Doorstop Interview

Wednesday, 13 July 2005
8.50 am

SUBJECTS: Shepparton Issues, Roads, Economic Management, Water, Industrial Relations, Supermarkets, Afghanistan

TREASURER:

Well it has been a great opportunity for me to visit Shepparton, to spend the night here, to support Sharman Stone who is doing a fabulous job as the Member of Parliament and to meet a wide range of people from industry in the area including fruit growers, vegetable growers, manufacturers and to discuss political issues here. I am also very pleased to see that there has been a bit of rain because I know the area has been in drought. I hope it rains much more substantially over the coming months. The Commonwealth Government has provided drought assistance of around $60 million to people in this particular area to see them through these difficult times. We know that showers won’t end the drought but we hope that over the months that are to come that we will see substantial rainfalls. This is an important area for Australia’s economy, it is the food bowl of Australia and I am very conscious of the great economic contribution that it makes.

JOURNALIST:

It would also have been pointed out to you Mr Costello, the link between the food bowl and that production and the state of the roads in the region. There was a fair bit of disappointment about only having $15 million re-confirmed for the GV highway duplication.

TREASURER:

Well I am going to drive the highway now back to Melbourne and have a look first hand. It is a national highway as you know and a large part of it has been duplicated. We the Commonwealth take responsibility for national highways. We have a very strong commitment to Goulburn Valley and we will continue to build that within the overall Budget to improve the transport links. I am not putting time limits on it but it is very much top of mind and it is a Commonwealth Government commitment.

JOURNALIST:

The fact remains though that with only $15 million confirmed in this Budget to go on with, the project is likely to come to a complete standstill because once that money runs out

TREASURER:

I don’t think the project will come to a standstill. With all highways all around Australia you build it in sections. You do that for various reasons. One is budgetary of course, the other is that contractors need time to complete particular projects. But we will continue to build this part of the national highway and to ensure that it is a first class road.

JOURNALIST:

But to let contracts out in a series according to Bill Payton who is the project manager, will add up to $3 million to the overall cost of completing the duplication and the Shepp bypass?

TREASURER:

Well as I say, the Commonwealth is committed to the development of this as national highway. The project will be built within budget over a reasonable time period. It is to be done consistent with the objectives of improving transport and I am taking the opportunity to have a look at it on the way back to Melbourne .

JOURNALIST:

Are you in some ways a victim of your own success in the perception throughout Australia and certainly the Goulburn Valley, that we keep being told that the Government is in a good financial state, we have got plenty of money, we are paying off debt but there is an expectation then that there should be a bit of money for the Goulburn Valley and the Calder highway?

TREASURER:

I don’t think so. Look, I think it is important that we manage Australia’s finances well and at the moment we have got a lot of challenges. We have got the challenge of terrorism – you have seen that in London . We are looking at what Australia can do to strike at terrorist bases in Afghanistan . We have improved domestic security by $4 billion over recent years. We have cut tax on the 1 st of July, we have cut taxes in Australia by $21 billion. So, if you can defend your country, cut your taxes, fund first class health and education and build roads, that is a tall order. But I think we are approaching it in a reasonable and a disciplined way and if we don’t approach it in a reasonable and a disciplined way, people know what the result will be – higher interest rates and nobody wants that for Australia.

JOURNALIST:

Have those people you have spoken to over the last 24 hours given you a fair idea of their vision for development in this region?

TREASURER:

Yes they have. The first thing of course is water. It seems to me as if water is important as any other issue there, for irrigation to sustain the crops which provide the basic primary industry. With the primary industry comes the transport links, with the transport links comes the services and there has been a lot of discussion about water – the National Water Initiative, the way in which we can recycle, the way in which we can improve allocation and I think this is going to be one of the greatest challenges for our country water and no more important area than here in Shepparton and surrounds to deal with the water issue.

JOURNALIST:

Labour is another issue that is constantly raised and the shortage of it, particularly in the fruit harvesting industry. Do you support the concept of importing labour?

TREASURER:

Well I support the harvest trail and I support the concept of people being given visas. I also support opportunities for newly arrived immigrants who maybe don’t have the higher skills to come here to an area where there is actually a shortage of workers more jobs than workers. More jobs than workers in this area. So if you are a worker any where in Australia and you can’t find a job this is a good area to come to. So I certainly support that. But I have also taken the longer perspective to Australia ‘s problems, I think this could be a wider problem in Australia in the years to come, that we will have more jobs than workers as the population ages and that is why we need welfare reform. Welfare reform is a big part of encouraging people to participate in the labour force. This is why it is important for Australians, why I announced it in this years Budget, why we are going to follow it up through the course of the year.

