TREASURER:
It's good to be here in Hobart again, as part of events coming off the Federal Budget. The Federal Budget which we brought down last Tuesday provides increases in funding for the government of Tasmania, in fact, under the GST arrangement, by which all GST income goes to State governments, Tasmania now receives more than it would have under the previous funding system. Around $7.5 to $8 million more in 2003-04. In addition to that we will be looking as to whether or not the State government will return some of that income in terms of tax cuts in the budget which will be brought down today or whether it takes the opportunity to alleviate some of the State taxes and it has a good opportunity to do that with that additional revenue.
The Federal Budget also brought down increases in funding for health, with a 17 per cent real increase over the next five years and we have guaranteed to any State that matches that, that 17 per cent increase, so will be looking very carefully at the Tasmanian State budget today to see whether or not they have a 17 per cent real increase in their share of health expenditure which will match that of the Commonwealth. But the Budget as a whole enabled the Commonwealth to attend to priority areas such as health and education, the military commitment in Iraq, to balance our budget and also to reduce taxes. I think that is a fair allocation of responsibilities and certainly strong economic management which we intend to continue. Any questions?
JOURNALIST:
Has the Federal Government received an approach from the US about setting up bases in Australia?
TREASURER:
Well, I think Senator Hill made a statement about that yesterday. The Australian Government has joint facilities already with the United States. They are part of the defence relationship and they are very important for Australia's security.
JOURNALIST:
Are there moves to set up more bases though?
TREASURER:
Well I think Senator Hill commented on that yesterday, did he not? That is a matter for Senator Hill.
JOURNALIST:
Can I ask for your response to the alleged al-Qa'ida tapes your immediate reaction to the naming of Australia and others as a specific target for the organisation?
TREASURER:
Well, Australia has been named by al-Qa'ida previously, by Osama Bin Laden, in a tape which is thought to be the voice of Osama Bin Laden, he named Australia as a terrorist target. In the context, actually, of East Timor, that Australia was a terrorist target because of the role that we had played in relation to East Timor, so it wouldn't be the first time that Australia has been named by a senior person of al-Qa'ida, or threatened you might say by a senior person in al-Qa'ida. Al-Qa'ida as you know is opposed to countries of the West for its own sick reasons, because we believe in liberty and the rule of law, and we take a strong line for individual freedom. And the Government will not be intimidated by that. It means that we will have to be careful with our security and we will be, and we have been putting in place a lot of measures over recent years to actually heighten Australia's security response in relation to travel reports and airports and other areas and it means that we must continue to focus on these areas.
JOURNALIST:
You mentioned East Timor, but the tape listed the countries involved in the Iraq conflict, misnaming we suspect included (inaudible), Norway and meaning Denmark. Doesn't that add, though, to the Opposition's claims that the Government should really admit that now, as a result of our actions in Iraq, we are a greater target.
TREASURER:
That was a point I previously made. Osama Bin Laden, had previously named Australia as a terror target, prior to Iraq and did so specifically in relation to East Timor. Now, I think that it was wrong in the way in which he described Australia's engagement in East Timor, which was as part of the legitimate aspiration of the East Timorese to an independent nation. There's certainly no action against Islam in Australia's motivation in relation to East Timor, but that's the fact of the matter. Before Iraq, Australia had been named by this terrorist organisation. I think you are wrong to think that a terrorist organisation acts in a logical way. If it were a logical organisation it wouldn't kill and maim innocent people. This is an organisation which, for ideological reasons, is bent on killing innocent people. It doesn't operate logically and to say that in some way you can negotiate or appease it I think is to make a mistake. This is an organisation that exults in killing.
JOURNALIST:
Mr Costello, can you get back to the Federal Budget and what you were talking about, a 17 per cent real increase in health expenditure in Tasmania. Can you report to (inaudible) Tasmania in fact, going to dip out, miss out by up to $30 million? Can you clarify that?
TREASURER:
Well, I want to make this very, very clear because I think there has been a little bit of misinformation on this subject. The five year Australian health care agreements, these are the agreements between the Commonwealth and the States, with Commonwealth sharing funding for public hospitals, provide for an increase over and above the last health care agreements, of $10 billion, or a 17 per cent real increase. That is, allowing for inflation, after inflation, a 17 per cent real increase. Now, State governments can certainly say, oh well we would like an 18 per cent increase or more. But they cannot say that the Commonwealth has cut funding. Now, the Commonwealth is offering a 17 per cent real increase and so we will be looking very carefully at the State budget today, to see if the State government is matching it. Because, at the very least, they should have in their budget today, a 17 per cent real increase in health funding if they want to match the Commonwealth's commitment.
