TRANSCRIPT

THE HON PETER COSTELLO MP

TREASURER

Interview with Keith Conlon and Tony

Pilkington

5AA

Friday, 3 September 2004

8.30 am (Adelaide Time)

 

JOURNALIST:

Peter Costello, good morning Treasurer.

TREASURER:

Good morning Keith.

JOURNALIST:

And I know we have stolen Trish Worth’s thunder, you are launching her

campaign today but we have given you the froggy cake.

TREASURER:

(inaudible)

JOURNALIST:

It is a State icon. You have got it in hand and I hear your wife is pretty

keen about them.

TREASURER:

These look fantastic. If there is anything that is actually richer, that

is more chocolate, I have never seen it in my life.

JOURNALIST:

(inaudible) that they are actually fattening Treasurer.

TREASURER:

You don’t think so.

JOURNALIST:

No, no.

TREASURER:

These are slim froggy cakes.

JOURNALIST:

By the way if you would like to call, we are just going to try and squeeze

two or three calls in with the Treasurer. And the topic came back again

into the news, and you want it in the news, interest rates. Mark Latham

has signed the guarantee that there, that he will try to keep interest rates

low. But a question from Tony at Black Forrest how can he do that when it

is virtually impossible due to our current increase in exports?

TREASURER:

Well, I have been the Treasurer for eight and half years and interest rates

have been pretty low during that period. But I never thought all you had

to do was sign a piece of cardboard.

JOURNALIST:

Is it harder than that?

TREASURER:

When I saw him sign a piece of cardboard yesterday I thought why I haven’t

I thought of that in the last eight and a half years. It is a little bit

harder than signing a piece of cardboard keeping interest rates down. You

have got to manage an $800 billion economy, you have got to manage employment,

you have got to manage inflation, you have got to manage the Budget, you

have got to manage industrial relations, you have got factors coming at

you from overseas like the American economy, or oil prices, and it does

take a little bit of management. And can I assure your listeners, it is

just not as easy as signing a piece of cardboard.

JOURNALIST:

It is in fact a problem for you as well as Mark Latham that interest rates

will go up. They are going to go up.

TREASURER:

Well interest rates at the moment are around 7 per cent, home mortgage

interest rates, which are as low as they have been for a long period of

time. They have averaged about 7 per cent during our Government. When our

Government was elected they were 10½ per cent so I think if you have got

them down at around 7 per cent that is pretty low by historical standards.

JOURNALIST:

But the question was, you know, how can we avoid that they are going to

go up?

TREASURER:

Oh, no!

JOURNALIST:

They are not going to go up?

TREASURER:

Because I am the Treasurer I never foreshadow future movements in interest

rates because markets will buy and sell the dollar and all the rest of it.

But I will make this point that if you keep inflation low, if you keep the

Budget strong, if you make sure that the management of the Australian economy

is firm then you can keep a low interest rate regime in place.

JOURNALIST:

And Mark Latham would say well that’s what I am going to do.

TREASURER:

Well I don’t think Mark Latham really understands economic policy. Because

he said all he had to do was sign this pledge. And you have only got to

look at the record of Labor in government. When they were in the government,

they weren’t against low interest rates they just couldn’t get them, and

interest rates averaged 12 ¾ per cent. Because they are subject to all of

the pressure groups and the interest groups that demand more money, their

Budget gets out of control, their industrial relations policy is bad and

that will put pressure on interest rates.

JOURNALIST:

What about the criticism of your Government and the last Budget where you

gave a lot of money into the community, you whacked a lot of money into

the community at a time when things are getting a bit heated. Might you

in the end be responsible, at least partly, for the rate rise?

TREASURER:

Well I would make two points here. The first is that the money that we

allocated was to help families with an extra $600 per child per annum and

to cut taxes. Now I think both of those are very responsible policies. The

second point I would make is I don’t see any evidence of the Australian

economy overheating. You might have see in the papers today that house prices

are stabilising and that if anything the big boom in house prices that we

have gone through over the last two or three or four years seems to be consolidating.

So, I don’t think it is a question of overheating I think it was a responsible

Budget in the context of a responsible economic management.

JOURNALIST:

Treasurer if you have got the cans on because John would like to join us.

JOURNALIST:

G’day John how are you doing?

CALLER:

Good morning how are you?

JOURNALIST:

Have you got a question for the Treasurer?

CALLER:

I have just got a question regarding this guarantee that Mark Latham signed

yesterday with interest rates. My question to the Treasurer is, is he or

the Prime Minister (inaudible) guarantee a (inaudible)?

TREASURER:

I was looking for one. As I said earlier John if I had known it was as

easy as signing a piece of cardboard I would have done it eight and a half

years ago.

CALLER:

Oh so I shouldn’t take it as gospel then?

TREASURER:

I don’t think so. I expect Mark Latham will be out there today signing

a piece of cardboard saying that he has abolished unemployment, maybe he

is signing a piece of cardboard saying that it will be sunny every day…

CALLER:

Oh okay. He must eat a lot of Coco Pops.

JOURNALIST:

Okay John. That’s the free kick.

TREASURER:

Thank you John.

JOURNALIST:

Harry has got a question for the Treasurer.

JOURNALIST:

G’day Harry.

