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 10/05/2007

Doorstop Interview
Parliament House, Canberra

Thursday, 10 May 2007
8.20pm

SUBJECTS: Budget Reply costing error

TREASURER:

I think Mr Rudd failed tonight to lay out a plan which would do anything serious for the Australian economy.  His speech was very light on detail. It had no really new initiatives.   He had no economic plan.  There was nothing there, which surprised me actually, for Australian families. 

The only tax cut that he proposed was the tax cut for foreigners.  Apparently, he would rather give tax relief to foreigners than to Australians and I think that is a misguided priority.  That proposal incidentally he has mis-costed, he hasn’t done his homework.  That proposal to cut withholding taxes he says would cost $15 million a year, in fact it would cost around $100 million a year.  He is out by a factor of six and it illustrates really that you can’t slide through in Federal politics on glib clichés, you have to work hard.  Economic management takes a lot of effort and a lot of work and I think tonight what you saw was that Mr Rudd was caught out because he has not done the work and he has not done the thinking.

JOURNALIST:

Do you welcome Kevin Rudd into the club of economic conservative?

TREASURER:

He says he wants to adopt our economic policy.  He says that he wants to adopt the policy of balanced Budgets.  He says he wants to adopt the policy of an independent monetary policy.  But you have got to remember this.  Labor opposed these things.  Labor opposed the balancing of the Budget, Labor opposed paying off debt and Labor opposed my reform to put the Reserve Bank of Australia on an independent basis.  In fact not only did they oppose it, they said it was illegal.  Now after all these years when the result are starting to come in he says ‘oh me too’ but you can’t really take that seriously.  When the hard yards had to be done in the Australian economy Kevin Rudd wasn’t doing them and now that they have been done he would have you believe that he secretly believed in them all along.  Well he didn’t. 

JOURNALIST:

What about the policy of more money for trade skills in schools, was that a good idea?

TREASURER:

Well the Government has established Australian Technical Colleges.  He missed, again, he didn’t know the number of Australian Technical Colleges.  He got the number wrong around Australia.  And of course we are doing that because there has been a failure at the State level in relation to technical education.  Well now he says that he can get the States to bring back Tech Colleges.  The reason the Australian Government had to establish Australian technical colleges is State Labor governments abolished them.  And to now say ‘oh well, we will give the States a bit more money and they will re-establish them all again’, I think is pie in the sky.  We had to go in and start establishing them because political correctness at the State level from Labor Governments abolished technical colleges back in the 1980s.

JOURNALIST:

What about plugging leaky pipes?

TREASURER:

Well again, you have a situation where you have State water authorities which have been raided for dividends by State Labor governments when they should have been using those dividends to reinvest in fixing the reticulation mains.  Why do you have leaky pipes in State water systems?   Because State Governments have robbed dividends out of water authorities that should have been going back into fixing the system.  Along comes Kevin Rudd and he says - well, he’ll put a very small amount of money, a tiny amount of money in from the Australian Government, which won’t make a major difference.  And, of course, if the State Governments aren’t fixing them at the moment there is no guarantee that this will make any difference at all.

JOURNALIST:

Mr Rudd’s pledge on year 12, to boost the number of students completing year 12 to 90 per cent, would you like to lift retention rates?

TREASURER:

Well, 90 per cent in 2020 I think he said.  2020 would be what, you do the math – is what five elections away, 2007, 10, 13, 16, 19 – five elections away.  That might be…

JOURNALIST:

(inaudible) along the way though, Mr Costello, I mean hasn’t the Prime Minister traditionally said that not all students want to complete year 12 – is that a realistic target?

TREASURER:

Well not all students do want to complete year 12.  There are many students that want to do apprenticeships and they should be given the opportunity to do so.  But, somebody says ‘well, I am going to have 90 per cent retention in 2020’.  That is after the 2007 election, 2010, 2013, 2016, 2019.  I don’t think Mr Rudd will be there.

JOURNALIST:

The Budget papers themselves say that you would like to lift retention rates, so you do want more people doing year 12 or not?

