WOOLEY:
G’day Peter.
TREASURER:
G’day Charles, how are you?
WOOLEY:
Peter this drought is an absolute disgrace. What are you going to do about it?
TREASURER:
Well I wish I could make it rain. The funny thing is at the beginning of the year, the Bureau of Meteorology announced that the El Nino…
WOOLEY:
Yes.
TREASURER:
…effect had ended and that is normally associated with drought breaking rains or a La Nina effect. Btu we didn’t get any follow-up. And they have now said that the chances of getting that effect are 50 per cent and they are downgrading all of the time. So the tragedy is that we may have had a false start as it were. The rain came, it looked like it was going to be followed up, many of our farmers got their crops in the field and it just hasn’t followed up.
WOOLEY:
Total failure of the winter wheat across a very large part of the east coast of Australia.
TREASURER:
Yes, and…
WOOLEY:
And that is for about the third year in a row.
TREASURER:
That is right. It looks like farm GDP fell about 11 per cent in the June quarter and over the course of the year it was about 20 per cent down. So…
WOOLEY:
Now, we can’t expect in perpetuity and if global warming, climate change is working faster as the international panel for the United Nations said only last week. If things are going faster than we think and in a permanent state, we can’t really expect, though we want you to do it now, but forever, for the taxpayer to have to subsidise. Do we need to look at a different way? I mean, Bill Heffernan is talking about moving farmers north to where the water is.
TREASURER:
I think there is something in that, that if there are areas of Australia which have more reliable rainfall – and the north of the Australia is such an area – these areas will become better agricultural areas. I don’t think there is any doubt about that and improving transport links in those areas will be a big part of opening them up for agricultural development. What we do as an Australian Government for farmers who are in what we call exceptional circumstances, that is exceptional drought, is we provide income support. We essentially make them eligible for unemployment benefits, even though they are not looking for work and that is designed to keep food on the table. We then have interest rate subsidies so that their borrowings can be serviced and they can continue on. There is another element Charles, where those farmers that say, ‘well look, for one reason or another I want to exit the industry’, we do have exit grants. And this is just to help people relocate out of farming either to a town or to a…
WOOLEY:
How generous are they, Peter Costello? How do you calculate them?
TREASURER:
Well normally they are income tested so that if you have a lot of other income you wouldn’t be eligible for them. But there are what we call relocation or exit grants. They vary in amounts which are just basically designed to help people get into another business.
WOOLEY:
So we are talking about hundreds of thousands of dollars I take it because you would need that to get into another business.
TREASURER:
Yes, yes. That is the kind of sum that you are looking at.
WOOLEY:
What are the banks, what are you saying to the banks? I mean, the banks have been patient, they have been quite decent but how long does their patience extend?
TREASURER:
Well, as I said earlier the Federal Government has interest rate subsidies and these subsidies are designed to enable farmers to continue to pay the interest on their borrowings. And I think at a time like this the banks have got to be pretty understanding. Let’s be frank about this. The Australian banks are making very strong profits…
WOOLEY:
They are.
TREASURER:
…they have very strong capital positions and their shares are rising very, very fast. They are making a lot of money out of a prosperous economy and I think they can afford to be understanding in relation to rural customers.
WOOLEY:
You are saying that the Australian, that the banks not necessarily the Australian ones since they are international, many of them, well most of them, that they have a moral responsibility to the people on the land and (inaudible)?
TREASURER:
Yes, I think that they should show understanding. At a time when their profits are at all-time records, when their share prices are at all time records, when they are making a lot of money out of a strong economy – which is very strong outside of the rural area, I think they can afford to be a little bit understanding in relation to rural customers.
WOOLEY:
Peter Costello, now that you are coming out from under the dark mantle of Treasury, you are allowed to talk about other things. What is your take on Burma and what should we be saying at the United Nations about the appalling regime there, a military dictatorship with an awful human rights record which has taken a wealthy country and impoverished it?
TREASURER:
Well it is an appalling situation. It is military rule where…
WOOLEY:
Do we trade with Burma?
