CHIN:
Good evening Mr Costello and thank you very much for joining us. This will be a very popular budget with taxpayers not to mention voters. In the light of that can I ask you when is the election?
TREASURER:
Well the election is due in November of next year. That is three years from the last election but in the meantime of course this is the second budget of this term. We have not fully got the first budget enacted but we will be asking the Senate to pass this budget because it funds important things like defence and security, it funds drought. It produces a surplus and at the end of the day an affordable tax cut as well and I think that is a responsible economic document at a time like this.
CHIN:
But do you concede that this is a vote-winning budget?
TREASURER:
Well, that is not in the way in which we have drafted it. We have drafted it because we think that it is right for the times. We sat down and we funded the military commitments and drought. We had a surplus - $2.2 billion will be used to repay debt and $2.4 billion will be returned to tax payers in the form of tax cuts and I think that is right. If you have retired debt we have now got Labor's debt under control then you can share surpluses with tax payers and that is what we are trying to do in this budget.
CHIN:
The question could be posed why not spend the $2.4 billion tax cut on Medicare for example.
TREASURER:
Well, we are actually increasing spending on Medicare. In the announcement of the Prime Minister I think two or three weeks ago an extra $900 million in relation to Medicare and we are increasing Australian Health Care Agreements, the public funding of hospital, public hospitals. So, we are providing for decent increases in those areas. But, I think that it is important that we keep our expenses under control and where we do that, to return money to taxpayers and that is what we have done in this budget.
CHIN:
In the other area of concern I am assured to a large part of the population is the area of higher education. In this budget higher education students will pay up to thirty per cent more in fees. What do you say to suggestions that you are creating a two tier education system?
TREASURER:
Well, we are creating a system where the taxpayer will fund about three quarters of the student's course and the student will fund about a quarter. And, in order to fund that quarter they will be given an interest free loan which they do not have to start making any repayments on until they earn above $30,000. If they do not earn above $30,000 they will never repay it. So, I think that it is a fair distribution of costs between tax payers and the students and I think that it is a fair funding mechanism for the student to be given that interest free HECS loan to help them through their course.
CHIN:
You do not think that 30 per cent is quite a substantial rise?
TREASURER:
Universities will be given flexibility, for some they will not increase fees at all, they can cut them if they like, but the maximum they can increase them is 30 per cent, but they can not increase them for nurses and teachers. Now, at the end of the day you have got to remember this. If a university is offering a course which is not worth the money it will not get the students. In fact we want to actually get a competitive situation where courses that are not valued by students are not offered, but if there is a course that is worth it, if it is of such an outstanding educational value that students realise that it is worth voting for well that is up to the university. It gives them the flexibility to do that and the money that the university gets, bear this in mind, the money that the university gets does not go to the Government, it goes to the university. Why? So it can provide better tuition and a better standard of education for the student.
CHIN:
Treasurer, thank you.
TREASURER:
Great pleasure to be with you, Lee Lin.