JOURNALIST:
What does it mean though if in fact they go above that, say to 18 per cent?
TREASURER:
Well, if they go above that, that will be good for the hospitals and I don't think anybody will complain, but we will be watching very carefully to make sure that they don't go below that.
JOURNALIST:
What does it mean in laymans terms, a 17 per cent increase? What sort of dollars?
TREASURER:
Well, I can give you the, well it means that the Australian healthcare agreements, the five year term will be $10 billion more, and it's a $42 billion commitment. That's the overall amount…
JOURNALIST:
But in (inaudible)?
TREASURER:
…between all of the States and Territories. I would have to break it down in relation to Tasmania, but that is the overall increase for all of the States and Territories.
JOURNALIST:
Can you say what that would be for this State?
TREASURER:
We can get you those figures, sure.
JOURNALIST:
Another question, what do you make of Parliamentary Secretary for Family and Community Services, Ross Cameron's comments in The Australian today, that people who whinge about healthcare and what not, make him sick?
TREASURER:
Well…
JOURNALIST:
What…
TREASURER:
…sorry?
JOURNALIST:
…what do you make of those comments? Is that appropriate do you think?
TREASURER:
Look, as far as the Government is concerned, and as far as I am concerned, it is important that we properly fund health and education. These are very important areas of Commonwealth expenditure. It is why we have a 17 per cent increase in Australian healthcare agreements in the Budget. It's why we had a $1.5 billion increase in higher education in the Budget. So that's the Government's position and it's my position. We are making these priority areas and we are increasing funding in these areas and we are also doing it at a time where we are reducing taxes as we introduced a tax cut in the last Budget.
JOURNALIST:
Do you think that it is appropriate that he makes such comments at people who have concerns about…
TREASURER:
Well, whatever he says, I am telling you what the view of the Government is and what the view of the Treasurer is, and I am sure it's the view of the Prime Minister as well.
JOURNALIST:
He seems to be the first of senior Liberals to actually come out and admit that Australians will pay more, middle Australians will pay more under the changes to Medicare.
TREASURER:
Well, Australians won't pay more under the Government's policy and let me ask rhetorically, how could that be the case when the Government is increasing funding? I still don't understand the argument. The argument is that somehow, by increasing funding, this will lead to higher charges. Now I know that is the Labor argument, that's for political reasons, but for those that carefully consider these things, I don't even follow the logic of how they allege that by increasing spending by $917 million, that somehow leads to higher fees. I would have thought that by increasing that spending, you would be reducing the pressures for higher fees.
JOURNALIST:
He also says that compared to other countries, for example Japan, Australians simply visit their doctors too often. What do you say to that?
TREASURER:
Who says that?
JOURNALIST:
Same man. Ross Cameron.
TREASURER:
I haven't seen those comments.
JOURNALIST:
What impact does the rise in the Australian dollar likely to have on the growth rate?
TREASURER:
Well the fact that the dollar is rising against the US dollar, makes it harder for exporters, particularly those that are dealing in US dollars. That means that the really competitive situation which our exporters had, say a year or so ago, when the dollar was much lower than it is today, that really competitive situation has abated. But you have got to bear in mind that when the Australian dollar was at those historical lows, and I think I made the point at that stage, that it was at those historical lows because of the US dollar rise, and at some point the US dollar would stop rising. That's what has happened and so you have had that correction in the market.
JOURNALIST:
So Labor's suggesting that the Budget has been framed around the 60 cent rate, is that correct?
TREASURER:
We always frame the Budget on the 30-day or the 90-day average at the time of framing the Budget, which was around 60 cents and that's the way we always do it. We have to make an assumption and we are very clear about those assumptions.
JOURNALIST:
So the rises to about 65 and 66-cent levels, will they have an effect?
TREASURER:
What you are actually trying to do when you are bringing down a budget, is that you are trying to give an average rate over the course of the year between 1 July 2003 and 30 June 2004. Now, if anybody can tell me now what the average is going to be between 1 July 2003 and 30 June 2004, I will gladly accept it. But none of us can, obviously, so what we do is we take a 30-day or a 90-day average at the time we lock in our assumptions. OK, thanks very much.