Treasury Place

Melbourne

Wednesday, 12 July 2006

10.20 am

SUBJECTS:

Transition

Well thank you all for coming this morning. Naturally there is a lot of interest in what has happened over the last several days and I am very happy and pleased to answer your questions and to give you my views in relation to those matters. The events of the last couple of days of course were sparked by Ian McLachlan who disclosed a meeting which happened on the 5 th of December 1994, at a time when the Liberal Party was wrestling with a transition of leadership, and Mr Howard and I and others were having various meetings in an effort to get a smooth transition of leadership for the Liberal Party, and I think that was successful.

When Mr McLachlan disclosed the nature of the meeting, and I was asked what happened, I have an identical recollection of events as he described them and as he noted in the written record. And I have told you what happened in that meeting, I have told you the truth of that meeting and I think the public knows the complete facts, and they are entitled to know the facts, and it was my obligation to tell the truth and I did. But that is some time ago of course, and since then there have been a lot of events including several elections. And at each of those elections I have been working as hard as conceivably possible for the Australian people, for the Government and for the Liberal Party which I intend to do.

I think that politics is not just about the daily business, or even about the monthly business. I think politics is also about the long term and I am committed to the long term – the long term future of this country – and I want to do what I can to make it better.

The last ten years have been about paying back the debt which the Australian Government incurred; getting interest rates down; getting more people in work; and now we need to lock that in, that prosperity, the hard won fruits of the last ten years. We need to lock that in for long term issues of the 21 st century. And I intend to do that, to make a contribution to the long term issues of the 21 st century – the things that Australia has to do over the next ten years and over the course of the 21 st century. My commitment to public life is absolute, and I will be making that contribution along with my colleagues in the interests of the Australian people to do the things which are necessary to make Australia the kind of country we all want it to be.

JOURNALIST:

Does that long term commitment include serving as Treasurer to and beyond the next election if that is the will of the Prime Minister and your colleagues?

TREASURER:

Well, Mr Howard and I had a discussion about this yesterday. My view is, just as it was in 1994, that political parties work best when they achieve smooth transition. That was our view in 1994 and that is still my view now. I have said that publicly over and over again. If political parties work these things out well, then they tend to do better in government and I think we should work these thing out well. At the end of the day of course, these are matters for all of the colleagues and all of the Party Room. And can I tell you I am no stranger to Party Room elections. I have run for a few of them. I have lost some and I have won many. I ran in 1993 and lost, 1994 and won, I didn’t run in 1995 for reasons we have been going over, I ran in 1996, 1998, 2001, 2004. So don’t let anybody suggest to you that I don’t value the Party Room or the electoral process. I do and I have been involved in six elections. So as I said, some not so good, some good.

JOURNALIST:

Did you seek an undertaking from Mr Howard yesterday that he would retire before the next election?

TREASURER:

What I said to him yesterday is what I have just said to you now and what I have said publicly. I think that the Liberal Party would be best served by a smooth transition. That is what I said to him and I have said that publicly because if transitions aren’t smooth, ultimately, that works against a political party. That is what I said.

JOURNALIST:

(inaudible) the next election?

TREASURER:

Pardon?

JOURNALIST:

Will there be a smooth transition before the next election?

TREASURER:

Well I said that I believed that there should be a smooth transition, he is yet to announce what his position is for the next election.

JOURNALIST:

Did Mr Howard give you an indication of what his intentions were to you yesterday? Did he say…?

TREASURER:

Well, as I have said to you, that is the substance of the discussion. I am telling you what my view is. I think that is in the interests of the Liberal Party, I think that is in the interests of the Government. I have put my view and I think as he said to you, he intends to consider his matter and his future and he will let you know when he has done that.

JOURNALIST:

So no new deal has been done?

TREASURER:

Well that is what happened yesterday. And what happened in December of 1994 you all know, and I am not getting into arguments about a deal, agreement, promise – I am not getting into those arguments – I just told you what happened in December of 1994.

