Interview with

Geoff Hutchison
ABC Radio, Perth

Wednesday, 10 October 2007

10.35 am

(WST)

SUBJECTS: Western Australia, death penalty, interest rates, advertising, election, mining, pensions, climate change

HUTCHISON:

Good morning to you. 

TREASURER:

Good morning Geoff.  Good to be with you. 

HUTCHISON:

Listen, you copped a bit of a shellacking from your own side here, in the West yesterday for supposedly not understanding the WA economy or spending enough time in the place which has been the engine room of your economic success.  Was that fair criticism?

TREASURER:

Look, I saw what was said in yesterday’s paper.  I didn’t have anything to comment about it, I don’t want to get into a slanging match with anybody.  I much more interested in the future than what happened in 2005 because I think that is what Australians are interested in – the future of their jobs, their incomes and their families – and I am very much somebody who is focussed on a positive future for Australia and that is what I intend to concentrate on. 

HUTCHISON:

Mr Costello, the Labor Party didn’t have a great day yesterday on the subject of capital punishment.  First we had the comments from Robert McClelland, then we had Mr Rudd give him a very firm slap.  We have heard in news reports today the possibility of Indonesia’s Attorney-General backing away from supporting capital punishment and indicating that the executions of the Bali bombers might be delayed.  Do you have any response to that?  Is that disappointing to you?

TREASURER:

Look, the Bali bombers killed 88 Australians.  Deliberately, pre-meditated, for no reason they went out and they murdered 88 of our fellow citizens.  They did so in a country which practises the death penalty.  They are Indonesian citizens.  Under Indonesian law, they have been sentenced to the death penalty.  They should have known that that was what they were up for and of course they should never have engaged in such a savage and heinous crime.  Now, Kevin Rudd’s team announced that they were going to campaign for these bombers, for these cold-blooded murderers and I think Kevin Rudd was embarrassed and he has changed his position.  I can understand why he is embarrassed by it.  I don’t think Australians owe any sympathy to the Bali bombers. 

HUTCHISON:

As a person of faith, is it hard for you to say that these men should be put to death?

TREASURER:

Well the Australian Government doesn’t practise the death penalty and we have never (inaudible) on behalf of Australian citizens who are subject to the death penalty overseas.  But I have got to say, murdering 88 people is a pretty heinous crime.  88 people they murdered. 

HUTCHISON:

I have a question from Peter.  ‘Mr Howard says he is against capital punishment overseas apart from the convicted terrorists, what if the terrorist was an Aussie – and it could have been David Hicks – would he plead for his life?  I think not.  Please get Mr Costello’s opinion.’  It is a difficult situation and certainly the Government gets criticised by agencies like the UN for this quality of Australian exceptionalism. 

TREASURER:

Well we are the Australian Government and it is our duty to look after Australian citizens.  And there are Australians that commit crimes overseas that make them subject to the death penalty.  I guess the best known is drug running.  We have had cases of Australians who have been caught drug running in Asia – they have been subject to the death penalty – because they are Australian citizens we make representations on their behalf and you would expect that from the Australian Government. 

HUTCHISON:

But their lives should be saved because they are Australian citizens?

TREASURER:

Well the Government is obliged to put their case because they are Australian citizens.  Now, let’s turn to Amrozi and co.  They are not Australian citizens.  They are not entitled to the protection of the Australian Government.  The people that were entitled for protection of the Australian Government were the 88 dead. 

HUTCHISON:

Yes.

TREASURER:

So, are we going to intervene on behalf of Amrozi?  I don’t think so.  I think we would be much more interested in looking after the families and sending our sympathies to the families of the 88 dead. 

HUTCHISON:

But the Indonesian Government says we are going to kill the Bali Nine, or some members of the Bali Nine, does the Australian Government say: ‘that is your law, that is what will happen.’  We will accept that?

TREASURER:

Well they are Australian citizens and the Australian Government makes representations on behalf of Australian citizens.  The difference here of course, is Amrozi and co. aren’t Australian citizens, they are not entitled to the protection of the Australian Government.  The people who were, were the 88 innocent civilians. 

HUTCHISON:

Mr Costello, I will just get you to pop some headphones on next to you.  We have got some calls.  First up, (inaudible), good morning. 

CALLER:

Good morning Geoff. 

