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 27/09/2007

Doorstop Interview
Institute of Public Affairs
Melbourne

Thursday, 27 September 2007
1.30 pm

 

SUBJECTS: Industrial relations policy, Wayne Swan, Labor’s economic management, Trade Practices Act, Labor ambiguity on tariffs, global financial markets

JOURNALIST:

…praise for your system, but it doesn’t seem to be getting through to the public.  How are you going turn this around in the campaign?

TREASURER:

Well the point that I make is that one of the reasons Australia has been able to manage low unemployment, real wage rises without inflation getting out of control, is that we have made great improvements in industrial relations.  And if we go backwards on that we will not be able to handle this low unemployment environment.  We will get inflation breaking out and it will end in recession as it always did in the past.  So this is absolutely critical to Australia’s future that the reform process is not turned back and Labor is for turning back.  It will end as it always did in recession and tears.

JOURNALIST:

Mr Costello, do you think Mr Rudd should endorse Mr Swan as his Treasurer as Mark Latham did before the last election?

TREASURER:

Well, obviously there is an argument going on in the Labor Party at the moment about who should be Treasurer if Mr Rudd gets elected.  Mr Rudd has refused to endorse Wayne Swan – I can understand why – there is a lot of concern obviously in the public about Wayne Swan.  But to suggest that Julia Gillard would be any better of course, is a nightmare scenario.  There is no reason to think that Julia Gillard would be better than Wayne Swan, and after that you are going down the ladder.  So the only way to save yourself from either Julia Gillard or Wayne Swan of course, is to make sure that Mr Rudd is not elected. 

JOURNALIST:

Will the election be a referendum on IR?

TREASURER:

I think that the election will be about many issues as it always is.  I think it will be about who has a plan for Australia that will enable people to keep their jobs, to keep their homes, to keep their businesses, that will allow us to use the progress that we have made in the past for opportunities in the future.  And of course to keep a strong economy which can manage the great challenge of climate change, of water, of health and all of those other things that we need for a good standard of living in the years which lie ahead. 

JOURNALIST:

Mr Costello, is a vote for Kevin Rudd effectively a vote for Wayne Swan as Treasurer?

TREASURER:

Well we can’t tell who would be Treasurer in a Labor Government because Kevin Rudd refuses to endorse Wayne Swan.  We can understand why, because there is no public confidence in Wayne Swan as an economic manager.  But there is no reason to be any more confident with Mr Rudd.  Mr Rudd hasn’t given the economy considered thought.  He hasn’t laid down plans which are necessary for Australia’s future.  He doesn’t understand the tax system – we know that – and he really is not ready to manage a $1 trillion economy. 

JOURNALIST:

Can you guarantee that current, that all Government Ministers will be returned to their current portfolios?

TREASURER:

Well, obviously I am not the person that allocates portfolios but I can certainly guarantee that those people that have made major contributions to the Government will continue to do so. 

JOURNALIST:

Under a Costello Prime Ministership…

TREASURER:

If you want to know who would be managing Australia’s $1 trillion economy, if the Coalition Government is returned, it would be me as Treasurer. 

JOURNALIST:

Under your Prime Ministership later in the term, who would be your Treasurer?

TREASURER:

Well we will get around to those things once we are through an election. 

JOURNALIST:

Then why should Kevin Rudd be made to make those commitments? 

MEMBER OF THE PUBLIC:

(inaudible), is there are any situations where unjust dismissal would be okay?

TREASURER:

Hang on, I think we will just take questions from the media if that’s okay. 

JOURNALIST:

The Birdsville amendment to predatory pricing laws which were passed at the last minute have been described as a nightmare for business.  Why did you agree at the last minute?

TREASURER:

Well the amendment that we put into the Trade Practices Act says that where you have market share and you engage in pricing for the purpose of reducing competition or for the purpose of restricting competition in one way or another, that that is contrary to the Act.  And I think that is a very sensible amendment.  We want low prices but we don’t want people to engage in purposeful anti-competitive conduct. 

JOURNALIST:

The Law Council has written to you warning that they will unequivocally reduce discounting negatively affecting consumers. 

TREASURER:

Well it is entitled to its view. 

JOURNALIST:

Treasurer…           

JOURNALIST:

Can Australia afford any slow-down in the tariff reduction?

TREASURER:

Well you see here again we have Labor speaking with ambiguous and confused messages.  On the one hand Labor wants to tell you that it is in favour of economic reform and an open economy.  But they are narrow-casting back to their union base, that if they get elected, tariffs will be back.  It is another example of where Mr Rudd on the one hand wants to say: ‘oh well, we won’t turn back the clock on economic reform,’ whilst narrow-casting back to his union base that if he gets elected he will be their man.  And there is this ambiguity running through Labor all the way, where they are putting forward contradictory messages to different interest groups telling them what they think those interest groups want to hear.  There is no considered economic purpose to Mr Rudd and his multitude of would-be Treasurers. 

JOURNALIST:

Mr Costello, if you are not prepared to elaborate on who may be the Treasurer if the Liberals are returned, why should Mr Rudd be expected to make a similar sort of commitment?

TREASURER:

Well I am prepared to elaborate.  And I have told you, if the Liberal Party is returned, the person managing the trillion dollar economy will be me. 

JOURNALIST:

What if you are to be become the Prime Minister?

TREASURER:

Well let’s get through this election before we start talking about the next one. 

JOURNALIST:

Treasurer…

JOURNALIST:

(inaudible)…

TREASURER:

Sorry. 

JOURNALIST:

…are you seeing signs in the credit markets now of some stabilisation?

TREASURER:

I think the fall-out from the US sub-prime market has a considerable way to go.  It is not yet entirely clear who is holding all of the risk on these defaults.  There will be different financial institutions around the world which will identify losses and in the interim financial institutions as between themselves are restricting credit or driving the price up.  That is going to put a lot of pressure on the international economy.  It is possible if this continues in the United States that it will work its way out into the real economy.  The US economy may well turn down.  But the important thing is that we keep Australia strong.  And we came through the US recession when the US went into recession in 2000-2001, we came through the Asian Financial Crisis in 1997, we can keep the Australian economy strong with experienced management and good policy.  And that is what we need to do.  Thank you.