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 23/05/01

Transcript No. 2001/073

TRANSCRIPT
of
HON. PETER COSTELLO MP
Treasurer

Radio 5DN - Interview with Jeremy Cordeaux
Wednesday, 23 May 2001
9.35am

E&OE

SUBJECTS: Budget

CORDEAUX:

He is with us. The Treasurer, Peter Costello, good morning.

TREASURER:

Hello Jeremy, how are you?

CORDEAUX:

Well they've poured over it from every point of view, in fact one of the journalists I see this morning has even gone to your astrological chart to check out your day.

TREASURER:

And what does it say Jeremy?

CORDEAUX:

Very good. It say's you're having a good day and big things in your future.

TREASURER:

Well, I had better consult that astrologer more often.

CORDEAUX:

Now tell me, what does this do, what does this Budget do, election spending, which is only, let's face it, just around the corner?

TREASURER:

Well the Budget continues responsible economic management, it's in surplus for the fifth consecutive year and that's enabled us now to pay down $60 billion of Labor's debts. And because the Budget position in the last year was stronger than most people expected, we're able to return some of the benefit to people in the community who deserve more help, in particular aged pensioners and self-funded retirees. And as you said, for the self-funded retiree, a tax-free threshold of $20 000 now, which means that they're finally getting justice under the tax system and for pensioners a payment of $300.

CORDEAUX:

A lot of people would scratch their heads maybe and wonder, this remedial work that is being done for the elderly and the self-funded retirees, maybe you wouldn't have had to do that had you had your eye on them a little bit earlier?

TREASURER:

Well last year we increased the pension and we increased it four per cent on 1 July and we've kept it two per cent above cost of living. So the pension today is, is higher than the cost of living by two per cent and that means that it's been increased over and above price rises and that includes tax changes.

CORDEAUX:

And you'll keep it always above two per cent?

TREASURER:

Oh yeah, oh yeah. And we actually, if wages rise faster than prices, we actually tie it to wages. But what we've done here is we've said over and above and in addition to that, the economy can do with a bit of with stimulus, the Budget is in a stronger position and can afford it and pensioners deserve it. So we're paying $300 to pensioners and part-pensioners and I think it will be warmly welcomed by the older Australians who'll benefit from it.

CORDEAUX:

You know Treasurer the one thing that seems to come up over and over again here in the court of public opinion is that people either didn't understand that $1000 given to certain people or you didn't explain it properly or people just chose to misunderstand it. But one way or another, it's got to be cleared up because it really does irk people that they think you promised them $1000 and they didn't get it.

TREASURER:

Well look, these things in the tax area, and I don't blame people, there's a lot of complications in the tax area and I know that only too well. The income tax is just, you know, incredibly complicated and what we said is, people who had savings and got income from those savings, it might be interest in the bank, or something else, then up to $1000 they would be given a grant dollar for dollar. A dollar from the Government for every dollar of income they had from savings. Now there were some people that weren't getting $1000 of income from savings, they might have only been getting $500.

CORDEAUX:

Or nothing.

TREASURER:

Or nothing. So when you give a dollar for dollar benefit, it depends on how much income they had. And that was the nature of that. But in relation to this grant which we announced last night, it's got nothing to do with your income. If you are a pensioner or a part-pensioner, an aged pensioner or part-pensioner ...inaudible... above pensionable age.

CORDEAUX:

That doesn't include disability pension or other pension?

TREASURER:

No, you've got to be above pensionable age - 65 for men, 61½ for women. You should get $300 next month and the only thing that can stop that is the Labor Party because we've got the legislation in the Parliament. If it's voted through in the next two days, you get $300 in June. So there's no questions about it, no questions of eligibility. The only thing that can stop it, and I hope they don't, I hope the Labor Party don't spoil on this one because they've been, as you know, trying to spoil on the Budget. I hope they just do pass it, because we can then get out to pensioners the $300 before the end of next month.

CORDEAUX:

Just going back to that $1000. I had somebody ring me yesterday, and he actually had the letter which was sent to him and he read it to me, and it was unequivocal, it was quite easy to understand but it is amazing how many people just didn't get the picture, they didn't get the story, they had the expectations but they didn't get the money.

TREASURER:

Well look I don't blame them and, you know, sometimes, when you got a letter it was clear, sometimes, you know, when it got reported in the media, and they might have read it in the media, you know the media might not have given them all of the detail. But there's no doubt about it and if you actually read the policy in the letter, that's the way it was structured. But anyway let's move on from that, because the good news is, $300 to pensioners and part-pensioners next month. The legislation's in the Parliament, and unless the Senate, you know, the Labor Party tries to use the Senate to block it, everybody should have that next month.

CORDEAUX:

Well it's not likely.

TREASURER:

I can't control the Senate of course, and you know the Labor Party does run a blocking game in the Senate.

CORDEAUX:

But it would be highly unlikely that it would block something as popular as that.

TREASURER:

Well you know, you just can't tell can you. They've tried to block so many things, but I just hope they don't block this one. And the other one of course is the compensation to POWs, again we have the legislation in the Parliament, and if that's passed this week, we can pay that next month as well. Look, it's a long time since the Second World War and the POWs deserve it and I think we can pay it to them.

