LAWS:
Peter good morning.
TREASURER:
Good morning John.
LAWS:
How are you?
TREASURER:
A bit tired at this time of year, we are in the middle of doing next years Budget, so it is a pretty busy period.
LAWS:
Yes, it is a tough old time, but you wanted to do it, you applied for the job.
TREASURER:
I would be happy to get out of Canberra, I can assure you of that John.
LAWS:
What today, or all the time?
TREASURER:
Well, it is a bit quiet this time of year, Parliament is not going, so it is just the Budget that keeps going through the Autumn.
LAWS:
Who found the error in Mark Latham’s strategy? You or somebody that works with you?
TREASURER:
Yes, it was me and some of my staff thought we should read this policy, because they billed it as such a great policy, and when we read it, it was obvious that they were pledging to increase the pension, an $8 billion pension increase. And we thought that this was either a shocking, glaring error…
LAWS:
Or a moment of great generosity.
TREASURER:
…or it was a policy which Labor would never be able to deliver on. And we couldn’t believe that if they knew what they were doing in their policy, they could have made a mistake like this, it is such a basic mistake. And it just illustrates really, that if you want to be in government, and you want to be responsible for the economy, you can’t just be so lax, you can’t be so lazy in your policy, and Mr Latham’s says that this is just an definitional error - let me tell you, this definitional error, if he had been in government, would have cost taxpayers $8 billion.
LAWS:
Yes well, you say that Labor couldn’t afford that, nobody could afford that.
TREASURER:
Nobody could afford that, and if (inaudible) this up and he had gone to the election with this policy, the pensioners would have known, would have wanted to have know where their increase is going to be.
LAWS:
Yes, tell me this. I have talked with him about some of the ideas he has got, and to ultimately remove tax on super contributions, surely would benefit the rich people far more that it would benefit those in need.
TREASURER:
Yes, but that is just a joke John, we all know that is a joke. He said his policy was to remove it in 20 years time…
LAWS:
Yes, but even if he reduced it, people who have got plenty of money left over and there are not a lot of them around, they would be throwing their money into super to avoid paying the other tax, PAYE tax or any other tax that they would normally pay…
TREASURER:
…of course you would, yes, of course you would.
LAWS:
…so you would lose money from the income tax system, and you would be helping the rich people, not that I mind helping the rich people, but I would rather help the poor people.
TREASURER:
Well, the whole thing is just a disaster, his whole policy, he hasn’t thought it out for a minute. You know, yesterday we had the super blooper. As time goes on, we are going to have the son of super blooper, the whole thing is…
LAWS:
And you can’t wait either, can you?
TREASURER:
…well, I mean, first of all he says abolish the tax in 20 years, so you are going to hold him to a promise he has made for 2024 are you?
LAWS:
No.
TREASURER:
Are you going to be behind the microphone saying, ‘Oh Mark, you promised 20 years ago that you would get rid of this policy.’
LAWS:
No, I don’t think I will be doing that because I don’t think he will be running the country.
TREASURER:
Just look at what has happened, the promise that he made 24 hours ago, he has taken away after 24 hours, but he wants you to believe that a promise that he has made for 20 years time…
LAWS:
Will come to fruition.
TREASURER:
…will come to fruition. Well…
LAWS:
Well, to begin with, I won’t be here, and secondly, I doubt very much that Mark Latham is going to run the country.
TREASURER:
…well…
LAWS:
What do you think his chances are?
TREASURER:
…in 20 years time he won’t be reading story books to kids, he will be reading them to, his kids will be old aged pensioners by then. They will be saying, ‘Daddy, where is the one about the abolition of the super contributions tax?’ You have got to take this, look, we all think it is a joke, but it is a serious business running a country.
LAWS:
Well I’m sure it is.
TREASURER:
And you have got to work hard at it, you have got to be right, it is not like running the Liverpool council you know…
LAWS:
Well, they did a good job there, didn’t they?
TREASURER:
…well, that was his, the last time Mr Latham was in office, he was in the Liverpool Council.
LAWS:
Yes, but in fairness, not during this period of time of course, but the problems they now have.
