money for the reconstruction of Iraq, and Australia will be making

a pledge. But, that is for Iraq, that is not for the United States, the

United States is the world’s largest economy and doesn’t require money

from us.

MITCHELL:

What about the Free Trade discussions, some of the protesters are saying,

well this could cost Australia jobs. Will there be something firm to

come out on trade?’

TREASURER:

Well, we will only be entering into a Free Trade Agreement which is beneficial

for the Australian economy, and which overall, creates jobs. That is

why you enter free trade agreements, because if you can boost trade,

then you boost your economic growth, then you boost your jobs. Now, that

Free Trade Agreement is not going to be signed today. You have negotiators

that negotiate these things Neil, and it is the most complex thing. They

go from subject to subject, they go from agriculture and then they go

into foreign investment, and then they go into thousands of different

issues. That won’t be signed today, but obviously today, what we will

be doing, is, we will be pushing the advantages for Australia of a free-trade

agreement. If you can get free trade into the world’s largest economy,

it is going to be a mighty lot of help for our exporters.

MITCHELL:

We are going to have to give something back, the cultural issue continues

to be raised, that is seen as sort of a non-tariff barrier, Australian

content on television. Will we give ground on that?

TREASURER:

That is one of the issues that we will have to negotiate on. Neil, you

have only got to turn on your television set every night to see that

there is a lot of US content in this country. The question is whether

there should be current restrictions, or whether there could be loosening

of some of those restrictions. That will be negotiated.

MITCHELL:

So, I accept that it is not going to be signed today, but is today an

important step in it…

TREASURER:

Oh, sure.

MITCHELL:

…or is it purely just politics?

TREASURER:

Oh, no, it is an important step, because the free-trade impetus in fact

came from President Bush himself, and there are many lobbies in the United

States that are against a free trade agreement with Australia so, if

the free trade deal is going to happen it is going to be the influence

of President Bush that will push it against those American lobby groups.

MITCHELL:

Who would benefit, in Australia, from the free trade, directly?

TREASURER:

People who currently can’t get their goods and their services into the

United States, either because there are quotas or tariff barriers…

MITCHELL:

Agriculture?

TREASURER:

Agriculture, ships, we build these fantastic catamarans here in Australia.

We can’t get those in to the United States. Cars, some of the Australian

made cars face tariff barriers going into the United States, so, anybody

who has got a current barrier on them going into the United States, if

that were lifted, would benefit.

MITCHELL:

Just to put it in context, you have got the US President here today,

the Chinese President here tomorrow, how important are these couple of

days in Australian history?

TREASURER:

Well, extremely important. You have got the leader of the world’s economically

and military most powerful nation. You have got the leader of the world’s

most populous nation, China, and the world’s most fastest growing economy.

You see, as China comes out of communism – the whole economy of China

was held back by communism – as it comes out of communism, its economy

is starting from the very low base, a billion people but a very low base.

As it opens its markets and moves away from communism, coming off that

base the growth rates, are much higher than they are in developed countries,

because we have already been through that stage of development. But this

is a country which is coming through what has taken in the western world

you know, maybe a hundred years, might be coming through in 20 years.

MITCHELL:

Just finally, the Australian dollar is high, you were warning about that

yesterday, the dangers of it. We are not happy when it is low, we are

not happy when it is high.

TREASURER:

Well, most people would be happy with a high Australian dollar. They

will say to themselves, well isn’t that great, you know, if we go overseas,

the dollar will go further, if we are buying goods from overseas then

they will be cheaper. And I think most Australians feel that a high dollar

is, it bucks up their spirits if you like. But in reality, in economic

terms – that is one side of the equation – the other side of the equation,

it makes it harder for our exporters. The Australian dollar has gone

up 25 per cent this year against the American dollar, and that means

for out exporters, in US dollars terms, they have lost 25 per cent competitiveness.

MITCHELL:

So there are dangers for Australia.

TREASURER:

Well, the difficulty is for our exporters. It is going to make life much

tougher for our exporters and if you make life tougher for our exporters

that will affect economic growth. So, it sounds a funny thing to say

because most Australians would say a high dollar good. The warning I

am giving is high dollar, difficulty for exporters.

MITCHELL:

Well, thanks for coming in, I know it is a very busy day. Have you ever

seen Canberra so tidy?

TREASURER:

Tidy?

MITCHELL:

Clean and tidy?

TREASURER:

Well, look it is generally a pretty tidy place as you know, I have never

seen so many barriers on the streets and I have never seen so many security

guards on those barriers, I think I can say that.

MITCHELL:

What about those fighter jets? Did they keep you awake all night?

TREASURER:

They did actually, they were pretty noisy last night, weren’t they? I

was counting the intervals between them as they went over.

MITCHELL:

What are you going to say to the President?

TREASURER:

We will talk about matters of interest between our two countries.

MITCHELL:

What do you call him, George?

TREASURER:

Well, formally, Mr President.

MITCHELL:

OK, Mr Treasurer, thank you.

TREASURER:

Mr Mitchell, thank you.