TRANSCRIPT

THE HON PETER COSTELLO MP

TREASURER

Press Conference

Treasury Place, Melbourne

Tuesday, 31 August 2004

2.00 pm

 

TREASURER:

Well ladies and gentlemen, today Sensis released its survey of small business

conditions in Australia. Sensis is what used to be called the Yellow Pages

Index and according to the Sensis survey which was released today, Australia’s

small and medium enterprises are experiencing the strongest business conditions

in a decade. Christina Singh who released the survey said business confidence

has risen 6 percentage points during the quarter to be at the highest level

since the index commenced 11 years ago. So small business is confident,

and small business is confident because the economy is strong, interest

rates are low, inflation is low and employment is strong.

Now, none of that happened by accident and none of it happened by chance.

The Australian economy is an $800 billion economy. To run an $800 billion

economy it takes management and discipline and the record of the Government

over the last 8 ½ years has been one of management and discipline.

We didn’t get there by chance and it wasn’t a fluke. And Australians have

to think very carefully in this forthcoming election, who are they going

to trust with their mortgage and their job? The Coalition with an experienced

team and a track record, or the failed mayor of a failed Council?

Now tonight the Government will be releasing the first of its commercials

for this campaign which will be released and go to air tonight starting

from 6 o’clock and I want to play it to you, that advertisement.

[Plays advertisement]

Well I think that record speaks for itself and it puts squarely, front

and centre of this campaign, the question of economic management. Are there

any questions?

JOURNALIST:

Australia has scored its second worse monthly trade deficit on record for

July, is that a serious worry?

TREASURER:

The figures for July in relation to international trade in goods and services

show that although exports fell by 3 per cent they are 16 per cent higher

than a year ago. Although rural goods fell slightly in July, they are 43

per cent higher than a year ago as the farm sector begins to recover from

the drought. The services exports grew by 1 per cent in July and are 7 per

cent higher than they were a year ago. So imports rose by 1 per cent in

July and imports rose, imports of capital rose 2 per cent, they are now

23 per cent higher than they were a year ago. The growth in capital imports

was consistent with the strength of business investment in Australia. So

we would expect over the course of the year as the rural sector continues

to recover from the drought, as the international economy strengthens, that

Australia’s exports will pick up. Australia’s imports have been strong because

the Australian economy has been growing faster than the rest of the world

but building capital capacity would be good for future investment.

JOURNALIST:

What will be the impact on the surpluses and deficits? Is there an upper

limit to foreign debt? What is an unacceptable level of foreign debt?

TREASURER:

Well the Government doesn’t borrow, let me make this point…

JOURNALIST:

I know.

TREASURER:

…no, no, no, I think it is a very important point. Since this Government

was elected, we have not borrowed a dollar in net terms. So, that borrowing

which is done on overseas markets is all done by the private sector, principally

banks. If Australian banks are able to borrow money and lend it out for

productive investment, then that is actually a good thing for economic growth.

It is a matter for the banks. We have done stress tests on the Australian

banks, they are very strong and they are very profitable, so I wouldn’t

worry about their financial position.

JOURNALIST:

What are the prospects for the current account deficit given today’s figures?

TREASURER:

The current account deficit we believe will narrow in the course of 2004-2005.

JOURNALIST:

But they are pretty shocking figures, (inaudible) $2.7 million deficit,

I mean how would you describe that figure that has come out?

TREASURER:

Well it is evidence of a strongly growing Australian economy.

JOURNALIST:

Treasurer there has been some feedback (inaudible) in the financial markets

say all this, I suppose questioning the emphasis on the Labor Government

causing interest rates to rise. They are saying a lot of the levers are

in the hands of the Reserve Bank and not the Government of the day and they

are playing down that emphasis, what do you say to that?

