JOURNALIST:
Mr Costello would you like the Department of Finance to have a thorough review of the whole system that operates with Telecards? Parliamentary Telecards?
TREASURER:
Well I think that the Minister, Senator Ellison has already put in place a number of changes. As I understand it, he’s already announced that he’ll be isolating out Telecard charges and tightening the rules under which they’re administered. So he’s announced a number of responses to the most recent episode already, and I am sure if there are any further measures that should be done, Senator Ellison will be looking at them.
JOURNALIST:
But do you see any call for them at moment given the rise of mobile phones and things, could we dump them altogether?
TREASURER:
Well, I am not sure that they’re used that much these days. They used to be used a lot more before mobile phones came in. I suspect that they’re used from overseas where sometimes mobile phones don’t actually operate, but I am the wrong person to ask about these things because you know I am no expert on how these things work but I suspect you’ll find that they’re being used less and less.
JOURNALIST:
But do you think we should know why they didn’t, Finance didn’t tell Mr Reith?
TREASURER:
Well, as I understand the situation, the Telecard was merged into a global bill for electorate offices and it was just this global bill that came through and I guess it depends on how much traffic you have through your electoral office. But if you have a large volume of traffic that sum would be merged and it wouldn’t be identified and it wasn’t until somebody actually identified the volume on the actual Telecard that the problem came to light. Now obviously the system should have been a better system and Senator Ellison as I understand it, has already announced that he is going to dis-aggregate, so that you can see what’s being used on the Telecard. He’s tightened the authorisation rules, he’s going to make sure that something like this can’t happen again, and if there are any further steps that can be taken including looking at whether these cards are required at all, I am sure that he’ll be taking them. He’s the responsible Minister.
JOURNALIST:
(inaudible) your own Telecard records Treasurer? Have you checked your own Telecard records just to make sure everything is...?
TREASURER:
Yes, I think somebody looked at it.
JOURNALIST:
Never lent it to the kids?
TREASURER:
No. Not only did I not lend it to my kids but fortunately for me, they are a little bit too young to know how to manipulate PINs at the age of six. I mean at the age of six they can manipulate parents but they can’t manipulate PINs. That’s the good news.
JOURNALIST:
(inaudible) likely to cause damage to a politician, any ongoing damage?
TREASURER:
Look, it’s something that Peter regrets and wishes hadn’t occurred. He acknowledged his mistake which was giving the PIN number to his son. He wishes it hadn’t occurred. The Government wishes it hadn’t occurred. The steps have been put in place to bring it to a conclusion. Criminal charges have been investigated and rejected. Civil liability has been investigated and rejected and the Minister himself is now repaying the amount. So it’s hard to think what more he could now do. He’s made full restitution even though he was found not to be civilly liable.
JOURNALIST:
Has he done his dash as a possible future Prime Minister?
TREASURER:
Oh I am not going to comment on things like that.
JOURNALIST:
What sort of damage do you think this has done to the Government?
TREASURER:
Oh look, it’s something that shouldn’t have happened and Peter wishes it hadn’t have happened, he’s said that. And the Government wishes it hadn’t have happened, and we will put in place steps to ensure this kind of thing doesn’t happen again in the future.
JOURNALIST:
Treasurer the Australian Dollar has fallen to a new record low today, at what level will the Government, the Reserve Bank actually become concerned about the currency?
TREASURER:
Look, we watch the Australian currency very carefully indeed and we obviously are aware of all of the international factors that are at work here, mostly international factors, not Australian factors. And factors such as the exchange rate between the US Dollar and the Euro, factors such as the rise of the greenback that have not much to do with Australia, in fact nothing to do with Australia. But we don’t get complacent about it. The important thing is to run a good economic policy. And in the real economy. That’s what we intend to do. What does that mean? Strong growth, low inflation, budget surpluses – we’ve just had the largest budget surplus in Australian history and this underscores the importance of running a surplus policy. Imagine if we’d not been running surpluses and anybody who thinks that you can now give away good economic management should think again. The incentives for good economic management are now greater than they’ve ever been in a world where money moves as quickly as it does now.
JOURNALIST:
What more can you do though in politics though? It’s obviously the markets aren’t taking any notice of your giant surplus.
TREASURER:
Look, what’s happening principally in the world today, is that the US Dollar is rising on the back of US events. All of the movements that you have seen in relation to the $A in the last week or so, haven’t turned on any news in Australia. What’s happened is that the US Dollar has risen not just against the $A but against numbers of currencies particularly the Euro. And it seems that the $A has been in a basket with the Euro, for reasons which aren’t quite proper, but that’s been the case. What do you take from this? You take from this that it’s important to run good economic policy. What’s good economic policy? Well good economic policy is a strongly growing economy on a low inflation rate with a better tax system promoting higher productivity and running a strong fiscal policy. And you know, I make this point, that we have to continue to run good Budget policy. And the suggestion that Australia, having done the hard yards, can now take a rest is wrong. We have to continue to do the hard yards.
JOURNALIST:
Looking at it another way, does a strong US Dollar pose risks for the world economy particularly if it keeps going up higher and then comes down with an almighty thud?
TREASURER:
Look I made this point before, the only thing worse than a strong US economy, which is swamping other world economies, is a weak US economy which is bringing other economies into recession. The thing to remember is this, it is better to have a strong US economy than a weak one because a weak US economy, if it led to a US recession, would have fallout in other countries. But having said that, a strong US economy particularly in relation to exchange rates can also cause difficulty. You saw in Europe, what two weeks ago, an unprecedented intervention by the European Central Bank, the Bank of Japan, the Bank of England, the Federal Reserve of the United States, because of the rise of the US Dollar and the difficulties that was causing. Now, the rest of us in the world have to live with that, and the only thing you can content yourself with saying is, the only thing that would be worse than a rampant US economy would be a recessionary US economy. The best thing frankly, is a US economy which is growing at a moderate and steady pace. And where markets are less volatile than they are now, but we can’t always run the desired outcomes in other peoples’ countries. The important thing is to run the desired outcomes in our own.
JOURNALIST:
Mr Costello would you be advising Telstra shareholders to hold onto their T2 stock?
TREASURER:
Well, look, I am not sure that we’re entitled to give out advice. Somebody’s liable to say to me if I do, I should have a dealer’s license and so I better be very careful. But look the important thing I think is to give Australians an opportunity to invest in their country and invest in Telstra and that’s what the Government wants to do. Thanks.