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 16/05/07

Doorstop Interview

Westin Hotel, Sydney

Wednesday, 16 May, 2007
2.30 pm

SUBJECTS: Consumer Sentiment, Economy, Interest Rates, Telstra, Executive Salaries

JOURNALIST:

Treasurer consumer sentiment is at a record high but you are lagging in the polls.  Does that mean your economic message is losing its sting?

TREASURER:

I think consumer sentiment is high because people are in work – we have got more Australians in work than ever before, they have had the opportunity to have a stable period of Government, they will be having tax cuts in July and of course for pensioners there is also a pension bonus.  I think when you put all of those things together, consumers are optimistic about their future.  That is a good thing for the public and it is a good thing for the economy actually, that people are optimistic about their future.

JOURNALIST:

But it is not reflected in the polls?

TREASURER:

Well this is reflecting the economic position of the country. And as far as I am concerned, it is my job as the Treasurer to ensure that the country is strong economically.  That is what I do, I make sure that our Budgets are balanced, that we pay off debt, that we give benefits to pensioners and we keep people in work. That is my focus.

JOURNALIST:

(inaudible) wages growth has been contained in the first quarter.  Does that mean that rate hikes are off the table (inaudible)?

TREASURER:

Well, it is important that we keep wages consistent with low inflation because if we were to have an outbreak of unsustainable wage demands then inflation would rise. That wouldn’t be good the economy and it wouldn’t be good for consumers.  It is why a decentralised industrial relations system is so important because if you go back to pattern bargaining or collective bargaining then you are going to have wage rises pushed right across the board that would be unsustainable in the economic climate and push up inflation. 

JOURNALIST:

Treasurer on another matter, the ACCC has introduced (inaudible) on Telstra.  Do you think it is appropriate, this action that they are taking?

TREASURER:

Well I don’t think I have ever seen a company in Australia engage in the kind of attacks that Telstra is currently engaging in upon an independent statutory regulator.  And I would say to Telstra this attack, and it is quite a personal attack, is absolutely unprecedented.  I think the management of Telstra has got to acquaint itself better with Australia and Australian conditions.  In Australia we don’t attack people who are independently doing their duty in the way that Telstra has chosen to.  And I can’t for the life of me see how it is going to help Telstra.

JOURNALIST:

(inaudible) an interest rate rise before the election?

TREASURER:

As a result of what?

JOURNALIST:

Of consumer…

TREASURER:

Look, to have strong consumer sentiment is a good thing. That means people are feeling secure about their jobs and about their houses.  That is what we like to see.  But our Budget has actually put Australia in a strong position as to weather all sorts of challenges. And when you see that this is a Budget in surplus for the 10th time, when we have now paid off all debt, that means that Commonwealth Government is not borrowing in the next year, we are adding to savings.  We are putting pressure, downward pressure on financial markets rather than upward pressure.

JOURNALIST:

(inaudible) with interest rate rises?

TREASURER:

Well that is an observation about events that are highly speculative unless you are going to tell me something.

JOURNALIST:

Should Kevin Rudd meet the Dalai Lama?

TREASURER:

Oh look, I have given up advising Kevin Rudd.

JOURNALIST:

Treasurer do you think it is appropriate that anyone should get paid $33 million for a year’s work?

TREASURER:

Can I say the Government doesn’t set these salaries.  These salaries are set by companies. They have to be approved by their shareholders.  It is up to the shareholders to decide whether or not they approve of that.  And we have laws that require these remuneration packages to go to shareholders.  I would urge shareholders to have a very careful look at these things.  It is their money, it is not set by the Government, it is their money and the shareholders should look very carefully at these things.

JOURNALIST:

Do you think most Australians would be shocked by the amount (inaudible)?

TREASURER:

Well most Australians earn about $45,000 - $50,000 a year, that is the average wage in Australia. So for most Australians they would look at anything above that as higher – a higher wage and anything below that as a lower wage.  And for most Australians their benchmark is their own wage.  And we know where that is, it is $40,000 - $50,000.  Okay thanks.