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 13/07/2004

TRANSCRIPT
THE HON PETER COSTELLO MP
Treasurer

Doorstop Interview
Senate Alcove Courtyard
Parliament House, Canberra

Monday, 12 July 2004
4.00 pm

SUBJECTS: Labor Costings; FOI; Superannuation; Kim Beazley; Iraq

TREASURER:

Mr Latham has made $9 billion of unfunded election promises to date and last week Mr Simon Crean said that his promises would be costed by PricewaterhouseCoopers. That strategy has unravelled today because PricewaterhouseCoopers has now disclosed the terms of the engagement that the ALP has given them and Pricewaterhouse says in its statement today under the limitations of engagement, listen to these words, “we will express no opinion as to whether the actual costs and savings of any initiative will be consistent with the ALP’s estimated costs and savings.” That is the limitation of engagement is that Pricewatershouse expresses no opinion on the costings. The terms of the engagement to Pricewaterhouse is to add up the figures and check the mathematical outcome. The assumptions that are going to be given are the ALP’s assumptions. Pricewaterhouse is not going to verify the assumptions. Pricewaterhouse is not going to cost the policy. What Pricewaterhouse is going to do is take the ALP figures, run them through an adding machine, and tell you what comes out at the end of them. This is an elaborate sham, so much so that Pricewaterhouse has been forced today to put out a statement saying precisely what it is going to do and what it is not going to do and what it is not going to do is cost the policies. ‘We will express no opinion as to whether the actual costs and savings will be consistent with the ALP estimated costs and savings.’ So the Pricewaterhouse contract has been specifically called not to tell you anything but to ensure you don’t know anything, that you don’t actually know what the policies are going to cost. Now, Mr Crean and Mr McMullan and I could run these figures through an adding machine, that doesn’t take very much. The critical question is what are the assumptions and what are the costs of the policies and that is precisely the thing that Pricewaterhouse says “we haven’t been asked to do and we won’t be doing.”

So, Labor’s elaborate sham has fallen apart from the day that it was announced which was the 5th of July, last week, to the date when Pricewaterhouse was forced to put out this statement today which I believe is the 12th of July. It lasted a week.

JOURNALIST:

Treasurer, once upon a time you had a tax policy and these (inaudible) you had now, and it didn’t add up, and you probably lost the election, the 1987 election as a consequence, wouldn’t it have been advisable to have something like what Pricewaterhouse has (inaudible) for the Labor Party on that occasion.

TREASURER:

Well, Labor, if the point of your question is, does Labor deserve to lose the election…

JOURNALIST:

You had a policy that didn’t add up…

TREASURER:

…hang on…

JOURNALIST:

…why couldn’t they find out whether their (inaudible) certainly…

TREASURER:

…well if Labor has policies that don’t add up and which are elaborately covered by a charade, they shouldn’t be voted into office, absolutely. Absolutely. And we now have $9 billion of promises out there. Mr Latham says he can spend $9 billion more, he can cut tax and he will have more left over at the end of it. That is what he says. And then he says, but you don’t have to take my word for it, ask Pricewaterhouse. We find out what Pricewaterhouse is doing, is it verifying those costings? No. Is it looking at the assumptions? No. What Pricewaterhouse is being done, is it has been given certain assumptions, given figures, add them up. This is an elaborate sham, this is a complete sham, and if the Labor Party wants to go into this election with an ounce of credibility, they will be renouncing these terms of engagement now.

JOURNALIST:

Did you…

TREASURER:

And they will be saying that Pricewaterhouse either won’t be doing anything for us, or Pricewaterhouse will be costing our policies, but to try and use the name of Pricewaterhouse to give you credibility for a task that you haven’t asked them to do, that is the sham.

JOURNALIST:

…did you or anyone else in the Liberal Party put pressure on PwC to put out this statement today?

TREASURER:

No, I didn’t. I did not, most definitely. I think Pricewaterhouse probably was aghast at what was said, because this is what Mr Crean said on the 5th of July, ‘the proposals from the costings that we have put forward, we have engaged Pricewaterhouse to do that independent check.’ ‘The proposals and the costings that we put forward, we have engaged Pricewaterhouse Cooper to do that check.’ This is what he said on the 5th of July, out comes this statement, what does it say, ‘we express no opinion as to whether the costs and savings will be consistent with the ALP’s costs and savings.’ You go right through here, they are not going to look at the assumptions, that is the whole thing about costings. Now, this is an absolute repudiation of Mr Crean and what he said on the 5th of July, seven days later and the thing that concerns me about that is anybody who reads this knows that the Pricewaterhouse costing is not going to be worth a zack in political terms, that the name is just going to be flashed out there to try and give some credibility to a whole lot of policies that don’t add up.

JOURNALIST:

Mr Costello, do you think that PwC has been unwise to enter into this sort of a deal with the Labor Party?

TREASURER:

Well, I think PwC has been wise to disclose the true nature of the engagement, let me make that point. It is clear that when the Labor Party talked about what PwC had been asked to do, they didn’t give the truth and PwC has now been forced, seven days later, to disclose what they had actually been asked to do. I would say to PwC, that they ought to look very closely at their client because a client that was prepared to misrepresent the task in the way that the ALP did seven days ago is the kind of plight that might get you into a lot of trouble.