CALLER:

G’day Treasurer. I have got a few small points here very quickly. Could

you tell me how much these cars are going to cost that you have recently

purchased or are going to purchase? The Statesman – bullet proof, shock

proof, everything proof cars. Can you tell me what the figure would be?

Also there are 100 tanks you are going to buy. Now you consider yourself

a pretty thrifty Treasurer yet apparently there are 100 tanks going to be

bought, or have been bought, from America and apparently you could have

got the tanks for half the price from Europe and it would have been a lot

cheaper because the ones from America are petrol guzzlers. And one more

thing, has Trish Draper paid her $10,000 back yet?

TREASURER:

Well can I come to the question of the tanks. We have decided to buy the

Abrams tank which is the US tank. We looked at all of the alternatives.

There was a British alternative, I think there was a European alternative…

JOURNALIST:

Was it (inaudible)?

TREASURER:

…maybe German from memory?

JOURNALIST:

Was one of the (inaudible)?

TREASURER:

They had different prices, but with tanks you get what you pay for. If

you want a heavily armoured tank you have to pay more. If you want a lightly

armoured tank you can get it cheaper.

JOURNALIST:

That’s right.

TREASURER:

But the lightly armoured tank won’t protect you to the same degree against

shrapnel and rocket propelled grenades. So we had a look at all of that

and the Abrams tank we thought was the best value for money. It has been

recently used quite successfully in Iraq and it performed very well.

JOURNALIST:

Do you know the cost of this security Statesman?

TREASURER:

Look I would only have to have a guess for you here but what they do is

they take the Statesman and they then put armour plates along the sides

and the glass…

JOURNALIST:

The glass…

TREASURER:

So if an ordinary Statesman is what about $50,000 or $60,000 I would guess

it would be over $100,000.

JOURNALIST:

Okay. And has Trish Draper paid her money back?

TREASURER:

I assume so, yes.

JOURNALIST:

Okay. Thanks for that Harry. Ian has got a question for the Treasurer.

TREASURER:

G’day Ian.

CALLER:

Good morning Mr Costello.

TREASURER:

Good morning.

CALLER:

I know we are being dictated to with the price of oil from overseas countries

but at the moment it just keeps going up and going up. Why or will the Government

cap the GST on fuel? It is getting to the stage where in this country, we

drive everywhere. It now costs me over $60 to fill my tank of fuel. If it

keeps going up to do a trip away for a holiday it is going to, every time

I fill my tank it is going to cost me over $100. It makes it impossible

to do. And then it far outweighs the CPI. There just doesn’t seem to be

any control on it at all.

TREASURER:

Well let me say that petrol is taxed in two ways. There is a Commonwealth

excise which is about 38 cents a litre and there is GST. When our Government

was first elected the petrol excise was much larger and in fact we cut it

from about 44 to 38, back in 2000. That excise doesn’t rise if the price

rises. It is absolutely fixed. The Commonwealth tax is absolutely fixed.

It is true that as the value of petrol goes up the 10 per cent GST will

rise with it. But all of the money from the GST goes to the State Governments.

I can actually give you the figure here in South Australia the South Australian

State Government gets 3,212 millions of dollars from GST. So it would be

open in relation to those States to say that they are collecting more GST

from the petrol price but Canberra is not collecting a dollar of GST.

JOURNALIST:

Nigel has a call, a question. G’day Nigel.

CALLER:

Good morning Treasurer. Nigel Doye (inaudible).

JOURNALIST:

Oh look we should warn you about this guy Treasurer he does ring fairly

regularly.

CALLER:

Look very quickly Treasurer, John Blake has just called me. He would like

you to get out now as you are eating into his segment. Thanks very much.

All the best I hope to vote for you.

JOURNALIST:

You are Treasurer of course impeding into John Blake’s segment so we have

got to just finish off.

TREASURER:

Ask Nigel to send in his tax file number next time, will you.

JOURNALIST:

The inevitable question before you go. Are we, when we vote come October,

are we voting for you as a future Prime Minister?

TREASURER:

Well you are voting for a team. You are voting for the team of John Howard

who is Prime Minister…

JOURNALIST:

For how long? When do you get to be the Prime Minister?

TREASURER:

…for me as Treasurer and Alexander Downer as Foreign Minister…

JOURNALIST:

Yeah, but when are you (inaudible)?

TREASURER:

It is like, it is like supporting Port Adelaide. You know you are voting

for Warren Tredrea you are voting for the…

JOURNALIST:

(inaudible)

TREASURER:

…the Burgoyne boys and you are voting for all of them. For the team you

have got to…

JOURNALIST:

We had to try. So if you are going to talk football, how is Essendon going

to go?

TREASURER:

Well we have got a big game against Melbourne on Saturday.

JOURNALIST:

That’s right.

TREASURER:

They’re on the slide and we’re on the up. So I haven’t quite worked it

out but if the Bombers win we could be back here at AAMI Stadium against

Port.

JOURNALIST:

Whoa, ho, ho, ho. Righto.

TREASURER:

Big game.

JOURNALIST:

Thank you Treasurer. And if you want to take those frog cakes with you.

TREASURER:

I will take the frog cake and thank you very much.

JOURNALIST:

By how many against Melbourne?

TREASURER:

18 points.

JOURNALIST:

18 points. That is the number one ticket holder telling you. He should

know, the Treasurer, Peter Costello thanks very much.

TREASURER:

Great to be with you fellas.