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 06/04/2006

Doorstop Interview

Thursday, 6 April 2006
12.00 noon

SUBJECTS: Unemployment, monetary policy, migration, ATO, wind farm, State Council

TREASURER:

In the month of March this year the number of people employed in Australia rose by 27,000 and the unemployment rate has fallen to 5.0 percent. This is good news. This is the lowest unemployment rate that we have had for around thirty years and importantly what we have now seen is we have seen unemployment below 6 percent for thirty one consecutive months, the longest period of unemployment below 6 percent since we began collecting these statistics back in 1978. Now the composition of employment this month was a rise in part time and a slight fall in full time but over the course of the year there have been 146,000 new jobs with full time employment increasing 82,000 and part time increasing 64,000. So over the course of the year we have seen very good composition particularly in relation to full time jobs.

The number of new jobs in Australia since March of 1996 is 1.7 million new jobs and in a country of 20 million people that is pretty exceptional so, these are good figures. As I have said previously unemployment can bounce around from month to month. It can be 5 percent of 5.1 or 5.2 another month. The important thing is that for 31 consecutive months unemployment has been lower than six percent. This is the lowest unemployment we have has in thirty years and it shows that there is still some strength in the labour market here in Australia. It is a better time now to get a job than it has been for thirty years because unemployment is now at it lowest for thirty years.

JOURNALIST:

There is call from industry to lift migration because of the job shortages and obvious the market is (inaudible) at the moment what do you think, should migration be lifted again?

TREASURER:

Well we have lifted the immigration intake in recent years quite considerably and we particularly focused on skills because that is the area where people are likely to have the best prospects, if they have got skills they are more likely to get a job and the country needs skills. So I think that we can continue to run a pretty strong immigration programme with figures like this but bear in mind of course that we are also looking to get Australians born here in work and they have got the best opportunity that they have had for thirty years.

JOURNALIST:

The industry wants another 20,000 skilled on top of what you did last year do you think that is feasible?

TREASURER:

Look I think it is possible to run and increased immigration programme focusing on skills. I am not going to put a number on it.

JOURNALIST:

Mr Costello are you worried that today’s strong employment numbers are going to prompt an interest rate rise?

TREASURER:

Look our monetary policy runs directed towards inflation. We target inflation to monetary policy, our monetary policy is directed at keeping inflation between 2 and 3 percent. Now there are some challenges in relation to that. The biggest one of course is oil prices and petrol prices but I don’t think we should see low unemployment as a challenge to that. Low unemployment is a good thing. Let’s not start getting worried about low unemployment.

We have been trying in this country to get here for thirty years so let’s not start getting worried now that we are there. But the important thing to make sure is that our wages are kept restrained and if we keep our wages restrained we will keep inflation down, that will be consistent with continuing growth in the economy and falling unemployment.

JOURNALIST:

This growth in part time jobs do you think that is healthy for the economy or do you think it is telling you that people actually want more work and not just part time?

TREASURER:

For us month to month the composition varies. Last month we had a huge kick up in full time jobs and a fall in part time, this month you get a bit of a correction. So you have to look at it over a period of a time and here are the figures: Over the last year 146,700 new jobs have been created, 82, 000 full time and 24,700 part times. So over the last year most of the new jobs created in Australia have been full time jobs. Now there are some people that only want to work part time. There are some people that are looking for part time work so the creation of new part time jobs is good for them. For the people that are looking for full time work the creation of full time jobs is what they are after.

JOURNALIST:

Could I ask a question on another topic please Treasurer, you have had the Warburton/ Hendy report on taxation for a little while now what is the gist of it?

TREASURER:

Well the report is a very comprehensive report. It is about 400 pages. It has not been printed yet. After it is printed and I have consulted colleagues and some time by the Budget we intend to put it out publicly. It measures the Australian taxation system against comparable countries, other developed countries around the world. It confirms that by comparison Australia has one of the lighter tax burdens. We are the eighth lowest taxing country of the thirty developed economies of the world and it goes through the various areas in which we apply our taxation. But the finding is consistent with international evidence that Australia has one of the lighter tax burdens of the developed economies of the world. Now we have to work to keep it there and, if we can, work to improve it.

JOURNALIST:

Are there any major changes that you will be picking up from that?

TREASURER:

Look I think the important thing will be to bench mark. It shows some areas where Australia is well in front of the world, some areas where we are not in front so I think we have to start working on those areas where we are not in front. But overall the picture is this: this is an economy which has grown well, where spending as a proportion of the economy is the second lowest in the world, lower than the US, and where the tax burdens is one of the lighter tax burdens of the developed economy of the world. Higher than the United States but only higher than the United States because the United States runs a massive budget deficit. If they were funding all of their expenditures rather than sending the bill to future generations then their tax burden would be higher than Australia’s.

