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 David Speers
Sky News

Tuesday, 10 May 2005
9.30 pm

SUBJECTS: Budget

SPEERS:

Peter Costello, thanks for your time tonight.

TREASURER:

It is great to be with you.

SPEERS:

I firstly want to ask you, when was the decision made on these tax cuts?

TREASURER:

As we were doing the Budget.

SPEERS:

Late in the piece though?

TREASURER:

No, my view has been for quite some time that if you can balance your Budget, re-pay debt, fund your services then we should be trying to get taxes as low as consistent with that. I saw the opportunity to cut taxes and we took the decision accordingly.

SPEERS:

Your decision or a joint decision?

TREASURER:

Oh look, the Treasurer is responsible for the Budget and for the big Budget measures, but at the end of the day you have got to get the Government as a whole to sign off on it.

SPEERS:

Those who have been pushing for tax reform really wanted to see the top rates brought down, now you have been generous in increasing the thresholds of those top rates but you haven’t really, or have you really tackled the issue of tax reform?

TREASURER:

Oh absolutely. Look, the changes that I announced tonight mean that only 3 per cent of Australians will be on that top rate, 3 per cent. For 97 per cent of Australians, that top rate won’t affect them. Now, you could argue, well why don’t you cut the top rate and that would produce huge tax cuts for millionaires, multi-millionaires, I thought the most important thing was to increase the threshold because that just makes the top rate quite irrelevant for most Australians.

SPEERS:

Let’s look at the welfare changes. Those on the Disability Support Pension currently are quarantined…

TREASURER:

That is right.

SPEERS:

…does this grant a two-tiered system though where two people with the same back injury for example, one who is currently on the support pension is fine but someone who is yet to join that pension won’t be able to get it?

TREASURER:

Well somebody who hasn’t been injured because you are only talking about people that might be injured in the future. My view is that you know, we wanted to be able to reassure everybody who is on a disability pension you won’t lose anything. No disability pensioner will lose anything. What we are talking about is the rules for the future and by quarantining people who are already on payments we can make that undertaking, you won’t lose it and we can do the same for single parents.

SPEERS:

But do you take my point though, that if you do have people with the same injury…

TREASURER:

I can understand your point, so your point would say you ought to have either got harsher with people that are currently on it or not done welfare reform at all. I think the important thing is to start working at reducing the increase rather than go back in relation to claims that have already been lodged.

SPEERS:

You also said in your news conference that this Budget includes a build up of infrastructure, what infrastructure?

TREASURER:

Roads, rail, the Auslink programme, a $12 billion programme, rail on the eastern seaboard, improving links down to Port Waratah, Hume Highway, Pacific Highway, there are some very significant infrastructure.

SPEERS:

A lot of that announced in the Auslink programme, but what is new in this Budget on infrastructure?

TREASURER:

Well a lot of it has been part of the Auslink programme but we have actually increased the amounts under the Auslink since last years Budget and it is around $12 billion, these are large sums, $12 billion is a large sum of money, it is more than you and I take home in our pay packet.

SPEERS:

Well I should hope so. You did say that your aim for this Future Fund is to put surpluses into it and also the proceeds of the full sale of Telstra. Is that your position or is that the Government’s position?

TREASURER:

Well the Government’s position has always been that if you sell an asset you have got to either build an asset or retire debt. If you sell an asset and spend it, the asset is gone and the money is gone. It is like selling the family silver. Now, previously in relation to Telstra what we did is we paid down our mortgage. Now that the mortgage is low what I want to do is build a financial asset.

SPEERS:

But has Cabinet ticked that off, that every cent from the sale of Telstra will go into the Future Fund?

TREASURER:

No, well we haven’t yet even got legislation to sell Telstra, so we haven’t yet gone into what is going to happen to a sale which is banned by law. But the object is to provide a saving for the future and the Future Fund is the obvious place for proceeds to (inaudible)?

SPEERS:

Are you going to have a battle though with your National Party colleagues on what to do with the Telstra money?

TREASURER:

Well you know, I think we have got to get the legislation to sell, through first. Don’t count your chickens until they have hatched.

SPEERS:

This is your tenth Budget, do you feel you get better at them?

TREASURER:

Well that is for others to say.

SPEERS:

But obviously it is a gruelling process.

TREASURER:

It is a lot of hard work, yes, it is a lot of hard work, it is a $200 billion budget and you would expect the person responsible for it to work hard and I do.

SPEERS:

And are you happier with this year’s budget than some of your previous budgets?

TREASURER:

Look, if you have the opportunity to balance a budget, set up a Future Fund and cut taxes, it is a great outcome to produce.

SPEERS:

Would you enjoy going through the process one more time?

TREASURER:

Well let’s get through this process, we are focusing on what we have done, what we have done tonight, how can we enact it. People have got to realise that the Budget is actually just an announcement, from now on it has got to be enacted and right up until the 30th of June we will fighting for this Budget in the Parliament. You have got to bare this in mind that this Budget will still go into a hostile Senate.

SPEERS:

But on the leadership which obviously a lot of people will be seeing this Budget through the prism of. You have spoken a lot about the need for a smooth transition, but you haven’t explained why there needs to be a transition anytime soon.

TREASURER:

Well I don’t think tonight is the night to go into those sorts of things, I think tonight is the night to concentrate on the important things that we can do for the Australian public and that is what I am focusing on.

SPEERS:

And you are not going to give anything more away about…

TREASURER:

No.

SPEERS:

Treasurer thanks for your time.

TREASURER:

Great to be here.