TRANSCRIPT
of
THE HON PETER COSTELLO MP
Treasurer

Doorstop
Tuesday, 19 February 2002
7.30pm

 

SUBJECTS: Ramsay Report; fiscal position; defence photos; Governor-General.

JOURNALIST:

Treasurer, on the auditors, just on the Ramsay Report, are there any aspects

of it that you are a little bit uncomfortable with, for example your Parliamentary

Secretary said he is not too keen on the panel? (Inaudible)…

TREASURER:

Well, I am not going to get into ruling bits in or ruling bits out. It is a

valuable report and we will look at it carefully but I think that there are

now even bigger issues coming down the track, particularly in the light of Enron.

The movement that numbers of the big accounting firms are now making to separate

out consulting work from accounting and audit. It is going to be very important

to see how far that goes, you know Paul Volker has been appointed to look at

Arthur Andersen on this point. And, of course, if the big 5 are affected by

these rules in the United States that will have worldwide implications. Here

in Australia we have the HIH Royal Commission which is going to look pretty

fairly and squarely at the role of auditors in relation to that company collapse.

We will have a look at the recommendations that come out of that and we will

take Ramsay, we will take developments in the SEC and we will take the Royal

Commission into HIH and we will announce a comprehensive response to all of

these issues.

JOURNALIST:

Treasurer, the Appropriations Bill which was introduced into the Parliament

last week to allocate an extra, about $430 million to Defence and Immigration.

Are you still expecting to record a surplus in the Budget, the underlying, underlying

surplus this fiscal year?

TREASURER:

Well, there were increases in two particular areas, you are quite right. Defence,

from memory was around $350, I can’t recall, something like $350 million. The

additional expenditures in relation to immigration was about $85 million, from

memory. And, as you would expect, Australia’s commitment in Afghanistan which

we are going to fund properly and we are going to enforce our policy in relation

to unauthorised boat arrivals. Off-setting that are under-spends, there will

be under-spends in numbers of departments and of course revenues which are still

being collected, so we think our Budget strategy is pretty much on track…

JOURNALIST:

So you still (inaudible) a surplus at this stage?

TREASURER:

…and our Budget strategy is pretty much on track and I will be announcing

our position for 2002-03 in the May Budget which we are now starting to prepare.

JOURNALIST:

Do you think you are still going to be able to make the superannuation promises

come through that you had offered in the lead up to the election, are you going

to have the money still to deliver on the super promises?

TREASURER:

Yes. We will be delivering on our superannuation proposals, including assistance

for younger people to have superannuation made in their name or spouses to have

superannuation contributions and a reduction in the surcharge, as I said tonight.

JOURNALIST:

What sort of money are you looking at in terms of the election promises that

will kick in, in sort of, (inaudible) this financial year and that you haven’t

necessarily detailed?

TREASURER:

Well, we detailed all of our expenses, they were very moderate. Very, very

moderate indeed. You recall that the Labor Party proposed much greater spending

during the election campaign. We had very moderate policies, particularly in

the current financial year, and in the next one. The reason we did that was,

as I have always made clear, the Government wants to run a strong fiscal strategy.

So we had very, very modest, they were all costed. We are still waiting for

the Labor Party, incidentally, to put its policies in so we can cost them. It

has not done so yet.

JOURNALIST:

Treasurer, do you still expect to get the proceeds from the sale of Sydney

Airport this fiscal year?

TREASURER:

I am not quite sure what we have got it in, but whatever we have got it in

we are expecting it to go ahead.

JOURNALIST:

You made comments during the election campaign about the children overboard

incident. Are you concerned about the quality of advice, the doubts, that weren’t

acted on, that the public servants didn’t report to Ministers like yourself

that there were doubts about this information?

TREASURER:

Well, the public servants were not responsible for reporting to me, let’s make

this clear. The reports were coming from Defence, principally Defence, and they

were being shared with other departments, like Prime Minister’s and Immigration.

The fact of the matter is, and I think we have been over this in Question Time

ad nauseam, that written advice was tended to the Prime Minister and to the

Government that people had thrown children overboard. And that written advice

was never contradicted to the Ministers. Now, they relied on the written advice,

yes they did, and they were entitled to rely on the written advice. If it had

been rendered to me I would have relied on it. It was not rendered to me because

the Treasury Department does not advise on these things, but if it had have

been, I would have relied on it.

JOURNALIST:

But they relied on verbal advice to get the whole issue running though, didn’t

they? They didn’t rely on written advice then?

TREASURER:

Well, the information came through. It was passed to the Minister and that

was confirmed in writing and quite honestly, with all due respect, you don’t

expect all of these Ministers, after they have got formal advice to, sort of,

ring down the chain and check it at every point down the chain. They rely on

the written advice which was tendered to them. And they were perfectly entitled

to rely on it.

JOURNALIST:

Treasurer, does your definition of strong fiscal strategy rule out deficits?

TREASURER:

My definition of strong fiscal strategy is a fiscal strategy that is strong…

JOURNALIST:

Does it rule out deficits?

TREASURER:

…and good.

JOURNALIST:

(inaudible)…the Governor-General’s position, given the defences he used for

someone who had sex with a young girl?

TREASURER:

Look, nobody in a position of responsibility would condone the use of a position

of authority for sexual favours. And I certainly would not, I think it would

be a terrible thing. And all parents would feel that way, that a person in authority

should not misuse that authority, in relation to a young person for a sexual

favour and I condemn it absolutely. And I know that the Governor-General is

going to prepare a response to all of these allegations and I think we should

just sit and wait for his response. And it is up to him, the ball is in his

court. Last question.

JOURNALIST:

Treasurer, a $500 million surplus, is that still in the ball park for you this

year?

TREASURER:

Well as I said earlier, we do not give a minute by minute, blow by blow description

of the Budget because, aside from anything else, when you are putting together

a Budget you have got to make large assumptions about your programs and your

revenues and it doesn’t change second by second, or minute by minute. But we

have run a disciplined and strong fiscal position. And we are expecting an outcome

which is consistent with our fiscal strategy and I will be reporting on that

at the time of the Budget.

JOURNALIST:

Are you expecting larger tax revenues?

TREASURER:

Well, as I say I can’t give you a minute by minute blow. You know, I can’t

say our expectation today is this, and tomorrow it is the next, and the day

after it is (inaudible). You do not have that kind of precision. It is not like

you sit down with a calculator and these collections are flashing up in front

of your eyes. You know, on a minute by minute, hour by hour basis. You sit down,

we are now, what, February, and you try to gauge what will come in between now

and the 30^th June. And you won’t even know it until, we don’t even

know until 3 months after the 30^th June what came in, so…

JOURNALIST:

But you get the monthly financial statements?

TREASURER:

..but the monthly financial statements are notoriously lumpy, everybody knows

that. You can not work anything off the monthly financial statements. Let me

give you one example. There will be very large tax collections in the month

of February. So you can’t, you know, because we gave a whole lot of people a

grace period until February, so you can’t go back and look at December and January

and say that is six-twelths or seven-twelths or… All I am saying to you is

you can’t do it like that, we don’t do it like that, that we run a strong fiscal

policy. So thank you all very much for your time.