TREASURER:
The Budget which I will bring down tomorrow night has been put together after a lot of hard work which has taken months. It is a Budget which is designed to set Australia up for future opportunities, to build the capacity of the Australian economy. It will be good for families and it will help families that are struggling with rearing children and juggling work. It will help mothers that maybe want to do a bit more part-time work with the costs of childcare; add to the capacity of the Australian economy; and bring dividends and benefits for all of us. The dividend of 10 years’ hard work has been the lowest unemployment rate in 30 years, and the investments of today will drive the jobs of tomorrow. And that is why we will be making sure that there is strong investment in the capacity of the Australian economy and we want to lock in the jobs growth to date but we want to go further and give better opportunities for all Australians.
JOURNALIST:
Do those better opportunities include tax cuts?
TREASURER:
Well, better opportunities mean a growing economy where kids can get jobs, where businesses are profitable and where the Government lives within its means. And that is the focus of tomorrow night’s Budget.
JOURNALIST:
Treasurer, with the polls the way they are, are you feeling added pressure this year?
TREASURER:
No, because what I focus on is doing the right thing by the Australian economy and doing the right thing by those millions of Australians whose future depends on a strong economy. That is my focus. And my focus is making sure that people can stay in work and people can keep their houses, businesses are profitable and our country remains strong.
JOURNALIST:
Do those better opportunities include better opportunities for you? I mean, how many more Budgets do you expect to do after this one?
TREASURER:
Well, let me focus on tomorrow night’s Budget. That is what I will do.
JOURNALIST:
Mr Costello, Airline Partners have apparently just put in a new bid for Qantas, what is your reaction to that?
TREASURER:
Well, the bid that was put forward by Airline Partners Australia lapsed when the time limit expired last Friday night. They have been to the Takeovers Panel which has ruled that way. There has been a review of that decision by the Takeovers Panel which has reaffirmed that. They have been to the Australian Securities and Investments Commission which takes the same view – that if you make a condition that you have to get 50 per cent acceptances by a certain time, that is the condition. If you haven’t got the acceptances by that time, the bid fails. So that bid as ruled by the Takeovers Panel is over. Now, what happens in the future if anyone wants to lodge a new bid, the whole thing starts again, everything starts again. And it is just like we were right back at the beginning of this whole episode. The system has worked well. Let me say this, the system has worked well. The Takeovers Panel was convened on a Sunday, the appeal was heard and reviewed. This has all happened within a weekend. The decisions are quite clear. The system has worked well. It is the bidders’ bid that has failed and I think the important thing now is for the Qantas board to announce what it intends to do in relation to the airline and the company.
JOURNALIST:
Does this mean that the Government would again review whether or not the bid is in the national interest when you say that the process starts anew?
TREASURER:
Well if a new bid is lodged, then that will of course have to be dealt with through the Foreign Investment Review Board. It depends of course on what the terms are. It could be structured entirely differently. We don’t know what the structure will be. But I am making this point, that bid by Airline Partners Australia has failed. It had to have 50 per cent by Friday night and it didn’t have it. And two Takeovers Panels and the Australian Securities Commission have now looked at it and that is the verdict they have come to.
JOURNALIST:
(inaudible) is this just a message from the shareholders that they don’t want it?
TREASURER:
Well this is a message from the shareholders that a majority of the shareholders didn’t want to accept that offer as it was put within the time that they had to accept it. So I think the bidders have to accept the decision, the decision is that the shareholders didn’t want to sell or a majority of the shareholders didn’t want to sell.
JOURNALIST:
Is the Board’s future now untenable?
TREASURER:
Well, the Board will have to make a statement as to where it stands. The Board recommended this offer. The shareholders, or a majority of the shareholders, did not accept the offer and I think the Board now has to make a statement as to where they stand and what they intend to do in relation to the company. Now, people say: ‘well there may be another bid,’ well there may be. There may be another bid from these people, there may be another bid from somebody else. It may be structured differently, it may have a different price. But I make this clear – the Government will not allow majority foreign ownership in Qantas. Qantas will have majority Australian ownership and no bid that doesn’t continue majority Australian ownership will be allowed to go the shareholders. Once a bid goes to the shareholders, it is up to the shareholders to decide. That is what you have seen happen in this case.
