Interview with John Laws

2UE

Thursday, 2 March 2006

9.20 am

 

SUBJECTS: Press Club speech, work/family balance, energy, housing, GST

LAWS:

Treasurer Good morning.

TREASURER:

Good morning John, good to be with you.

LAWS:

Good to talk to you. You were very funny at the Press Club thing, you have

got a very nice sense of humour.

TREASURER:

Well, you have got to enjoy life, don’t you John.

LAWS:

You bet, you certainly do.

TREASURER:

If you don’t have a joke with yourself you won’t get through the

day but anyway, look, I enjoy mixing it with journalists, they come down and

they ask their trickiest questions and sometimes you are able to hit them over

the fence and sometimes you have just got to block them. Sometimes they take

your wicket.

LAWS:

Well, rarely in your case I think.

TREASURER:

Well, you have got to get up early in the morning to beat these journalists,

John.

LAWS:

Why, do you?

TREASURER:

They are tricky people.

LAWS:

But you are fond of them, aren’t you?

TREASURER:

I love them all.

LAWS:

You really seem to have gone on the front foot in recent times as Steve Lewis

said on The Australian front page today, you have spoken out on multiculturalism,

you spoke your mind on that RU486 and now you are promising to do more for the

ladies to make Australia the most female friendly country in the world, what,

can you tell me what you mean by that?

TREASURER:

I would like to see a situation where women are able to pursue their careers,

their interests to the maximum extent where they don’t meet any barriers,

where we are able to harness the skills and the talents of the women of Australia

and I think it will make Australia a stronger place.

LAWS:

Do you think they have barriers put in front of them now?

TREASURER:

I think we are probably one of the best countries in the world, I think if

you look around the world there wouldn’t be that many where women’s

opportunity is as great as Australia but I still don’t think it is as

good as it could be. I think there are areas where we could make particularly

the work and family balance better.

LAWS:

Is that what you call a pressing issue?

TREASURER:

I think so, I think if you spoke to many women today, particularly mothers

that are looking after children they feel as if they are pressured, particularly

if they have got a part-time job – a lot of them do have part-time jobs

now – and I think they would say that if things could be done to make

things easier then I think they would welcome it.

LAWS:

What are the other issues that you think are very pressing for Australia at

this time?

TREASURER:

I think John, we still haven’t got our export regulation right, we are

in the middle of a big minerals boom, our ports are not coping with the way

in which they could be handling exports, there is too much State-based regulation

– I think that is a big problem for Australia – I think we need

national markets and electricity and gas and I have this idea of an energy freeway,

an energy freeway from Australia and other producing nations in east Asia to

the big consumer markets of Korea and China. If we can get our domestic markets

right we can become a global supplier and that will place us well for 10, 20,

30 years.

LAWS:

You have also warned that we face slower economic growth because of weak consumer

spending and the housing slowdown but the word I am hearing now is the housing

slowdown has slowed down is starting to come up again.

TREASURER:

Yes, it has been slowing really for some time, I would say a year, maybe two.

LAWS:

Yes.

TREASURER:

And that is a welcome thing, John, I think house prices got too high and as

a consequence of that you would expect a correction and we are getting a correction

and I want to see a correction. And once you have that correction then what

you would like to see is stable prices maybe small increments, but I don’t

want to go back to the situation where house prices were booming in the way

they were a couple of years ago – that is not good for an economy –

remember this point, the bigger the boom the bigger the bust.

LAWS:

That’s it.

TREASURER:

It always happens that way and so the reason we are against booms is we are

against busts and you try and take a little bit of air out of the balloon before

the balloon pops on you.

LAWS:

Why won’t you change the Grants Commission formula which determines how

the GST is divided up?

TREASURER:

Because I don’t set it.

LAWS:

But you can have it altered, can’t you?

TREASURER:

No, the formula is set by an agreement between the States.

LAWS:

Why is it that…

TREASURER:

They have agreed to this. This is a very important point here John, they have

agreed to this formula and given the role to an independent umpire. Now, in

every State in Australia today John, there is some State Treasurer complaining

that it is unfair to him. New South Wales are complaining, in WA they are complaining,

in Victoria they are complaining – every one of them has got a reason

why it is unfair to him – and the best way of handling this and it has

been going on now for 70 years, is to have an independent umpire and they can

set the formula between themselves – which they did.