JOURNALIST:

Does your desire for a smooth transition mean you won’t challenge between now and the next election Mr Costello?

TREASURER:

Look, I have told you what the discussion was yesterday. I have told you where things are now at and we will see how they work out.

JOURNALIST:

So you are ruling out a challenge?

TREASURER:

I have answered the question.

JOURNALIST:

Do you think he needs to declare his intentions before Christmas (inaudible)?

 

TREASURER:

Well look, he indicated obviously he will consider these matters and he should consider these matters. I am very happy for him to do that. I, after answering all of your questions which I am very happy to do, will get on with the substantive business of the day.

JOURNALIST:

(inaudible) stay in public life because you’re committed to making Australia the kind of country you want it to be, can you give us a sort of preview of the sort of things you think are necessary?

TREASURER:

Sure. Look, I said earlier, the last ten years have been ten years of very hard work. Getting unemployment down to 5 per cent, balancing the Budget, paying off $96 billion of Labor debt. We are seeing results, more Australians in work than ever before, higher wages than ever before, a debt free government, proud and confident and strong, but the critical thing now is to lock that in for the future. We don’t want to lose that, we never want to do that, and the future challenges that are going to come at us – and some of them I outlined quite recently – we have got to work at improving the federation; I would like to see Australia’s fertility rate increase; we have got to solve the endemic problem of water; we have got to modernise our constitutional arrangements so that they accord with our sense of nation. We have got to deal with some of these big issues over the course of the 21 st century, and Indigenous standards and the quality of life for our Indigenous people are going to be a very big part of that. These are the great challenges. They won’t be fixed tomorrow, they won’t be fixed even next year, but if we are all here in ten years time I would like to see us to have made progress over the next ten years. And it is the next ten years that I am thinking about. The Government has made enormous achievements over the last ten years and now we have got to start thinking about the next ten years.

JOURNALIST:

…your comments about leadership transition have in any way damaged your credibility as a leader if (inaudible)

TREASURER:

Well I think all Liberals would agree that parties should try and work these things out in an ordered and measurely way. I think all Members would agree and I point to the fact that that is what happened in 1994. See, the Liberal Party had not previously worked these things out. We’d had Peacock, Howard, Peacock, Downer, Hewson. We have had a lot of ballots and I think in 1994 it was very successful and I think people would think that it was one of the reasons why we were able to open up ten years of political achievement.

JOURNALIST:

…damaging for your cause as the future leader in any way?

TREASURER:

Let’s just remember this, that the public pronouncements were from Ian McLachlan. Not from me. Let’s just get this one point absolutely clearly on the record – the events of the last several days did not come from anything I disclosed. Ian McLachlan, who has no motivation other than what he saw as his duty to history, made the comments that he did. Let’s be absolutely clear about this.

JOURNALIST:

But you made one pointed pronouncement on Monday in support (inaudible)

TREASURER:

No, no, no I’m sorry – not in support. No, you are quite wrong about that. The statement that I made on Monday was what happened. You asked me what happened in the meeting and that is what happened. Now, it was not in support of Mr McLachlan, it was simply the truth and I don’t think that I could have done anything other than told you the truth.

JOURNALIST:

Could you clarify one other matter of fact which the Prime Minister says there could have been no undertaking or deal but subsequently you had a lunch where you did not rule out yourself running for the leadership which would have negated any undertaking made at that meeting.

TREASURER:

Nothing that happened subsequent to the 5 th December 1994 in any way qualified, countermanded, changed, moved, derogated from what happened on the 5 th December, Michael, nothing whatsoever. Now, you know, a lot of…

JOURNALIST:

Was the Prime Minister mistaken when he says you had that lunch?

TREASURER:

…look, I am not going over it a thousand times, there was a meeting on the 5 th of December. You know what happened. Mr McLachlan was there. He has told you what happened, nothing changed that, there were no subsequent events that changed that at all. Now, that was in 1994. The key events that it was about passed some five or six years ago and it didn’t come to pass. And when the time passed, as I have said over and over and over again, I did what you would expect me to do – which was to say nothing about it and get on with work.

