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 18/08/2006

Interview with Jon Faine
774 ABC

Friday, 18 August 2006
8.30 am

SUBJECTS: Coles Myer, Woodside, Port of Melbourne, postage allowance

JOURNALIST:

Mr Costello, good morning.

TREASURER:

Good morning Jon, good to be with you.

JOURNALIST:

You have responsibility for the oversighting of the FIRB the Foreign Investment Review Board. Would you approve a foreign takeover of Coles Myer?

TREASURER:

Well, it is too early to say anything like that Jon. The fact is that we don't yet have an application before us. Once we have an application before us we carefully consider it, we take into account the national interest, and we make a decision accordingly. Of course, we don't even know who the identity of the bidder is, nor do we know what the attitude of the company is.

JOURNALIST:

Well, all of what you have said there is correct but we can rely on what would seem to be well informed commentary throughout the business media. If we discuss then a theoretical retailer and a theoretical foreign takeover, what would be the criteria that you would apply in deciding whether or not it is in the national interest for it to be sold to overseas investors?

TREASURER:

Well (inaudible)

JOURNALIST:

It's very hard to hear you Mr Costello, you are very muffled at the moment.

TREASURER:

Oh I'm sorry Jon, I'm just on my mobile phone at the moment, is that better?

JOURNALIST:

That is, thank you.

TREASURER:

Okay. Jon, the statute says that the decision has to be made according to the national interest, so that is the one thing and the only thing that can be taken into account. Now, when you are looking at the national interest it is very broad obviously. You would have regard to the nature of who is making the offer, you would have regard to the attitude of the company itself, you would have regard to the place that the company has in the Australian economy and you would have regard to whether or not a change of ownership would be in the national interest. It's all of those matters that you take into account when you make your decision.

JOURNALIST:

The last time this became front page news was I think the Woodside takeover which you blocked.

TREASURER:

Yes, the last application which I rejected, and it may well be the last application that was rejected, was in the case of Woodside where Shell had made an application to take over Woodside. Woodside, as you know, is one of our major oil and gas producers on the Northwest Shelf and as you know I disallowed that takeover offer.

JOURNALIST:

Why was that contrary to the national interest? If you can answer that you can give us an insight into the way you decide these things.

TREASURER:

Well the thing that motivated me most in relation to that was that the Woodside field was competing for contracts against other fields which Shell owned and my view is that if Shell had owned Woodside then there was a risk that they would put production of other fields in front of Australian production and other fields would get major contracts as you know we ended up getting a major 20 year contract in China. The offer that was made by Shell for Woodside was made before the energy and commodities boom that we are currently going through. If you look back at the price that was offered it is just a fraction of what Woodside is trading at today and I think most people would say that was the right decision.

JOURNALIST:

You decide then, if you are asked to decide in relation to something like Coles Myer, does it matter who owns a retailer? Is that anything to do with national interest it is hard to see how it could be, it is not like a resource, a petrol resource?

TREASURER:

Well these are matters that you have to take into account and I have to be very cautious here, as you know, not to pre-judge any application that may be made so I can only speak in the general as to the kind of things that you take into account when assessing the national interest.

JOURNALIST:

On a separate front Peter Costello, Ted Baillieu for the first time as Parliamentary Leader will be addressing the State Liberal Conference this weekend. Are there differences of policy emerging between you and he?

TREASURER:

Oh, I am not sure that there are. He focuses of course mainly on State issues, I focus of course mainly on Federal issues. I believe that Victoria and Victorians are looking for a change of government and I wish him very very well in the next election. I think that he has a big job to do, to win the trust of the Victorian voters but I think he is well qualified to do it.

JOURNALIST:

He seems to have adopted a scattergun approach in the last two weeks on a whole range - a raft of local issues - do you think Victoria needs a toxic waste facility?

TREASURER:

Well Jon, I might have my own views on all of these issues but because I am not responsible for the policy I think I will let that ball pass by the off-stump?

JOURNALIST:

Is the national interest that the Port of Melbourne be able to expand to meet what the business users of it regard as its full potential?

TREASURER:

I, as somebody who is vitally interested in the Australian economy and our export performance, I believe that we have to do everything we can to keep our ports world class and I do believe that one of Melbourne and Victoria's comparative advantages is as the largest container port in Australia and I think from an economic point of view, from a Victorian point of view, from a Melbourne point of view, the Port of Melbourne and its capacity is absolutely critical and I would certainly welcome those moves which are required to keep the Port of Melbourne as one of the great ports, probably the principal port of Australia.

