JONES:
In the context of all of this I came upon a quote last night when I returned home by the man that would be Prime Minister, Treasurer Peter Costello. He addressed what is described as Sydney’s largest Christian conference, it is called Passion ‘04. An estimated crowd of more than 30,000 listened to Peter Costello’s speech at the Sydney Superdome and he was wildly acclaimed. In part Mr Costello said, ‘we need a return to faith and the values which have made our country strong’. Many would feel that that is most probably relevant today. He is with me in the studio, good morning.
TREASURER:
Good morning Alan.
JONES:
Faith and values, what did you mean by that?
TREASURER:
I think a lot of parents in particular are worried about the kind of values that their children are growing up with, some of this gangster rap that you hear repeated mindlessly over and over on television and radio, worried about some of the values that have been pushed through television programs, and I think that a return to faith and the values on which our society were found, the values of the ten commandments, respect for other people, respect for their property, would actually strengthen our society.
JONES:
What about the values system inherent in what has been going on relation to Mark Latham and the alleged argument that there is a dirt unit within the Coalition, is there a dirt unit?
TREASURER:
Absolutely not. That is a completely false allegation.
JONES:
Is the argument by Mark Latham that there is a dirt unit the pushing in itself of dirt?
TREASURER:
Well, a lot of these things he seems to raise himself. He is the person that keeps talking about all of these things. Can I tell you, nobody in the Government, nobody, has talked about videos or his sister or anybody else. And…
JONES:
Should these things be off limit?
TREASURER:
…the proof is in the pudding Alan. You have got, I think I heard journalists on the radio last night, one after the other, saying none of this had come from the Government. Now, he himself said, his ex-wife has said certain things, Liverpool Labor Councillors have said certain things, obviously, that has been in the media, but this allegation that his problems are somehow the fault of the Government is absolutely false.
JONES:
What does this all do though, for the public’s perception of politics? I mean he for example himself gave Alexander a pretty tough time when Alexander Downer was Opposition Leader.
TREASURER:
Sure, well Mr Latham was somebody who over the years built his career on what he called muscling up, he called politics a cage, and he was probably the person who brought abuse to the highest standard, or I would say the lowest standard, in the Federal Parliament. He said at one point that he didn’t want the Parliament to be namby pamby, it was a cage, and you recall that is when he described Tony Staley as deformed, you know Tony is crippled, so I think the Parliament did go through a very bad period, led mostly by Mr Latham actually.
JONES:
Given that an election is in the offing, what would you as, you know, virtually one of the senior leaders of the Government, want to see in the public place for debate to determine who should govern this country?
TREASURER:
Well…
JONES:
(inaudible) one of the issues?
TREASURER:
…I don’t care about videos and I think it is complete nonsense to say that his sister has got something to do with his political career and anybody who publishes that, and by the way I haven’t seen anyone publish that, should be condemned if they do it. But having said that, what is absolutely relevant is his capacity for financial management. Now, Mr Latham wants to be the Prime Minister of Australia, let me tell you, the Budget is a $200 billion Budget and his capacity for financial management is very relevant to his job application for Prime Minister. And that is why his record as the Mayor of the Liverpool Council is absolutely relevant to his qualification for the highest office in the land and that is why what the Mayor’s of Liverpool say about his financial management, and I am not talking about his bucks night, I am not talking about his sister or anybody else, but when he was in the public office of Liverpool Mayor, his spending decisions and his record is part of the public record and part of his job qualifications for the Prime Ministership. And his record was a bad one, a very bad one. He spent a lot of money and he said well, the savings will appear, the trouble is the money got spent and the savings never appeared and the Liverpool Council under his mayoralty was not a success. If he can’t run a council, he can’t run a country.
JONES:
Just talking about running the country, you met yesterday with the Board of the Reserve Bank, there will be an announcement at half past nine this morning, is there a case for interest rates in this environment to be going up?
TREASURER:
Well, I am not going to pre-empt any announcement at nine thirty, let me make that point. But the way in which we have put interest rate policy in Australia is that we focus on inflation. If inflation is a threat to the economy, then interest rates are adjusted accordingly, but inflation is low in our economy, it is down around 2 per cent, we don’t have inflationary pressures and that is consistent with a low interest rate regime.
JONES:
Access Economics said yesterday that you are $52 billion in new policies has left the Treasury cupboard, quote, ‘distressingly bare.’
TREASURER:
Well, I have never even heard of the person who wrote that for Access Economics, was it a Mr Rumble?
JONES:
I think so, yes.
TREASURER:
Well…
JONES:
He said the Government has displayed all the restraint of Meatloaf, who is the popular singer, at McDonalds.
TREASURER:
…yes, well, I thought to myself, Mr Rumble has written a piece to try and get publicity for him and his organisation, but it doesn’t make him qualified. Reputable economists don’t talk about Meatloaf, do they?
JONES:
So you are happy are you, about the capacity for the Government to be able to stay in surpluses into the future?
TREASURER:
Well, Alan, when I first became Treasurer the Commonwealth Budget was $10 billion in deficit, and I have done nine Budget’s, we have brought the Budget back into surplus, we have had seven surpluses. So I think I am qualified to speak on the Budgetary position.