JOURNALIST:

You did more than say nothing about it you said that there had been no deal though?

TREASURER:

Michael, I am not getting into a semantic argument about promise, deal, agreement or undertaking. That is what happened. That is what was said and nobody…

JOURNALIST:

(inaudible) subsequently you went and said there was no deal…

TREASURER:

No, Michael I have never denied that on the 5 th of December 1994 in a meeting with Ian McLachlan and Mr Howard, Mr Howard said to me, unsolicited, that he wanted to do one and a half terms and then hand over. That is what happened. That is the truth. Now, as I have said to you, the one and a half terms were over five or six years ago. Were over. About 2000. And in the year 2000 I did not call a press conference and say ‘hey, by the way….’. You know what I was doing? I was trying to implement the new taxation system. And then we were running into an election. I never breathed a word because obviously I knew that there would be enormous press interest if I did. And from that day to this I have never breathed a word until the third person in the room gave his explanation, and once that happened I had to comment.

JOURNALIST:

So you’re telling us today that you’re not going to do anything about – you’re going to take no action?

TREASURER:

What I am telling you today is I am absolutely committed to the long term future of Australia and I want to give leadership in this country on the issues that will concern us in the 21 st century. I want to lock in the prosperity and the achievements of the last ten years and take them further because there is more to be done. That is what I am telling you.

JOURNALIST:

(inaudible)?

TREASURER:

Well, as I said to you, there is nothing new in any of this. I have known this for 12 years. We have all known this – Mr McLachlan, Mr Howard and I – for 12 years. There is only one thing different. The public now knows. It is no news to us.

JOURNALIST:

Who’s got a better chance of winning the next election, yourself or John Howard?

TREASURER:

Well, George, I think that the Liberal Party should win the next election and I will be working to make sure that it does.

JOURNALIST:

Even if there is no smooth transition, you will stay on?

TREASURER:

Let me tell you that is the answer to the question.

JOURNALIST:

Is it conceivable that John Howard could stay…

TREASURER:

Last two questions.

JOURNALIST:

…for another ten years (inaudible)? I mean Reagan did it.

TREASURER:

What was the last question?

JOURNALIST:

Did you ask for a smooth transition, did you tell Mr Howard you believed there should be one?

TREASURER:

Well, I have said that publicly. No, no, no, no, I have said it publicly on numbers of occasions. I have said it again today, I said it yesterday, I have said it over and over and over again. I believed that in 1994 and I believe it now. Yes?

JOURNALIST:

Before yesterday’s meeting the Prime Minister suggested you were guilty of hubris and arrogance in speaking the previous day, how do you respond to that, and secondly did the Prime Minister offer any reprimand in his talk with you in yesterdays meeting?

TREASURER:

No, and Michael you get called a lot of things in politics and I don’t let that worry me in the slightest. So, the only point I will make is this – at the end of the day, if you have done nothing wrong you have nothing to fear by telling the truth. And that is what I have done and I have done nothing wrong. And that is why I have nothing to fear from telling the truth. In relation to other matters, far from me running around and saying in 2000 that the Party Room should suddenly be disenfranchised, I did nothing to disclose any of these conversations except work hard and get

re-elected by the Party Room in 2001. That is what I did. So, this suggestion that somehow I don’t value the Party Room, no-one values the Party Room more than me, as I said. I have stood from election in the Party Room in 1993, 1994, 1998, 2001, 2004. I absolutely value the Party Room. Absolutely. And I have put myself up for election in the Party Room, I don’t want any suggestion whatsoever that I don’t understand the Liberal Party or the Liberal Party Room. Gee, I have been in it quite a while. And I have the highest regard for all of my colleagues. Every single one of them. They are a group of wonderful people, for whom I have the highest regard, and nobody can suggest to the contrary and I don’t think anybody is. Thank you all very much.