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 13/03/2003

TRANSCRIPT

THE HON PETER COSTELLO MP
Treasurer

Doorstop
Parliament House, Canberra

Thursday, 13 March 2003
11.50 am

SUBJECTS: February Job Figures; Budget reforms; Iraq; Graeme Samuel; ethanol

TREASURER:

Well, Australians will welcome the fact that the unemployment rate fell in February to 6 per cent, which is the lowest rate since Labor's recession in 1990. In addition to that the very, very strong jobs growth that we saw in December and January, has been more or less maintained, a slight reduction in the number of jobs, but coming off increases of very substantial proportions in December and January means over the last four months, something like 190,000 new jobs have been created. Considering, in the light of the worst drought in a century, the difficult international situation, rising oil prices, weakness on international share markets, it demonstrates a very strong resilience in the Australian economy, the kind of resilience that was noted by the OECD in its recent report. So in the face of shocks in the Middle East on oil prices, domestic buffeting from the worst drought in 100 years, for unemployment to have fallen and to be at the lowest since the recession of 1990, is something that all Australians will welcome.

JOURNALIST:

Leading indicators are suggesting that we may see a slowdown in the rate of jobs growth in mid-2003. Do you subscribe to that?

TREASURER:

Well, you have got to remember this, that we forecast an unemployment rate of 6 per cent by the end of the financial year, which is June. We have already arrived at that forecast. The prospects for the Australian economy in the coming year will be influenced by a very difficult world situation, the threat of war in Iraq, rising oil prices. One thing that could go for us, we hope, is the breaking of the drought. You only get a drought like this every hundred years or so. So that will be going for us, the international situation will be going against us. But the resilience of the Australian economy, I believe, will mean that we can come through those difficulties.

JOURNALIST:

Given that resilience, do you think there is now a good chance that the unemployment rate could fall below 6 per cent since, the first time since the early `90's?

TREASURER:

I think to get the unemployment rate below 6 per cent and to keep it there will require further structural change. It will require the passing of the Government's industrial relations legislation, in particular, the passing of the Government's Budget measures from last year, in relation to pharmaceuticals and welfare reform. It is possible with these figures bouncing around, that it will bounce up and it will bounce down, but to take the unemployment rate down below six and to keep it there, will require the implementation of the Government policy. I call on the Senate and I call on the Labor Party in particular, to cease their campaign of opposition in the Senate, to pass the Government's legislation and let us get on with the job.

JOURNALIST:

What sort of levels do you think we could see these reforms do pass through the Senate?

TREASURER:

If the Government's programme passed through the Senate I think you could see the unemployment go below six and stay there. But these reforms have now been held up, some of them for 3 and 4 years, and who is suffering because of Labor's opposition - people who are looking for work.

JOURNALIST:

Do you think you need to learn some more Senate seduction techniques to get those things through?

TREASURER:

No, I think that what we need is a responsible Opposition Leader. I think you would have to agree this is probably the most irresponsible Opposition Leader we have seen in a very long time.

JOURNALIST:

Treasurer, can you say whether the Government backbenchers are completely unanimous in their support for the Government's position on Iraq?

TREASURER:

In my experience, having talked to a lot of backbenchers, not all obviously, but has moved around a lot of the backbenchers, I believe there is a very high degree of agreement in the Coalition parties on the Government policy in relation to Iraq. Yes I do.

JOURNALIST:

Would you have handled the situation any differently if you were leader?

TREASURER:

Look, I think that the critical issue here is the disarming of Saddam Hussein from weapons of mass destruction. And I think that is the objective that we have got to keep in mind. We all want peace, every one of us wants peace. But peace is both short-term and medium-term, and medium-term, dictators with weapons of mass destruction are not a recipe for peace.

JOURNALIST:

(inaudible) the Budget surplus of 2003-04 with the cost of a possible war?

TREASURER:

Look, we have already made allowance for the pre-deployment of Australian troops in our Budget figures, hundreds of millions. Now, I can't go any further than that because I don't know whether there is going to be a war and I certainly don't know its extent or its duration. But I can tell you, that we have managed to make allowance already, and keep our Budget in a very strong position. Can I make this point - Australia is forecasting a budget surplus, slim surplus, in 2002-2003, the current financial year. There are very few other countries in the world that are in that position. Certainly not the United States, certainly not the United Kingdom, certainly not Europe, certainly not Japan. So the position of the Australian Budget compared to developed countries around the world is strong. It is very strong.

JOURNALIST:

Treasurer, are you considering any other nominations for the head of the ACCC with Graeme Samuel now in deadlock?

TREASURER:

We support the best qualified person and I have not heard anyone suggest that Mr Samuel is not the best qualified.

JOURNALIST:

Treasurer, do you believe that Tony Blair's position as Prime Minister in England is under threat?

TREASURER:

Look, I have got enough trouble understanding Australian politics to comment on British politics.

JOURNALIST:

Treasurer, there was a report in this morning's Australian that Cabinet would mandate a 2 per cent average ethanol content in petrol. Is that correct and...

TREASURER:

Not as far as I know.

JOURNALIST:

...do you support any ethanol being in petrol?

TREASURER:

Well, what I read in The Australian today, was that a Minister was proposing this. It is the first time I have heard of it. I find it very unlikely. Very unlikely. I suppose Ministers can propose anything they like, you had better ask him, but I found the story very unlikely.

JOURNALIST:

What about the reported $150 million subsidy, the oil companies, do you think that's a good idea?

TREASURER:

Well, as I said, I found the whole story very, very unlikely, but you'll have to go and ask the Minister. As far as I know there is no such plan. It hasn't reached my ears, I can assure you of that.

JOURNALIST:

The market is still awaiting a replacement for Dick Warburton, will that replacement be sitting around the Central Bank's board table come early April at the next monthly board meeting?

TREASURER:

Could be, it depends on when the Cabinet decides on these things.

JOURNALIST:

Have you put any names to Cabinet?

TREASURER:

What I put to Cabinet is a matter for Cabinet.

JOURNALIST:

Treasurer, does the Prime Minister have a difficult job today selling the war at his lunch time address?

TREASURER:

Look, this is a difficult time, let's not mince any words about it. We have a situation where the world is looking at the situation in Iraq and there are different countries taking different positions. And Australia has pre-deployed its troops and believes it is important for the disarming of that dictator, and this is a difficult time. And people will want to know whether we are doing the right thing. And the point that the Prime Minister will make and it is the point I have made, is, we all want peace. But you have got to consider it in the immediate and the medium-term. You won't get peace by walking away from a bigger problem in the medium-term. And to think that a dictator can hang on to weapons of mass destruction, and the message that that will send to other would-be dictators around the world, is not a recipe for peace. It is a recipe for greater difficulties down the medium-term. Now these things have to be balanced, you have to make judgement calls, and I am sure the Prime Minister will be making such in his speech today.

Thanks.