Treasurer’s Birthday; Year of the Outback; Qantas; Telstra; Drought; Zone Allowances

2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | 1998
Iraq; wheat; water rights; economy
August 13, 2002
Telstra; Mobile Phone Coverage; Rural Transaction Centre; Debt Reduction
August 15, 2002
Iraq; wheat; water rights; economy
August 13, 2002
Telstra; Mobile Phone Coverage; Rural Transaction Centre; Debt Reduction
August 15, 2002

Treasurer’s Birthday; Year of the Outback; Qantas; Telstra; Drought; Zone Allowances


Interview with Tom Harwood
ABC Radio
Wednesday, 14 August 2002


SUBJECTS: Treasurer’s Birthday; Year of the Outback; Qantas; Telstra; Drought;

Zone Allowances.

“Birthday” by the Beatles plays


All right now this morning, but I couldn’t resist. Peter Costello, the Federal

Treasurer. Welcome to Longreach. Welcome to Western Queensland and happy 45th

Birthday. This is yours.


Thank you very much.


People on the radio can’t see this but you can imagine chocolate cake on a

yellow tray with 45 on top of it. You will probably see it on the news tonight.

Don’t worry about it because you haven’t missed anything.


Did you make it yourself…?


No I didn’t, my wife made that.


What’s her name?




Thank you Elizabeth, if you are listening, and I am sure you listen to Tom

every morning on his radio program.




Thank you very, very much for this cake. It is terrific.


Now can we do the serious business first?


We have got a few people in the studio with us to share it.


Yeah, well it’s tourist season. You expect that sort of thing. If you would

like to you can stab the knife in any time you like.


Oh right.


Some of these people reckon you’re pretty stressed, that sort of thing. The

Treasurer is now cutting the cake with a knife for those who can’t see it.


I tell you what…


I think this is great radio. I got to tell you. It is a chocolate cake.


It is a chocolate with raspberry topping on it saying Happy 45th

Birthday Peter. Thank you very much Elizabeth.


You are welcome.


It’s great to be here.


Now what, why are you here? We have heard all sorts of speculation in news

mayhem this morning. And just we will play the Beatles now. Why are you here?


It’s the Year of the Outback and I was asked to be an Ambassador for the Outback

which they said wasn’t onerous but it said that if you had the opportunity to

visit the outback during the year it would be a great thing to do. And Bruce

Scott asked me to come down to Roma to go to the Cattle Sale and we are doing

a few things there, so I thought we might as well start in Longreach and work

our way to Roma, which is what we are going to be doing over the next couple

of days. And it is my first visit to Longreach. I went out last night to the

Qantas Museum and we are going down to the Stockman’s Hall of Fame this morning.

And it looks like a pretty great town, actually.


It’s not too bad at all. And of course there’s a fair bit been made of the

fact that you went to the Qantas Museum last night after Cabinet discussed Qantas’

future yesterday. The locals say, that Qantas doesn’t own the Museum but we

have an interest in what happens. What is going to happen with Qantas if they

need more money?


Well, Qantas at the moment, ever since it was privatised from being a Government

owned airline has had a restriction on foreign shareholding. That is, it has

to have a majority Australian shareholding. And Qantas wanted that restriction

lifted so that it could become a foreign owned airline. The Government had a

look at that yesterday. We discussed it. We didn’t think that the case had been

made out. Qantas is an Australian icon, it has always had a majority ownership

from Australia. We thought it was right that that continue. And we weren’t convinced

that there was an economic case that said Qantas couldn’t be a successful airline

while still retaining majority Australian ownership. And that is why we decided

not to change things.


So of course the other big ownership question is Telstra. And Telstra you want

to have sold? And you said there will be benchmarks for rural areas. How are

you going to determine what those standards will be?


Well there are a number of standards which have already been put in place and

which will be enshrined in legislation – a universal service obligation, an

obligation to provide services, to provide them at a particular cost, as you

know we have caps on calls, and also a charter for the introduction of new technology

as and when it becomes available. So that Telstra will have very strong service

standards that it has to meet. And I should say in the context of Qantas, it

is also our policy that Telstra will remain in Australian hands. That it will

be an Australian owned company. At the moment it is an Australian owned company

and it will remain an Australian owned company.


