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 11/07/2005

Interview with Jon Faine
ABC 3LO

Monday, 11 July 2005
8.35 am

SUBJECTS: Victorian Liberals, Bill Farmer, immigration, Phillip Aspinall, religion, industrial relations, national security, Steve Vizard

FAINE:

Peter Costello good morning.

TREASURER:

Good morning Jon, good to be with you.

FAINE:

And you come to see us on a day when you are splashed all over the front page of The Age newspaper. State Political Editor, Paul Austin has interviewed Joy Howley a former President of the Victorian Branch of the Liberal Party who accuses you and your long-time cohort Mr Kroger, Michael Kroger of political thuggery. What is your response?

TREASURER:

Well I think it is sad. Joy was a President about five or six years ago. I don’t think she has been very involved in the Party since. She has attacked not only the Federal Party, the State Party, the State President, the State Director, it is on the front page of The Age. So, I don’t think it does her any credit…

FAINE:

It doesn’t give you much credit either, does it?

TREASURER:

...well, and I don’t think it’s helpful for the Liberal Party. So you would have to ask yourself if someone attacks the Federal Party, the State Party, the State President and the State Director, you would have to ask yourself what the intention is really.

FAINE:

The intention is so try to democratise the Liberal Party which she says has an internal culture of punishing dissent which she effectively says you and Michael Kroger are responsible for.

TREASURER:

The Liberal Party is a party where people freely join and they freely vote and they elect their president. Joy may have opposed the election of the current President, but she ran her own candidate, the candidate didn’t attract much support. Now, that is no reason to therefore attack the whole Party.

FAINE:

Well she says it is, she says you are responsible for a culture that is anti-democratic despite what you may say about people being free to join and free to participate, she says that you take no prisoners effectively.

TREASURER:

Well that’s totally false. The Liberal Party is a voluntary organisation which you join. And I have got to say to you I think it is in the best shape I have seen it in 15 years. The best election result since 1990. The most marginal seat which was Labor before the last election is now on a margin of 5 per cent. The fundraising is stronger than I have ever seen it in my time as an MP. And I pay tribute to Robert Doyle, I think Robert is doing a good job and if you believe the polls he is coming back. So, I think actually it is a lot stronger than it has been for quite some time, it won’t be helped by attacks like that but you put them to one side and you get on with the job.

FAINE:

Robert Doyle is ‘unelectable’ she says and your own polling says so and tells you so.

TREASURER:

Well yes, she has attacked the State Leader and said he is unelectable and you would have to ask yourself, why would somebody whose interests were in the Liberal Party say that?

FAINE:

Because in the same way that the Labor Party is going through examining its own entrails sometimes with astonishing frankness, it is happening now in your Party too.

TREASURER:

Who is her candidate?

FAINE:

Well I don’t know, she may come up with somebody but she is saying you need to have an open discussion about it and you need to be frank within the Liberal Party.

TREASURER:

Look as I said, she was a State President six years ago when the Liberal Party lost office. If she wants to attack Robert Doyle I suppose it is a democratic Party, she can put forward somebody to challenge him. I don’t think she will.

FAINE:

Have you had a rapprochement with Jeff Kennett? Have you sat down recently, broken bread with Jeff Kennett as it has been reported?

TREASURER:

Yes sure, I have always dealt with Jeff. We used to deal with Jeff quite regularly at Premiers’ Conferences. I put in place the New Tax System with his assistance which was to replace State taxes with GST. He was very, very much at the vanguard. We had a discussion about that just recently when we last caught up and he was reminiscing to me that after all of the work he did, Steve Bracks was the one that inherited the benefit and I pointed out to him that there is no justice in politics. All of that GST revenue which we put in place and which goes to State Governments to replace indirect taxes ended up going to the Bracks Labor Government…

FAINE:

And Labor Governments in all of the other States as well, and this is regarded as a fundamental weakness and it is said in terms of your aspirations to become Prime Minister, if you can’t sort out the problems in the Victorian Branch of the Liberal Party, well if you can’t control Victoria, how can you project yourself onto the national stage?

TREASURER:

Well Jon, flowing on to all of the other States, it has been a big part of the reason why the Labor Governments are in office. They have this wonderful revenue base which is given to them because of the Federal Government but it is not just for spending it is also to replace other State taxes and Victoria has done reasonably well, it is not the worse by any means, but some of those other States are still not abolishing the taxes that they should have and I am going to make sure that I keep putting pressure on the States so that the public of Australia gets the benefit of that deal.