HUTCHISON:

What is your question for Peter Costello?

CALLER:

Good morning, Peter.  I am glad you said you are only interested in the future, or more interested in the future than the past.  I would like to know what advice you have for young home buyers who are currently facing 100 per cent increase in the interest rate?  Thank you very much.  

TREASURER:

Well, you might know something about interest rates that I don’t know.  I think it is important that we keep interest rates low in this country.  The standard variable interest rate at the moment is about a bit over 8 per cent.  When I became Treasurer it was over 10 per cent and it had been as high as 17 per cent.  So I am very conscious of keeping interest rates low in this country and the critical thing at the moment is to keep interest rates low even though the economy is growing very strongly.  It is much easier to keep interest rates low when you have got high unemployment (inaudible).  We used to have double digit interest rates when we had much higher unemployment – double the unemployment rate – we did today. 

HUTCHISON:

Mr Costello, last election interest rates was a very important subject but now you have a new phrase that has found its way into the vernacular and it is mortgage stress and that seems to have found its way into the debate.  I think the whole issue of housing affordability is going to be very, very important in this election.  What will you be able to offer people?

TREASURER:

Well the most important thing I think, to keep people out of mortgage stress of course, is to keep them in work.  What the figures show is that most people who suffer repossession are people who lose their jobs or have family breakdown.  That is, there is a big material change in their income.  Australia’s default rate on mortgages is very low by international standards.  But, it is important, I think, that we make sure that pressure on interest rates is downward pressure rather than upward pressure – that is what our economic policy is designed to deliver.  And of course, I think it is also important that we look at the supply side of housing to try and get more land released for housing and more houses built in Australia. 

HUTCHISON:

Good morning Geoff. 

CALLER:

(inaudible). 

HUTCHISON:

What is your question?

CALLER:

Oh my question is in regards to the (inaudible) of government advertising that they have done over the last ten years and the (inaudible) at the moment.  And why on earth, you know, this should be allowed?  I mean, the Government seems to think that taxpayers money as a (inaudible).  I don’t think (inaudible) or Liberal Party ads, it has all been you know, (inaudible) effectively been the taxpayers are paying for it.  And I just want to read a sentence from a (inaudible) Nick Greiner, the Premier of New South Wales in the lead up to an election back in 1991 and he issued this (inaudible) and said there must be no advertising that could be (inaudible) in a party political purpose.  (inaudible) are not to contained photographs of ministers and advertising must have a clear commercial or essential community information purpose and be necessary about the particular time.  So why is the Government over the last 11 years spent $2.2 billion of taxpayers money and most of it has been for (inaudible) just in the lead-up to en election?

HUTCHISON:

Thank Geoff. 

TREASURER:

Well that is not the case, of course.  The Government needs to inform people of various changes in policy and of course of their entitlements.  Take superannuation at the moment.  An area I am familiar with.  On the 1st of July this year, we abolished all tax on superannuation for people over 60.  Tax on pensions, tax on lump sums.  Now, the reason we did that was to encourage people to put money into superannuation.  If people don’t know that they can get a tax free payment out of superannuation then they won’t invest in it.  So, you have to alert people to their rights.  I think it is a very proper thing to do.  If you want to encourage people to invest in superannuation, you have got to let them know what their rights are. 

HUTCHISON:

Mr Costello, I read it, and I don’t know how accurate this is that the Government is spending something like $1 million a day on these government advertisements at the moment.  They are telling us, among other things about WorkChoices, now is that not also election ad?

TREASURER:

Because the advertisements on WorkChoices are alerting people to their rights – which they are.  There is a criticism if they are not, but what do I do if I suspect I am being underpaid?  The answer is, go to the Workplace Ombudsman.  Now, if you are alerting people to their rights, I think that is a perfectly proper thing to do.  It would be quite different if somebody was appearing on TV saying: ‘vote Liberal,’ or ‘vote against Kevin Rudd.’  But if you are alerting people to their rights, then it is a perfectly proper thing to do.  And can I make this point, I think the caller that he hadn’t seen advertising by government in this way before.  Every State Labor Government in Australia is advertising as we speak. 

HUTCHISON:

Yes, none of us like it very much though.

TREASURER:

Well we may not like it…

HUTCHISON:

But the spend from the public purse is astronomical these days – Federal and State level. 

