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 20/04/2006

Doorstop Interview

Shangri-La Hotel
Cumberland Street, The Rocks
Sydney

Thursday, 20 April 2006
2.10 pm

 

SUBJECTS: Prime Minister, oil, alternative fuels, China boom, resources, family tax benefits

JOURNALIST:

Treasurer, the Prime Minister has indicated today in two radio interviews that he has no intention of retirement, do you welcome him contesting the next Federal Election?

TREASURER:

I am not going to speculate on those matters.

JOURNALIST:

Treasurer, do you think than another recession would eliminate the, or wipe out the good news of today?

TREASURER:

Well, if Australia went back into recession that would throw many people out of work. It would end many businesses. It would be a lot of hardship for the Australian community and one of the successes of the last ten years has been to avoid recession. Much of the rest of the world has gone into recession during that period Asia, the United States good economic management is directed to avoiding recessions and that is what we are focussing on here.

JOURNALIST:

Treasurer, do you think the oil price is at a point now where it could cause harm to the economy?

TREASURER:

It is a risk, the oil price is a risk to the economy, of course it is inflicting enormous pain on motorists which no one welcomes. It is not good for motorists, it is not good for consumers, it is not good for businesses, it is not good for the economy. We had hoped that these extraordinary high prices would pass through the system but they have now continued for months and you would have to say that until such time as world supply is boosted it looks like they are going to continue and the worst possible thing would be if it set off another round of inflation. The first two oil shocks set off a round of inflation throughout the world in the early 70s, I think we are better prepared these days but we can't afford to be complacent about it.

JOURNALIST:

Labor and the Democrats are calling for more to be done with alternative fuels, is there anything the Government might do in the Budget to help alternative fuels being used?

TREASURER:

Well I think that things like bio-diesel, LPG might be things that some people are able to look at. I think longer term obviously, from an industry point of view, solar and other alternative technologies are going to be of interest to people. In a market situation when the cost of one form of energy goes up other forms of energy start getting more competitive and the investment signal goes out to those alternatives to start experimenting and start producing and I hope the market will work in this situation.

JOURNALIST:

Treasurer, you said the investment boom, the China boom, would only last another couple of years, what do you think will happen to the Australian economy if it slows down or ends?

TREASURER:

No, what I said is I think there is a lot left in the China boom and I said I didn't see China coming to an end, what I said was I saw other countries taking these investment signals and boosting supply, with increased supply then of course even with today's demand you would expect prices to come back. So, I wasn't saying that I expected the Chinese economic development to come to an end, what I was saying was I expected the prices to moderate because I believe countries other that Australia, just like Australia, will be working on boosting supply.

JOURNALIST:

And what will happen to the Australian economy at that point?

TREASURER:

Well at that point of course then resource companies, which are getting extraordinarily high prices at the moment will have to cope with moderating prices, returning to more historical levels, but when that happens, I can't precisely tell you unfortunately.

JOURNALIST:

Treasurer, do you think that family benefits, much in the news this week, contribute to the low rate of participation by women in the workforce in Australia?

TREASURER:

See, you know, you can look at the two sides of these things. If you want to be extraordinarily critical, and some news outlets do want to be critical, what you say is a financial system which offers mothers a real choice if they want to, to stay at home penalises them from going into the workforce. That is one way of looking at it. If you want to turn the negative on every perspective but a positive way of looking at it is it offers them a real choice if they do want to stay at home with their children. Now, I would say to the advocates who say this is a bad situation, that we ought to heighten incentives to go into the workforce, what are they advocating? Are they advocating a restriction of the financial choice of mothers that do want to stay at home? Because that would be one way of heightening incentives. Do you understand my point? There are two sides to every coin.

JOURNALIST:

But do you accept that the way the system is structured is creating disincentives for women to go to work after they have children?

TREASURER:

Well look, I know it is hard for women who have young children to go into the workforce. They are not only trying to hold a job, they are trying to look after their children, they are worried about their children. You have got school holidays, you have got childcare costs, I know it is hard and our family has been through this too, I know it is hard. But the flip-side of this is that women are better educated, more highly skilled than ever before and we can tell from statistics can't we, there are more women in the workforce than ever before. So I am not saying it is easy but if you actually look at the outcomes there are still today more women in the workforce than we have ever had before.

JOURNALIST:

You are also encouraging elderly Australians to remain in the workforce for longer, would that include the Prime Minister?

TREASURER:

Well we can include you in that (inaudible).

JOURNALIST:

So you would like to see the Prime Minister (inaudible)?

TREASURER:

Well I would like to see you remain the workforce for some time. There is a place for old TV commentators. Last question.

JOURNALIST:

Treasurer, the Inspector General of Taxation has called today for self-assessment of income tax to be scrapped and introduce more of a hybrid model, should income tax self-assessment be replaced with a new (inaudible)?

TREASURER:

That is a long question that one, I will go and have a look at what he said. Thank you all very much for your time, thanks.