FAINE:

That is a separate issue though Peter Costello, this is about internal discipline and control of the Branch. If you can’t sort out the problems of the Victorian Branch of the Liberal Party, how do you project yourself as a national leader?

TREASURER:

Well see Jon, you think I should control the Branch, do you?

FAINE:

Well the Liberal Party do.

TREASURER:

Well I thought Joy Howley’s complaint was that I did.

FAINE:

Well it depends how you exercise that control, whether through force of personality or by ruthless discipline is the issue.

TREASURER:

No, no I don’t think it is up to me to control anything. As I said earlier, this is a democratic party where people stand for election. Joy runs her candidates, they lose. She is disappointed about that but that is what happens in a democratic party. Now, it is not up to me to control it, it is up to the members to control it. The members join, the members vote. Now, when you have contested elections, free elections, not everybody can win. But when you lose the ballot Jon, we have all lost ballots, normally what you do is you re-double your efforts and you work hard for the cause. Alternatively you can go to The Age newspaper and spray the Federal Party and the State Party, the State President and the State Director. Which do you think it is likely to be more productive?

FAINE:

Why do you think she is doing that then?

TREASURER:

Because she lost the ballot.

FAINE:

Years ago.

TREASURER:

Well as I said to you, she runs her candidate, she ran her candidate against the current State President and he lost.

FAINE:

It remains though for you a festering sore, does it not?

TREASURER:

No.

FAINE:

You dismiss it entirely?

TREASURER:

Well as I said to you, the State Division of the Liberal Party is in a stronger position than it has ever been. Look, we came through a federal election where we had the best result in 15 years. As somebody who does probably as much fundraising for the Party as anybody else, I can tell you that finances are stronger than they have ever been. At the State level if you believe the polls, the State Party is stronger than it has been for some time so, actually I would say to you the Liberal Party under the current leadership of Helen Kroger is in a stronger position than I have seen it probably in 15 years.

FAINE:

Just one more question on internal Victorian issues, why did you approach Jeff Kennett to sit down and have lunch together after years of pretty open hostility to each other?

TREASURER:

Well he rang me and invited me for lunch, that is why. And always being interested in having a good lunch, I said yes.

FAINE:

Were you surprised to hear from him?

TREASURER:

No, because Jeff has been ringing me quite a bit over recent years…

FAINE:

Yes, some of your conversations we have been privy to, we have had them shared with us from time to time.

TREASURER:

…I don’t think so because he has been in Beyond Blue, a Federal Government appointment and he has been reporting back on the work that he has been doing and he is very good company actually.

FAINE:

He has said some very rude things about you in the past.

TREASURER:

He has said some rude things about a lot of people in the past, never as rude about me as he was about John Howard I can assure you, but that was in the past.

FAINE:

Well let’s move onto other things and there are many of them. Bill Farmer has been the head of the Immigration Department through its troubled recent times. He has just been offered a promotion, he is now going to be the Ambassador to Indonesia, how come?

TREASURER:

Because he is a diligent public servant and he has a good grasp of foreign affairs and he will make a good ambassador.

FAINE:

He has been managing a Department that has been plagued with problems and scandals and delivered more bad headlines to your government than any other department.

TREASURER:

Well there has been an inquiry into, I make no bones about it, there have been some cases that shouldn’t have happened. Cornelia Rau should not have happened.

FAINE:

Under his watch, he is responsible.

TREASURER:

I make no bones about it. A lady who was psychiatrically ill was held in detention. They didn’t know who she was and she was speaking German so it appears, but it shouldn’t have happened. I make no bones about that and I am very sorry that it did happen. Now, there has been an inquiry into that, there will be a report which will be considered tomorrow in the Cabinet and I hope that the report will lead to procedures to ensure this kind of thing doesn’t happen again.

FAINE:

This is an attempt to save Amanda Vanstone and even Phil Ruddock, you get rid of the Department Head, but you don’t even sack him, you don’t even make him responsible or accountable, you promote him. What is going on here?

TREASURER:

No, it is not an attempt to protect Amanda Vanstone. The Departmental Secretary said quite rightly, there has got to be change arising out of the Palmer report, somebody new ought to come in and there will now be an opportunity to do that. I don’t believe that there is any failing on the part of the Minister at all. I don’t believe that the Minister, the Minister didn’t make the decision in relation to Cornelia Rau or Vivian Solon, but…

FAINE:

Under the law, the Minister does, the Minister has absolute power in these cases and delegates it to the department. Where does the buck stop?

