TRANSCRIPT OF
THE HON PETER COSTELLO MP
Treasurer

Interview with Madonna King
4BC

Friday, 12 September 2003

4.50 pm

SUBJECTS: Senate Reform, Middle East Visit, Reserve Bank dividend

KING:

Good afternoon Treasurer

TREASURER:

Good afternoon Madonna

KING:

I understand you have spent your lunchtime calling for reform to the

Senate. Why is that so necessary?

TREASURER:

Well, we have laid down a program for some long term reforms in Australia

coming out of our Intergenerational Report that are aiming to get changes

in place for the next 30 and 40 years, changes that will be required

to cope with the ageing of the population which is happening in all…

KING:

What kind of changes are we talking about?

TREASURER:

Changes which will put pharmaceutical benefits on a sustainable financial

basis, that will reform our welfare system and that will lift participation

in the workforce, and these changes, they are for next week or even for

the next fortnight but, they are for twenty, thirty and forty years time.

They have been blocked in the Senate and I think it is about time, that

if we can’t get sensible long term legislation through the Senate, that

we have a look at reforming the Senate as well.

KING:

Okay, in what way?

TREASURER:

One of the things that I put forward today was a proposal that if legislation

has been blocked twice in the Senate, and there is an election and the

Government is returned, that could go straight to a joint sitting of

both houses of Parliament and if there was a majority in a joint sitting,

pass the bills into law. That would allow a Government which is re-elected

to put through legislation that had been blocked by the Senate in a previous

parliament.

KING:

And is this something that is seriously under consideration to try and

get those three things through that you mentioned.

TREASURER:

Well, not just those things of course. They’re the things that are being

blocked at the moment, but if we were to change our Constitution and

improve the way of resolving deadlocks in the Senate then it could apply

to a lot of other legislation as well.

KING:

I can imagine the Senate will be recalcitrant on this too.

TREASURER:

Well, it need not be so.

KING:

But a lot of people will say that the Senate is there as a protection.

You don’t really have a right to reform it in that way and prevent them,

as, you know, as the second tier.

TREASURER:

Well, this is another point that I was making today, that the Senators,

these Senators have enormous power, but who knows them? Who knows who

they are? How are they held accountable for their actions? You know,

I guarantee that if you and I were to sit down now and try and name the

Senators, we would have a lot of trouble doing so. I think the public

would even have even more trouble doing so. They have got this enormous

power, but because they are not hardly known in the public, they don’t

seem to be accountable and I think that is a reason why we should have

a position whereby Government isn’t held to ransom by these unaccountable

Senators, but can manage to keep its legislative program going.

KING:

Would it be better if we didn’t have a Senate at all?

TREASURER:

Well, that is another question. I don’t think you will ever get round

to abolishing the Senate, but what I’m pleading for, is a reform of the

Senate which will make it work much better and be more accountable

KING:

And you’re saying that they are totally unaccountable to voters?

TREASURER:

Well, Senators as you know get elected on – the Opposition Senators who

are blocking legislation are elected on the Labor ticket…

KING:

But this will affect your Senators you know if the tables turn and eventually

you’re in Opposition.

TREASURER:

Sure. Very few people know who they are and yet they can hold a whole

Government to ransom and I think the public, I don’t know that the public

has a mechanism for holding them accountable. It is not as if they are

accountable to electors in a particular electorate. They are elected

on a statewide basis and, you know, it is good to have a house of review.

I’ve said in my speech today that a house of review should look at long

term issues, but it is not good to have people blocking long-term reforms,

turning the house of review into an obstructionst house.

KING:

Okay, on another topic. The Reserve Bank has contributed quite a bit

to the Government’s coffers, I think about two billion over the past

financial year and now that windfall has been broken into two installments,

one this year and one next year. Why is that?

TREASURER:

Well, we have had a policy of smoothing dividends when dividends are

particularly large, rather than take them in one particular year. We

did this some time ago. We have had a policy of smoothing them. There

are a lot of companies that do the same, because otherwise large, bulky

one-off dividends have the effect of artificially bolstering the accounts.

Now we have entered into this policy and tried to set a benchmark and

smooth the dividends for the sake of giving a more accurate picture.

KING:

Can you see how a cynic or even a voter might think that it gives you

a nice little nest egg or a pre-election kitty for next year?

TREASURER:

Well, if we had wanted to, we could have taken full dividends this year.

But I think it’s better policy to smooth it rather than have a huge lump

in one year and a small amount in another year to try and smooth it,

so that it’s a constant in your accounts.

KING:

Okay, I’m interested you are heading off to the Middle East. What do

you hope to achieve in that trip?

TREASURER:

Well, I am going to the meeting of the International Monetary Fund in

Dubai, where I will be representing Australia, but I hope on the way

to be able to call in, in Israel. It is a difficult time there at the

moment, as you know, and things are quite difficult with the outbreak

of terrorism. But I do hope that I can call in and that I can meet some

of the key players. I think…

KING:

As well as the economic issues you are looking at the wider interest

(inaudible) of what is going on there.

TREASURER:

Absolutely. The great issue in the Middle East at the moment, is whether

or not the road map to peace between Israel and Palestinians can be advanced

and I will be hopefully speaking to people about that and seeing whether

or not the road map can be advanced and whether progress can be made.

KING:

Okay, your comments on the Senate and your trip to the Middle East. Is

this part of your stated aim to become more involved in public debate

on issues outside the national economy.

TREASURER:

Well, I think Senate reform is now critical for Australia and, yes, I

am going to engage in that debate. And of course Australia’s economic

position depends a lot on world conditions so…

KING:

But what is your next issue, apart from the national economy. What else

are you going to speak out on?

TREASURER:

Well, look we will deal with these issues before we start new ones. There

is plenty of work to be done I can assure you of that.

KING:

Okay Treasurer Peter Costello, thanks for your time