LAWS:

But we are left with a situation now, you are telling me really that 50 per

cent are unhappy, 50 per cent of…

TREASURER:

No, I would say 100 per cent are unhappy.

LAWS:

Well, if 100 per cent are unhappy why don’t they use their noggins and

ask the independent arbiter to alter the situation. I mean if we are left with

a situation where New South Wales is going backwards and at the same time we

are subsidising other states it is a bit wrong.

TREASURER:

But it is not going backwards because of this.

LAWS:

No, well they were…

TREASURER:

It is going backwards because of the economic management of the State government.

LAWS:

…or the lack of.

TREASURER:

And this system by the way, it is not a new system this has been going well

basically since Federation. What happened at Federation was the big States agreed

– the big States of New South Wales and Victoria – that they would

come into the Federation, the consequence of that was that there would be a

sharing of revenue across the nation with all of the other colonies, this has

been going on for 100 years. Now, what has happened of course is that New South

Wales is now in financial trouble, they were warned about this, they were warned

not to rely on the property cycle, the property cycle turns down, they got into

trouble. So guess what the problem is? The problem is a formula and a system

that has been going on for 100 years.

LAWS:

Yes, but…

TREASURER:

(inaudible) politics, I mean…

LAWS:

… 100 years is a long time ago, I mean we are talking about something

that was designed 100 years ago, that is a bit old now.

TREASURER:

Well the sharing between the States in a Federation was designed 100 years

ago this happens in every federal system.

LAWS:

2 per cent growth in New South Wales compared to Queensland and Western Australia

with about 10.4 per cent and yet you are going to want to take money from New

South Wales. Should you be looking after them?

TREASURER:

What happens was that the Grants Commission, the independent umpire…

LAWS:

Yes.

TREASURER:

…said because royalties were strong in Queensland and Western Australia

they were taking some money off them, they redistributed it to New South Wales

and Victoria, New South Wales and Victoria have said they didn’t take

enough off and in Queensland and WA they are crying blue murder because they

were stripped of money. That is what is happening today. Now, you know, you

want me to you know, try and solve all of their problems…

LAWS:

No, no, no.

TREASURER:

…I think the best thing to do – and this is what the Federal Government

has done since the Grants Commission was established – appoint an independent

umpire, the States agree on the formula and if they can’t agree amongst

themselves they go off to this arbiter.

LAWS:

Well shouldn’t you be encouraging that at the moment?

TREASURER:

Yes, I do. I said yesterday, if you don’t like the formula go back and

get between yourselves and negotiate a better one.

LAWS:

Can’t you change the formula?

TREASURER:

No, this is a formula they have agreed between themselves.

LAWS:

Yes, but you can’t change that, that is beyond your powers?

TREASURER:

Well I am not going to, no, I didn’t set it, they agreed between themselves

and imagine if I walked in and I said well you see this formula you have all

agreed, I am changing it. And they would all turn on me.

LAWS:

But you can handle that.

TREASURER:

I can handle most things but you know, John, you know, here are we, we are

trying to run a national economy, we are trying to keep people in jobs, we are

trying to deal with world wide oil prices, I am going to focus on those things

rather than arguments between the States which has been going on for 100 years

and a lot of this John is just done for domestic political consumption, and

if New South Wales complain of unfairness it will always get a good run in New

South Wales, if WA complain of unfairness it will always get a good run in WA,

if Queensland complain of unfairness will always get a good run in Queensland

and that has been going on for 100 years, you know, the game doesn’t change.

The important thing I think is that we focus on the important things.

LAWS:

Okay, it is good to talk to you and again congratulations on the National Press

Club thing, I thought it was terrific…

TREASURER:

Thank you very much.

LAWS:

…and I think you did a whole lot of good for yourself.

TREASURER:

Thanks very much John, I appreciate it very much.

LAWS:

Nice to talk to you Peter.

TREASURER:

Okay, bye.