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 10/10/2007

Interview with
Simon Beaumont
6PR

Wednesday, 10 October 2007

8.35 am
(WST)

SUBJECTS: Death penalty, pensions, Treasury, roads, superannuation, Brian Burke, WA polls

BEAUMONT:

Mr Costello good morning.

TREASURER:

Good morning Simon, good to be with you. 

BEAUMONT:

It is nice to see you in Perth.  Can we start with this one: should the Bali bombers Amrozi (inaudible) be executed?

TREASURER:

I don’t have any sympathy for the Bali bombers to be frank.  They decided to kill Australians, they killed 88 of our fellow Australians.  They killed them just because they were Australians and I don’t think we should waste our sympathy on them.  I think our sympathy ought to go to our fellow citizens and their families.  I certainly wouldn’t be spending my time trying to help Amrozi and co.  I would be spending my time trying to offer sympathy and support to the victims. 

BEAUMONT:

Should they be executed?

TREASURER:

Well this is a matter that will come up under Indonesian law.  As you know, Australia doesn’t have the death penalty but Indonesia does.  They committed their crime in Indonesia, they will have to pay for their crime under Indonesian law.  But I wouldn’t waste the resources of the Australian taxpayer trying to get a better deal for them.  I would rather spend our time and our energy showing sympathy to the Bali victims and their families.  And let’s also bear in mind we just had an Australian soldier who was killed in Afghanistan.  He was killed in Afghanistan by the Taliban.  The Taliban were giving safe haven to terrorist training camps.  He was doing his duty to protect all of us and my sympathy goes to him.  And I think it is legitimate to have sympathy for him.  I don’t have a great deal of sympathy for Amrozi and co. 

BEAUMONT:

As you say, it is not our government’s policy in this country to support the death penalty, but do you personally support it in these situations with acts of terror?

TREASURER:

I don’t support it in Australia and I don’t ever see it coming back in Australia.  But you are talking about Indonesia here.  You are talking about an Indonesian citizen in Indonesia who commits a heinous crime and that is the law in Indonesia.  He does it in Indonesia, he knows what the law is in Indonesia, he takes his chances with the Indonesian law, why Robert McClelland or Kevin Rudd decided that the Australian Government should intervene and try and lobby for clemency on behalf of Amrozi and co is beyond me.  You know, there are real victims here and they are the 88 that are dead. 

BEAUMONT:

Say in two years time you are the Prime Minister and an Australian is caught for drug trafficking or drug smuggling overseas – Malaysia, Thailand – one of the countries where they have the death penalty.  What do you say?  What do you do as Prime Minister?

TREASURER:

I think it is different if it is an Australian citizen because we have a duty to protect Australian citizens.  So, we were and we do ask for clemency for Australian citizens.  That is Australians who have been picked up overseas, convicted of a crime, facing the death penalty.  But I think that is quite different to a situation where you have got Amrozi and co. who are Indonesian citizens.  We, the Australian Government don’t have any obligation towards them.  We had an obligation to the 88 dead (inaudible) have an obligation to.  So that is why I say to you, whilst we would urge clemency for an Australian citizen, we wouldn’t spend our time worrying about the Bali bombers. 

BEAUMONT:

Treasurer, the latest rise in aged pensions was in September.  There was $12.60 per couple which gives couples $898.20 a fortnight, around about $23,000 a year.  A single pensioner (inaudible) $537.70 a fortnight.  That is about $13,000 a year.  Given rents, the price of petrol, food, the cost of government services, when will pensions rise again?

TREASURER:

Well pensions rise every six months.  We increase them either by the Consumer Price Index or we increase them to match increases in wages.  Wages are rising faster than prices so for most of the last seven or eight years the pension has risen in proportion to wages.  And that has been in advance of prices, in advance of the Consumer Price Index.  We also announced in our May Budget a $500 bonus to pensioners which was a one-off payment to assist them with bills.  We have done that before and it is my policy when the budgetary circumstances can afford it.  So it is paid in addition to those indexations – twice a year indexations – payments to pensioners to help them with their bills. 

BEAUMONT:

Do you concede that it would be pretty tough for a couple to live on $23,000 a year these days?

TREASURER:

Yes I do, it is not a lot of money. 

BEAUMONT:

Can that indexing system, (inaudible) against wages or the CPI, can they be assessed?  Can they be looked at by your department?

TREASURER:

Well, we always keep these things under review but we actually changed the system.  The system was index it to the CPI, to prices.  We changed it to index it to prices or to wages – whichever was the higher.  The good news is, wages have been increasing faster than prices so pensioners have done a lot better under this system than they did under the previous Labor system. 

BEAUMONT:

But as you say, you concede that it is still not a great deal of money?

TREASURER:

You wouldn’t be rich (inaudible) on the aged pension. 

BEAUMONT:

Although you have changed the system, will you look at it again?

TREASURER:

We keep it under review.  I think this is a much better system than the previous system and the policy has been when the Government has the ability to do so to pay a bonus which we have just done on the 30th of June this year. 

