The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Peter Costello

Peter Costello

Treasurer

11 March 1996 - 3 December 2007

Transcript of 05/11/99

Transcript No. 99/80

TRANSCRIPT OF
The Hon Peter Costello MP
TREASURER

Doorstop Interview

Melbourne Convention Centre
11.45 am
Friday, 5 November 1999

SUBJECT: Budget, Republic, Interest Rates

JOURNALIST:

Mr Costello, the Budget forecast, the revisions are to be released this month, can you give us a more definite timeframe, a date in November?

TREASURER:

Well, well release it as soon as its ready. We hope that well be able to release the Mid-Year Review in mid-November, but at the very latest a bit after that. Were working on them at the moment and when its ready well have it all there for you.

JOURNALIST:

Are we going to see our annual growth this year revised upwards?

TREASURER:

Well, we put out a forecast of around about 3 per cent in the 1999/2000 Budget, which is a bit of a slowing on last year, but still by world standards, quite strong. Were looking at that growth forecast and it may be that we can revise, its more likely to be revised up than down, if it is revised, but well see by the time we put out the forecast.

JOURNALIST:

With just 24 hours to go, how are you feeling about the vote tomorrow?

TREASURER:

Look, I think its a wonderful opportunity tomorrow for us to set the future course for Australia. I think that in their hearts and in their heads, Australians feel republican. Our Constitution is a constitution which provides Australia as a Constitutional Monarchy and its served us well over the past. But I dont think its the modern symbol of Australia and I dont think its the symbol for the next century. We have an opportunity at the Referendum tomorrow to make sure that our Constitution reflects whats in our hearts and in our heads. And I think that in our hearts and in our heads we feel republican. And with a Head of State performing the duties that are currently performed by the Governor-General, that is a modern symbol for Australia, a President, I think will have more enduring symbols for the next century of Federation.

JOURNALIST:

If were denied that symbolic change, how much of an embarrassment will it be firstly to Australia, and secondly to our Prime Minister?

TREASURER:

Well, I think if on Sunday, Australia is still a Constitutional Monarchy, many people will feel that its been an opportunity missed. And as we go forward our hearts and our heads will be telling us were republican and our Constitution will be telling us were monarchists. And I think the Constitution will start bruising the reality. It will be telling us something we dont feel. And I think that will give us some difficulties. It will be hard to explain it to ourselves as to why that happened. I dont think theres any reason why people should feel threatened by the change. In fact, I think a Yes vote will mean Australia going on in a much more normal way after Saturday than a No vote because a No vote will be said by some to mean, we feel monarchist. It will be said by others to say, no, no, no, we feel radically republican. And I think youre going to get a very large argument about what it actually means and what it actually achieves. So, Id like to see the Constitution reflect what I think has happened in our hearts and our heads. And I think thats that we now think of ourselves more in republican terms then in terms of monarchy.

JOURNALIST:

What does your politicians gut feeling tell you about the result? Do you think its going to succeed?

TREASURER:

Look, my guts tell me no more than the polls. I look at the polls, I think theyre the best indicators. And you would have to say, in the polls there is obviously a lot of people that are still worried about change. And to those people Id say, this is safe, its secure, life will go on very much as it has, but well have a modern symbol at the head of our nation and one that well feel much more comfortable with. We dont feel comfortable anymore when Australia is represented on the international stage with the Queen representing us. We know that, because if we did feel comfortable about that wed have the Queen at the Olympics in the year 2000. We know thats not right, so we have the opportunity to change our Constitution. To make the Constitution reflect the way in which we really feel.

JOURNALIST:

Treasurer, do you believe the potential inflationary impact of the GST contributed to the RBAs decision to raise rates on Wednesday?

TREASURER:

Well, of course that was not a real or imagined reason for the Boards decision. The Board made very clear what its decision was based on. Principally based on the fact that the international economy is much stronger then the last movement in interest rates when we reduced rates. Now weve been through the biggest financial and economic crisis of our time in 1997, 1998, 1999 and our whole region was in recession and we needed an accommodative monetary policy. And what the Reserve said is, as the world economy picks up, it wants to move further back to neutral. Thats not actually a bad thing for Australia. That the world is moving back and the world is going to start adding to our growth rather than taking away, as has been the case over the last two years.

JOURNALIST:

Do you think given the profits that the banks announced over the last couple of days theres an argument that they should try to hold any interest rates down?

TREASURER:

Well, there is no grounds whatsoever for any bank to move its interest rates, its lending rates, more than 25 points, more than 0.25 per cent. I noticed this morning the Commonwealth Bank moved its rates by 0.25 per cent. There is no ground for any other bank to do any more than that. Now there is also opportunities, of course, for banks that want to get customers to move by less. Im not against that. Its the competitive bank that is going to get the customers here. But if there is a bank that says, were going to use a 0.25 per cent movement in official rates to increase our lending rates more, it is using that as a cover. Theres no grounds to do so and Id say to consumers shop around and get a competitive deal.

JOURNALIST:

Can you do anything to stop them though?

TREASURER:

Ill be watching them very, very carefully. Thanks.