TREASURER:
It bears having a close look at his record in the Liverpool Council…
LAWS:
I have done that Peter, and you are quite right, it does. Listen, should the fees on super funds be performance based, because I think they should. It is crazy if we don’t gain anything, that the people who are organising the super funds take money from us anyway. I mean, if I put my house up for sale and it doesn’t sell, the estate agent doesn’t get a commission.
TREASURER:
I think that there are a lot of problems with super funds in the sense that you are not given choice, this is the biggest problem to me. If you go into, let’s say the building industry or you go in to the hospitality industry, then your super goes into these, what is called these industry finds. And they can more or less charge you anything they like, you can’t take your money and go to another fund…
LAWS:
No you can’t.
TREASURER:
…you can’t say, well I didn’t like the investment performance, I am going to go to another one. It is just locked in there. We have been trying now, since 1997 to get freedom of choice so that people can take their super from one fund, if they don’t like it, if the fees are too high, and take it somewhere else. It is like, you know, if you don’t like one radio station you can switch to another one. After a while people get the message. But the freedom of choice has been blocked in the Senate by Labor since 1997.
LAWS:
Ok, well what about the fees being based on performance?
TREASURER:
Well, I think that different funds should be able to offer different investments and they should transparently disclose their fees, and I think people should then have the choice, it should work like other markets work.
LAWS:
Because if, why should they take money when they haven’t performed? It is like I say, selling a house, if you don’t sell the house you don’t pay the commission to the estate agent, why the hell should you pay it to somebody running a super fund.
TREASURER:
Well, we had a situation 2000-2001 where most of the superannuation funds of Australia actually lost money…
LAWS:
That’s right.
TREASURER:
…and you had less money in your super at the end of the year then you had at the beginning.
LAWS:
That’s right, but we still had to pay the fees.
TREASURER:
Still had to pay the fees and you couldn’t say well, thanks very much, I would like to go to another fund, one that is performing better, because there is no freedom of choice. So, I keep coming back to this point, there should be transparency in relation to fees, but the people should have the choice, it should work like other markets.
LAWS:
OK, but why don’t you fix it so that we don’t pay fees on super funds that don’t perform?
TREASURER:
Well, to fix it we need to change the law to give people freedom of choice…
LAWS:
Change it.
TREASURER:
…well, we have been trying since 1997…
LAWS:
And the climate might be different now.
TREASURER:
…and the Senate, lead by the Labor Party is opposed to it.
LAWS:
Ok, but I think the climate might be different now.
TREASURER:
Well, we will keep on going I can assure you of that, because people deserve to have some choice. The thing that gets me you know, is that it is their money. It is your money and yet you are not allowed to actually decide who is going to be investing it for you.
LAWS:
Yes, but you thought that I was being cute the other day when I said it was my money and thank you very much for letting me spend it. As the funds grow, their fee income rises anyway, so they are doing pretty well, I mean they (inaudible) from that.
TREASURER:
Look, superannuation, particularly the industry funds, I keep coming back to that, 9 per cent of your money goes into this fund whether you like or whether you don’t.
LAWS:
That’s right.
TREASURER:
If you happen to be running the fund and it can’t be taken out, it is good business to be in.
LAWS:
And that is why you should have a look at it.
TREASURER:
Yes, I agree with you more, absolutely, I am and as I said to you, I pledge again to try and overcome this Senate obstructionism, I absolutely pledge again. We are going to keep on going until people have the right to control their own money.
LAWS:
Do you believe in separation of powers?
TREASURER:
Yes.
LAWS:
Well, why then can’t Mick Keelty say what he wants to say in his position and the Prime Minister say what he wants to say in his position without this terrible bickering going on?
TREASURER:
I think Mick made his comments and it was blown up by the media and he issued a statement saying that he had been taken out of context.
LAWS:
After he was told to.
TREASURER:
Well, you say that John, I don’t know that.
LAWS:
Well, I know that the chief adviser to the Prime Minister was on the phone to him 10 minutes after he had finished an interview on Channel Nine.