TREASURER:

Well I will make, the first point I will make is that the monetary policy

running in Australia was put in place by this Government. We have an agreement

between me and the Reserve Bank Governor whom we appointed and the agreement

was to target inflation. And those arrangements have served Australia well

and I support them. Can I remind you that when I put those arrangements

in place the Australian Labor Party opposed them, and announced that they

will be suing the Government and have them undone. Now, obviously they haven’t

taken that legal action yet, but I just emphasise that point to say, again,

it was a reform which this Government had to do and was opposed in doing.

Now I think that an independent central bank has served Australia well but,

if you can’t manage your Budget, if you can’t manage your industrial relations

system, if you can’t manage the micro reform, if you get an imbalance in

your domestic economy, then you put pressure on interest rates, and that

is what happened in the course of the 13 years of the Keating Labor Government.

Now, there was a reason why interest rates, home mortgage interest rates

went to 17 per cent. It was because the economy was out of balance, and

the only way that the Labor Party could think of getting it back in balance

again was to call a recession. And you will recall Paul Keating’s words.

This is the recession we had to have. It was a policy created recession,

with high interest rates. Now, keeping your economy out of recession should

be the object of economic policy and the last 8 ½ years we haven’t

had a recession, the United States has, and France and Germany and Japan

and Hong Kong and Singapore, and comparable countries have, but we haven’t

and that is not a matter of luck. It is not a fluke, it takes management.

JOURNALIST:

Mark Latham has promised a Charter of Ministerial Integrity, what do you

think about that?

TREASURER:

Well, it is not the first time that Mark Latham has promised Charters with

improved standards because, in the 2001 election, the Federal Member for

Werriwa, Mark Latham released a Charter of Campaign Honesty and his pledge

was in that Charter of Campaign Honesty, to concentrate on issues, rather

than making personal attacks on opponents. After he released that Charter

of Campaign Honesty, some of the things he said about people – Tony

Staley was deformed in every sense of the word, Janet Albrechtsen, a journalist

on The Australian was a skanky ho. He attacked Tony Abbott over

his illegitimate child, he called the PM a licker…

JOURNALIST:

That is not a full quote Treasurer.

TREASURER:

…I am not going to give you a full quote, but do you know what I mean?

George Bush – dangerous and incompetent. He attacked me, and he described

politics as a cage match. Now, we are releasing today Mr Latham’s last Charter

of Campaign Honesty as reported on the 16^th of October 2001 and

saying this: that no person has displayed lower standards of Parliamentary

behaviour than Mr Latham and his Charters don’t mean a thing.

JOURNALIST:

This is quite similar to the type of line that John Howard took in the

1996 (inaudible) against the Keating Government (inaudible) Parliamentary

standards, do you think (inaudible)?

TREASURER:

Well I don’t think that anyone would take Mr Latham seriously on standards.

There is no person, I have been in Parliament for 15 years, well coming

up, well 1990, 14 years. I have been in Parliament for 14 years, I have

never seen a person with lower Parliamentary standards than Mark Latham.

The level of invective and personal abuse, you know, Tony Staley who walks

on crutches, he described as deformed in every sense of the word, journalists,

who he attacks with words like ‘skanky ho’, the Prime Minister, you will

recall the words he used about the Opposition Front Bench, the words he

used about the American President, nobody has had a lower standard in Parliamentary

life than Mark Latham. So for him to say that somehow he will improve the

standards, is laughable.

JOURNALIST:

He is reformed, is he not, no more crudity?

TREASURER:

Oh, when did he reform?

JOURNALIST:

When he became the Leader.

TREASURER:

Oh he reformed what, eight months ago? So, the person who has the lowest

standards in public life, is now entitled to claim that he will actually

improve standards. Perhaps he should have reformed before he engaged in

the lowest standards of public life.

JOURNALIST:

Treasurer, what role are you going to be playing in the campaign?

TREASURER:

Well, I am going to be presenting the Government’s economic case, first

and foremost, and the Government’s economic credentials, and as you can

see the Government’s economic record and the Labor alternative, which I

think is something that should be worrying all Australians. And campaigning

in my own seat and campaigning in every marginal seat that I can get to.