TREASURER:

Well we may not like it, but to suggest that the Commonwealth Government is the only government that advertises.  I know nine governments in Australia that advertise – eight of them are Labor and one of them is a Coalition.

HUTCHISON:

Gwen has got a good question.  Good morning Gwen. 

CALLER:

Good morning, good morning everyone.  Mr Costello, you are an employee of the Australian people, correct?

TREASURER:

Well, keep going.  Yes. 

CALLER:

So the people of Australia want and need to know the date of the election.  Why can’t you give it?  And please don’t say you don’t know. 

TREASURER:

Well you asked me not to say I don’t know, but it is the truth, what else can I say? 

HUTCHISON:

Gwen has gone.  Oh, hang on, you are back Gwen. 

CALLER:

It is a very poor government that doesn’t know the date of the election when it is obviously so close, that is all I say. 

TREASURER:

Well the way in which the Australian Constitution works is that the Prime Minister makes an announcement dissolving the Parliament and calling the date.  It has to be done within three years of the calling of that Parliament.  That means it can be done any time between now and the end of the year.  The Prime Minister will in due course make such an announcement – I don’t make such an announcement – and I can honestly say to you as a consequence of that I can’t give you the date. 

HUTCHISON:

Are you happy with that answer, Gwen?

CALLER:

No.  No. 

HUTCHISON:

The reason Gwen is frustrated – I know you get asked this a lot – but the question is what possible reason does the Prime Minister have for delaying an election announcement?

TREASURER:

It is not delayed. 

HUTCHISON:

But what value, you know, we have…

TREASURER:

But it is not delayed.  I think this is a very important point, Geoff.  It is not delayed.  The Constitution says that an election must be called within three years of the sitting of the Parliament.  It has not been delayed.  Nothing has been delayed.  The time hasn’t expired. 

HUTCHISON:

Why not call the election?

TREASURER:

Well.

HUTCHISON:

Was it because there was hoping to see a bounce in the polls which have not bounced for six months?

TREASURER:

Well, he will call the election as is required by the Constitution. I make this point, not only has it not been delayed but I think the Federal Parliamentary year is nearly three years, nearly all of the State Governments are four years.  It is not as if this abnormally long, it is actually by Australian standards one of the shortest Parliamentary periods.

HUTCHISON:

True, but we’ve had this mock-campaign for such a long time and I know it is not your fault for the (inaudible)… Kevin Rudd as Leader of the Opposition.

TREASURER:

Kevin Rudd has been campaigning all this year, so this means that John Howard should have called an election?

HUTCHISON:

Do you understand that the public is probably really, really fed up with this?  Or do you think that they are not?

TREASURER:

Well, if he called an election believe me you are not going to have a lessening of the tempo, you are going to have a increase in the tempo. 

HUTCHISON:

How much credit do you give to Western Australia for the money in Federal coffers?

TREASURER:

Well the mining industry of Western Australia is very important to Australia’s national economy, there is no doubt about that.  The exports of energy and of iron ore and other resources are very, very important for Australia’s export earnings and a lot of that, well probably the majority of that comes out of Western Australia.  There are of course other resources in states that are important to our …

HUTCHISON:

So the Gorgon project will provide hundreds of millions of dollars, how much is going to come back to this State with infrastructure development?  Kevin Rudd seems to be quite generous in his promises as far as how much to comes back here.

TREASURER:

Oh, really?  What was his promise?

HUTCHISON:

A hundred, I will have to get the figure but I remember it was approximately $100 million.

TREASURER:

A $100 million, when?

HUTCHISON:

Do you want to talk about him?

TREASURER:

No, no I make the point, no, no I am not trying to have a go at you.  I think Kevin Rudd was very, very clever and made a promise that wouldn’t amount to very much at all.  As I understand what he said was that there will be $100 million when the Gorgon Field started paying Petroleum Resource Rent tax.  That may be in 10 years time.  So I think the promise was in 10 years time he would pay $100 million.  Now, do you want to wait for 10 years to get $100 million?  Okay, fair enough.

HUTCHISON:

What would you give back then, Mr Costello?

TREASURER:

The GST arrangements are delivering a windfall of $500 million a year now.  $500 million a year now, that is the system I’ve put in place.  Kevin Rudd has said $100 million in 10 years time.  Now, it might be clever politics but I don’t think it is a lot of money.