TREASURER:

Well, as I said, in the case of Cornelia Rau for which I feel very sorry and I don’t justify it at all. They were unable to identify her, she was passed across as I recall by Queensland police who identified her as somebody who couldn’t show she was an Australian citizen. Now the system failed her, it should never happen again. But to say it was Amanda Vanstone’s fault I think is a long bow Jon.

FAINE:

So, 200 cases requiring investigation by consultants, external consultants brought in, but nobody pays any political price.

TREASURER:

That doesn’t mean that the 200 cases were all decided wrongly.

FAINE:

But they require investigation, no we don’t pre-empt the outcome of the inquiry.

TREASURER:

Absolutely, what they said is we will put every possible case where there could have been something done wrongly and we will examine them. We don’t know yet how many of those 200 were decided wrongly, but they are all being looked at.

FAINE:

It reinforces the belief though that under the Howard Government you can pretty much do anything wrong but if you are regarded as a Howard loyalist you never pay the price.

TREASURER:

I don’t think so, look, Amanda Vanstone didn’t make the decision on Cornelia Rau.

FAINE:

Technically she does under the Immigration Law.

TREASURER:

Well, you know, and what, technically do I make every tax assessment, do I?

FAINE:

Technically yes.

TREASURER:

Well I am not sure I do technically…

FAINE:

If there was an inquiry into…

TREASURER:

…I am not going to take responsibility for every wrong tax assessment, am I?

FAINE:

…good analysis…

TREASURER:

Including yours, Jon.

FAINE:

…good analogy, if there were mass problems with the Tax Office that had been brought to people’s attention and nothing had been done and there was the same wrong culture in your Department that has been discovered and described in her Department, then you would expect to pay the political price.

TREASURER:

I am not sure that is right. Look, Ministers are accountable to the Parliament, there are occasions when they do make personal decisions and they are responsible for justifying them. If they mislead the Parliament, if they make a wrong decision, then they pay a very high price. But I don’t believe that Amanda Vanstone made a wrong decision.

FAINE:

We will wait and see. Ten minutes to nine on 774 ABC Melbourne, Jon Faine with Peter Costello, the Member for Higgins and the Federal Treasurer on the radio this morning. Peter Costello, the new Anglican Archbishop of Australia, Phillip Aspinall on AM this morning reiterated that he will continue to speak out on industrial relations laws, if it makes him unpopular with the Government, so be it. How far should church leaders go in getting involved in politics?

TREASURER:

Well look, as citizens of Australia they are entitled to speak freely like anybody else. Nobody questions the right of anybody to speak out you know, provided you don’t defame somebody or incite violence or whatever. So, Phillip Aspinall has the same right as everybody else. However, when he makes a statement, you are entitled to scrutinise it. Now, just because it is made by an Anglican Archbishop doesn’t mean it is right, no…

FAINE:

But Kevin Andrews, your colleague said he should stop even making comment, would you go that far?

TREASURER:

…well, I don’t think it will stop church leaders making comment, no I don’t, I say that look, they always have, they always will.

FAINE:

So you disagree with Kevin Andrews?

TREASURER:

Well Jon, I am just saying the reality is Phillip Aspinall, it is a free country, he can say what he likes. But I am making this point, just because he has a theological degree doesn’t mean he is an IR expert.

FAINE:

That is absolutely true, but he has a lot of clout because he is a leader of what is it, millions of Australian Anglicans.

TREASURER:

So we assess what he says on IR against the facts. I went through all of this with the GST. The churches were heavily engaged in the GST, mostly opposing it, and I remarked at the time I didn’t know how so many churchmen became tax experts. Now, they had every right to talk about the GST, I don’t think much of it was well placed. And where are we now Jon? It is five years on, they said it would destroy the economy, produce a recession, you know, put people into poverty, I don’t think any of those things happened. So, like any other citizen they can say what they like, it doesn’t mean it is right though, it has to be assessed and given the same weight as any other member of the community, that is the way I put it. When an Anglican Archbishop speaks on IR he has every right to speak, but his views on IR shouldn’t be given any special weight, I don’t believe, because of his theological training. It should be assessed on its merits.

FAINE:

At the same time because you continue to get involved with some of the new church groups, in particular Hillsong keeps being mentioned time and time again, the relationship between politics and religion in Australia has come under increased scrutiny. Are we getting too much religion in politics?

TREASURER:

Well you see this is the point. Everybody goes around and says, well we are worried about the influence of the Pentecostal churches, you know, they might get involved in politics, but we will defend the right of Anglican Archbishops to engage in politics.

FAINE:

And conversely you are saying the Anglicans should stay out but you don’t mind if the Pentecostals get in.

