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

Peter Costello


11 March 1996 - 3 December 2007

Transcript of 31/03/01

Transcript No. 2001/030

Hon Peter Costello MP

Victorian State Council, University of Melbourne, Hawthorn
Saturday, 31 March 2001

SUBJECTS: Dollar, Interest Rates, Backbenchers


The dollar plunged to new lows overnight. What can you do about it? And what is your reaction?


I have said on numbers of occasions before, the things that are influencing the Australian dollar – US dollar exchange rate at the moment are not reflecting economic fundamentals – balanced Budget, low inflation, low interest rates - are working for Australia and the exchange rate is not fully reflecting those fundamentals. I also note incidentally that the Opposition, an irresponsible Opposition, has tried to make political capital out of that. This irresponsibility of Mr Crean and Mr Beazley is now even beginning to worry State Labor figures. On Friday night, John Brumby went on Victorian radio and called on people to stop talking the economy down. Mr Crean couldn’t even last 24 hours. He was out there today in breach of John Brumby’s call, behaving as per usual in an irresponsible manner. Now if the Labor Party has a policy on the currency, it had better tell us what it is. Because rollback isn’t going to do anything. And handing Australia across to trade union leaders isn’t going to do anything. And its campaign of sabotaging the Government’s economic policy in the Senate isn’t going to do anything. So if Labor wants to complain we’d better ask what its policy is because all of the policy it seems to want to introduce won’t contribute to economic growth in fact far, much more likely to do the reverse.


Do you think there will be another drop in interest rates then?


I can’t speculate on the future course of interest rates, but, and I’ve said before, that we have a low inflation economy, there are no price risks that are emerging and in the context of a low inflation economy, the Reserve Bank has to meet its target which is 2 to 3 per cent over the course of the cycle. It doesn’t look as if that is at risk of blowing out at the moment.


It’s been reported that groups of MPs are meeting to discuss the Prime Minister’s personal performance. Are you aware of that?


No I’m not. Thank you.