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 05/11/2007

Doorstop Interview
Angle Vale, Adelaide

Monday, 5 November 2007

11.45 am (SA Time)

SUBJECTS: Road and rail funding for South Australia, interest rates, Australian economy

TREASURER:

Today I am announcing the Coalition’s plans for $1.56 billion of integrated road and rail network under the Commonwealth AusLink 2 Program.

Our AusLink 2 Program is a plan to build Australia’s road and rail infrastructure and build the capacity of our economy over the period 2009-14.It is a stepping stone towards our vision for 2020, the integrated transport plan for Australia.

And today I am announcing the projects in South Australia which will total $1.56 billion under AusLink 2 between 2009-14.

For regional South Australia this will involve more funding for the Dukes Highway, for the Sturt Highway, for the Stuart Highway, for the Eyre Highway and also for Port Wakefield to Port Augusta.

For Adelaide what it will involve is the South Road upgrade, the Southern Expressway, Port Wakefield Road, Port Wakefield to Adelaide upgrade and Gepps Cross.

Importantly the Australian Government will be increasing its financial commitment to the Northern Expressway where we’re standing today, an expressway which is designed to link from the Sturt Highway to Port Wakefield Road and to take B-Doubles off what you can see are very narrow roads here which have not been built for major freight transport.

David Fawcett the local Member for Wakefield has been very, very important in putting this before the Federal Government.I want to thank him for the work that he’s done. This will be absolutely critical for the freight task linking the important Sturt Highway and the Port of Adelaide.

This is a major commitment.By announcing an additional $279 million we will now bring the Federal Government’s contribution to $425 million for the Northern Expressway and I want to pay tribute to you David for the work that you’ve done in relation to this.

This is all part of a plan to build a stronger Australian economy, to get more people in work.If we didn’t have a strong economy we couldn’t afford to build the infrastructure that we need.And by building the infrastructure that we need we’re going to build a stronger economy in the years which lie ahead.

JOURNALIST:

The South Road upgrade appears to be a bit of a shortfall seeing that will cost over $2 billion.Is that the intention of the Government to provide only half that money?

TREASURER:

No, the Australian Government has said that it will provide a billion dollars towards that road by 2020.Over the AusLink period of 2009-14 we will be providing $250 million.These roads need to be built in stages – firstly to handle the traffic, secondly because of the construction involved, and this is a strong Commonwealth commitment to getting that on the road.

JOURNALIST:

Mr Costello the Prime Minister announced that when he was here in August.Are you just repackaging a lot of this money?

TREASURER:

No.Today we’re announcing a full $1.56 billion under AusLink.Some of the projects have been individually announced but we’re making new announcements today which when taken with the previous announcement is an announcement of $1.56 billion for South Australia – the biggest road and rail investment in South Australia ever.This is the biggest road and rail investment from an Australian Government in South Australia ever - $1.56 billion.And it’s integrated, it’s planned, it’s not just road by the way, I should say too, the rail projects worth $165 million will also be funded including Adelaide to Kalgoorlie, grade separation on the Stuart Highway and an Adelaide Hills Rail Study.

JOURNALIST:

Treasurer on another matter, have you ever heard of Pat Conlon?

TREASURER:

Yes, State Minister.

JOURNALIST:

Yeah for what?

TREASURER:

Well roads.

JOURNALIST:

Transport.Alexander Downer wants to have a debate with Mr Conlon over transport.Do you think that’s appropriate that you enter a Federal and State sphere together or is that blurring the boundaries somewhat?

TREASURER:

Well look the Australian Government funds under its AusLink Program, it funds integrated road and rail and we do that for roads which are strategic and important to the national economic infrastructure like the Northern Expressway.Then there are State roads which are funded by State governments either out of their own revenue base or indeed out of the GST revenue base.Then there are local roads which are constructed by local councils either out of their own revenue base or out of Commonwealth Programmes like Roads to Recovery. Each level of government has to be held accountable for its responsibility here.Now here’s the Australian Government stepping up to the plate with $1.56 billion under AusLink.The State Government has to be held accountable for State arterial roads and I don’t see anything wrong with debates going on between various representatives on the accountability and the responsibility.

JOURNALIST:

Mr Costello the Government’s been criticised for the money that’s been directed to other States and there’s been some criticism that South Australia has dipped out.You’re saying that the timing of this announcement has not been changed nor the amount?

TREASURER:

No because we announced our AusLink Program for Queensland, New South Wales and Victoria yesterday – I was in Victoria announcing the Victorian angle, the Prime Minister was in New South Wales and I believe Mr Vaile was in Queensland and the first opportunity to get across here to South Australia which is the next day to announce the South Australian link.

JOURNALIST:

What do you make of the (inaudible) that South Australia has been left off the campaign because some sources are conceding these very marginal seats?

