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 1/06/01

Transcript No. 2001/082

TRANSCRIPT
of
HON PETER COSTELLO MP
Treasurer

Doorstop
Wantirna South
Friday, 1 June 2001
12.30 pm

 

SUBJECTS: Aston Liberal candidate Chris Pearce, bracket creep, capital expenditure and building approval data, One.Tel employee entitlements

TREASURER:

Well, it is a great pleasure to be out here with the Liberal candidate for Aston, Chris Pearce, who is a local, hes a family man, hes been on the local council, he has a local business and I think he will be a great candidate to replace Peter Nugent who had an untimely death and who served this area so well.

The last time that Aston was held by the Labor Party in 1990, home mortgage interest rates were 17 per cent; today they are under 7 per cent. That means for a family in this area on an average mortgage, they are saving today $1000 a month, compared to what they were paying the last time the Labor Party held the seat of Aston. $1000 a month for average families, thats the saving that has come through lower interest rates, good economic management. We want to continue that. We know it is going to be a hard task here in Aston to hold this seat, but Chris is a great candidate. Our policy of keeping interest rates low and helping families has been helpful. The unemployment rate is now half of what it was in 1990 when Labor last held the seat and we will be fighting to retain the seat of Aston at the by-election in 6 weeks time.

JOURNALIST:

Do you think that these recent complaints about bracket creep are going to assist you in retaining the seat?

TREASURER:

I think so, because youve got to remember this, that under the Labor Partys tax rate a person on average earnings would today be paying a top marginal rate of 43 cents. Because we have reformed the income tax table, a person on average earnings today is paying a top marginal rate of only 30 per cent, of only 30 per cent. And that means that for something like over one million people, they have had a reduction in their marginal tax rate, down from 43 per cent to 30 per cent. Average families in areas like this have benefited from cuts in income taxes, and as Mr Beazley said yesterday, he doesnt think income taxes are too high, in fact, if he had had his way they would be higher. They would be higher today.

JOURNALIST:

Can you comment on the capital expenditure and (building) approvals data we saw yesterday?

TREASURER:

The building approvals data we saw yesterday were encouraging, a bit of strength returning to construction as the transitional effects wash out - the bring forward in the first part of the year 2000, the slow-down in the second part of the year 2000 - they were encouraging. I expect that building approvals will strengthen through the year. It will be supported by the First Home Owners Scheme and now you can get a grant of up to $14, 000 for the First Home Owners Scheme and lower interest rates. In relation to capital expenditure the plant and equipment figures were stronger than the building and construction. In relation to building and construction, youre still seeing a lot of the transitional effects wash out in the first quarter, but wed be expecting that again to pick up in 2001 - 2002.

JOURNALIST:

Treasurer, when can we expect to see the terms of reference on the (inaudible) to the HIH Royal Commission?

TREASURER:

Well, Im not personally handling that but I imagine it will be discussed by the Cabinet at its next meeting or so and it will be announced after that.

JOURNALIST:

Were you personally distressed to see another group of employees out of work following the One.Tel collapse?

TREASURER:

Oh sure. Look, nobody likes to see a private sector company get into financial trouble, nobody likes to see that. This is a private sector company that has got into trouble for whatever reason. I think that given the nature of that company and some of the investors involved, the company should be in a position to look after all of its employees entitlements, and I hope that it does.

JOURNALIST:

Well they say they have no money.

TREASURER:

Well, they have some substantial shareholders and I think the company should be in a position to look after its employees and I hope that it does. It will take some time before the dust settles, but I think they do have an obligation to their employees and I hope that they observe that obligation.

JOURNALIST:

Do you believe the $7 million each of the directors took in bonuses should be returned to the company so that, as called for by the union?

TREASURER:

Its hard to imagine, isnt it, that the directors could have been entitled to huge bonuses when their company was getting into financial trouble.

JOURNALIST:

Thats them driving the truck over there.

TREASURER:

Ill say that again, just wait for the truck to (inaudible)

Its hard to believe that directors could be entitled to huge financial bonuses for running a company when it was getting itself into financial trouble. It is hard to believe that, and I think the directors ought to have a look at the bonuses that they paid themselves. I think the company ought to make sure that it looks after its employees first and I cant see that those directors were doing such a good job that they were entitled to those bonuses, and I hope they reconsider their position.

Thank you.