So guarantees for the people in the bush?


Oh yes. One of the things as you know that we did some time ago, we had Tim

Besley do a report on standards particularly in regional areas and he gave directions

on how to improve standards in regional areas. There has been a lot of work

done and quite a bit of money spent over the last year or two to improve those

services. And I expect at some time what we will do is we will have another

look at that. Work out if the standards are up to scratch before proceeding

with proposals to introduce further private equity.


I don’t know how much you managed to see as you were arriving yesterday, but

as you will see in the next few days, this area is heading back into drought

again. And I have heard some places already are in pretty significant drought.

You are reported as having said that you didn’t believe a drought would have

an impact on the Australian economy and I think many people out here will probably

tell you otherwise because they see themselves as making a significant contribution

to the economy. But are you going to be budgeting for some sort of assistance

for people in this drought?


Well, absolutely drought affects the economy and has an enormous effect on

agricultural production. And that is a point I have always made. I am also asked

from time to time, when are you going to change your forecasts, and I think

the point that I made is we make our forecasts for overall GDP, two times during

the year. We make it at the Budget and we make it at the Mid Year Review. We

don’t give a running forecast. We don’t change it from week to week. We don’t

change it from month to month. Financial market screen jockeys change it from

day to day, I don’t get that luxury. I get a chance at my forecasts twice a

year. But obviously the drought through western New South Wales and up into

Queensland and through western Queensland is a matter of very severe concern.

Obviously it will also be affecting production. And that is a dreadful thing

not just for the communities concerned but also of course for the country generally.

The big C Country. Australia Country.


The place we all live in.


The small c country generally and the big C Country generally. And obviously

I hope that it rains. Somebody said that I should do a rain dance. But I think

that is beyond the powers of any of us. And so it is going to be a lot of hardship.

If drought gets to the stage where it is considered an unusual event and people

or areas become eligible for drought assistance, the application is made firstly

to the State Government and eventually from the State Government up to the Commonwealth

Government for exceptional circumstances. There are some areas that have already

done that and some that have not.


Certainly on just another area that concerns people greatly living out here.

It seems to be based often on distance from Canberra rather than actual remoteness.

For example Mt Isa folks get a higher zone allowance yet they have access to

things like K Mart and Kentucky Fried, McDonalds and all those sort of things.

People in Longreach get less and yet don’t have any of those sort of things

unless they were sort of drive four hours to (inaudible) for example. Is there

any chance that zone allowances can be looked at at some point? Well, I know

Bruce Scott is one of the people who has been pushing this for a long time too.


Look, they were put in place those zone allowances a very long time ago. And

as a consequence of demographics, if some of the areas that a long time ago

were considered to be remote are not so remote these days and other areas that

weren’t so remote a very long time ago are considered to be remote these days.

I think up in Cairns you can still get a remote area allowance and that is obviously

becoming quite urbanised now. So, from time to time, we have looked at redrawing

these boundaries. The problem with these boundaries as you know is every time

you redraw it and somebody drops out they think it is unfair. And so whenever

you start drawing lines on a map it becomes a very tricky business. We have

had to do that with a lot of things recently. But it is something that we always

keep under review. We actually think that the more important thing is to try

and cut taxes generally and, if you can have general tax cuts, of course they

are worth much more than the zone allowances. That is why we cut income tax

and cut capital gains tax. And some of the big tax cuts that we have actually

put in place for capital gains where people can sell the family farm and retire

into the town if they want to, capital gains tax free at 55 or rollover to a

new property, we have found there is a much better way of delivering tax relief

over the last 3 or 4 years.


You are a young bloke. You are only 45 today. I wish I was 45 again.


How old are you Tom?


Only about a year and a half ahead of you. Yeah but you are already at the

second top job in the country basically. Where do you go from here? When?


Well, I, look it is something that has been an enormous amount of work being

Treasurer as you can imagine. But I still, I think there are still things to

be done. I guess the thing that you worry most about is, keeping the economy

growing and keeping job opportunities for people. That is what is mostly on

my mind.


I have got news coming up in about 7 seconds.


Is that right?


So thank you very much for spending time with us. I wish we had longer. I really

do. But it is news time. It is a quarter to eight.


Thanks very much.