JOURNALIST:

How will the industrial relations reform benefit country businesses?

TREASURER:

Well industrial relations reform means that companies can be more profitable, that they can therefore pay higher wages and they can create more jobs. Let me make this point, you won’t create more jobs in Australia unless your businesses are trading profitably because a company that went broke never created a new job. A company that went broke never created a new job. So, it is important to keep companies profitable if you want new jobs and higher wages and I believe that changing some of the unnecessary complication and highly litigious laws that we have got will give business confidence to create new jobs. New jobs, higher wages, that is what we are on about.

JOURNALIST:

Peter, in relation to the drought, a lot of people are still hurting very, very badly. Are there any other initiatives to help them under consideration?

TREASURER:

Well the initiatives we have are in relation to exceptional circumstances, we pay support for families, that is so that they have an income. We make available business loans with subsidised interest rates. We have softened the assets test in relation to that income so that more people can qualify. We would like to see State Government, frankly, make a better contribution but if they can’t make the contribution we are going to go ahead with our contribution nonetheless. The only thing that will fix the drought long-term let me tell you, is rain. We see people through the hardship but it never fixes it. The only thing that fixes it is rain and with these drops starting to come down on my head, let’s hope we are getting some.

JOURNALIST:

But any other initiatives?

TREASURER:

Well they are the initiatives that we announced as recently as a month ago and they are yet to play out and they will be of advantage to many more people. Let’s get those initiatives in place and let’s make sure we get them out to the people that are affected.

JOURNALIST:

Back to the IR reforms

TREASURER:

Yes.

JOURNALIST:

the unions have staged quite a managed campaign. They are saying workers rights will be eroded. Is this the case?

TREASURER:

Well unions are engaging in a scare campaign against reform, but that doesn’t mean that it is right. In fact it is not. Most of the things that they have said in their scare campaign are wrong. I would say to people that it is very important that we get the facts here which is why the Government is advertising the facts in newspapers. And the facts are these, that if we have better industrial relations, if companies are able to trade profitably, we will get more jobs in Australia and we will get higher wages. But nobody ever got a wage rise from an unprofitable company. You have got to have a productive economy if you want more jobs and higher wages.

JOURNALIST:

Can you guarantee workers won’t be worse off?

TREASURER:

What I can say is this, is that improved industrial relations will mean more jobs and higher sustainable wages, that is what I can say and when those reforms take effect that will be the outcome over the medium and longer term.

JOURNALIST:

You have also spoken to pharmacists about supermarket chains coming into the area. What is the Government doing to address this?

TREASURER:

Well at the moment there are various restrictions on supermarkets being able to sell pharmacy products and they stand. The supermarkets cannot under current rules sell pharmacy products and those rules are not changing.

JOURNALIST:

With polls against you going to Afghanistan with troops, do you think the Government will make the wise decision of sending them or will they take the majority thinking of people which seem to be against these extra troops?

TREASURER:

The point I would make is this, when terrorists strike with bombs, they are able to strike because they have been trained either in how to make bombs or trained in how to plant them or directed by handlers to kill and maim and cause maximum destruction. Catching those terrorists after the event and bringing them to justice is important. Disrupting their training and their supply before the incidents occur is even more important. Terrorists don’t just pop out of think air, they are intensively cultivated by propaganda and training. We know that some of the worst terrorist training is taking place in Afghanistan in Taliban camps and if the Taliban should be able to re-establish camps in Afghanistan then that is a danger to the whole Western World including Australia. That is why if Australia can make a contribution to a functioning democracy in Afghanistan, to maintaining order against would-be Taliban recovery and disarming terrorist camps, that is why it is important to the security of Australians in the long-term, that is what I would say.

JOURNALIST:

And have we got the back-up of security here to protect ourselves if something happens here and they are overseas?

TREASURER:

Well look it is important that we have adequate security plans in Australia. This is something that we discussed in the Cabinet and Security Committee meetings yesterday. We will be making sure that those security plans are in place, that they are quite detailed and that all responsible authorities including state authorities are focused on this and I believe that we do have such plans. Thank you.