Shell/Woodside, Mitubishi Tariffs, Peter Nugent

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Foreign Investment Proposal – Shell Australia Investments Limited’€™s (Shell)
April 23, 2001
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April 26, 2001
Foreign Investment Proposal – Shell Australia Investments Limited’€™s (Shell)
April 23, 2001
IMF Predicts Favourable Economic Prospects for Australia
April 26, 2001

Shell/Woodside, Mitubishi Tariffs, Peter Nugent

Transcript No. 2001/042



Hon Peter Costello MP


Interview with Jeremy Cordeaux, Radio 5DN

Tuesday, 24 April 2001


SUBJECTS: Shell/Woodside, Mitubishi Tariffs, Peter Nugent


Shells hopes of a Woodside takeover were dashed yesterday when the Federal

Treasurer, Peter Costello rejected their $10 billion bid. A lot of money, $10

billion. The Treasurer said that it was the hardest decision hes ever had

to make and he defends his action as being in the national interest. Treasurer,

good morning. Can you hear me Sir?


I can hear you. Good morning.


Well, you made the papers today.


Well it was a hard decision. It was a very complicated deal. It had people

on different sides, the companies of course had different views. At the end

of the day it was my responsibility to decide whether this was in the national

interest and I took the view that Australias national interest lies in exploiting

the North West Shelf resource, Australias largest energy resource, to the

full and making sure that when we market the resources in Asian countries,

every opportunity is given for those exports to triumph over competing exports

from other fields.


Well just for the record, Treasurer, I think you did exactly the right thing.

But people are going to say that youve done not only the thing in the national

interest but youve done the thing in the political interest as well.


Well, theres a statute here, Jeremy, and its a Foreign Acquisitions and Takeovers

Act and it says a bid can be rejected if its not in the national interest.

And there have been court cases on this and the law is that youre only allowed

to consider the national interest which is what I did. It was hard. Somebody

had to make the decision at the end of the day. I spent a lot of time on this.

I went through it in great detail and I came to the conclusion that Australias

national interest lies in having an operator on our largest energy resource

who is going to be developing it to the full and maximising our export income.


I think the thing that people forget is that the criticism that we all throw

at politicians is that they think about Budgets from one year to the next.

(inaudible) the current political term which is 3 years or in the best case

4 years. You really, I mean the statesman-like thing is to think 10, 20, 30

years out. Thats the whole point. Thats whats in the national interest.


Well this is Australias largest energy resource and we hope it can become

one of Australias largest if not the largest export earner. If we can market

liquid natural gas out of the North West Shelf into China and Japan and Korea,

it would be a fantastic export earner for Australia. The North West Shelf is

going to be there in 10, 20 and 30 years. Its going to be there long after

Ive left the political stage. And I had to make a decision as to what would

be in the best interest in 10 and 20 and 30 years. Thats the way I approached

it. I wasnt looking at this as to what would be in the best interest in the

next 5 minutes or the next 50 minutes but what would be in our interest for

decades to come and thats why I came to the conclusion I did. You, some people

say youre right, some people say youre wrong. At the end of the day someone

had to make the decision and it was me.


You know, you say that it is in the national interest. Being the Treasurer,

youre going to get decisions like this to make all the time. I guess the next

one on the horizon is going to be Mitsubishi saying to you about tariffs and

protection, otherwise if you dont increase tariffs or at least hold tariffs

theyll pull out of Adelaide. You are going to get that sort of decision to

make as well. What might you decide if that was put in front of you?


Well Id say two things on the car industry, Jeremy. The first is, we have

slashed taxes on cars. There used to be a 22 per cent wholesale sales tax on

cars and now theres a 10 per cent GST. And the car makers have been at the

Government for years to slash taxes on cars, to help sales. And we have. And

thats been very positive for Mitsubishi and others. The second thing Id say

is weve slashed taxes on the export of cars. There is no tax on the export

of cars now. There used to be under the wholesale sales tax system but there

is now no tax and the slashing of the tax on the export of cars has been better

for the car industry than any of these tariff decisions. So I think weve gone

an enormous way in rearranging the tax system to help motor car manufacturers.


But you know theyre going to want tariff protection. Thats the thing that

theyre going to want as a gift if you like to stay in Australia.


Well, look any company is entitled to put its case to us. And we give them

a fair hearing. But Id make this point, the tariff arrangements have, the

motor car manufacturers asked for certainty and the tariff arrangements were

put in place for 2005, 2010, years ago, so everybodys been on notice. But

what the Government has done which has never been done before and is of enormous

benefit to the car industry is that weve slashed the tax both for domestic

and weve abolished all tax for export of Australian cars. And frankly Jeremy

the value of that is much greater than any tariff.


Peter I know youve got to run, but just quickly, the $25,000 compensation

for ex POWs, will that in fact be given to the, lets say the POW has died,

will that go to his next of kin or her next of kin?


Jeremy, Im not handling that matter. Rather than give you information which

may not be entirely accurate I think its probably better to leave that to

the relevant Minister.


All right, well well pursue it. We did have a question on it earlier on the

day. And Im terribly sorry to see Peter Nugent died of a heart attack.




Very young, 63 I think.


Yeah, Peter Nugent was Federal Liberal MP in Aston, in Melbourne. He died of

a massive heart attack. This was a terrible a shock to all of us. He was a

friend of mine. A colleague of mine. We came into the Parliament together in

1990. Our heart goes out to his widow Carol and their family. Our thoughts

are very much with them at this time.


And on a housekeeping front, youll have a by-election to fight in that seat.


Probably will but now is not the time to think about it. Its been a terrible

shock for all of us.


Peter Costello, thank you very much for your time. I know how busy you are.


Thank you.