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 21/04/2006

Interview with Karl Stefanovic
Today Show

Friday, 21 April 2006
7.10 am

SUBJECTS: Debt free day, Budget, petrol prices

STEFANOVIC:

Good morning to you Mr Costello.

TREASURER:

Good morning Karl, good to be with you.

STEFANOVIC:

Well today, you get to do what many Australian’s only dream of and that is to pay off the mortgage.

TREASURER:

Yes, we started with $96 billion. That was the Labor debt when the Government was elected in 1996 and over 10 years we have been working to pay it off and today we go debt free. And what that means for people is that no longer do we have to raise taxes to pay the interest bills or to re-pay the Labor debt, that we have gone debt free and we have got a lot more options and a lot more freedom for the future.

STEFANOVIC:

You mentioned that wonderful three letter word then – tax – we have paid off our debt, we have got a surplus, when are you going to start giving it back?

TREASURER:

Well, we have got a round of tax cuts legislated for 1 July, we are going into this year’s Budget. I have always said if we can manage to fund all services that people want in health and aged care, in defence and in terrorism and balance the Budget and lower tax, that is what we are going to try and do. So, we have got a round of tax cuts already legislated and we will go into the Budget round and see what we can do.

STEFANOVIC:

You must have something in mind already, are we talking about tax cuts again in the Budget or are we talking about major tax reform?

TREASURER:

Well, major tax reform is tax cuts…

STEFANOVIC:

Both?

TREASURER:

…because nobody wants a reform which increases their tax so what we would be looking at is trying to cut the tax burden. Australia has now got the second lowest spending of any of the developed countries of the world and we have the eighth lowest taxing. So if we can keep our spending down and pay off our debt as we have, of course we have got to work at keeping tax as low as we can. And just to compare it with America for example, America has a huge government debt, it is one of the reasons why the American Government now is a bigger spender than the Australian Government, we have got a leaner government than America.

STEFANOVIC:

What you seem to be indicating is that we are heading for some sort of tax cut in the Budget?

TREASURER:

Well, one is already legislated, that is definite. And as I say if we can afford to maintain the defence against terrorism and the army and all the rest of it, increase our health expenditures, we will see what else we can do.

STEFANOVIC:

A lot of people this morning in particular are talking about petrol prices, that seems to be the biggest issue for them at the moment, how they can handle that and with the possibility of inflation increasing as well, that is a major worry for people.

TREASURER:

Oh, petrol prices are really killing people, they are killing people at the bowser, I know that, and we are living through an oil shock. These are the highest oil prices we have ever seen and whenever you see the oil price go up the petrol price just follows it, petrol comes from oil…

STEFANOVIC:

You won’t cut the excise at all?

TREASURER:

It is not caused by excise, we did cut the excise…

STEFANOVIC:

That would lessen the burden though, perhaps?

TREASURER:

…we cut it from 44 cents to 38 cents and the price has gone since we did that from 80 cents to $1.40. We cut the excise. This is caused by oil prices increasing, the only thing that can be done to get relief at the bowser is for an increase in world oil supply which will bring back the price.

STEFANOVIC:

So people are worried about, as I said, inflation, those petrol prices and then struggling to meet their mortgage repayments.

TREASURER:

Sure, let me make a couple of points here. One is we have got to keep inflation low and secondly if we can keep inflation low, we can keep mortgage interest rates low and mortgage interest rates as you and I know are a lot lower today then they were when Labor was in power and interest rates were 17 per cent. Imagine if you were facing a 17 per cent rather than a 7 per cent interest rate.

STEFANOVIC:

The Gallery, when the Gallery talks everyone listens as we all know, yesterday was a good example when Mr Howard was asked about possible retirement, this is some of what Laurie Oakes had to say in his package in National Nine News last night:

TREASURER:

It is the day we will pay off the mortgage, tomorrow. The Government will owe nothing.

OAKES:

But even as he celebrated, Mr Costello’s hopes of being rewarded by becoming Prime Minister later this year suffered a major blow. John Howard giving his strongest signal yet that there will be no vacancy.

HOWARD:

I am not considering retiring.

OAKES:

In case anyone missed it:

HOWARD:

I am not considering that.

STEFANOVIC:

We guess he is not considering that, is that a concern for you at all?

TREASURER:

No look Karl, I am focussing on the important things for the Australian public, how can we contain inflation, how can we keep interest rates low, how we can get the debt monkey off our back. They are the things that I think about and work on, today is one of the great days.

STEFANOVIC:

Do you consider it a major blow?

TREASURER:

No, I don’t take any notice of that kind of thing, I just get on with the things that are important for the Australian public.

STEFANOVIC:

Do you think that you could beat Kim Beazley if you lead the Party into the next election?

TREASURER:

Well, I am not going there Karl because as you know that will just give more fodder for your good friends at the Gallery.

STEFANOVIC:

Do you think you could beat him though?

TREASURER:

I know where you are going.

STEFANOVIC:

It is just a simple question, Treasurer.

TREASURER:

And a good one, and an even better answer.

STEFANOVIC:

Mr Beazley got himself into a bit of strife yesterday not knowing some of his own Senators, what did you think of that?

TREASURER:

Well, he was in Adelaide and he was telling the people of Adelaide how good his Senators were so he should know who his Senators are.

STEFANOVIC:

Do you know who your Senators are? Let’s play Millionaire for a second. Who are your Senators in Tasmania?

TREASURER:

Well, why don’t we start in New South Wales, I am in Sydney…

STEFANOVIC:

Does that give you time to think about Tasmania?

TREASURER:

Well, we are in Sydney, I can go through them all.

STEFANOVIC:

Off you go. We are not holding you up.

TREASURER:

Senator Coonan, Senator Payne, Connie Fierravanti-Wells, Bill Heffernan, Sandy Macdonald and Fiona Nash.

STEFANOVIC:

Alright, let’s go to Tasmania quickly before we run out of time.

TREASURER:

I think I will take the money at this point, if that is alright.

STEFANOVIC:

Alright, should I let the Treasurer go on…

TREASURER:

I will take the money rather than play on until next week, Karl, if that is okay with you.

STEFANOVIC:

Just quickly before we go, we are running a Nine MSN poll question this morning, we are asking, Should Peter Costello lead the Liberal Party into the next election and he hasn’t been on-line this morning yet, 31 per cent saying yes, so far, only a small sample. Very nice for you to join us this morning, we appreciate your time.

TREASURER:

Good to be with you, thanks Karl.