Doorstop Interview

Sheepvention,

Hamilton Showgrounds

Monday, 1 August 2005
1.00 pm

SUBJECTS: Telstra, vegetable growers, roads, tax concessions, unfair dismissal legislation

JOURNALIST:

Telstra debate (inaudible) $2 billion has been suggested. Do you agree with that?

TREASURER:

Well look this is a matter that the Government will discuss. Obviously the important thing is to resolve the ownership with Telstra but also to do it in a way which will ensure that we have good services and consistent with our national economic policy. It is very important that we do not lose sight of national economic goals in this whole debate. Goals like responsible economic management, low interest rates, low debt, all of those sorts of things. So, these are matters that the Government will be discussing after we have taken lots of soundings. Obviously we will be making a decision which is in the interest of the national economy.

JOURNALIST:

What do you think of the figure of $2 billion, like (inaudible) $5 billion suggested?

TREASURER:

Well look, people suggest all sorts of sums. At the end of the day we have got to make sure that the decisions which you take are financially responsible and that is what I focus on. If we do not continue running strong financial policy, if we do not continue with a strong economy, if interest rates go up or inflation were to break out, that would not be doing anybody in Australia a favour. So, the decision which we take will be consistent with good communications policy but it will also be consistent with good financial management because that is what has kept Australia going and growing over the last eight or nine years in the wake of huge economic challenges coming to us from our region and the world.

JOURNALIST:

National Party (inaudible) from watching (inaudible)?

TREASURER:

Look, anyone can put forward their views. These matters will be discussed inside the Government.

JOURNALIST:

The National Party and Telstra directors have said that Telstra services in the bush are not up to scratch. Would you say that was a fair comment?

TREASURER:

I think that it depends on the services that you are looking at. I think in relation to mobile phones, services have improved very dramatically in rural Australia, that the coverage that we have achieved with the roll out of mobile phone services is probably as good as anywhere in the world, and if you were to compare it to the United States or Canada or other large countries. Of course now the argument moves on from mobile to broadband but that is an entirely different subject. But, the steps that we have taken particularly in relation to mobiles, have really improved services for people in rural and regional Australia.

JOURNALIST:

Mr Costello, should any money from the sale of Telstra go into the fund that the Nationals are proposing?

TREASURER:

Well as I have said, people put forward various alternatives, these matters will be discussed inside the Government. The Government will make its decision, the decision that we make will be consistent with good communications policy and good economic management. That is the important thing because if we were to make financially irresponsible decisions then interest rates will go up and that is in nobody’s interests least of all rural and regional Australia.

JOURNALIST:

Mr Costello, the Tasmanian vegetable growers have been driving their tractors in Melbourne, coming across to Sydney and heading towards Canberra on 11 August. Do the Tasmanian vegetable growers and Australian vegetable growers have a case?

TREASURER:

Well I think that the public is entitled to labelling laws which make it clear where a product is from. Then they can make their choices and I think clear labelling laws which lead to informed consumer choices are very important and I support them in relation to that. I also think that Australian vegetables can be produced to a quality and at a price second to none in the world, so I think the important thing here is if the quality is good and the price is good, and I believe it is, then I think our producers should be able to compete with anybody anywhere in the world.

JOURNALIST:

Will you be giving them any special consideration?

TREASURER:

Well I met with McDonalds last Friday to discuss these issues with McDonalds and to put a case on behalf of the vegetable growers. The McDonalds organisation indicated to me that it would be sending its Chief Executive to Tasmania shortly to meet with the growers and to talk with the growers and to hear their side of the case and I welcome that, I think it is a good step forward. I think that McDonalds ought to, at the very senior level, hear the case of the Tasmanian growers because if they can produce best quality at world competitive prices then they ought to be able to sell their products.

JOURNALIST:

You mentioned roads in your speech. One of the roads that you clearly have not done here is the Princess Highway. The State government says they will put in the money if the Federal Government does. Do you think there is any chance of that?

TREASURER:

Look, with the Federal Government builds national highways, and the Federal Government is now funding councils for Roads to Recovery. The State Government takes responsibility for its roads. They are State arterial roads. The State Government will be getting record funding, GST funding this year, so that it can build its roads. There is no reason why it cannot take full responsibility for the roads which are under its jurisdiction.

JOURNALIST:

So you do not think it should be part of Auslink?

TREASURER:

Well we have announced as part of Auslink the Geelong by-pass road and we have announced a whole agenda of roads of national importance and we will be funding the Victorian Government with record money this year for road construction. They will be getting more money than they have ever had before.

JOURNALIST:

Mr Costello, (inaudible) western Victoria here, a great part of the world. Increasingly though, it has been mentioned that timber companies are eating away at the social capital of this fantastic part of the world. The tax effective blue gum schemes, would you be willing to, were you looking to the tax effectiveness of these schemes, is there any way that social capital (inaudible)?

TREASURER:

Yes we will. It is true that the timber industry at the moment has concessional tax treatment, it is possible that that is attracting some investment which is not interested in the end product, it is only interested in the tax deduction. We have got an inquiry going at the moment in relation to that, what is called the pre-payment rule. We do not want to kill the reforestation industry, obviously, but by the same token if it is leading to the misallocation of resources you would not want that to happen either.

JOURNALIST:

What is the definition of that?

TREASURER:

Misallocation of resources is where people are not investing because they are interested in the growing of trees, they are investing simply to get a tax deduction. So, we have got an inquiry and we will do that.

JOURNALIST:

Unfair dismissal laws are a bit of a catch between what you are saying and what the Prime Minister has said. Are you embarrassed by that in any respects?

TREASURER:

No, I think the Government’s position is pretty clear.

JOURNALIST:

So what you originally said in terms of a cap on possible companies is different to what the Prime Minister said, so there seems to be a little bit of a difference there?

TREASURER:

No, I think you are wrong about that.

JOURNALIST:

Just very quickly on the Telstra issue, is it worth agreeing to some of the National’s demands to get the sale of Telstra through?

TREASURER:

As I said the Government will make a decision which will be good for communications, which will be financially responsible and will be consistent with keeping interest rates low and the budget balanced. And that decision will be in Australia’s interests. I am not going to take any decision which will put pressure on interest rates, which will put people out of work, which would not be consistent with good financial management and would not be consistent with good communications. So, they are decisions that we will discuss when we come to an agreement on it. Thanks.