JOURNALIST:

Ted Baillieu told us live to air on either Tuesday or Wednesday, I cannot remember which, that there was no need to move the wholesale fruit market in order to expand the Port of Melbourne's operations and he backed the growers and the retailers who want to keep the market where it is.

TREASURER:

Well, I am not entering into the location of the market, that is a matter for State colleagues, but I am making this point, that absolutely critical to Australia's export performance is good port management, and critical to that is Australia's largest container port in the Port of Melbourne. If it wants to keep serious commerce and industry here in Melbourne and Victoria, should be at the forefront of development and it should be Australia's major container gateway.

JOURNALIST:

Where I am heading with all of this of course Peter Costello, is that Mr Baillieu has sided with the retailers against big business on the market location and port redevelopment, he has sided with the residents up at Nowingee and Mildura against the business community needing a toxic facility, he has supported things like condoms for prisoners, civil unions for gays and a whole raft of other issues which put at him at odds, for instance with you, on both business and social issues.

TREASURER:

Well Jon my responsibility as Federal Member and Federal Treasurer, is to do what is right for the nation and on those Federal issues I will take those policies that will advance Australia in its interest. I make no bones about that.

JOURNALIST:

But you have got the senior Victorian Federal Member, you, at odds with our Parliamentary Liberal Leader Ted Baillieu on a raft of issues now. You are in the same Party but you disagree on all these things.

TREASURER:

Well on State issues, this is a matter for Mr Baillieu and his colleagues and they will put their policy to the Victorian electorate and I wish them well. But as a senior Minister in the Federal Government I will be doing what is right in the interests of the nation and we'll put our policies in to the people at an election next year.

JOURNALIST:

Should be an interesting conference this weekend. While I have you just quickly please another few things we are about to hear from the administrator of Ajax fasteners, a deal that was thought to be likely to get together in the last 24 hours to save Ajax fasteners, a car component manufacturer, seems to have fallen over and it looks as if this critical piece in the jigsaw puzzle, the car industry jigsaw puzzle, is going to go into liquidation now.

TREASURER:

Well the Federal Government has a scheme which we put in place to guarantee employee entitlements. If they can be paid out of the assets of the company they should be, but if they can't be paid out of the assets of the company then the Federal Government has a scheme in place to guarantee these. I don't think there is any State Government scheme that has been put in place and the State Government might like to look at that

JOURNALIST:

No, but if we have another manufacturing sector collapse, and particularly here in Victoria's critical car industry.

TREASURER:

I was going to go on and say, in relation to the car industry, particularly in relation to the components industry, I would hope that the business itself would continue, particularly if this is one of only a small number of businesses capable of supplying those components. The fact that the business can be sold means that the manufacture and the supply of components can continue on.

JOURNALIST:

And finally Peter Costello, are you entirely comfortable with the decision taken to extend the printing and postal allowance for incumbents MPs to the point where they have got hundreds of thousands of dollars available to mail out to constituents paid for by the taxpayer?

TREASURER:

Well, these allowances have been in place for a very long period of time, if not forever

JOURNALIST:

Not to this extent, not to this extent.

TREASURER:

and what has happened is that they have been increased in accordance with the increases in printing and postage costs

JOURNALIST:

20 per cent Mr Costello, and you can dip into next year's to bring it forward.

TREASURER:

Well, it is not an annual 20 per cent. 20 per cent after a number of years, and of course it has got to be used for communications in relation the electorate, it cannot be used for any personal use so

JOURNALIST:

It makes incumbents almost impossible to knock off.

TREASURER:

Well, my experience is that incumbents will be the defeated if they do a bad job, and I would say that it is important that incumbents can communicate, but the incumbents that tend to lose are those that don't communicate with their electorate.

JOURNALIST:

Up to $60 million of taxpayers' money to incumbent MPs for their election expenses. It seems anti-democratic on the face of it.

TREASURER:

Well Jon, bear in mind that that's Labor MPs, Green MPs, Democrat MPs, National MPs and Liberal MPs.

JOURNALIST:

So it's like the Australian cricket team once you are in you don't get out?

TREASURER:

Don't think this is an entitlement for only one side of politics.

JOURNALIST:

No, no, no, it is for incumbents, once you're in you can't get knocked off.

TREASURER:

Yes, it is for every political party, and Independents too, may I say, in order to enable them to communicate with their electorate.

JOURNALIST:

Well we will speak to one of those, Peter Andren says he thinks that it is unnecessary and he is against it, but everyone else seems to be for it. Thank you, you have been generous with your time this morning, we had better move on.

TREASURER:

It is great to be with you, thanks Jon.