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 10/05/2005

Interview with Rena Sarumpaet
SBS

Tuesday, 10 May 2005
Pre-Record

SUBJECTS: Budget

SARUMPAET:

Well Treasurer thanks very much for joining us. The Budget’s already been described tonight as irresponsible. What makes you so sure that this $21 billion handout won’t rebound as an interest rate rise?

TREASURER:

Well it’s not a handout it is a tax cut. And if you have a strong economy and more people are in work then more people paying lower tax raises the same amount of money as fewer people paying higher tax. And I think it is important that where we can we keep our tax rates as low as possible and we had the opportunity with low unemployment to do that. And I think it’s a very responsible thing to do. It will get a lot more incentive into the Australian taxation system.

SARUMPAET:

Aren’t the tax cuts once again targeting the better-off? I mean it’s a $6 milkshake and sandwich for low income earners but a three course dinner for those on higher incomes.

TREASURER:

Well it is a cut in the rate from 17 per cent to 15 per cent for lower income earners. Many lower income earners do not pay any tax. You can not cut tax if you do not pay it. And if you have a low tax rate, even a significant cut means that in dollar terms it does not look that big. But in percentage terms the highest tax cut go to low income earners. They have the biggest percentage tax cut out of this policy.

SARUMPAET:

What about your Welfare to Work programme – doesn’t your carrot and stick approach assume too optimistically that there are enough jobs out there and enough employers willing to hire blue collar workers often, who often have low skills?

TREASURER:

Well unemployment is the lowest it has been in 28 years so if we are ever going to try and reform our welfare system and help people on welfare get into work, now is the time to do it. We have not had a better chance in 28 years. Now I think with training and with help many of these people will be able to get work. We want to have a situation where every able bodied Australian of working age has the opportunity to look for work and find it. And that is my goal. That is my ambition. And now is the time to go after it.

SARUMPAET:

You are an ambitious man. You have said that you were hoping for extra marks from the media and from the public for this Budget. How much credit do you personally deserve for it?

TREASURER:

Oh well the Treasurer is responsible for the Budget. It is my obligation to put it together and to deliver it. And that is what I have done.

SARUMPAET:

Do you want to present an 11th Budget?

TREASURER:

Well let us just concentrate on the issue at hand, the issue at hand is what we are going to do for Australians, for our tax system, for our Future Fund, for Welfare to Work. I have only brought it down about an hour ago and now we have got to go through the business of enacting it.

SARUMPAET:

Well Treasurer thanks very much for joining us.

TREASURER:

Thanks for your time.