TREASURER:
Sure, but let me tell you, Mick Keelty is the Commissioner of the Federal Police, his independence is protected and Mick does not have to do anything that he doesn’t think is right, and I don’t think Mick would do anything that he didn’t think was right. I know Mick quite well, I deal with Mick quite a lot…
LAWS:
He is a very strong independent sort of character.
TREASURER:
…forceful yes, and Mick, you know, I don’t think Mick could be brow-beaten. Mick is a pretty independent character, you have got to be to be a Commissioner of the Federal Police. And it is possible that he genuinely thinks that he was taken out of context, that is the obvious explanation….
LAWS:
If he was taken out of context, why did Peter Cosgrove then say that he disagreed with his statement?
TREASURER:
Well, Peter is also a pretty independent chap, and he has got his views. I know Peter pretty well too in fact, I deal with Peter and Mick quite a lot and I have got to tell you, they are both pretty robust fellows. They are the kind of fellows that you would want beside you…
LAWS:
Sure.
TREASURER:
…if you are on the beat or in a trench, and that is why they are Commissioner of the Police and Chief of the Defence Force.
LAWS:
Yes, but the Chief of the Defence Force is there at the Prime Ministers pleasure, isn’t he? One would think that he would want to cater to the Prime Ministers whims?
TREASURER:
I am not sure about that, the detail of it, but the Chief of the Defence Force is a pretty high office, you don’t hire and fire them on a moments notice, you give them a term. They are given a term when they are actually put into the job. But let’s bring it all back, Peter Cosgrove is the Chief of the Defence Force, he is the General of the Australian Army, he is the hero of East Timor, I don’t think Peter Cosgrove would say anything that he didn’t feel was right.
LAWS:
But he is a John Howard appointment.
TREASURER:
Well, he is an appointment on the recommendation of the Minister of Defence and he holds a very senior office, and with all due respect, Peter is a pretty strong character and I think Peter would only say what he believes in.
LAWS:
What do you believe?
TREASURER:
About this issue?
LAWS:
Yes.
TREASURER:
I think that Australia was a terrorist target before the war in Iraq, in fact I said so. In fact I got criticised by the media for saying so, we were a terrorist target because of who we are, the kind of country we are…
LAWS:
All of that.
TREASURER:
…all of that, and bear in mind the Bali bombing, which was the greatest terrorist attack on Australia, had nothing to do with the Iraq war.
LAWS:
No, but do you not believe that the Iraq war has escalated the possibility of a terror attack in Australia, given what happened…
TREASURER:
No, I think we were a terrorist target…
LAWS:
I think so too, but I think we are more of one now.
TREASURER:
…you know, you are either a target or you are not.
LAWS:
You see, I think they are both right. I think both the Prime Minister and Mick Kelty are both right.
TREASURER:
Let me take you back a step. We do have a statement from Osama bin Laden, naming Australia as a target because of its stand over East Timor.
LAWS:
Yes.
TREASURER:
East Timor.
LAWS:
Yes.
TREASURER:
Now what happened in East Timor is that the people of East Timor voted for independence, the Indonesian Army withdrew, Australia went in to restore peace and order, we didn’t conquer anybody…
LAWS:
No.
TREASURER:
…we didn’t engage in any war against any religion, but in the twisted mind of a terrorist, if you stand up for democracy and the rule of law and independence, you can be a target. These people are not rational John.
LAWS:
They are certainly not rational, but if they reacted that way over East Timor where we didn’t conquer anybody, as you say, and that is quite right, we didn’t steal a country, if they reacted that strongly over East Timor, you can’t tell me for a minute they wouldn’t act more strongly over what happened in Iraq.
TREASURER:
Yes, but my point is, before Iraq, these people had marked us as a terrorist target and in fact, Australians had been the victim of a terrorist incident before Iraq, so you can’t say, Iraq led to all of this, no.
LAWS:
No, but you can say what he said, that it has made us a bigger target than we were prior to Iraq, and you know, I think he is right, and I think John Howard and you are right, we certainly were a target before Iraq, but I think it is very hard to argue that fact that we are a bigger one now.