CORDEAUX:

Indeed. Indeed. Is this an admission that the people, prisoners of the Japanese suffered more than the prisoners of the Germans, because the German prisoners of war are not included in this are they?

TREASURER:

Yeah, that's right. The prisoners of war of the Japanese did suffer more than other prisoners of war.

CORDEAUX:

Yeah.

TREASURER:

I think that's pretty well-known and the other countries that have made compensation, our allies in the war, Britain, New Zealand and Canada, have paid it to prisoners of.....

LINE DROPPED OUT AND CONNECTION LOST

CORDEAUX:

Sir, you there?

TREASURER:

Yeah, I don't know what happened there Jeremy.

CORDEAUX:

I think we've got an overload of calls on the exchange and people are trying to get through to make their comment. I guess the guys down at the Reserve Bank would have to be about your favourite people at the moment wouldn't they?

TREASURER:

Oh well, I think they do a good job. It's been a difficult time for them and for all of us involved in economic policy, but I think they do a good job.

CORDEAUX:

Well they were able to pay the Government a considerable dividend there. Was it about $2 billion?

TREASURER:

We don't actually go into the precise amount of dividends in the Budget but it was, it was of that order. They pay dividends. They're a bank and as you know banks always pay dividends. This is a bank that the Government happens to own and they pay a dividend just as Telstra pays a dividend to the Government because the Government has a 51 per cent ownership of Telstra as well.

CORDEAUX:

Treasurer, would you mind taking a couple of calls?

TREASURER:

Sure.

CORDEAUX:

Just a couple, I know you're busy and you've got an absolutely full, chock-a-block schedule. Hello Barbara.

CALLER:

Oh good morning Jeremy. Good morning Mr Costello.

CORDEAUX:

And what's your question?

CALLER:

What are you going to do with the disability pensioners Mr Costello? We still have to pay the GST and the levies and everything else and try and keep house.

TREASURER:

Well disability pensions were increased by four per cent on 1 July of last year, and we've made sure that disability pensions are two per cent above rises in cost of living. So if cost of living goes up, the disability pension will always be in excess of it, and in addition, you talked about levies, some of the levies that disability pensioners pay, we've abolished in this Budget, like Financial Institutions Duty, that's just one less levy pay, and that will be of real assistance for disability pensioners.

CORDEAUX:

Now to a quick call from Susan. Hello Susan.

CALLER:

Good morning. Yes I would like to ask Mr Costello, if your husband's over 50 years old, and you can't get a job in this State and you're living on $30.00 a week less than pensioners with no concession, and he's offering $800 for a course, there are no courses for $800. There's no job training, these men will be on the dole for years and you won't give them any extra money to live on like you've given to rich pensioners.

TREASURER:

Well I don't think pensioners are rich and I think there would be a lot of pensioners that wouldn't agree with the assessment that they're rich. In relation to people that are out of work, taxpayers funds are used to provide unemployment benefit, as you know, and in last night's Budget we increased funding for training for people who are of mature age, they are given job training, job search training. They've been given the opportunity for study and they have places in those training programs and if there is somebody over 50 that wants a place in some of the Government-run training programs, we can certainly put that person in touch with them.

CORDEAUX:

Well for South Australia, there are some very good aspects for the Budget. The largest defence upgrade in 25 years and that's something that we pride ourselves on being able to hold our own in.

TREASURER:

Can I say one of the other things of real benefit to South Australia in this Budget Jeremy is that, from last night we cut all taxes on businesses that pay, that buy cars. If you're a business, you buy a car, you don't pay any tax at all and that means if you're buying fleet, you'd be saving $3 500 a car and if you want to know what will help the car industry the fact that ...

CORDEAUX:

That sure will.

TREASURER:

Business can now buy cars tax-free I think will be of enormous benefit to the car industry. We cut taxes on cars for consumers with the GST and now we've abolished them for businesses, so I think that will be of real help to the South Australian car industry.

CORDEAUX:

For those people who do buy shares, they've got a break there as well and the Financial Institutions Duty, that's gone.

TREASURER:

Yeah, well if you buy shares, you don't now have to pay stamp duty from 1 July, it comes in on 1 July. You don't know have to pay stamp duties on shares. Five and a half million Australians own shares, did you know that? So they won't have to pay stamp duties and of course there are 7 million Australians who have money in superannuation funds that buy shares on their behalf and that will cut taxes for them. The Financial Institutions Duty is abolished. Company tax is being reduced on 1 July and self-funded retirees who are having tax reductions as well. So I think there's a lot of tax cuts in this particular Budget, that will be good for the economy.

CORDEAUX:

I know you've got to run, but they say that the next area of concern and the next area that's in need of some sort of close scrutiny is superannuation. Have you got any immediate plans to do something to make it simpler, make it more attractive, make the tax arrangements simpler?

TREASURER:

Well I think it should be simplified. I've said that before. But I've also said I think the important thing is to bed down tax changes before we move to superannuation. We're in the process of doing that. We've made a lot progress in relation to that. Once we've finished that, then we can get onto other activities.

CORDEAUX:

Thank you sir. Good to talk to you. Have a great day.

TREASURER:

Great to talk to you again Jeremy.

CORDEAUX:

Treasurer Peter Costello.