TREASURER:
I am not quite sure that we have much trade with Burma. I know for example that Australia takes in refugees from Burma. But you have got a military dictatorship which has jailed or sentenced to house arrest a democratic leadership. It is a military dictatorship which has denied human rights. You are now seeing quite properly in my view demonstrations from Buddhist Monks – peaceful demonstrations – and what this is showing to you is that this military dictatorship does not have popular support.
WOOLEY:
Yes. No, if we don’t, if we are not beholden in any way to Burma, I mean I can understand why you blokes don’t say, aren’t terribly critical of China, although you know, the terrible human rights abuse is in China too and shocking things, happenings I saw them myself on the Tibet border. But in the case of Burma, is Australia able to bring moral and economic and other pressure to bear in the concert of nations?
TREASURER:
Well we are certainly able to bring moral and political pressure to bear – yes – and we do and we will. We will condemn human rights abuses in Burma. We will condemn a military dictatorship which is refusing to allow elections and which is jailing its opponents.
WOOLEY:
And it is a mad dictatorship too. As Treasurer, you will love this. But a few years ago one of the generals in charge there, one of the loony generals decided that all, that the currency should be re-jigged so that it could be divisible by nine because he thought nine was an auspicious and a numinous number.
TREASURER:
It’s a funny thing you know, lunatics always have funny views on money and…
WOOLEY:
Careful.
TREASURER:
And you know, I come across them all the time, people who write to me with new views on how the Australian monetary system should be handled and…
WOOLEY:
I get those kind of letters in really tight scrawly little writing…
TREASURER:
Yes, yes.
WOOLEY:
…and you feel like you need to wear plastic gloves to read the letter.
TREASURER:
Yes, hand written, single spaced, generally three or four pages with ideas about how the world could be changed if we changed our monetary system.
WOOLEY:
And you think, oh my God, this person has a vote.
TREASURER:
This seems to be pretty universal. The only difference in Burma is that these people seem to be in charge of the country, yes.
WOOLEY:
Peter Costello, after you appeared on Laurie Oakes’ programme on the Sunday Programme, the Laurie Oakes interview a couple of weeks back, Ray Martin popped up and said: ‘Peter Costello is such an interesting and amusing and a funny man and a clever man, why is he so buttoned down in bureaucratic when he gives an interview?’ Now, I know it is not easy to tango with Laurie, but are going to as Paul Keating, remember, famously said when people said: ‘you are a bit dull, Mr Keating, you are a Treasurer, do you think you can get a bit of colour into it if you are Prime Minister?’ He said: ‘I could throw the switch to showbiz.’ Can you throw the switch to showbiz, Mr Costello?
TREASURER:
Oh absolutely, Charles. Look, I think people who know me know that outside of the working hours in the Treasury I have a lot of fun, I enjoy life, I have a wide circle of friends and a sense of humour. And it is hard to sound humorous when you are announcing the latest change in Fringe Benefits Tax. But if you can do a little two-step in between, I would be very happy to do it. You won’t see me tangoing with Laurie Oakes, by the way. Even though Laurie has lost a lot of weight, I don’t think I would take him as a dance partner.
WOOLEY:
He has lost a lot of weight. For a large man he now moves with the easy grace of a cat, doesn’t he?
TREASURER:
I have challenged Laurie Oakes to a run up the hill of Parliament House. And I said: ‘now when you have lost you know, the required amount I am giving you a challenge.’ So the Australian press are getting out and waiting for this challenge.
WOOLEY:
Well that is the kind of thing we need to do to humanise you a little, Peter Costello. Peter, I have done something I never do. I have joined, I suppose it is almost a political movement. I have joined something. I never join anything. I am member 170,639 of the Australian Republican Movement. Are you a member?
TREASURER:
No, I am not a member.
WOOLEY:
But you are on the side of.
TREASURER:
Well, when we had the referendum in 1999, of course, I supported a yes vote, oh yes. And I thought that was a workable model and I argued the case for it and you know, I was very happy to do so. I think it is something that will happen in Australia one day.
WOOLEY:
If you blokes turn around the polls and if Malcolm Turnbull lets you become Prime Minister – there is a lot of questions in that – will you bring on the Republic, Peter Costello?