TREASURER:
The reality is, and whether we like it or not, people have decided to target us because of who we are and the way we live and what we believe in, and we are either going to respond to that, and defend our people, which is what I believe we should, or in the face of that, we are going to show weakness. And let me tell you, a terrorist will never respect you for weakness.
LAWS:
No. Well I agree with that. But if you take the scenario that occurred in Spain, even though the Spanish Opposition was running the line that we are going to pull the troops out of Iraq before the explosions the other day, but obviously the propaganda machine of the terrorists of Al Queda, will say, well look what we have done here, we have caused troops to be withdrawn from a war zone and we have changed the government of a country. I would be a bit worried about this country when it gets closer to the next election, given that Mark Latham has already said that he will pull the troops out of Iraq as soon as he possibly could.
TREASURER:
So you know what you say to terrorists? You say to terrorists, don’t be under any illusion, we will not give in to terrorism, terrorism will not pay. And if you lead them to believe that they can make terrorism pay, far from defending yourself, you will be opening yourself up to attack.
LAWS:
Yes well, that is exactly what I am saying, because now we have got Mark Latham saying what they said in Spain, we will pull the troops out of Iraq, so if they could cause the vote to change in Spain, what is going to stop them thinking that they couldn’t do the same thing in Australia?
TREASURER:
Well, I am not going to go into a scenario…
LAWS:
No I don’t…
TREASURER:
…playing over that, I am just going to say that as far as I am concerned, and as far as the Government is concerned, the terrorists ought to know this. This is a country that wont be giving into terrorism. Don’t think that it will work.
LAWS:
Well, I think it is good to hear you say that, but I am simply talking to you as speculation is going to be rife that this is a possibility and if it is a possibility, it is a very disturbing one.
TREASURER:
Well, you can speculate, but I think we ought to be clear as a country…
LAWS:
We are not going accept terrorism.
TREASURER:
…and in fairness you know, in fairness I think this would be the Opposition’s view too, I think this would be a bipartisan position, and I think everybody ought to understand that this is a bipartisan position, terrorism will not pay.
LAWS:
I agree with that. Just quickly, because I know you are busy. Are Tony Abbott’s comments on abortion some kind of an attempt to soften us for a cut to funding 75,000 abortions a year, currently subsidised under Medicare, are you going to make a change to that?
TREASURER:
They were personal views, Tony was speaking as an individual, he is as you know a devoutly religious man…
LAWS:
Yes.
TREASURER:
…and we respect his views for that, and he was giving a personal statement on Christian views in relation to abortion and it wasn’t a statement on behalf of the Government.
LAWS:
OK, because it is a very delicate area.
TREASURER:
It is a delicate area and there are big passions and there are terrible choices that people face in this area and we would not want it to become one of those incendiary political issues…
LAWS:
Good.
TREASURER:
…in this country.
LAWS:
That’s good though.
TREASURER:
So I think people have got to respect views, they have got to respect life and I think the dialogue has got to go on in an open way. Let’s not try and turn elections on issues like that. They do in the United States you know.
LAWS:
Yes, I know they do. So, there is no budget going to go on in that area?
TREASURER:
No.
LAWS:
Just finally, if you were a sponsor of St Kilda, how would you feel about these sex allegations?
TREASURER:
Terrible, terrible, it is shocking. You know, we have to be careful here because everyone is innocent until they are proven guilty, but I make the statement in relation to St Kilda that I made in relation to the Canterbury Bulldogs, the players duties are to the police, to tell what they know, the courts will decide whether people are innocent or guilty, but there is a duty to co-operate with the law enforcement authorities, and the only way you can get rid of these things is if everybody is open and tells what they know.
LAWS:
And the sooner the better.
TREASURER:
And the sooner the better, and let them get back to playing football. You know they are young people who get paid a lot of money these footballers, and the temptations and the pressures on them are very great, but at the end of the day, they should be co-operating with the law enforcement authorities. And victims are entitled to protection.
LAWS:
Yes. OK, thank you very much for your time Treasurer, as usual it is a delight to talk to you.
TREASURER:
Great to speak to you, thanks John.