JONES:
Treasurer good morning.
TREASURER:
Good morning Alan, good to be with you.
JONES:
I just wonder, you know, in the Parliament, you demolish people. Do you think we have all been a little bit too difficult? You lot have been too difficult to get into the ring now, and start realising that you have got a battle on your hands?
TREASURER:
Well we sure have a battle on our hands. The polls show that Labor is in front, Mr Rudd has got very cocky about his chances, as you have seen. But of course, people are yet to really consider the issues in an election period, and they really have to think very carefully about whether or not they are going to trust an inexperienced team with their business, their mortgage, their job. And I think as the election campaign draws on, you are going to see people thinking about these things more seriously. Don’t take economic growth for granted. The Prime Minister of Canada addressed the Australian Parliament during the week and he noted Australia’s economic performance – because it is noted around the world – and that was his message, don’t take it for granted. This is a result of a lot of hard work. We can’t be complacent about it, and if Mr Rudd thinks, as he apparently does, that it all runs itself, he is not equipped and he does not understand the difficulties of economic management.
JONES:
They have no tax policy. Does that mean that come after the election, if they are successful, the GST could go to 20 per cent?
TREASURER:
Well you see, this is the thing that we really have to get to the bottom of. You cannot increase the GST unless you have the agreement of six States, two Territories and the Commonwealth Government. And I put that clause in the agreement when GST came in. We have never had one political party control all six States, two Territories and the Commonwealth Government before. Of course, if Mr Rudd gets elected, for the first time in Australian history you would have Labor controlling six States, two Territories and the Commonwealth Government. So it would open the door for an increase in the GST. And the thing that worries me is that as we know the State Premiers are always demanding more money and I think they will put inordinate pressure on Mr Rudd to do that.
JONES:
Are you going to play, now that it is quite clear, that if John Howard wins the election, he will begin as Prime Minister and at some point down the track you will be the next Prime Minister? Does that mean that the public are going to see you much more upfront in this campaign trading blows with the other people than otherwise a Treasurer might be?
TREASURER:
Well I hope so. I hope that I have the opportunity during the campaign to get out and to explain to people the forward programme that we have. Because we have got a huge programme for the future of Australia, I want to be out there talking about it. A programme in relation to education, our programme in relation to…
JONES:
Just on that, just on that, do you mean all of those announcements in the Budget, now, that Higher Education Fund you announced, all right, and you talked about pouring what, $10 billion into the Higher Education Fund, invested and what, that dough then will go to universities?
TREASURER:
Yes.
JONES:
Does the public know about this?
TREASURER:
Well we have already announced that this year we will be putting in $6 billion and the plan is to grow it further. It will be invested for the future. And the earnings from that will be going to build our first-class educational institutions. Alan, if you went to some of our educational institutions today, you would see they are pretty tatty in terms of their physical infrastructure. We need to rebuild them. I want Australia to have educational institutions which will rate above the best in the world. And this Endowment Fund is our means of doing this. This is a plan to build first-class facilities in world-class institutions in the years which lie ahead. Now, that is part of our plan. Part of our plan is also water, ensuring that our capital cities have enough water so that our lifestyle can be maintained. Fixing irrigation in the Murray-Darling Basin. Water is a big challenge for this country. There is more to be done in relation to keeping our tax burden low. We have cut taxes in recent years….
JONES:
How many Budgets have you presented where there have been tax cuts?
TREASURER:
Well, 2003, 2004, 2005, 2006, 2007.
JONES:
And in the last Budget you said $31½ billion…
TREASURER:
Yes.
JONES:
…will be forgone by the Government in tax cuts over the next four years.
TREASURER:
Yes that is right. We legislated one tax cut which took effect on 1 July of this year and the law provides for another to take effect on 1 July next year. So…
JONES:
When you became Treasurer which is 11 years ago now, nearly 12, what was the highest marginal tax rate?
TREASURER:
Well the highest marginal tax rate at that point was 47 cents and it cut in on all income over $50,000. That is, as soon as you got to $50,000 under Labor, you went on the top tax rate. Now, we have cut the top tax rate to 45 cents but it doesn’t apply to any income until you are over $180,000 from 1 July next year. Over $180,000. So, people today who are earning say, $50,000-$60,000 were paying 47 cents under the Labor Party. Now, of course, they will only be paying 30 cents on that income, it is a cut of 17 cents.
JONES:
Let me ask you this question about your opponent, and again I think that when you are in the Parliament, I say this seriously, I mean, you are all passion and fire and fight. I just wonder if sometimes in the public place we go a little bit soft on the facts. I mean, Kevin Rudd has said he is going to rip up WorkChoices, but then we find that the Australian Workplace Agreements will now be phased out over five years. WorkChoices laws won’t be ditched until 2010. So, if he were to become Prime Minister he continues to run the joint on your policies, is that right?
TREASURER:
Well this has become a technique of Mr Rudd. He makes promises and then when you read the fine print you find out that he is not going to do anything about it when he gets elected. So let’s take this industrial relations. He makes a promise in relation to industrial relations. When you read it carefully, for example in relation to workplace agreements, nothing would change until 2012. That is, nothing would change during the Parliament for which he is seeking election. He did the same thing the other day in relation to hospitals. He said he would look at taking over hospitals. When you actually read his policy what he was saying was that he wouldn’t do that if he was elected this election. He might do it if he was re-elected in 2010 and a referendum went through, which we all know wouldn’t go through. So again, he is a very tricky man, Kevin Rudd. He is well-packaged and he is making a lot of promises for the never-never but he is not delivering any real changes for the Australian people.