JONES:
Mark Latham says a vote for John Howard is a vote for Peter Costello as if that ought to be something that should frighten the national electorate. How do you react to that?
TREASURER:
Well, over the years John Howard and I have worked very closely, he has had the most senior position in the Government, I have had the second most senior position in the Government, we have worked very well, I am happy for people to look over my record of financial management. When I say look at Mr Latham’s record of financial management, I don’t say, hands off my own. People poor over my financial record on a daily basis and I think the record in terms of low unemployment, low inflation, low interest rates, seven surplus Budgets, reducing Labor’s debt by $70 billion has put Australia in a much stronger position than we were in in 1996.
JONES:
One of the key issues of the May Budget to people listening to you this morning was this $600 per child one-off family payment. There has been all sorts of talk about some families being over-paid, I think Kay Patterson said 0.1 per cent of families, have there been overpayments and if people have been overpaid, must they pay it back?
TREASURER:
Look, you hear these anecdotal cases, but we laid down a rule which was this, anybody who had an entitlement to the Family Tax Benefit in the 2003-04 year, that is the financial year which has just finished, would be entitled to an additional $600 per annum, per child. That is the instruction that we have given, as far as we know, every such person has been paid their $600 entitlement.
JONES:
In New South Wales, just on this GST business, we have had a State budget brought down recently where taxes will increase by $558 million, land tax revenue has gone through the roof with a $326 million windfall, there will be a record $5.3 billion collected from property tax, which is up 230 per cent in nine years. The public here think, well what the hell, I thought the GST was to relieve us of all of these taxes, it just seems to be an addition to the tax burden.
TREASURER:
Well, all of the GST goes to the States, you know that.
JONES:
But it doesn’t seem to relieve the poor taxpayer in the states of other taxes.
TREASURER:
Well, I like reminding people of that because there are some people that don’t know that. Every dollar of GST is received by Mr Carr and Mr Bracks and Mr Beattie and Mr Gallop and all of the State Premiers.
JONES:
Why doesn’t the Government say, well listen you are not going to get this money unless you retire certain taxes?
TREASURER:
Well, we have done an agreement with them and the money is just appropriated to them. Now, we said to them, this money should be used to abolish other taxes. The taxes that we have forced the States to abolish are, were the Bed Tax, the Financial Institutions Duty, which was when you put money into your bank account, the Bank Account Debits Tax, when you took money out of your bank account, stamp duties on shares. But the thing that really does concern me, is as the GST revenue grows and New South Wales is now getting more money under the GST than they were under the old system, they are getting a financial bonus, the States are increasing their spending and that is why they are increasing their taxes.
JONES:
Would you say that there is a bigger issue facing the country than the water issue, we see nothing from either party about how we are going to prevent the recurrence of debt that we have had to endure and now possibly the worst of all time, you have said you will provide several hundred million dollars to return sustainable water flows to rivers, but just leaving the rivers alone, what are we doing to make sure that the drought cycle doesn’t continue? What are the programs for example, for grey water? What is the desalination program? What is the program to stop us flushing our toilet with the same water we make our tea with?
TREASURER:
Well, there are a lot of programs that have been put in place by State Governments to encourage water tanks, this is in residential areas…
JONES:
Shouldn’t you take a lead on this?
TREASURER:
…well…
JONES:
National prices, this is costing you the earth.
TREASURER:
…well, we are taking the lead on the river system because it crosses state borders…
JONES:
That doesn’t affect farmers though, does it?
TREASURER:
…the Commonwealth Government, well, I will come back to that in a moment. The Commonwealth Government has never run metropolitan water systems…
JONES:
But the Snowy Mountains scheme is a Commonwealth initiative.
TREASURER:
Absolutely. Why? Because it has affected rivers and rivers that crossed State borders. Now, we are going to take a major engagement in the way in which water is allocated through our river system and to our farmers. We had this big initiative which was agreed to by the States, we are going to have a proper water market, we are going to make…
JONES:
Forget the rivers though, forget the rivers for a moment, isn’t the water crisis a national crisis requiring say, the issuing of infrastructure bonds, so that people can build weirs and dams, or a national development bank where they can get cheaper money if they are going to build infrastructure to create something which will reduce the water crisis in the future?
TREASURER:
…well, I think that there is a case for building further dams, absolutely, and I think the biggest problem here Alan, is not the financing of them, the biggest problem here is locating them. I think one of the reasons why the State Governments have not built enough dams, I am not singling out any particular government here, is that every time they put on the drawing block, a place where a dam ought to go, there are local objections, or conservation objections, and I think that the infrastructure for water reservoirs, particularly for our major metropolitan cities has run down.
JONES:
So how much longer are we going to endure this kind of set-up with water restrictions in every State and farmers facing drought with no solution?
TREASURER:
Well, you will have to speak to those that are responsible for building the dams, but I agree with you, I agree with you, and I think the problem is going to be environmental, it is not going to be financial.
JONES:
And an election, has the Prime Minister discussed an election with you?
TREASURER:
Sure, we discuss timing, but…
JONES:
Will this be an appropriate time now to indicate what you are thinking?
TREASURER:
…but I think, but he makes the final decision obviously, and he has to my knowledge not made any such decision.
JONES:
Good to talk to you.
TREASURER:
Good to be with you.