JOURNALIST:

What theory is need (inaudible)

TREASURER:

Well I will let you know in due course.

JOURNALIST:

Treasurer the opposition is making a big deal about skilled migration. They are trying to distinguish from your Government. Do you think the Coalition by their sort of emphasis on training local people first before brining in more migrants?

TREASURER:

Look I think it is important we train young Australians and give them the opportunity to develop skills and our Australian technical colleagues are all directed towards doing that. We are now establishing technical colleges which will give a whole lot of importance and I hope respect to skills training. I think one of the big mistakes that State education departments made was to get rid of technical colleges, particularly in this State. This disaster of the Cain/ Kirner years when they began phasing out technically colleges, we need technical colleges, they were good technical colleges. Now the Commonwealth has got to bring them back and we have to give them and prestige that they didn’t have in the past and we are going to set up technical colleges to get skills going but all of this takes time. If you start at an Australian technical college in year 11 today it is going to be 4 or 5 or 6 years before you are full trained and out in the workforce so you do have to make some of this up with migration but it should never be to the detriment of young Australian having an opportunity.

JOURNALIST:

Treasurer, small business is very concerned about a Tax Office ruling that they have got to pay the full GST on sales even in the case where they get a partial deposit, do you have a response to that?

TREASURER:

Well as I understand it this matter is going to be taken to the courts so the courts can give a ruling in relation to that and we will have a look at what the ruling is.

JOURNALIST:

So it is a possibility it may get addressed depending on the outcome of the case?

TREASURER:

Let’s see what the outcome of the case is.

JOURNALIST:

Treasurer you talk about low unemployment as a priority, given that is the case the new fair pay commission will it be one of their primary roles to keep wages low as a way of keeping unemployment down given there might be inflationary pressure on wages.

TREASURER:

No the fair pay commission is there to set fair pay standards but to set fair pay standards taking into account not only those that are in work but also those wanting to get into work. You do have to consider them as well but taking both of those matters into account to set a fair pay standard. That is what it is there for.

JOURNALIST:

Treasurer the …

TREASURER:

Sorry we will take one from here and go across

JOURNALIST:

… the Bob Hills wind farm has been knocked back because it could claim the life of one rare parrot a year. Do you support Senator Campbell in that decision?

TREASURER:

Look he is the Minister for the Environment. It is his obligation to have a look at these things. He has had a look at these things. He made his decision. The decision is out there for everybody to analyse. I am not an environmental expert but Senator Campbell is the man that is charged with the responsibility of making these decisions.

JOURNALIST:

Do you support his decision?

TREASURER:

I support my colleague, of course I do.

JOURNALIST:

Jeff Kennett once described these parrots as trumped up Corellas. What do you think of them?

TREASURER:

I have never actually seen one. They are so rare I have never clapped eyes on one. Perhaps after this decision they will be so present that I will actually get one in my backyard. I will swap you a bat for a parrot.

JOURNALIST:

Thanks Treasurer I just …

TREASURER:

Last Question.

JOURNALIST:

… Last year the Prime Minister said that under the new IR laws you wouldn’t need a certificate if you were sick for a short period of time, however there is a memo from Kevin Andrew’s office today saying that you could be required to provide a medical certificate or medical evidence even if you are off work for one day can you please clarify?

TREASURER:

Well if you want clarification as to Minister Andrew’s memo I suggest you put it up with him.

JOURNALIST:

Can you give me just a comment, the Victorian Liberal Party State Council is on this week, Treasurer. Ahead of that it is a State election year. Do you have any comment in particular what you are looking for from the Party now looking forward?

TREASURER:

Well look, we had our best federal election result ever here in Victoria in the 2004 election. What am I looking for in the Party? I am looking for a level of unity and commitment that I saw in the federal Members in that election. I am looking for support from the administrative headquarters for those federal Members, support in relation to administration and fundraising, the level that we had over the course of last year. That is what I want to see continue.

At the State level what I think is important is that the State party get its act together. I think it is important that they start to talk about the issues that are of concern to Victorians and I think that it is important that they start to focus on gaining the trust and the confidence of the community and that would be my advice to them. Gain the trust of the community. I think there are a lot of Victorians that want better Government in this State and they are looking to the State opposition to provide it. So provide it, and I think that is what they should be concentrating on.

JOURNALIST:

Mr Costello the $1.8 billion mental health funding is it new money…

TREASURER:

Yes.

JOURNALIST:

… all new money it hasn’t been previously allocated?

TREASURER:

Yes.

JOURNALIST:

Mr Costello (inaudible) the interest rates might rise next month (inaudible)?

TREASURER:

I don’t give a running commentary on future movements of interest rates. Thank you all very much for your time.