BEAUMONT:

It is 18 minutes to nine, you are listening the morning programme, my guest in the studio is the Federal Treasurer, Peter Costello, the Federal Member for Higgins.  If you would like to call Mr Costello this morning he is happy to take some calls – 9221 1882.  But Treasurer, (inaudible) get those headphones on.  Jim, good morning to you.

CALLER:

Good morning Simon.  Good morning Mr Costello.

TREASURER:

Good morning. 

CALLER:

I saw, you give the old age pensioners, mature pensions as you call them, $500 one-off payment and the disability pensions nothing.  How was that justified?

TREASURER:

Well the bonus that was paid this year was a bonus to aged pensioners and retirees.  And the thinking behind that was that for those that had retired, those that were of retirement age, there should be a bonus and that is why it went to both of those classes.  In relation to disability, if you are of retirement age, you would normally move off disability and on to aged pension.  In relation to disability, it wasn’t paid this year because it was for people of retirement age. 

CALLER:

And another thing is in the pension when we get say, a $12 rise a fortnight, our rent goes up $8.  I mean, we get $4 out of that.  That is not the cost of living. 

TREASURER:

Yes, well there is also rental allowance of course for people who are renting, who are pensioners and renting.  Some pensioners will own their own home, but of course there are other pensioners who are renting.  And the rental allowances are also indexed to cover rents. 

BEAUMONT:

Thanks Jim, thanks for your call.  Is there, that final payment, that bonus payment of $500, as you say, people once they go into a certain age category can get the aged pension.  Are they looking at reviewing that one-off payment for disability pensions as well?

TREASURER:

Well, the situation is and always has been if you can grow the economy, if you can get more people in work, if you can balance your budget, if you can pay off debt then I think you ought to be looking at helping people as best you can.  Bonuses were never paid before I became Treasurer.  No previous Treasurer ever paid a bonus to the aged pensioner.  Now we have been able to do it with a strong economy, if we can help disability pensioners further in the future, of course we would like to do so. 

BEAUMONT:

Mike from (inaudible), good morning. 

CALLER:

Good morning and good morning Treasurer. 

TREASURER:

Good morning Mike. 

CALLER:

Good morning.  I have a question, it appears that you are the heir apparent should the Government be returned and in that case, I wondered whether or not you can’t say to whether or not you will retain the Treasury portfolio to begin with.  Will you?

TREASURER:

Well I certainly intend to retain the Treasury portfolio if the Government is re-elected and I intend to be Treasurer if the Coalition is re-elected, most certainly. 

CALLER:

And if you return to the Prime Ministership, who will be your Treasurer?  In your own parlance, who will be driving our formula one car when you become Prime Minister?  I think that the voters need to know that consider we are deciding on whether or not, essentially elect you as our Prime Minister and that is my question?

TREASURER:

Well thanks very much, Mike.  Well I think I will be around for quite some time.  I think my experience as Treasurer has given me a bit of an insight into the Australian economy and whatever capacity I serve in the future, I think I will be around for quite some time directing the economy. 

BEAUMONT:

Should you guys be returned, Mr Costello and John Howard as I think, the term (inaudible) uses ‘well into the next term I will be handing over the reins’.  Have you spoken to Mr Howard about that?  Do you know what ‘well into the next term’ means in terms of time?

TREASURER:

Well it just means some time in the next three year term of Parliament.  I don’t think it is a specific time.  But with businesses it is quite normal to have succession and planning for the future.  I don’t think there is anything wrong in doing it in politics.  In fact, I think it is quite a good thing to do in politics and I think what John Howard has said is he is certainly running for re-election at this election.  He doesn’t intend to be running for re-election in the 2010 election.  So at some point before that as we start getting the line-up going for the 2010 election, there will be a transition. 

BEAUMONT:

So you don’t, it doesn’t worry you, you don’t know when that will be?

TREASURER:

Oh no, it hasn’t been fixed but…

BEAUMONT:

(inaudible)?

TREASURER:

No, it would be something that would be lined up before the 2010 election but that is two elections away and I am bit more focussed on the current one at the moment. 

BEAUMONT:

Oh yes, I understand that but as Mike said, some of us are focussed on this one because that may impact on…

TREASURER:

Sure.

BEAUMONT:

…who is the Prime Minister. 

TREASURER:

Sure.  And what I would say to people is the record over the last ten years is a very strong one in terms of jobs, in terms of budgets, in terms of inflation, running and managing the Australian trillion dollar economy is pretty tough and I think our experience stacks up pretty well compared to the inexperience of Mr Rudd and his team. 

BEAUMONT:

All right, eight minutes to nine, listening to the morning programme.  We will take a break, your calls to Peter Costello the Treasurer, are more than welcome.  9221 1882. 

AD BREAK

BEAUMONT:

Mr Costello, yesterday you mentioned that the Federal Government will spend $1.7 billion on roads in WA and I wonder over what time period that will be?

TREASURER:

That is over a 5 year time period under our Auslink 1 programme and that is funding roads such as (inaudible) Bunbury Highway, the Great Eastern Highway, the Great Northern Highway and of course the rail links.  And then from 2009-2014 we go into our Auslink 2 programme and that will deliver considerably more over that period than $1.7 billion for road-rail in Western Australian.