JOURNALIST:

Mr Costello, the Department of Treasury is down at the Administrative Appeals Tribunal today with a team of lawyers and a QC funded by the taxpayer trying to ensure that documents aren’t released under FOI laws that you suppressed using rarely used powers, what is the big secret and why can’t those documents be released in the public interest?

TREASURER:

Well, you will recall that the Labor Party, you will recall that the Labor Party asked me a question about this after News Limited said that these were rarely used powers and you will recall that the powers were used by, just from memory, Ralph Willis, Paul Keating, George Gear, Bryan Howe. Every Treasurer bar one, since the laws were introduced, that is how rarely they have been used…

JOURNALIST:

Why…

TREASURER:

…by every Treasurer except one…

JOURNALIST:

…why are you using them?

TREASURER:

…no, hang on, hang on, and I think this is very important for The Australian to put in its story, every Treasurer bar one, since the laws were introduced, that is how unusual…

JOURNALIST:

And why are you using them?

TREASURER:

…no, and what the Freedom of Information laws say is that in order to preserve advice from public service to Ministers, where it is necessary for the purposes of confidentiality to do so, the Minister can give a certificate, which I have done. Now the AAT looks into that and it determines whether or not for the purposes of confidentiality, that is required. But I can tell you this, and again, I think this is worth reporting, that the documents that are being sought include the Question Time Briefs. Now, if Ministers have to disclose to newspapers their Question Time Briefs, we might as well give them to the Opposition too…

JOURNALIST:

Some of the…

TREASURER:

…Question Time Briefs with all due respect, are matters that are given for the purpose of high confidentiality in the Party.

JOURNALIST:

…some of the documents relate to the, Mr Costello…

JOURNALIST:

(inaudible)?

TREASURER:

On fees?

JOURNALIST:

On fees.

TREASURER:

I think there should be the ability to move your superannuation savings with the minimal cost and complexity available. Now, the whole reason why we want freedom of choice is so that people who are getting a bad return can move their superannuation to a fund which will give them a better return and if there are large exit fees, that ease of entry and ease of exit, that competitive market will be frustrated. So, I would thoroughly recommend to the superannuation funds themselves that as a measure of competitive discipline, that those fees be made as low as possible and I will be seeking to have some discussions with the funds in relation to that.

JOURNALIST:

Mr Costello, will the return of Bomber Beazley help Labor…

JOURNALIST:

(inaudible)?

TREASURER:

They do. The ALP can give its policies to the Treasury and have it costed, (inaudible). I want to make that entirely clear.

JOURNALIST:

But that (inaudible).

TREASURER:

They can do it today. They can do it today. The ALP can provide their policies to the Treasury and Finance and they can be costed…

JOURNALIST:

Can they lose their confidentiality?

TREASURER:

…and they can do so under the Charter of Budget Honesty. And I make it, I make this point, that the offer has been open to them in previous elections, they have refused to take it up and there is a reason why they refuse to take it up, they don’t want them to be costed. If you had $9 billion of unfunded promises you wouldn’t want them to be costed, so you know, if the ALP wants to give its promises for costing then it is open for it to do so.

JOURNALIST:

(inaudible)?

TREASURER:

Well, my view is that the return of Mr Beazley is Mark Latham’s attempt to try and patch up Australia’s alliance with the United States. But you have got to bear this in mind that it was Mark Latham who caused the problem in the alliance relationship and I don’t think until Mark Latham changes his position you can solve those problems. Mr Beazley would be better than Mark Latham, that is for sure, but at the end of the day, it is Mark Latham that is still the Leader and it is Mark Latham that is still committed Labor to the policies that have given problem on the alliance…

JOURNALIST:

The Government has been very complimentary of Mr Beazley’s abilities in recent weeks…

TREASURER:

…yes, well that is what I said. I said, Mr Beazley is much better than Mr Latham, I said that. He would be much better at managing Labor’s relationship with the United States than Mr Latham, but Mr Latham is still the Leader and the problems that are on the relationship are problems that have been given by Mr Latham, not by Mr Beazley, poor old Mr Beazley, he has got to be brought in to try and clean up the mess, he didn’t create the mess, and if a Leader creates a mess, then the Leader has by and large got to clean it up.

JOURNALIST:

(inaudible) that Labor is warming up to roll back their policy on (inaudible)?

TREASURER:

Well, I would expect that their reappointment will mark an opportunity for Labor to try and review and change its policy, I can’t imagine any other reason why it has been done, but as I say, if the problems have been created by Mr Latham, it is very hard for Mr Beazley to clean them up.

JOURNALIST:

(inaudible) The US Senate report on the…

TREASURER:

Last question.

JOURNALIST:

…used in the Iraq war is relevant to Australia? Do you think we should be…

TREASURER:

No, I don’t think so, I think we had our own inquiry, it was done by a Parliamentary Joint Committee, the Parliamentary Joint Committee made its own findings, as a consequence of that the Government has now, has Phillip Flood doing a further inquiry, but I think this is a question of each country looking at its own intelligence agencies, that is the US Senate looking at the US intelligence agency, we have had the Australian Parliament, the Joint Committee, of both Senate and House of Representatives looking at ours. Thanks very much.