JOURNALIST:
(inaudible) authority to turn a blind eye to that Cabinet decision and allow the hedge funds to push up the foreign shareholding. Have you sought any explanation of that?
TREASURER:
Well I don’t believe that the authorities have turned a blind eye.
JOURNALIST:
Mr Costello, back on the Budget, earlier this year you released the Intergenerational Report which talked about raising workplace participation. What signs will there be in the Budget in trying to get those people on the margins – mothers, people on disability pensions, back into the workforce?
TREASURER:
Well I think it is very important to encourage mothers back into the workforce. The availability and the affordability and the assistance of childcare is absolutely essential. That is one of the reasons why we will be making Australia’s childcare system more affordable and the assistance better. In relation to older employees who we want to keep in the workforce, our superannuation changes are designed to encourage them to take superannuation and remain in the workforce. Our changes in relation to the Disability Support Pension are designed to encourage more people who can do part-time work to come into the labour force.
We have got a full court press going here, at every step increasing the capacity of the Australian economy. Now that we have unemployment at 30-year lows, we have to try and encourage the workforce to expand and that will be encouraging mothers who want to, to take up the opportunity of work, people who are previously discarded as disabled to have that opportunity, and older workers, who are put on the scrap heap to stay in the workforce. This is a full court press for Australia’s economic capacity.
JOURNALIST:
Is that a hint that at the lower end there must be some tax relief to make it more worthwhile for people to work those extra hours?
TREASURER:
Well…
JOURNALIST:
Is the Budget aimed at the lower end in some ways?
TREASURER:
Well, this is a Budget which is squarely aimed to increase the capacity of the Australian economy and to help families. And I make no apologies for that.
JOURNALIST:
Have you become any more sympathetic to Bronwyn Bishop’s Committee recommendations?
TREASURER:
Well I believe that the important thing is to have a 30 per cent rebate for out-of-pocket expenses. And to make that available, not just through the tax system but to all families. You see, one of the things about having a rebate on your tax is if you don’t pay tax, you don’t get it. But making the payment available even outside the tax system for those mothers that don’t pay tax at all or pay very little tax, will actually give them much better benefits than a 30 per cent rebate or indeed any other kind of tax relief.
JOURNALIST:
Treasurer, is this your greenest Budget to date?
TREASURER:
This will have measures which will improve Australia’s environment, fund care for our river systems and our greatest water basin, the Murray-Darling Basin and make sure that we start preserving Australia’s great natural resource, our land, our river ways, our vegetation, our environment.
JOURNALIST:
Treasurer, the Qantas bid, can you tell us how you think it has affected the company looking to the future, this argy-bargy that has been going on?
TREASURER:
Well, you have got to be very clear about what has happened here. A bid was put forward to buy Qantas shares which conformed with our requirement that there be majority Australian ownership. When the time for the bid expired, a majority of shareholders had not accepted it. The shareholders didn’t accept it. The bid fails. The bid is over. Qantas is now being managed by the same board and the same chief executives. What they intend to do with Qantas is a matter for them and they should make a statement. They are the people who are now running that company, the people who have been running it for years. They recommended that people sell their shares to the new consortium. A majority didn’t want to. That keeps that board in place, that chief executive in place. They have to now tell you what they intend to do with Qantas. The company is still there. It is still under the control of the same people because a majority of shareholders didn’t want to sell.
JOURNALIST:
Are you relieved, politically?
TREASURER:
I said when I approved the bid that as long as there was majority Australian ownership, as long as services were maintained, frequent flyer points were maintained, capacity in this country was maintained, whether people sold their shares or not was a matter for them. As it turned out, a majority didn’t want to sell.
JOURNALIST:
It makes it easier for the Government now.
TREASURER:
Well that is a matter for the shareholders themselves, they owned it, I said they had the right to deal with it, a majority of them didn’t want to sell, the bid fails. The old board and the old management now have the obligation to state what they intend to do. Sorry, Mr Farr did have the last question.
JOURNALIST:
I just wondered, I am sure the nation’s imagination is going to be gripped by the concept of a steel Mississippi. Can you elaborate on that and tell us who came up with this wonderful name for this project?
TREASURER:
I think the journalist did. I think, if I were you, I would direct my questions to the journalist. He may be well known to you, Mr Farr.