PRESENTER:
The Treasurer, Peter Costello, has been in Washington over the weekend, joining with other Finance Ministers from around the world to ponder the worrying state of the global economy. The Treasurer’s been attending IMF and World Bank meetings, putting the case that Australia’s fundamentals remain good, and that the country is poised to resume strong economic growth. But correspondent Michael Carey asked Mr Costello if that resumption was being held up by deteriorating conditions for Australia’s major trading partners.
TREASURER:
What it does for Australia is, it means that if the world is growing slower, then there will be less demand for your exports and that commodity prices you would expect to be weaker and that will affect the incomes that we earn. The good news for Australia is that now that we’ve taken taxes off exports under our tax reforms, our exports are much more competitive on world markets. With the recent exchange rate, they are super-competitive on world markets and we can actually have significant exports continuing, notwithstanding the downturn. But the downturn will nonetheless affect us as it will affect all of the world. It’ll make things just that little bit more difficult.
CAREY:
Regardless, Australia does clearly need direct foreign investment. Have you had to explain the Woodside deal? Has there been any curiosity as to what, whether that signifies a policy shift on behalf of Australia?
TREASURER:
The situation over here is that people don’t find it that unusual. The United States protects its national interest. Other countries protect their national interest. This is an example of where I made a decision in Australia’s national interest. It does not represent a significant change in our foreign investment policy because investors know, we operate one of the most liberal policies in the world.
But when you are talking about a project which is our largest energy project, which already has substantial foreign investment, and the question relates to who should operate and manage that, you’re entitled to look carefully at the national interest. Other countries do it, and Australia did it.
PRESENTER:
Treasurer, Peter Costello.