JOURNALIST:

It is just you signalled in the past that you wouldn’t necessarily always

stick to economic, that you might want to talk about other things. Is that

still the case?

TREASURER:

If I can I will, I love talking about Parliamentary standards for example.

JOURNALIST:

Was there a, was there a Cabinet decision yesterday that forced your back

down in terms of ruling out a challenge?

TREASURER:

No.

JOURNALIST:

Any bruising (inaudible) events of yesterday Treasurer?

TREASURER:

None whatsoever.

JOURNALIST:

There is a piece in The Sydney Morning Herald that says that there

was a Cabinet meeting yesterday morning that discussed how questions would

be handled, as far as this question goes if it happens, is that wrong, is

that piece wrong?

TREASURER:

Absolutely.

JOURNALIST:

So there was no…

TREASURER:

I said absolutely. Absolutely.

JOURNALIST:

So no discussion?

TREASURER:

None whatsoever.

JOURNALIST:

Even between yourself and the PM?

JOURNALIST:

No Cabinet discussion whatsoever, absolutely wrong.

JOURNALIST:

But what about the PM?

TREASURER:

No. Well, we had a discussion in the press conference as you can see.

JOURNALIST:

But did that, anything leading up to it…

TREASURER:

No, it was completely false. I read that in The Sydney Morning Herald,

completely false. But I don’t normally go into Cabinet discussions and I

won’t adopt that as a principle in the future.

JOURNALIST:

Do you think you need to have one of those conversations?

TREASURER:

I am sorry?

JOURNALIST:

Do you think perhaps you need to have one of those discussions?

TREASURER:

What discussion?

JOURNALIST:

On when these questions arise during the campaign, before when they do.

TREASURER:

Well questions arise and you answer them.

JOURNALIST:

Is there a conscious decision to bring up Mark Latham as quickly as possible

in the way you just did?

TREASURER:

On his standards? Well, Mark Latham today made the extraordinary claim

that he would improve Parliamentary standards and you are entitled to judge

that promise by his record. We will make a claim on economic management,

you judge us by our record. If he wants to make a claim on Parliamentary

standards, you judge him by his record. Nobody has engaged in more Parliamentary

abuse in the 15 years that I have been in Parliament, than Mark Latham.

And not against his opponents, by the way, and not just against people like

the President of the United States, but against journalists, and I could

go through the list of journalists that he’s personally abused. Nobody decries

somebody disagreeing with what a journalist writes or having a different

view, but do you attack, do you attack them along the kinds of words that

he did?

JOURNALIST:

(inaudible) a positive campaign that (inaudible) your economic (inaudible),

when, are you going to switch to hard-negative, I mean you are criticising

Mr Latham now, what about the, what is the tenor of the advertising campaign?

TREASURER:

Well, the tenor of the advertising campaign…

JOURNALIST:

Is it going to be all like this…

TREASURER:

…well, we have something else to say later on, I’ll tell you at the time,

but you can see it – that is a positive message of economic management and,

look, there are two ways to judge the Government on economic management.

You can judge this Government against previous governments, or you can judge

this Government against other governments around the world. So you can judge

this Government against the previous Hawke/ Keating Labor Government, you

can judge this Government against the American Government or the French

or the German, or whatever their achievements have been. And I think if

you judge this Government against international economies on growth, on

inflation, on employment, this Government has got a very strong record.

JOURNALIST:

Why did it take so long for you to rule it out yesterday? The potential

for a challenge.

TREASURER:

Well I don’t think it took very long at all.

JOURNALIST:

It seemed to be a quite remarkable turnaround from the morning on radio

to the press conference…

TREASURER:

Not in the slightest, that has been the position for a very long period

of time.

JOURNALIST:

Even with the second press conference, with the press conference with Mr

Howard, it took many, many questions before you actually, before you stated

categorically that you would not challenge?

