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 23/07/01

Transcript No. 2001/099

 

 

TRANSCRIPT
of
THE HON PETER COSTELLO MP
Treasurer

Doorstop
Loreto Mandeville Hall
Melbourne
Monday, 23 July 2001
3.00 pm

 

SUBJECTS: Producer Price Index, Republic, bonds, tax cuts

JOURNALIST:

Can you comment on the PPI figures Treasurer?

TREASURER:

Well, this is a new index that has just been put out. It is hard to compare it with the Consumer Price Index. But it shows that whilst there has been movement in prices they are not undue or unexpected, but movement in prices appears to be consistent with continuing low inflation. We will be getting a Consumer Price Index figure during the week, and I think that will give us a pretty clear snapshot as to where underlying inflation lies. It is our object, of course, to keep underlying inflation low, which is consistent with the current interest rate regime.

JOURNALIST:

Do you support a republican debate before 2005?

TREASURER:

Before?

JOURNALIST:

2005?

TREASURER:

Look, as you know, during the most recent Referendum campaign, I supported a yes vote because I thought the model that was put up was consistent with the continuation of the Parliamentary system, whilst changing our symbolism. The Referendum was defeated. And I think you have got to wait for this debate to come back again from the grassroots. I think one of the lessons that came out from the last Referendum is that the public hadn't been engaged. I think probably the people that had been pushing it had been in engaged, but I'm not sure the public had been engaged. I think the important thing now, is not to push the public, but to let the public get re-engaged in the whole issue. There is a meeting going on in Corowa on the weekend. Corowa was the scene of the reinvigoration of the Federation proposal, and I think that is the way things ought to go. I think it ought to now become a peoples' movement and when the people feel that they are ready to re-look at the issue, that will be the time.

JOURNALIST:

What do you think of the proposal to merge State and Federal bonds?

TREASURER:

This has been an issue which has been put to me by some of the State Treasurers. I said to them that we would examine it. I am happy to examine it. Obviously some of the States are not in the strong financial position of the Commonwealth, and would probably have to take a margin if their credit rating was different. But, it is something that I am prepared to look at, but it is not something that I imagine is going to happen in the immediate future.

JOURNALIST:

I take it you are not in favour of a fast-track republic then?

TREASURER:

Look, I think the last Referendum was a fast-track and it was defeated. So, if this question is going to come again, and there aren't many questions that come again, obviously the Australian public will have to be enfranchised. And it is not until the Australian public feels that this is a movement of their own, sufficient for it to get a majority of votes, and a majority of votes in a majority of States, it is never going to come to anything. And I'll say to any politician that wants to try and make political capital out of it, that is not the way to proceed. I think what the public showed is, they will decide this issue, when they're interested in it. And a politician who wants to go out and get partisan votes on the issue, is not being fair to the issue, is not taking the issue seriously and is destined to fail, I think. And I would say that to any politician who thinks that they can turn this into some kind of vote winner. Constitutional Referendums aren't there for partisan votes, and if they are really serious they would be waiting for the Australian public to be enfranchised.

JOURNALIST:

Treasurer, would the Coalition be in a position to offer tax cuts at the next general election?

TREASURER:

At the next election there will be this critical difference between the Coalition and the Labor Party. The Labor Party will have higher income tax rates than the Coalition. It has to have higher income tax rates than the Coalition because of this stupid rollback policy. If it is going to rollback the GST and spend the same or more money, the money is going to have to come from somewhere, and it will come from income tax. So we are in the position where we have put in place an indirect tax base that can fund social services. And, the Labor Party says it wants to rollback that base, well if it is going to have the same level of social services, it will have to have other taxes higher, and those other taxes will be income taxes.

JOURNALIST:

Would you be positive about the economic outlook for the country? Do you think the country will be in an economic state that you'll be able to promise lower income tax rates at the election?

TREASURER:

I know this, that under a Coalition, income taxes will always be lower than under a Labor Party because the Coalition has put in place a broad based goods and services tax to fund services. The Labor Party wants to destroy that base, so to fund its social services it will have to have higher taxes elsewhere than the Coalition, and they will be higher income taxes. People have got to understand this. Mr Beazley has tried to take a cheap, populous road. And he only wants to tell the public half the story. His cheap, populous road is, that he can narrow the indirect tax base, but the other side of the story is, that the narrower that indirect tax base goes, the higher direct taxes go. That is the consequence and that is why after 5 ½ years his tax policy is now in tatters. Now, I'd better go.

Thanks.