JOURNALIST:
Treasurer, first of all, the action in East Timor. What sort of constraints is it going to put on the Budget?
TREASURER:
This will be a very major commitment for Australia in peacekeeping terms. We will have a large number of soldiers on East Timor and of course they will be at risk. We will have a big humanitarian aid effort in relation to East Timor and that will also have a cost. There will be significant costs to the Budget as a result of our involvement. But our involvement is right, it’s necessary, it has the full backing of the international community, it’s our area of responsibility and we have to ensure that we have a strong economy that can meet these challenges as they arise.
JOURNALIST:
Are you going to have to make adjustments to the Budget to cater for it?
TREASURER:
We will be working on costings once it becomes clear what’s required in humanitarian terms and what the length of the commitment will be. We’ve done some preliminary work. Yes, it will take new expenditure. Yes it will.
JOURNALIST:
What about the Defence Budget, does there need to be replacement of equipment and that kind of thing?
TREASURER:
Well, we have a Defence Budget to replace equipment all the time. What’s different about this is that we are going to have a significant military force stationed outside continental Australia. And it takes money to equip and keep the ordinance and ensure the supplies for those troops. It will also take money to do the humanitarian aid which is going to be a big part of it. That will take new expenditures. That will have to be funded as new expenditure in the Budget and we are currently working on costs in relation to that.
JOURNALIST:
How surprised has the Government been by the demands from the Australian people for Australian aid into Indonesia?
TREASURER:
I think the response of the Australian people has been overwhelming. Overwhelming in support of the Government’s initiatives and overwhelming in support of the plight of the East Timorese people. I think public opinion has been shocked at the killing and the looting and the tragedy and the plight of the East Timorese people. There was strong support for the Government to take the action that it has. We now have strong support from the international community. This is a significant military engagement for our country. This is the biggest military engagement we’ve had since Vietnam. And it is going to be an expensive engagement and that’s a level of the commitment of the Government and the people of Australia.
JOURNALIST:
Treasurer, you said that we can expect a significant impact on the Budget in this current Budget. How about future years, what are you looking at for that?
TREASURER:
Well, once we’ve analysed the costs and we know the length of the duration, we’ll start factoring that into the Budget. But we have a Budget in surplus. This is our third year of a surplus Budget and it’s our strategy to keep the Budget in surplus. So, we’ll have to ensure that we keep the Budget in surplus and we budget for these sorts of events. It will mean that spending will have to be tightened in other areas. But we’re not going to let down our troops and we’re not going to let down the humanitarian effort. We are going to budget and we are going to pay for this.
JOURNALIST:
Are you worried about threats to the Indonesian economy? You mentioned some of that in your speech.
TREASURER:
Well, Indonesia’s economy has in the last two years has been through a major crisis – contracted something like 13 per cent. It has contracted. And you saw even in the events of the last two weeks the crisis of confidence. Confidence in the economy there is still fragile. You saw the effect on the exchange rate in Indonesia and in relation to investors. So, it’s an economy that’s been through a very bad period and confidence is still fragile. In the long term we want to have stable and prosperous neighbours – that’s the point. Just as an economic downturn in Asia affected our economy for the worse, an economic upturn will affect it for the better. And it’s in our interests to have strong economies amongst our neighbours.
JOURNALIST:
Treasurer, there is a hostility in Indonesia towards Australia. Do you see that as widespread or just some sections of the society?
TREASURER:
Well I think it’s important, just as we should understand Indonesia’s aims and objectives, I think it’s important that they understand ours. And our aim and objective here is to secure peace for the East Timorese people, to ensure that the United Nations mandate is carried out and to prevent humanitarian tragedy. That’s what we’re there for. And this is something that Australia is making a large commitment, a large commitment in military terms, in aid terms, in monetary terms, in personnel terms. And we’re doing it because we have the aim and objective of averting humanitarian disaster. And I think it’s important that this is understood in Indonesia just as we understand Indonesia’s aims and objectives. Thanks.