TREASURER:

I want every child or student that has the desire to do so and wants to go down that career path to finish year 12.  I also want those students who are interested in practical things to have the opportunity to become apprentices.  I think we made a big mistake in this country when we told every student they had to go to university.  There are a lot of students who are much better equipped for apprenticeships and trade, and our country needs more people to do apprenticeships and trade.  And if at the end of the day you try and force all of them through year 12 and into university, you will, in my view, undermine the apprenticeships system.

JOURNALIST:

What about the pledge to allow small businesses to charge the Government interest if they are tardy with paying their bills?  Small business would like that, wouldn’t they?

TREASURER:

Well, I think the more important thing is to make sure the bills are paid on time.  That is our governments policy.  Instead of saying you can pay them late and pay a small interest and make sure they are paid on time. 

JOURNALIST:

Mr Costello, Tony Blair is about to announce his resignation.  How envious are you of Gordon Brown?  Are you starting to feel like the last bridesmaid on the dance floor?

TREASURER:

I think Prime Minister Blair has been a great leader for Britain.  I pay tribute to what he has done particularly at the international level.  I think his strongly courageous stand in relation to terrorism has served the world well and one of the things that you have to pay tribute to Tony Blair for was that he was the person that got the British Labor Party to give up the socialist objective.  Something of course the Australian Labor Party still hasn’t done. 

JOURNALIST:

Treasurer, you didn’t want to rate your own Budget today, but what would you give Kevin Rudd’s Budget reply out of ten?

TREASURER:

It was not well thought out.  He got his major economic matter wrong, he got the numbers wrong.  He is not good on detail, Kevin Rudd, and you can’t skate through with advertising.  I thought it was very significant that he released a TV commercial tonight.  Rather than do a substantive speech to demonstrate that he had economic credibility, he cut a TV ad.  And I think that just about says it all about Kevin Rudd.  Why do the hard work when you can cut a TV ad and take the soft option?   And I must say, I don’t know when this ad was cut by the way.  I assume it was cut before the Budget.  He was even cutting his commercials for the Budget reply before the Budget had been given.  And that really says it all, doesn’t it?  The substance is not important.  What counts is the media image.  Now, you can go well for a certain amount of time if you practice politics like that.  But when real peoples lives are at stake, when it is their jobs and their businesses and their mortgages, they want to know they have got somebody that does a bit more that cut a commercial.  They want to know that you have got somebody who can do the hard work, make the hard decisions, get their numbers right and actually bring down policy which will make a difference.

JOURNALIST:

Do you think Kevin Rudd’s good run is over?

TREASURER:

Well I just say this.  The longer it goes, the more he will get found out for being policy light, for not having done the hard work, for getting his sums wrong and for trying to skate through on cliché and media image.  And that is going to be his problem.  Thanks.  Well anyway, I will just give you this.  The report of the, this is your year 12 retention rates thing, I am losing my lighting, I am sorry, I can hardly read it, says, if somebody will, I will just table this.  The report of the knowledge nation, which was the Kim Beazley initiative, said this: recommendation ten; Australia must ensure that by the year 2010, a minimum of nine out of ten young people leave their teens with a year 12 equivalent qualification.  It was Beazley’s policy, 90 per cent by 2010.  Announcement tonight was 90 per cent by 2020.  So the big, bold announcement was to put Labor’s policy back 10 years. 

JOURNALIST:

That was seven years ago. 

TREASURER:

Yes, the big policy announcement was to put the (inaudible) back 10 years. 

JOURNALIST:

(inaudible) in Opposition for the last, they have been in Opposition for seven years.

TREASURER:

Well it is hardly a big, new, bold initiative.  And I table that for you. 

JOURNALIST:

And can you take us through the detail of how he has messed up his figures on…?

TREASURER:

Well I told you that the tax for foreigners which he announced tonight was he said, going to cost $15 million a year and it will cost $100 million a year.  He is out by a figure of six.  Okay, thanks.