Doorstop Interview

Captain Cook Drive, Cronulla

Friday, 21 April 2006
10.10 am

SUBJECTS: Shark Park, debt free day, global warming, oil, Solomon Islands

TREASURER:

The Australian Government will be providing $9.6 million to upgrade Toyota Park, the home of the Cronulla Sharks. I want to pay tribute top Bruce Baird, the local Member who has been instrumental in lobbying for this and to also thank Barry Pearce, the President of the Club who has been on my case for quite some time in relation to this.

In order for the stadium to be complying with disability requirements and with building controls, it needs a huge upgrade to make sure that it is a complying stadium which can cater for not only the rugby league fans but also for local schools and community groups who use this important facility. The $9.6 million will deliver an equitable access facility, improve security, do environmental improvements particularly on the other side of the ET Stand and it will make community improvements which will make this a much better stadium, much better for the fans of the Cronulla Sharks and visiting fans but also importantly for the community here in the Sutherland Shire that is terribly proud of the Cronulla Sharks and terribly proud of this facility. So I am pleased to be able to stand here today and to announce an Australian Government contribution of $9.6 million, the club itself will be putting in some additional finance about $800,000 this will make a state of the art facility complying with building requirements and disability access, it will be an important contribution for the people of the Sutherland Shire and a great community facility.

So congratulations to the Cronulla Sharks, to their President and to the local Member, Bruce Baird who is here with me today.

JOURNALIST:

Mr Costello, is the fact that you have got the country completely out of debt now make you more able to make grants like this?

TREASURER:

Well, it is another important day today, today is ‘Debt Free Day’, it is the day on which the Australian Government will eliminate its debt. We started off in 1996 with a debt of $96 billion, we have been servicing that debt, paying the interest costs and we have been repaying it and today we eliminate the last of the $96 billion debt of the Australian Government. And that will take the debt monkey off the back of Australian taxpayers. Our saving in interest alone is now about $8 billion a year and that means that we can free up that $8 billion for more important investments health, education and it also means that after we have attended to important spending we can work on reducing tax burdens.

JOURNALIST:

Mr Costello, how many games do you expect you will get to at the Cronulla Sharks?

TREASURER:

I hope I can get to some over the course of the year. I was down here last year and I hope I can come back this year and see some games. I think I brought the club a bit of luck last year

PEARCE:

Yes, we beat the Roosters.

TREASURER:

we beat the Roosters that night and you know, without being critical, they may need a bit more luck this year.

JOURNALIST:

Just on another issues, Gordon Brown has made a speech overnight to the UN about climate change and he said if it is not addressed it could have economic consequences. Do you believe in climate change and do you think it could have economic consequences for Australia?

TREASURER:

I think there is irrefutable evidence that the globe is warming, I think that has been proven, and what it means is that we have to address the challenges. And of course the challenges will not only affect the environment but the economy as well. I would make this point though. It is not enough just for the developed countries to address emissions, the huge increase in emissions around the globe are going to start coming out of countries like China and India and even if Australia cut all of its emissions, the economic growth in China within about a year as I understand it would totally replace all of those emissions. So we have got to bring the developing world into this project and of course that is what our partnership is all about the Pacific Partnership to bring in countries like China and India into the response to global warming.

JOURNALIST:

With government debt now paid off is it time for tax cuts?

TREASURER:

Look, the great thing is having paid off $96 billion of debt we now have interest savings, because we had to pay interest on that debt of $8 billion per annum. Now, some of that money has gone into improved health services and improved education services, some of it has gone into reducing taxes and if we can invest in the kind of services that Australian’s need and want, if we can balance our budget we ought to continue to work to reduce the tax burden.

JOURNALIST:

I suppose this news comes as Australia’s foreign debt hits $500 billion, does Australia face a foreign debt crisis at the moment?

TREASURER:

Well, you see the taxpayer doesn’t owe a dollar of foreign debt because the taxpayer doesn’t owe a dollar of government debt. The Government doesn’t owe a dollar of foreign debt because the Government doesn’t owe a dollar of debt. Private institutions, particularly Australian banks borrow overseas, they then on-lend that money back into Australia. Now they have to watch their balance sheets but I can assure you of this and I think you will agree with me, Australian banks are enormously profitable. There is no problem at all with the level of borrowings of Australian banks and we monitor these things, there is no problem at all. So when you are talking about borrowing overseas you are principally talking about Australian banks, maybe big Australian corporates but you are not talking about the Government and you are not talking about the Australian taxpayer.

JOURNALIST:

Macquarie Bank’s Chief Economist says the Australian economy would be better off if the Government used debt to invest in more infrastructure for future generations, why can’t (inaudible)?

TREASURER:

Well the Government does invest in infrastructure. We have the largest investment ever in road, the Commonwealth is now as part of its Auslink programme investing in rail. Our investment in health is greater than it has ever been before, and our investment in education is greater than it has ever been before. So you are going to ask me, how can you increase all of this investment and pay off debt, well that is what economic management is all about. And look at today, we are even investing in community facilities like Toyota Park.

JOURNALIST:

But you don’t want to use debt as a tool to invest in the future of the country?

TREASURER:

Well, we are investing in the future of the country and we are doing it in a way which is containing borrowings, reducing interest and promoting economic growth and that is an even better way to do it.

JOURNALIST:

(inaudible) the Prime Minister said this morning on the radio that he believes the escalating fuel price, oil price, will lead to an increase in the cost of everything. Do you have concerns that that might exceed our inflation target and feed into interest rate rises?

TREASURER:

Look, there is no doubt that increased oil price which is punishing people at the bowser at the moment will push up the Consumer Price Index, there is no doubt about that because a big part of the Consumer Price Index is the petrol price. What we want to guard against is the second round effects where people take that increased petrol price and then start putting up the price of other things as well. And if that occurred then inflation would begin to take off. That is what we don’t want in Australia and that is why we have to be very, very vigilant. The petrol price is causing pain to Australian families, I know that because it takes so much to fill up the tank but it would get even worse if we had those second round effects and that is what we have got to guard against. Last question.

JOURNALIST:

Mr Costello, what is the cost to the Budget next month of sending the extra troops and police to the Solomons?

TREASURER:

Look, it depends of course on how long they are there but we have already factored into the Budget costs for RAMSI, they will be a little bit more given this deployment but easily handleable, if there is such a word, handleable.

JOURNALIST:

Why should taxpayers pay for the Shark’s good fortunes?

TREASURER:

Look, this is an important investment for the community, let’s make that clear the Sutherland Shire as a whole it is not just the Cronulla Sharks that use this facility, it is the people that support them, it is the schools that play here, it is the community groups and there have been some other clubs that have received financial assistance with facilities and even some down this part of the world so I think it is only fair that the Cronulla Sharks also receive some assistance. Thank you very much.