TREASURER:
I was going to say, what number member were you, Charles?
WOOLEY:
170,639. Not a lot of votes.
TREASURER:
I was going to say, it is not bad I suppose, 170,000. But I think to get a referendum through, you would probably need closer to what, 6 or 7 million.
WOOLEY:
I am working on it, I am working on it. I have got around 5 million in regional Australia which is why you are talking to me now.
TREASURER:
I have got to say, your regional listeners were probably less likely to support that cause than urban (inaudible).
WOOLEY:
They are, I have spent a lot of time in regional Australia and the scones and the tea and there has always been a picture of Her Maj on the wall somewhere.
TREASURER:
Yes, well of course, if you look at the vote in 1999 when we had the referendum, it tended to do better in the inner city areas and the further you got out from the inner city areas the (inaudible) it went, actually.
WOOLEY:
Exactly. Just before you go, the polls are still bad although you look good in Western Australia. But the stockmarket is soaring again, it has gone to a record high, we have full employment. There is still a lot of scratching of heads, isn’t there about these polls results, not just by you blokes but by the journos themselves who make an obsession of counting the numbers.
TREASURER:
I think that is right. Look, I think the economy is in good shape and it is in much better shape than it has been for a very long period of time and that has taken a lot of hard work to get there. Some people say: ‘oh well, we can take it all for granted.’ You can’t. Have a look at the United States at the moment. The world’s largest economy. Looking a bit sick with mortgage default, the declining property values, consumer sentiment and just because we managed to avoid the last global recession in 2000-2001 and we managed to stay out of the Asian Financial Crisis in 1997, people think: ‘oh well, the Australian economy is impregnable.’ It is not. It takes a lot of work.
WOOLEY:
No, in fact it is very much linked to the world economy, isn’t it?
TREASURER:
Very much so.
WOOLEY:
They used to say: ‘when America sneezed, Australia caught a cold.’
TREASURER:
You are absolutely right and you saw a touch of that when the sub-prime market started to default in the United States, you saw our dollar dip and our stockmarket dip. And you know, these things develop and can actually pull Australia in. It does take a lot of fine calls and tough decisions to actually make sure that we can avoid the worst excesses of overseas influenza.
WOOLEY:
Peter Costello, just before you go, were you hugely relieved when you watched Lateline last night and Malcolm Turnbull said you can have the job if you get re-elected?
TREASURER:
I know this will surprise you, Charles, but in fact, I didn’t even watch Lateline last night. I had other things on my mind.
WOOLEY:
Well now that you know, are you hugely relieved?
TREASURER:
Oh look, I think it is all a bit of colour and movement.
WOOLEY:
We need more of that.
TREASURER:
Yes, the critical thing is of course, what happens in the election. That is going to determine who the future government of Australia is.
WOOLEY:
Absolutely. Peter Costello, are you going to join the ARM – the Australian Republican Movement? Are you allowed to?
TREASURER:
Oh yes, there are…
WOOLEY:
Will your wife let you?
TREASURER:
Oh, she would probably encourage me to…
WOOLEY:
Good.
TREASURER:
But there are Liberal members who are members. I have never been a member of that particular organisation myself. I was a bit, there was another sort of an organisation that I helped work on. They were called, I think, Conservatives for an Australian Head of State. So I am bit more moderate than you ARM-ers.
WOOLEY:
Oh, if I join some extreme movement, I mean, I really, it is just a patriotic enthusiasm for getting rid of the Queen on my part and the Scottish ancestry having fought against the English for so long.
TREASURER:
Oh, is that right? It is all fighting…
WOOLEY:
We are settling old scores here, Peter Costello.
TREASURER:
Oh, are you? What, 300 years later?
WOOLEY:
It is not just the Labor Party who are good haters. Mate, thank you very much for your time this morning.
TREASURER:
Thanks very much Charles.
WOOLEY:
It was really good to talk to you and I think you did throw the switch a little to showbiz.
TREASURER:
I will do my best.
WOOLEY:
Keep it up, won’t you? Good. See you.
TREASURER:
See you.