TREASURER:

I don’t think so. We actually took a lot of questions on payroll tax, now

we had to go through all of those questions before people raised it, but,

no, there was no problem at all.

JOURNALIST:

Mr Costello, do you have an expectation that during the next term of Parliament

that Mr Howard will stand down and handover to you?

TREASURER:

No, he’s made his position on that quite clear.

JOURNALIST:

And what’s your position on that…

TREASURER:

The same as his.

JOURNALIST:

…do you have an expectation…

TREASURER:

The same as his.

JOURNALIST:

…do you have an expectation…

TREASURER:

… no, my position on that is the same as his.

JOURNALIST:

…that the Party at some point might ask him to step down?

TREASURER:

No, my position is the same as his.

JOURNALIST:

Can you articulate that for us?

TREASURER:

As he has announced.

JOURNALIST:

Now that there is an election campaign, obviously the decisions of the

Government are on hold, so what does this mean for the France’s attempt

to takeover AXA?

TREASURER:

For who sorry?

JOURNALIST:

France of the AXA Group’s attempt to takeover the AXA company.

TREASURER:

Well, during the caretaker period, you wouldn’t normally make a decision

on that unless you sought the consent, unless it was absolutely urgent and

you sought the consent of the Opposition.

JOURNALIST:

Have there been any calls for urgency on that?

TREASURER:

Not that I’m aware of.

JOURNALIST:

So this decision won’t be reviewed until after the poll?

TREASURER:

I would assume so, unless somebody says there’s some urgency before October

the 9^th, which I’m not aware of.

JOURNALIST:

…Green’s drug policies, does the Liberal Party (inaudible) reconsidering

preferencing the Greens ahead of Labor as a result of these drug policies?

TREASURER:

Well, look, we normally put Labor last, but, actually I heard Bob Brown

on radio here in Melbourne this morning and he was asked about their policy

on drugs, and I thought he rather confirmed that there are some drugs that

the Greens would like to investigate legalising. He certainly named ecstasy

as one. He said on radio that the Greens, Bob Brown said on radio today

that the Greens believe we should investigate legalising ecstasy and making

it available in a controlled environment. He was asked this question: ‘you

are interested in looking at the regulated supply of ecstasy?’ Brown: ‘to

look at it, yes.’ So, I think that story actually has been confirmed by

Bob Brown. This has been widely known for anyone that follows politics,

that the Greens have a policy in favour of death duties, that is their policy.

The Greens have supported taxing the family home with a death duty. And

there’s a lot of people that say, oh, well, you know, the Greens are interested

in the environment, but you’ve got to admit, there are a lot of policies

that the Greens have which are quite extreme and I don’t think it’s a secret,

it’s just a question of looking them up, you can find them on the web and

making them known.

JOURNALIST:

So do you consider that to be (inaudible) that these sorts of policies

to be further, harder left than the Labor Party would be a reason for shutting

(inaudible) and preferencing Labor ahead of them?

TREASURER:

Well, it would be a very big thing for us to give a preference to the Labor

Party. We do not agree with the Greens policies, but I don’t think there

is a chance of the Greens winning the election. There is a chance of Labor

winning the election, that’s why we won’t be preferencing the Labor Party.

JOURNALIST:

Just a quickie on the video, do you think it’s a good production? Why is

Mr Howard lecturing there, and is that typical of his Cabinet presentations?

TREASURER:

Well, there is, there is Cabinet footage in there and there’s also him

discussing policy with people and do I think it’s a good production? Yes.

The most important thing is the content. The content is absolutely A1 and,

you know, if Mr Latham, what is Mr Latham’s attack on our economic policy,

ask yourself that question. We’ve been in office 8 ½ years and all

Mr Latham seems to be able to say is, oh, they’ve fixed things up to such

a degree that not even I can muck them up. That seems to be his position,

to which I say, he underestimates himself. He would have a real good red

hot go at mucking them up. Thanks very much.