HUTCHISON:

I guess people are asking is there more, than the generous GST payments to come back here.

TREASURER:

Well we do.  I mean we have numbers of funds, such a road and rail funds to build infrastructure and the important thing there is that they are distributed to the areas of most need and I can assure you a lot of that will be distributed to Western Australia.

HUTCHISON:

Let me try and get to as many calls as we can before eleven.  Naomi, good morning.

CALLER:

Good morning Geoff, listen, thank you very much.  And Mr Costello, thank you for taking my call.

TREASURER:

Thank you.

CALLER:

Now this one has worried us for a long time, it is regarding DFRDB.

TREASURER:

Yes.

CALLER:

I want to know whether you can give me a reason why the true value of our pension is being eroded because it is not being indexed to keep track with wages and any CPI calculations.  There have been a lot of questions asked about it.  It is not just our pension, it is the fact that, you mentioned before how in next year, normal people are going to, not excluding members, the general public are not going to get taxed on their superannuation.  We are still going to be subjected to a 10 per cent tax on our super contribution that we have already been taxed on years ago.  Now, I know it is probably difficult for you to give me an answer on this now, but can you look at it, because there are a lot of veterans out here that are not managing as well as what you think they are on their pensions.  Can you give me an answer?

TREASURER:

Sure.  Look, it is a pretty complicated area and let me just generally explain as best I can, that the Defence Force Pension is paid as a pension.  It is not what we call an accumulated superannuation scheme where you put money in, where that money is invested, where you get back what was put in.  It is paid as a pension.  Because it is paid as a pension the earnings were never taxed.  It wasn’t what we call a taxed superannuation scheme.  So, if it (inaudible) on the way out, it isn’t tax free as it was never taxed (inaudible).  What we introduced to try and help those people and we helped those who were under accumulation scheme is a rebate on their tax.  They will be entitled to a 10 per cent rebate on the tax of their entitlement.  We did that to try as nearly as possible to even up the tax treatment with those who are going get a tax-free threshold with accumulation funds.

HUTCHISON:

Patrick, good morning.

CALLER:

Good morning, Geoff.  Mr Costello, I want to talk about climate change.  I am really concerned that a lot of these issues that you are talking about now won’t be worth a dot in a very space of time.  Half of what …read the .. last few years.  Interesting to read the literature over the last few years, I read an article in 2003 that said … 2007 … getting shorter and shorter to the point where some of these … the same… we’ve got five years to turn things around, which to me, seems looking at the way the Government approaching climate change …

HUTCHISON:

What is your question, Patrick?

CALLER:

The question is, what is the Government doing about climate change?

TREASURER:

I think it is a fair question and the Government wants to move on several …

HUTCHISON:

…put all those ads on television, I know that much.

TREASURER:

Perhaps we need to get them to our caller.  Let me go through some of the things that the Government is doing.  First of all, of course, it is Government policy to meet our Kyoto target, and we are on track for that.  Secondly, we are going to introduce an emissions trading scheme which will put a price on carbon emissions and people will have to pay for them as a consequence of that.  And thirdly, we have got a low emissions technology demonstration fund which gives grants to promote cleaner forms of fuel.  And one of the areas is, for example, we announced recently a grant to build a solar power plant on the East coast of Australia.  Fourthly, we do have renewable energy targets.  Fifthly, we do have rebates for people who want to put solar panels on their houses or indeed solar hot water systems.  That is quite a lot that the Government is actually doing in this area.

HUTCHISON:

Patrick, thank you for calling.  We’ve only got about a minute left.  So, it is an appropriate time to ask Peter Costello, what kind of Prime Minister would you be?

TREASURER:

Well I am focussed on the current election and if we are successful at the current election, then I hope to continue on as Treasurer. 

HUTCHISON:

But more than that Mr Costello, we understand that a vote for Mr Howard is essentially a vote for you and sometime during the term, it is acknowledged now, so it is a fair question…Prime Minister.

TREASURER:

At some point before the 2010 election, John Howard has indicated that he wouldn’t be contesting the 2010 election, so at some point before the 2010 election there would be a change and a succession and we will deal with that when that arises.

HUTCHISON:

Thanks for coming into the studio this morning.

TREASURER:

Thanks, Geoff.