JONES:
Well this week he was opposed to poker machine taxes but he was the person who with Wayne Goss introduced poker machines into Queensland.
TREASURER:
Yes, it’s strange, isn’t it? He seemed to discover poker machines this week, he said he would do something about it and of course then the press said, well what will you do about it? He said: ‘oh, I will ring up the Treasurer’s brother and I will ask him what to do about it.’ Well surprisingly enough, I have actually spoken to my brother about poker machines. And I called the Productivity Commission inquiry. We have had a full inquiry in relation to poker machines. It is one of the best inquiries that has ever been done. It has made recommendations in relation to how to deal with problem gambling, relocating ATMs for example, putting limits on people – a whole range of measures. We have set up a Commonwealth-State council to implement these measures because gaming and poker machines are run by State Governments, as you know. We have been working on that and if we had have had stronger cooperation we could have made more progress. Now, Mr Rudd should know that poker machines are regulated by the States, after all when he was working as a Queensland public servant he introduced them to Queensland. But he doesn’t seem to have done the hard work on the detail, again, to actually look at the problems as we have and try and do something about them.
JONES:
So, at the end of the day, how do you see, there is all of this talk about he is for the future and John Howard is about the past. I mean, you are about the same age as this fellow, what is it, what are we saying to Australians about a future under Howard/Costello?
TREASURER:
What we are saying is this. There are things that have to be done to improve our country. We have come a long way but there are things that have to be done. They have to be done in the area of water and jobs. They have to be done in the area of the environment and education. And the people who are going to be able to do those things are the people who have the experience, who have thought and done the hard work and whose track record indicates that the public can trust them. It won’t be done by people who don’t have experience and haven’t done the hard work and don’t have the policies…
JONES:
You can’t do anything without economic growth.
TREASURER:
…and are making PR type announcements. And they won’t be done without a strong economy. But let me make this point, that whatever Australia’s problems are, we will cope with them better from a strong economy. A strong economy and jobs will give us the opportunity to deal with our environmental challenges and to build water supplies. But if you lose the economy, if you go back to unemployment, if you go back to the debt we had under Labor, we won’t go into the future with a position of strength, we will go in in a frail condition and that is not what Australia wants.
JONES:
Just before you go because I know you have to go, just answer this question. In my opinion, the most significant decision you have made in the last five years was made this week when you agreed to the amendment to the Trade Practices Act, proposed by Barnaby Joyce, the so-called Birdsville amendment which now gives small business a real place and a real play in the community, in business against predatory pricing. There has been a major erosion I am sure you are aware of this, small business has been very angry with the Howard Government at the extent to which the Woolworths, the Coles, the Lend Lease and these people are running the battler out of town. How strongly are you now going to sell that reform?
TREASURER:
Strongly Alan. Look, you said in your introduction that you and I have had our differences over the years and this is one of the points that you have argued. And after hearing what you had to say and others had to say, we sat down, we had a very careful look at it, we decided to introduce a new amendment and it will go into the Senate today and I hope it will go through. We listened, we are going to improve the Trade Practices Act, it will make sure that there is additional protection for small business where people are using market share or using power unfairly. And I think it will be something that will really change commerce for the better.
JONES:
Absolutely. Just one final thing on that, are you confident the ACCC will have both the power and the resources to then prosecute consistent with those changes?
TREASURER:
Sure. We have increased resources to the ACCC enormously over recent years. We increased fines recently under the Trade Practices Act so you can have a $10 million fine or you can be ordered to pay a percentage of the money you made from the unfair practice and I believe Graeme Samuel and the ACCC is thoroughly resourced for the task, but of course if they come to us and say they need additional resources we will always look at that as we have in the past.
JONES:
Okay and just one thing before you go. Your family, because now that you are being anointed in this way, your children, can just tell my listeners how old your children are?
TREASURER:
Well I have been married for 25 years now and Tanya, of course, means everything to me. We have got three children. I have got a son who is 20, a daughter – and he is in the entertainment business – I have got…
JONES:
We all are, aren’t we? So is his father.
TREASURER:
No, he is genuinely humorous. I have got a daughter who is 19, she is studying overseas at the moment, working and studying overseas and our youngest daughter is 13.
JONES:
And how tough has it been you know, this last 11 years, formative years for the children and you are trying to sort of make the black equal the red, in Canberra all the time, there would have been long absences away from the family, Tanya being the mother and the father.
TREASURER:
Yes, I think it has been, well I pay great credit to her because with my absences she has more or less brought the children up on her own and I am sure there have been some tough moments. There have been some good moments too. I remember I used to be a scorer for my son’s football team and other Dads in the crowd would walk up from time to time and they would say: ‘have you got that score right, because we don’t think you can add up.’
JONES:
Is there a case for the Treasurer, managing a mammoth economy as is Australia is increasingly becoming, to have a residence and be permanently established so doesn’t have to be separated from his family in Canberra?
TREASURER:
Well I think there is. And I am not talking from my own point of view because I haven’t had one and wouldn’t have one over the last 11 years. But I think in the future, somebody who comes after me, I think it would be a good idea. It was done in the 1940s, by Richard Casey and the building is actually set aside in Canberra so I would recommend to my successor that it be done after I have gone and it would be up to them. It is not something that I have sought myself.
JONES:
Okay, good to talk to you and thank you for your time.
TREASURER:
Thanks very much Alan.