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 27/01/2004

TRANSCRIPT

THE HON PETER COSTELLO MP
Treasurer

Interview with Alexandra Kirk
AM, ABC

Tuesday, 27 January 2004
8.05 am

 

SUBJECTS: Labor’s $2.4 billion costings black hole; Telstra; superannuation surcharge; ALP Conference; Tax relief.

PRESENTER:

The holidays must be over. The roads are busy, schools are preparing for the new term and politicians are arguing about money. Opposition Leader Mark Latham is unveiling more spending promises in the lead-up to the Labor Party Conference prompting Treasurer, Peter Costello, to claim that he’s uncovered a $2.4 billion black hole in Labor’s election costings. Labor insists it’s found between $5 and $6 billion in savings and that its spending measures will be fully funded. Mr Costello has joined us from Melbourne and he is speaking to Alexandra Kirk.

KIRK:

Treasurer, good morning.

TREASURER:

Good morning Alex.

KIRK:

Now Labor says that all its election spending promises are fully funded. The savings are based on your Budget figures. Much of their savings are based on in fact scrapping Government programs plus not selling the rest of Telstra. So how do you claim to have found a $2.4 billion black hole?

TREASURER:

Well, the Labor Party has now promised, I think, $6 billion of new funding and they released a list of how they would pay for it. $2.4 billion of that spending saving just doesn’t exist. Just does not exist. And then we had a…

KIRK:

How do you justify that?

TREASURER:

Well for example they say that they will save money by not selling Telstra. What they forget is that by selling Telstra and using the money to retire debt, doesn’t cost you, it saves the taxpayer money.

KIRK:

But in the first instance actually…

TREASURER:

So they say…

KIRK:

…preparing Telstra for sale does cost money.

TREASURER:

And that is offset by the interest payments you save from the proceeds. They have just left the other side of the equation out. Let me give you another example, they say for example that not by having, by not having choice in the public superannuation scheme they can save money. But the Government has announced that it is not proceeding with that choice. It just doesn’t exist. The saving doesn’t exist. There’s another $700 million does not exist. Let me give you another one. They say that they won’t cut the superannuation surcharge and they will save money. The superannuation surcharge has been cut. It has been cut. It has been introduced. So, unless they are going to turn around and say, oh we are going to reintroduce increases in the surcharge the so-called saving just does not exist.

KIRK:

But Labor says it hasn’t committed to those super savings that you refer to because the measures actually went through so there are no savings to be had. Now you still…

TREASURER:

Absolutely. There are no savings to be had and yet superannuation surcharge appears as one of its savings measures, $700 million. $700 million. And there are no savings to be had. That’s $700 million that doesn’t exist. That’s absolutely right.

KIRK:

You still don’t know the size of the surplus. That’ll be available going into the election for election promises. So, who did your analysis of Labor’s costings?

TREASURER:

Oh, we do them ourselves on the basis of the material we have from the official Departments, Treasury and Finance. And you know, for example, it’s pretty obvious, if you claim you can save $700 million from cutting, from not cutting the superannuation surcharge when it’s been cut you can’t say that. It’s obvious. Now, if you say, well we can save money by not introducing choice and the Government has announced that it won’t be introducing choice you can’t save the money. If you say, oh well we won’t prepare Telstra for sale, and that’ll save us money but forget about the savings you get from retiring debt. This is basic stuff. This is amateur hour. Now, you have read in the paper Mr McMullan today says, he has warned people, don’t believe what our Shadow Ministers are saying. He has said all of the promises that they have been making they won't be able to deliver on. That is what he said. He has said to people, when they put out these press releases, when they claim that this is our policy don’t believe them. Here is a Shadow Minister essentially saying that his other Shadow Ministers have no credibility. The truth of it is that none of them have credibility when it comes to money.

KIRK:

Well what he is saying is, isn’t he, that only 25 policies have the tick and they’re the only ones that count when you are talking about spending measures. So in that case, haven’t you jumped the gun?

TREASURER:

Well, the 25 don’t add up because, you know, I have just given you three measures which pull their savings apart, absolutely. And then outside the 25, what Mr McMullan is saying is don’t believe the Shadow Ministers. Well, who is to say that he is right and the Shadow Ministers are wrong? Let me tell you something. At the ALP Conference this week, business will roll up and they will listen to Shadow Ministers promise them the world in all sorts of areas. Now I want the Australian public and business to bear in mind that Senator, Mr McMullan has said, don’t believe those promises. In fact I would say, don’t believe any of the promises you hear coming out of the ALP National Conference. It is all done for publicity. There is no basis behind it. Labor hasn’t done the work and they can’t be trusted with money.

KIRK:

But in coming out here before Labor’s National Conference, are you worried about Mr Latham’s profile and momentum since he became Leader?

TREASURER:

No, I was pretty shocked by the way in which the Labor Party began its conference yesterday, by claiming it could save money that didn’t exist and today by claiming that you shouldn’t believe its own Shadow Ministers. I have heard of people saying after an election you shouldn’t have believed our promises, I have never heard of anyone saying before an election, don’t believe our promises. This is a first. And I thought that all of those people that go to the conference should bear in mind the words of Mr McMullan, don’t believe our promises.

KIRK:

Well, you have a healthy surplus and you expect that to continue in the May Budget, so much so, that you have been talking about a tax cut ahead of the next election. So isn’t talking about a black hole at this early stage, nine months out from the election, suggesting that the coffers may not be as full as you have previously indicated?

TREASURER:

Well, the point I have just made is, Labor has promised the world and it can’t deliver. And when it says that oh we will do this, this and this to pay for it, it can’t do it. So I am just saying, Mr McMullan is right, you can’t believe those promises. As for the Government, our position has been that if we can balance our Budget and if we can have low debt and if there is a surplus then the people who have created that, the taxpayers of Australia, should have a call for tax relief. That is what we did in last year’s Budget. If we had the opportunity, that’s an if, at the time of this years’ Budget that would be the approach we would be taking.

KIRK:

Treasurer, thanks very much for joining us.

TREASURER:

Thanks Alex.