TREASURER:

And what is the difference is the general view in the media is a churchman is entitled to speak on a social issue as long as he has a left-wing perspective.

FAINE:

Is that how you see it?

TREASURER:

I think that is the view probably in the ABC, yes. But if a churchmen has a view on a social perspective that happens to be conservative, well that is a danger to democracy as we know it. Hillsong can’t be good because it is not supporting a left-wing view whereas an Anglican Archbishop, that is good, Uniting Church, even better because that is generally a left-wing perspective. Here is what I think Jon, here is what I think. The Anglican Archbishop has every right to speak his mind as much as the Pastor of Hillsong, but neither of them is an expert on tax or industrial relations. They have got to be assessed on their merits. It may well be that they are right, I am not saying they are not, but just because you have got a degree in theology, doesn’t mean you are an expert on the Industrial Relations Commission.

FAINE:

Some commentary in the Australian Financial Review suggests that security costs in Australia, particularly to Government, could triple in the wake of the bombings in London late last week. Have you reviewed the cost of security to the Commonwealth Budget, to the Federal Budget.

TREASURER:

Jon, since 2001, from memory, we have increased spending on security by over $4 billion.

FAINE:

Is it going to have to go up even more now?

TREASURER:

We will constantly monitor it but most of the big things we have already done in relation to airport security, in relation to raising tactical response groups, tactical assault groups, in response to a chemical biological nuclear (inaudible) response group, most of the big stuff we have already done but I couldn’t say that there is nothing more that should be done. As terrorists refine their tactics and adopt a new mode of operation, so too, we have to respond and when you see a new mode of operation, the first thing you do is you say, how would we protect against that mode of operation? You review everything you have got and if your defences wouldn’t have responded to that, you reconsider them.

FAINE:

So do you expect to receive a submission in any way from the defence or intelligence branches of the Australian Government saying we need more money because of the latest perceived threat?

TREASURER:

Well certainly in the last Budget we increased funding to the intelligence agencies quite considerably, we did that as recently as May. The most recent British incident really raises the issue of mass public transport. There has been a meeting of Transport Ministers in relation to that, but as you know, transport is also a State responsibility. Now, Jon, what do you do? We have been through all of this. Do you want to have a metal detector on everybody that goes into a railway station – you can do that? Your queues will be very long, your railway stations won’t operate with anything like the frequently they currently do.

FAINE:

They are not doing that in London, there is no reason why we should do it here?

TREASURER:

And of course you are just screening passengers, are you going to screen the line, every bit of track? Now, that would be an unbelievable cost and at the end of the day it probably wouldn’t work as a mass transit system either, so with all of these things you have got to take into account the dislocation that is involved not just the protection.

FAINE:

Very briefly, did ASIC go too soft on Steve Vizard? Do you want to know why they have come up with the deal with him that they have come up with?

TREASURER:

Well I have asked ASIC and the advice that I have been given is that they have referred the brief to the Director of Public Prosecutions who decides on whether or not criminal charges should be laid and the Director of Public Prosecutions in this case did not advise the laying of criminal charges. And there is a technical reason for that, it all has to do with the accountant and whether or not the accountant would give a statement. I don’t want to go into all of the technical details but in the circumstances where the Director of Public Prosecutions advised in that way, then the most that ASIC could do was to go for a civil penalty. It is not a suing for compensation it is an actual penalty.

FAINE:

Do you want it reviewed, the decision taken?

TREASURER:

I don’t think it can be Jon, no, I think they have come to an agreement with Mr Vizard and his lawyers.

FAINE:

Are you unhappy with the outcome?

TREASURER:

I accept the advice of the Director of Public Prosecutions but you know, there is something in there in the procedure about witness statements that I am going to call for further advice on.

FAINE:

And you are off to the Children’s Hospital to hand over $2 million with a smile no doubt on your dial?

TREASURER:

Yes, we are going up the Murdoch Centre at the Children’s Hospital to announce important improvement in medical research and capability here in Victoria. The Children’s Hospital as you know is a great Melbourne institution and we want to make it stronger.

FAINE:

$2 million, that is a lot of money for people but a drop in the bucket for the sorts of costs that this sort of research involves.

TREASURER:

Absolutely, it is for the Gait Centre for Clinical Research Excellence. We have tried to support the hospital as much as we could. You might recall we announced some grant in relation to cancer treatment and also out of hours medical services but this is just as an important enhancement for medical research and I congratulate the hospital very much on that.

FAINE:

We have covered a lot of ground, thank you.

TREASURER:

It’s great to be with you Jon, thanks.