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 25/06/2005

Doorstop Interview
Hyatt Hotel, Canberra

Saturday, 25 June 2005
Noon

SUBJECTS: Oil prices, economy, GST

JOURNALIST:

…is there something you can do on petrol taxes particularly on the excise?

TREASURER:

Excise is fixed, excise is fixed at 38 cents and it does not move, regardless of the price of petrol. The thing that moves the price of petrol, of course, is the world oil price. You have seen that world oil prices have gone up over the course of the last month, they are at the highest dollar levels they have ever been. This is principally because of world factors, the supply and demand on the world stage. It is not good for the economy that oil prices are so high and it is not good for motorists. But, unfortunately until you see the world oil price come down petrol prices will remain high.

JOURNALIST:

But what more can the Government do, what more can anyone do to keep the (inaudible)?

TREASURER:

Well, the only thing that will keep petrol prices lower is if the world oil prices fall. If supply is increased, particularly in countries like Nigeria where there have been civil disturbances, there has been some talk of OPEC increasing production and that would help, but these are international factors.

JOURNALIST:

You will not look at changing the excise?

TREASURER:

The excise is fixed. The excise that applies is 38 cents a litre, we cut it from 44. It does not rise with inflation, and in real terms it declines year after year.

JOURNALIST:

…the Prime Minister be seeking when he goes to the United Sates next month, what advice can the United States give Australia on this issue?

TREASURER:

Well I do not know that we look for our advice from the United States. When he goes to the United States he will be engaging in discussion with President Bush on matters of national security and I imagine they will be discussing developments in Iraq and important issues on the alliance between the United States and Australia.

JOURNALIST:

He will also be talking to Greenspan. The Prime Minister seems to indicate he will be asking for advice from Alan Greenspan. What sort of advice could he possibly give?

TREASURER:

I’ve had many discussions with Alan Greenspan, and when you have these discussions you discuss the nature of the world economy, developments in the two countries. They would be discussing the US economy. And I think Dr Greenspan would probably be firmly focussed on how Australia is in a much stronger financial position than the United States because Dr Greenspan has warned about the US Budget deficit which is very large in the United States, unlike Australia which has a Budget surplus. And I think actually Mr Howard would be able to share a few things with Dr Greenspan while he is over there.

JOURNALIST:

Treasurer, given the tax cuts that you have given out in the last Budget and the surplus that the Government still has and the high price of petrol, is there room to cut that 38 cent level further?

TREASURER:

Well the Government cut it. We cut it from 44 to 38. It used to be indexed. If it hadn’t have been cut and it had been indexed, it would probably be well over 50 cents by now. We have cut it to 38 cents and I think that was a responsible policy. It was a policy that we put down in the year 2000.

JOURNALIST:

(Inaudible) double taxation, Treasurer. We have excise and then the GST floating on top.

TREASURER:

No, that is why we cut it Paul. We cut it from 44 to 38 so that as a consequence of that the tax was less. Not more, less.

JOURNALIST:

Treasurer, the Prime Minister said this morning that when it comes to reform he feels like he is running a race where he never gets to the finish line. Do you ever get that feeling in politics?

TREASURER:

Oh absolutely, reform never stops. You have seen how our country declined through the 70s and the 80s and the early 90s. You have seen how our country has come back through the 90s and 2000s. We climbed the world economic ladder through the late 1990s and into 2000. But we will not stay at the top of that ladder if we do not continue reform. It is the reform that got us there, it was getting our budget into surplus, retiring debt, cutting interest rates, bringing in the GST, cutting income taxes, halving capital gains tax, cutting company taxes. All of those things made us climb up the ladder, but if we do not continue with industrial relations reform, with pro-competition we could just slide down the ladder again and reform has to keep on going.

JOURNALIST:

Will John Howard ever reach the finish line do you think Treasurer?

TREASURER:

We are all working on reform, Jason, all the time. This is a great reform task that we are embarked on and the greatest reform for the Australian economy at the moment is industrial relations. I cannot say to you how important this industrial relations reform is going to be.

JOURNALIST:

Do you share the same dream as the Prime Minister, that recurring dream that in politics you will never quite get there, you are always trying?

TREASURER:

Well, look, let me tell you, Paul, when the first man ran through the four minute mile barrier, it was the fastest mile ever run. If you ran a four minute mile today you would not even get to the Australian national championships. The standard goes up all the time, the economic reform never stops. We climbed the ladder because we started reforming the Australian economy, if we want to stay there we have got to keep on going. Thank you all very much for your time.

JOURNALIST:

(Inaudible) you would be announcing some increased responses to some of those recalcitrant states, can you expand on any of those?

TREASURER:

Well, the State Governments receive all GST revenue. They receive that GST revenue, as part of a deal under which they agreed to abolish other taxes. Taxes like stamp duties on mortgages. Now, they cannot have both. They cannot have the GST and the taxes it is designed to replace. Some States are making good progress, other States are making no progress. We have to fight for the Australian public here to get lower State taxes. Because the Australian public was promised that with the GST they would get lower State taxes We have to fight with those States, and we will be announcing measures that will help people in those States get the tax cuts that they deserve.

JOURNALIST:

Something specific to WA and NSW?

TREASURER:

We will be announcing something to help get people get the tax cuts they deserve, particularly in states like NSW and WA, but some of the other States have got to go faster too.

JOURNALIST:

So you cannot expand on that now? What those measures will be?

TREASURER:

Well if I expanded now there would be no surprise for you later on Stephanie. I have got to keep you interested and engaged and give you a happy second half of the year. Thank you all very much.