SPEERS:
Treasurer, good morning.
TREASURER:
Good morning.
SPEERS:
Are you concerned at all that this cocktail party at Kirribilli House might have breached electoral laws?
TREASURER:
No I don’t think it has, but as the Prime Minister said yesterday, he is quite happy to have the AEC have a look at it and I have no doubt when they do have a look at it that everything that should be done, has been done.
SPEERS:
Well he AEC apparently said it appeared to be a gift in-kind to the Liberal Party, but then was reportedly told to shut up.
TREASURER:
No, you can’t do that. The AEC is an independent organisation, it doesn’t follow political instruction. There is no way that the AEC could have had its decision influenced in any way. And that is as you would expect. AEC runs elections in this country so it has got to be independent. It has a long history of independence and I have no doubt whatsoever that when it looks at the matter and forms its own view, that will be its own view.
SPEERS:
So they are looking at it?
TREASURER:
Well, the Prime Minister said in Question Time yesterday that he was quite happy for the AEC to have a look at it. And so I assume that is what is happening.
SPEERS:
Well they are giving no comment at all.
TREASURER:
No, well they probably haven’t had a look at it. You don’t actually give a comment until you have had a look at it.
SPEERS:
You would like them to have a look at it?
TREASURER:
Well, the Prime Minister said he was happy for them to do it. They are a statutory organisation, they ensure that they do whatever they have to under the statute.
SPEERS:
Would, it would be a better look for the Government though, if this was properly investigated?
TREASURER:
Well I don’t think there is anything unprecedented at all. I must say, if you haven’t got a policy, as Mr Rudd doesn’t, you have got to think up ten questions a day. You do need something to fill in the time…
SPEERS:
You don’t think voters care about this?
TREASURER:
…and I think Mr Rudd has now had something like 20 questions, I mean, what else is he going to ask? Is he going to ask about unemployment? Is he going to ask about growth? Is he going to ask about tax?
SPEERS:
But voters do care about this.
TREASURER:
Well, voters in my opinion care about whether they have a job, what tax they are paying, whether or not their businesses are secure. I don’t think Mr Rudd is capable of asking a question about any of those things because he can’t actually find anything to disagree with. So he has got to fill in his day.
SPEERS:
Well let’s look at the economy. He said this morning that productivity growth isn’t good enough. Is it good enough?
TREASURER:
I think what Mr Rudd displayed this morning is he knows precious little about economics. I think it is there for all to see. He has never given it a thought, he didn’t know the figures. You would have to say it was almost embarrassing, it was so bad. And why does he get himself into this trouble? Because he has an industrial relations policy which is back to the dinosaur age. He wants to go pre-Paul Keating, back to the dinosaur age. Why? Because the unions want it. Now, there is no other country in the world that is going back to the dinosaur age. It took us nearly a century to move beyond the centralised wage fixation. We have made great progress and he wants to take Australia back. And that is why he gets himself into trouble.
SPEERS:
But what he is pointing to is the Budget papers. Your own Budget Papers which do seem to show zero productivity growth in this financial year. Is that right?
TREASURER:
The National Accounts…
SPEERS:
(inaudible).
TREASURER:
…hang on, the National Accounts which measure productivity in the last two quarters, show a huge productivity surge – a huge productivity surge, 1.4 per cent in the December Quarter and 0.6 per cent in the March Quarter. Now, I have always said this: that when the investment phase, which we are going through at the moment, starts working out in increased production you will get a big surge because there is huge investment going on. When the investment goes on, right – that is all shown as expenditure – but until you actually finish your investment and that lifts production you don’t get the increase in productivity.
SPEERS:
So Treasury is wrong to say there will be no…
TREASURER:
No, no, no, no – as I said – as the investment phase finishes and the production comes on line, I have always said you will get a huge productivity lift. Now, we actually saw some of that in the last quarter and I think you will see some more in the next quarter. Let’s have a look at it.
SPEERS:
So why do the Budget Papers say no productivity growth?
TREASURER:
Well they don’t say that. The Budget Papers put out estimates in relation to employment and they put out estimates in relation to GDP. The estimate that they put out in relation to GDP will be surpassed. It will be surpassed.
SPEERS:
So more than 2 ½ per cent?
TREASURER:
Absolutely, in 2006-07. And it will be surpassed. And it is a good thing, and why? Because production flowing from this investment is starting to come on and what you have got from the National Accounts – it’s not a forecast – it is an actual. It has happened. Mr Rudd unfortunately can’t read the National Accounts and so when he was asked today, he didn’t know the answer.
SPEERS:
You have criticised him for re-regulating the labour market and suggesting that that will have a negative impact on productivity. What then will the introduction by the Government a couple of months ago of the Fairness Test – isn’t that re-regulation?
TREASURER:
Oh, it is nothing compared to awards and abolition of AWAs. Think of this: at the moment one of the industries in Australia which is extremely profitable is mining. The mining industry uses AWAs, individual contracts. They are going to be abolished. Abolished. So Mr Rudd turns around, on one hand he says, oh well, we are riding the mining boom; on the other hand he said, but by the way I would like to take out all of the reforms which have helped this mining boom. Including the abolition of AWAs. Now, most people presumably, would go back onto awards. Now that’s good for the unions, the unions will be back in control. But what is it going to do for the mining industry in this country?
SPEERS:
Well some of those miners at BHP are worried about the safety implications of AWAs. Is that a concern for you?
TREASURER:
No. I think you will find that in the mining industry – which at the moment is profitable – AWAs are leading to very high wages, they are helping the output in the mining industry. If they were abolished that would provide a very, very difficult situation for the mining industry. And let me also make this point: that if you get rid of AWAs you return to awards, which will give the union movement the opportunity to piggy back out of profitable industries through awards, wage increases into the general economy. This will unleash inflation as it has in the past and it will end in a downturn as it has in the past. One of the reasons why we have been able to grow the economy, have unemployment at 4.2 per cent but still have low inflation, a conjunction of circumstances that we haven’t seen for over a generation is that we now have a much better industrial relations system. And that is the industrial relations system that Kevin Rudd – on instructions from the ACTU – wants to get rid of.
SPEERS:
Treasurer, just finally the Labor candidate running against you in your seat of Higgins has described it as real Kath and Kim country. What does she mean by that, and it is offensive?
TREASURER:
I think it is belittling. It is belittling to the people who live in Ashburton, people who work hard, decent people, they have got a very strong community. To say that she compares it to this satirical programme which is designed as a comedy, I don’t think the families of Ashburton would compare themselves to comic figures. I think they are good hardworking people, living in a pretty prosperous area of Australia and who really aren’t being well understood at all by the Labor candidate. So if the Labor Party wants to put up candidates who throw off at people who they say they want to represent, it makes you wonder really, whether or not they have got the ability or the qualifications to run for the office.
SPEERS:
Peter Costello, thanks for your time.
TREASURER:
Thanks.