BEAUMONT:

(inaudible) then will spend $5 billion this year, is $1.7 billion enough over 5 years, would you consider works that might boost Bunbury Highway and how important they are and how extensive they will be?

TREASURER:

Sure, well, of course as I said from 2009 – 2014 when we go into our Auslink 2 it will be considerably more than $1.7 billion.  But, what the Commonwealth does is it funds national highway and strategic roads, I am going to go and have a look at a few strategic roads here in Perth today while I am here, we might go and have a look (inaudible). And, then of course what the Commonwealth also does is it collects all the distributes GST back to the States which they have for their road funding so the Commonwealth is engaged in two levels here, it is engaged directly on strategic roads and roads and national highway but then of course it funds a large degree of the States themselves for the States to go and do State work. (inaudible).

BEAUMONT:

But the States can choose (inaudible).

TREASURER:

(inaudible).

BEAUMONT:

(inaudible).

TREASURER:

Well, no I don’t think when you look, there are two ways in which the Federal Government funds roads.  The Federal Government funds roads directly which are national highway, roads of strategic importance or local roads through councils, through councils.  The Federal Government also funds the States with general recurrent revenue part of which will be used by the States at their own discretion for State roads.  Now, you know I think when you actually look at it the contribution of the Commonwealth is making is a very significant contribution, in fact it is greater than ever before in Australian history.

BEAUMONT:

Seven minutes to nine, if you want to talk to the Treasurer, the phone lines are open.  Fernando has a call in.  Hi Fernando. 

CALLER:

Hi I just wanted to touch base on a couple of issues, one is the superannuation which is the company contribution has been taking its 9 per cent for so many years now and my suggestion is for you the Government is that you within the next two years you increase the employer contribution by 2 per cent to 11 per cent and to reduce the company tax from 30 to 28 per cent.

TREASURER:

Well, it is something that we can certainly have a look at Fernando, I guess I make two points.  One is of course you know we cut company tax rates to 30 per cent already.  And the second is, we are trying to encourage people to put more money into superannuation themselves.  From 1 July this year we abolished all tax on superannuation pensions and lump sums for people over 60 and that provided a real big incentive for people to put their own money into superannuation.  If you happen to be a low income earner we also have a co-contribution scheme where as if you put a $1 into superannuation the Government will put a $1.50 to match it.  So, getting employers to put more money in is one way of going about it but encouraging people themselves to put more money into superannuation is something we are definitely trying to support and encourage people to take up. 

BEAUMONT:

Fernando thanks for your call. 9221 1888 if you would like to give us a call.  Treasurer, the polls and there are many of them however (inaudible) in recent years, in recent election campaigns.  They have you a long way behind I suppose on both the issue of two-party preferred and the preferred Prime Minister in many ways.  It would seem that over here in this state, (inaudible) Brian Burke is doing his best to try and get you blokes re-elected, isn’t he?  And the spectre of Brian Burke over the Labor Party both, certainly in this state is enormous.  I wonder if you think that is happening in the Federal election?

TREASURER:

I think it is.  Look, Brian Burke exercises enormous influence in the Western Australian Labor Party. Everybody knows that, he seems to have tentacles that run to Ministers, to Members of Parliament, through the unions and let’s not forget that Brian himself has had a very chequered career and his power in the West Australian Labor Party is so great of course that Kevin Rudd been duchessing Brian Burke for a long time.  He used to fly across here and try to get his support when he was looking for the leadership for the Labor Party.  So, I think people are genuinely concerned about the influence of Brian Burke, they are genuinely concerned about Brian Burke’s influence on the Labor Party and I think we ought to be very concerned about the fact that Kevin Rudd spends so much time wooing and being wooed by Brian Burke because that means his tentacles will reach into a Rudd Government as well. 

BEAUMONT:

The polls have been good for you blokes over in the West for some time, they are now starting to trend downwards for you.  What is that due to, what has happened there?

TREASURER:

Well, I think look the polls will move around but we have been stronger in Western Australian than in many other states, I think that is partly because the economy has been stronger and I think it is partially also because there is not the fear campaign that the unions have whipped up against AWAs in Western Australian.  The Western Australian people know that AWAs have been important for the mining industry and that they have delivered increased wages and (inaudible) actually to be listening to the unions scare campaign and I would say to Western Australians, look, AWAs have been an important reason why the mining industry has been strong, it is a great industry for Western Australia, let’s not go back to the old days, let’s keep a good industrial relations system in place.  Only a Coalition can do it, if Mr Rudd was ever to get his hands on the levers of power it would turn industrial relations back, that would be bad for the mining industry.  I said earlier that if he were ever to get into a position of influence you would want to know how influential Brian Burke would be.  I think in all those circumstances the return of a Coalition Government is very important for Western Australia.

BEAUMONT:

All right, Treasurer we will leave it there.  Thank you for coming in today.

TREASURER:

Thank you very much, it is good to be with you

BEAUMONT:

Nice to see you too.