TREASURER:

Nobody is conceding a thing.We are not conceding a single seat anywhere.And can I say, I would have liked to have announced the South Australian funding yesterday but I couldn’t be in both Victoria and South Australia so I had the opportunity to get here today and to announce it today and it’s a great announcement for South Australia.I think they will be very pleased.

JOURNALIST:

There are plenty of senior South Australian Ministers who could have announced it yesterday.Nick Minchin could have announced it yesterday couldn’t he?

TREASURER:

Well Nick’s a very good Minister and a very good colleague of mine but as the Treasurer and in relation to major funding announcements I do like to make them.

JOURNALIST:

Mr Costello the Prime Minister has said that inflationary pressures are unavoidable in an environment where there’s drought, strong economy, high oil prices.Do you see inflationary pressures worsening?

TREASURER:

Well, our forecast in relation to inflation is that through the course of 2008 there should be some moderation.And I will point out to you that the Consumer Price Index which came out a couple of weeks ago was below 2 per cent for the year.There are some one-off factors in that and at times during the year it’s been higher, it’s been up around 3 with some one-off factors.But we do see inflation moderating in 2008.Now there are inflationary pressures in the Australian economy at the moment.Let’s think about what they are.Oil prices at all time world records.There is the drought which continues to affect food prices in Australia.Now these things are outside the control of a government and there’s not much you can do about them other than to wish that the drought would break but we do think that in relation to domestic matters it’s important to be vigilant in relation to inflation and we are.Let me make this point to you, whilst I have been Treasurer inflation has averaged 2½ per cent, under the previous Government it averaged 5.2 per cent – more than double.

JOURNALIST:

But aren’t you saying that because of all these external factors or factors that you can’t control are contributing to the inflation rate, isn’t that saying that whether it’s your Government or a Labor Government it won’t really matter?

TREASURER:

Oh no, I think that it will matter.Inflation will be higher and interest rates will be higher under a Labor Party and particularly under its industrial relations policy.Now bear this in mind: under the Labor Party the home mortgage interest rate was never as low as it is today. It was never as low as 8.3 per cent and that was even when we were in recession.Even when Labor had 10 per cent unemployed in this country home mortgage interest rates were higher than they are today.So, how would the Labor Party ever manage near full employment?And how could you ever manage near full employment by going backwards on industrial relations?The last time – let me make another point – the last time we had terms of trade as strong as this, was under a Labor Government in 1974.The inflation rate was 16½ per cent, not 2, not 3, 16½ per cent.So, I don’t think there’s any doubt by reason of Labor’s history and by reason of Labor’s policy inflation will take off under that industrial relations policy and that will put pressure on interest rates.

JOURNALIST:

But your Government promised at the last election to keep interest rates at record lows.Economists and investors are united in tipping that rates will go up on Wednesday.If it does, do you think there will be voter backlash?

TREASURER:

Well, the home mortgage interest rate at 8.3 per cent is still lower than at any period under the Labor Party, at any period, including during recession.

JOURNALIST:

But that wasn’t the promise.

TREASURER:

Well my promise to the Australian people is and always has been that we will manage the Australian economy so as to make sure that we have growth and jobs and under a Coalition Government interest rates will always be lower than they were under the Labor Party or will be.

JOURNALIST:

Would you have made that promise that the Prime Minister made?

TREASURER:

Well, I have answered the question.

JOURNALIST:

Do you think there’ll be a backlash if the rates go up this week?

TREASURER:

Well I think what people will think is this, you have got a US sub-prime crisis going on with an announcement today of huge losses by Citigroup to add to huge losses from Merrill Lynch.You have got oil prices at all time world records and in an international environment which is uncertain and where challenges are coming at us from every angle, I think they’ll want people who can manage the economy in Government and Kevin Rudd and Wayne Swan have no experience and what’s more their policies are misguided.And they represent a real risk to every Australian.

JOURNALIST:

So your policies have had nothing to do with interest rates rising?

TREASURER:

Well, under our policies we have a home mortgage interest rate which is today lower than at any period under the Labor Party notwithstanding the fact that we have 2.2 million more jobs, 2.2 million.

JOURNALIST:

Joe Hockey says he will resign from the front bench if the Government makes substantial changes to WorkChoices.Will you give the same guarantee?

TREASURER:

Well I guarantee that we won’t be changing WorkChoices.

JOURNALIST:

But would you stand down from the front bench if you did?

TREASURER:

Well, it won’t happen and I have told you that.The balance that the Government has at the moment is the appropriate balance.It’s a balance which allows jobs to be created, which takes pressure off inflation, which is pro small business.It’s a balance which has allowed I think 430,000 new jobs to be created.I wouldn’t want to go back to where we were under Labor, higher inflation, less jobs and higher interest rates and keeping our industrial relations flexible and pro small business is a big part of that.

JOURNALIST:

Do you think Mr Hockey…

TREASURER:

Last question.

JOURNALIST:

…was trying to send a message to Mr Howard and yourself?

TREASURER:

No, I don’t.Okay, thanks.