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 8/05/2007

Interview with Paul Bongiorno
Channel 10

Tuesday, 8 May 2007

SUBJECTS: Budget 2007-08

BONGIORNO:

Thanks for joining us, Treasurer. 

TREASURER:

Thank you, Paul.

BONGIORNO:

Can it do the trick?  Can it save the Government’s bacon?

TREASURER:

Well it will invest in the future.  This is the biggest investment we have seen in skills, the biggest investment we have seen in road and rail, this is building big investment for a big country.  And if the economy grows, and that creates jobs for Australians, then that is what we are after.

BONGIORNO:

Well, I suppose, people could say that the money that you’ve spent tonight, which is coming from tax revenues is available and something for an incoming Labor Government to spend.

TREASURER:

Well, sure if Labor wanted to put up taxes, they could, but I do not think they should. 

BONGIORNO:

They wouldn’t have to, would they?

TREASURER:

Well, the taxes have been cut, and we have done that to help middle income Australians because we believe that middle income Australians who have been doing it tough, ought to be encouraged.  We want to build the capacity of the workforce.  If you cut taxes for those particularly targeted to $40,000 - $50,000 then this will add to the productive capacity of our economy and that is what we want to do.

BONGIORNO:

Well the $31 billion over 4 years, that is a lot of spending power back into the economy.  Already one economist tonight says that you’ve taken a calculated risk on what could be upward pressure on inflation and therefore, interest rates.

TREASURER:

Well at the end of the day the Budget will still be in surplus - about $10 billion.  That is what we expected last year.  And that was about the outcome for this year.  So, overall when you look at it, it is pretty responsible to have a surplus and it is pretty responsible to have a surplus of about $10 billion.

BONGIORNO:

And you are saying in answer to that, there is a minimum risk.

TREASURER:

Well I do not think this is a problem at all in terms of stimulation.  And I would not have done it if it had have been.

BONGIORNO:

Just going to your iconic (inaudible) in the Budget tonight, the Endowment Fund for universities, $5 billion.  Wouldn’t it have been better to put that $5 billion straight into the universities?

TREASURER:

Well that would have been spending, you see, and what we want to do is invest.  If we invest $5 billion and use the earnings, then the $5 billion is always there and it can be added to.  And it can generate earnings for future generations.  If you spend it, it is gone, just gone.  There is nothing for future generations and that is why we want to make sure that we have got something for future generations. 

BONGIORNO:

Well, why couldn’t you have made it easier for students of low and middle income families, like for example, giving some HECS relief?

TREASURER:

Well, we introduced new scholarships of course.  And that is designed for kids who need assistance.  More scholarships.  There is, in fact, better recurrent funding.  But if you want to rebuild facilities that are first class, the world class kind that we want, then the best thing is to invest.

BONGIORNO:

You’ve lifted the caps on full fee paying students.  Won’t that crowd out the poorer students?

TREASURER:

No, because all of the Commonwealth funded places, which are funded by the taxpayer will have to be delivered by the universities.  If they want to take in some fee paying students, many of whom by the way are overseas students, and they have got room for them, and that provides better facilities, well it is a bit tough to say they can not do it.

BONGIORNO:

Environmental groups tonight are grateful that you used the word climate change in the Budget speech, but one, in fact Greenpeace said that you had gone to being a climate pretender.  They say you haven’t done enough on climate change?

TREASURER:

Well, I am sure they will always say as we go through this climate change debate which will go for decades, that more can be done here and more can be done there, but gee, this is a great start.  It is a great start with the Murray Darling Basin and Natural Heritage Trust and I think they are real practical results and I think they will deliver for all Australians.

BONGIORNO:

Peter Costello, thank you.

TREASURER:

Thanks, Paul.