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 10/05/2006

Interview with Ross Stevenson & John Burns
3AW

Wednesday, 10 May 2006
8.05 am

SUBJECTS: Budget 2006-07

JOURNALIST:

Good morning Treasurer.

TREASURER:

Good morning, good to be with you Ross and John.

JOURNALIST:

Last week the Reserve Bank Governor tapped the brake of the Ferrari - that is the economy - very lightly, he woke up this morning that whilst he is tapping the brake you have floored it.

TREASURER:

We brought down a Budget which does important structural tax reform both on the income tax side and especially on the superannuation side and it will set Australia up for opportunity - to take your car model, we are entering a new model.

JOURNALIST:

He is not going to have the…

TREASURER:

Your model will drive faster in the years to come.

JOURNALIST:

Your right foot flooring the accelerator won’t require him to put a bit more pressure on the brake by a further interest rate rise, will it?

TREASURER:

And my steady hand is on the wheel. That is the most important thing.

JOURNALIST:

Now listen Superman, what do you say to the criticism that the average bloke on $40,000 to $60,000 a year only gets $10 a week while the $150,000 mega-rich bloke gets $120 a week extra in his kick?

TREASURER:

Well when you are reducing tax rates you get tax cuts in accordance with the amount of tax that you pay, so somebody on $150,000 is probably paying $60,000 in tax so when you have a percentage cut it looks bigger in dollar terms but if you actually look at the percentages the largest percentage tax cut goes to lower income earners.

JOURNALIST:

There have been changes to superannuation and to my eye there are certainly incentives for people in their sixties to retire, do you know anyone in their sixties who might be thinking of retiring?

TREASURER:

That is you next year, isn’t it Ross?

JOURNALIST:

Not quite, but you know, they are just increasing those incentives for a bloke in his sixties to jump ship and retire.

TREASURER:

Well the changes mean that if you are over 60 and you retire you won’t have any tax on your lump sum or your pension if you are in a taxed superannuation fund. This is the biggest change we have had in superannuation for decades and I think it has been very well received and it will make superannuation attractive and if you are over 60 it will be a much better system of realising your benefits. This is a good change and it is long overdue here in Australia.

JOURNALIST:

You will have plenty of dough for a big spend next year when you deliver your twelfth Budget as I think you will. I am not making decisions for you, that is Tanya’s job, but that would presumably be your last Budget - big spend, election late next year and in Kirribilli old boy by Christmas 2008.

TREASURER:

I’m pleased you realise who actually has the power around the household. I am under a higher authority and you picked it.

JOURNALIST:

I’ve looked at some of the figures you’ve spent money on, for example, $10 million on flagpoles in every school, $2.3 million for the National Circus Centre, an upgrade of the Embassy in Kabul. You couldn’t find just an odd dollar, an odd cheque here or there to build a Prime Ministerial residence in Melbourne?

TREASURER:

No, there is no programme for that, although, don’t forget we also allocated some money to build the sports museum at the MCG for the Melbourne…

JOURNALIST:

You could live in there.

TREASURER:

The Sports Hall of Fame and Olympics, so that will be a good place to hang out in.

JOURNALIST:

You can live with the hide of Phar Lap. Now listen the question is have you got any dough left to suck up to us next year before the election?

TREASURER:

Look, these are responsible reductions in income tax, improved superannuation arrangements and they will make Australia a better economy. And we are still being prudent about next year. I am being cautious to keep a good bottom line in the Budget and we will make sure we get these changes in place before we think about any others.

JOURNALIST:

I’ve got some folks with some questions. We’ll ask people to be concise if they can. Greg, a question for theTreasurer.

CALLER:

(inaudible) I earn $50,000 a year, I don’t have kids and I don’t own a house, so quite frankly I’m SOL when it comes to your Budget and I don’t even get a flagpole.


JOURNALIST:

Righto, he wants to know what he’s done to deserve his poor treatment. He earns $50,000 a year and doesn’t have any kids. SOL is an abbreviation for muck on the pluck.

TREASURER

This Budget cuts taxes for people on $50,000. They were paying 30 per cent tax rate from $21,600 to $25,000. They’ll have a 15 per cent tax rate so that rate is cut in half in that range delivering a income tax cut at $50,000 and of course, if the chap in question has superannuation as he most likely does, when he comes to retirement he will find he will be living far better in retirement as a consequence of the 2006 Federal Budget.

JOURNALIST:

Righto, Mal, fire away, concise please.

CALLER:

Good morning. I would just like to raise a question. For people over 60 that are unemployed, from the 1 st of July you have introduced new activities to work for the dole, how will they paying, help with the cost of petrol.

JOURNALIST:

…theme this morning is the cost of petrol.

TREASURER:

Sure and I understand that. You know, I only wish that there was something we could do about the world oil price, but you have to got face reality, the world oil price is beyond Australia’s control and it governs petrol prices.

JOURNALIST:

What about the excise though?

TREASURER:

Well, we cut the excise, we cut the excise from 44 cents to 38 and the price went up from 80 cents a litre to $1.50.

JOURNALIST:

Judy has got a question. Fire away, Judy.

CALLER:

I want to know, I’m insulted that you offer me a $9.80 pay rise a week. That is an insult when petrol has gone up to 20 and stop blaming the world’s oil prices around the world because I work in that industry and I know it’s not the problem

TREASURER:

Judy…

JOURNALIST:

When she says pay rise she means tax cut.

TREASURER:

Yes, it wasn’t a pay rise it was a tax cut. Well petrol prices have gone up around the world. It is unfortunate. I don’t like it. You have seen the outcry in America. You have seen the outcry in Europe. There is an outcry in Japan. Petrol prices are not unique to Australia, in fact, there is probably a bigger outcry in the United States. You have seen that on your news at the moment. That is because oil principally comes out of the Middle East and Africa. We don’t, we are not self-sufficient in oil in this country. We import more than two thirds of our oil and most of that is coming out of the Middle East and we import it at world prices. Whilst you have got trouble in Iraq and the possible sanctions on Iran, the price of the oil coming into Australia out of the Middle East is just too high. It is punishing, but it is a price that is not controlled by the Australian Government.

JOURNALIST:

Your understanding, we have got to let you go, we made undertakings to let you go about now, that payments to the miners in Beaconsfield, they are taxable or non-taxable for selling their story to the media?

TREASURER:

It is hard for me to give a tax ruling on the spot but generally speaking if it is income, it is taxed, but I wouldn’t know what the ruling is. I would have to get the Commissioner of Taxation on here to try and give you a ruling. He probably would want to know a lot about the facts too.

JOURNALIST:

That’s fair enough.

TREASURER:

Don’t take it from me, fellas.

 JOURNALIST:

No worries. A very quick last question. This was, that was your second last Budget wasn’t it?

TREASURER:

Well this is the Budget that I am in the process of delivering and I am trying to get through the Parliament. And I hope we can get it through the Parliament and do good things for the Australian people.

 JOURNALIST:

Good luck. You’ve got a majority in both Houses, I don’t know how you are going to do it.

TREASURER:

They don’t always come good.

JOURNALIST:

Thank you very much for your time.

TREASURER:

Thanks for your time, Ross.