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 16/08/2005

Treasurer
Interview with Michael Brissenden

7.30 Report

Tuesday, 16 August 2005
7.30 pm

SUBJECTS: Telstra sale; Future Fund

JOURNALIST:

The Labor Party says this is a $3 billion softening for the Nationals. Is it? Are you buying off National support for Telstra?

TREASURER:

Sorry, what is a softening?

JOURNALIST:

The supposed $3 billion you have set aside for Telstra and the $2 billion coming out of the Future Fund.

TREASURER:

Well, no decision has been made yet.

JOURNALIST:

Are you prepared to spend money out of the money that has been put aside for the Future Fund?

TREASURER:

Look, the position of the Government is this: we have now reduced the Labor Party debt by $80 billion. It was $96 billion and we have reduced it by $80 billion. The proceeds for the sale of Telstra should not just be spent: - because if you spend the proceeds at the end of the day you have got no shares and the money is all gone. So what should be done with those proceeds is that we should invest them on behalf of the nation. The Future Fund is the vehicle that we have set up to invest on behalf of the nation and we have always said that the proceeds of a major privatisation should be either building a new asset, which the Future Fund will do, or retiring debt.

JOURNALIST:

So it has been no truth to the speculation, I admit it is speculation at this point in the papers, that $2 billion of that money may be used in a special Telstra Future Fund?

TREASURER:

What was put forward was a proposal that the earnings on $2 billion would be available for ensuring that services in rural and regional Australia are kept up to scratch. I have said that you would have to look at such a proposal very carefully, and it is quite a considered proposal, but these are matters that have not been decided by the Government yet.

JOURNALIST:

But this is one of the things under consideration by Cabinet?

TREASURER:

Well, Mr Vaile put forward a proposal that a fund be earmarked so that the earnings from that fund be available in relation to modernising Telecommunications in rural and regional Australia. I have said that is certainly well worthwhile looking at, it is something which you would have to consider very seriously. It has not been considered yet, but I have indicated that it is quite a serious proposition.

JOURNALIST:

So it does not contradict what you have said a couple of weeks ago, I think it was, putting aside a large amount of money would be inflationary and economically irresponsible?

TREASURER:

No that is what I precisely did say a couple of weeks ago, that a $2 billion fund with earnings to be directed to telecommunications, particularly ensuring that new technology is accessible would be a serious proposition and would have to be seriously looked at.

JOURNALIST:

Now Wayne Swan says that you are guaranteed in the Budget that the Future Fund would be a locked box, doesn’t this suggest that you are prepared to dip into it willy nilly?

TREASURER:

No, because there is nothing in it. Unfortunately, I do not think Labor yet understands the Future Fund. Once you put money into the Future Fund it will be invested in the future for all Australians. But as of today there is nothing in it. This is a question of ensuring that some money is put into it and invested for the future of all Australians.

JOURNALIST:

This is just one of a number of proposals that you are looking at or that Cabinet will be considering?

TREASURER:

Well Mr Vaile put forward a proposal, I think it is a proposal that is well worth looking at, but these are matters that are being considered.

JOURNALIST:

The sale itself would have to be still, how should we say, the share price certainly is not where you would like it to sell it anyway to (inaudible) is it?

TREASURER:

Well the share price went down in response to recent announcements from Telstra but the Government has always made it clear we are not a distressed seller, we do not have to sell. We would want to sell in a way which maximises the benefit for the Australian people and invest the proceeds for future generations. What we do not want, a situation like the Labor Party had, when it sold off assets, spent the money, put the Budget into deficit and lost both the shares and the proceeds. That is what happened in the end with Qantas and the Commonwealth Bank. We do not ever want to see a repeat of that performance.

JOURNALIST:

Will you also be considering the Trujillo $5.7 billion proposal, what do you think of that one personally?

TREASURER:

Well, Mr Trujillo put forward his proposal, various Senators have put forward their proposals, various analysts have put forward their proposals, obviously we consider those that have merit and the Government will announce a position.

JOURNALIST:

Clearly you need to bring someone like Barnaby Joyce on board, don’t you? He seemed, yesterday at least, (inaudible) this $3 billion speculation. He seemed to be pretty happy with that.

TREASURER:

It is not the question of one person, it is a question of all the members of the House of Representatives and all of the Senators - all have an interest in this. But I would say even more than them what is in the interests of the nation as a whole. What we have got make sure is that when the status of Telstra is resolved the Government does not just waste the assets and spend them, but the assets are put aside, either to retire more of Labor’s debt or to build an asset which we can use for future generations.

JOURNALIST:

Do you think Senator Joyce is adequately taking note of what is in the national interest in this case?

TREASURER:

I think it is important that we all take notice of the national interest. This is something that is a very large financial decision and it is something that I want to be able to say set us up for opportunity in thirty years time. That is the time frame I have got in mind here. Thirty years.

JOURNALIST:

What is the time frame for a decision?

TREASURER:

Well, all these matters will be considered and hopefully we will be in a position to get the decision soon.

JOURNALIST:

Treasurer, (inaudible).

TREASURER:

Thanks.