MITCHELL:
Federal Treasurer, Peter Costello good morning.
TREASURER:
Good morning Neil.
MITCHELL:
Now, you will be at the barbecue today, is it BYO? Do I have to take any tinnies?
TREASURER:
I don't know. I read in the paper that they have got a menu, but just in case, you could try. I suspect that your tinnies will be x-rayed though, Neil.
MITCHELL:
How do you think Australians will react to this visit, react to George Bush?
TREASURER:
I think that they are interested in seeing President Bush up close. Obviously he is the President of the world's most powerful nation, its largest economy, its greatest military power. So they will be interested to see him up close, they will be interested in what he has to say, they will be interested in what the outcomes are for Australia, particularly in terms of trade and economic linkages. And apart from all that, I think they will see it as two friends, Australia and America, in a spirit of openness and honesty exchanging views.
MITCHELL:
Are you concerned there could be a protest in the Parliament during his speech? I mean they are talking about shouting out at the President.
TREASURER:
My view Neil, is that if they do that it will be totally counterproductive. I don't think the public would support it for a moment. And if they do it they might be playing to the far left of Australian politics, but I think the general public won't think much of the Members of Parliament that try stuff like that.
MITCHELL:
Will you have a private meeting with the President?
TREASURER:
Senior Ministers are having a meeting with him this morning.
MITCHELL:
What do you hope to achieve? What will come out of it?
TREASURER:
Well I will have an exchange on economic issues.
MITCHELL:
And what do you want, what do you want from it?
TREASURER:
We will talk about some of the world economic problems, particularly the state of the world's economy and other matters that are effecting our economy and the world. Of course, you heard the expression that if America sneezes, the world catches a cold. It is the world's largest economy, what happens in America influences the globe, and what influences the globe affects Australia and so, we will probably be discussing some of the economic issues.
MITCHELL:
Is there a chance he wants money out of it?
TREASURER:
No, I don't think the American President would want money out of us.
MITCHELL:
No, (inaudible) discussion they might want more aid in Iraq in particular.
TREASURER:
Oh, well, there is a conference going on at the moment in Madrid, to pledge money for the reconstruction of Iraq, and Australia will be making a pledge. But, that is for Iraq, that is not for the United States, the United States is the world's largest economy and doesn't require money from us.
MITCHELL:
What about the Free Trade discussions, some of the protesters are saying, well this could cost Australia jobs. Will there be something firm to come out on trade?'
TREASURER:
Well, we will only be entering into a Free Trade Agreement which is beneficial for the Australian economy, and which overall, creates jobs. That is why you enter free trade agreements, because if you can boost trade, then you boost your economic growth, then you boost your jobs. Now, that Free Trade Agreement is not going to be signed today. You have negotiators that negotiate these things Neil, and it is the most complex thing. They go from subject to subject, they go from agriculture and then they go into foreign investment, and then they go into thousands of different issues. That won't be signed today, but obviously today, what we will be doing, is, we will be pushing the advantages for Australia of a free-trade agreement. If you can get free trade into the world's largest economy, it is going to be a mighty lot of help for our exporters.
MITCHELL:
We are going to have to give something back, the cultural issue continues to be raised, that is seen as sort of a non-tariff barrier, Australian content on television. Will we give ground on that?
TREASURER:
That is one of the issues that we will have to negotiate on. Neil, you have only got to turn on your television set every night to see that there is a lot of US content in this country. The question is whether there should be current restrictions, or whether there could be loosening of some of those restrictions. That will be negotiated.
MITCHELL:
So, I accept that it is not going to be signed today, but is today an important step in it...
TREASURER:
Oh, sure.
MITCHELL:
...or is it purely just politics?
TREASURER:
Oh, no, it is an important step, because the free-trade impetus in fact came from President Bush himself, and there are many lobbies in the United States that are against a free trade agreement with Australia so, if the free trade deal is going to happen it is going to be the influence of President Bush that will push it against those American lobby groups.
MITCHELL:
Who would benefit, in Australia, from the free trade, directly?
TREASURER:
People who currently can't get their goods and their services into the United States, either because there are quotas or tariff barriers...
MITCHELL:
Agriculture?
TREASURER:
Agriculture, ships, we build these fantastic catamarans here in Australia. We can't get those in to the United States. Cars, some of the Australian made cars face tariff barriers going into the United States, so, anybody who has got a current barrier on them going into the United States, if that were lifted, would benefit.
MITCHELL:
Just to put it in context, you have got the US President here today, the Chinese President here tomorrow, how important are these couple of days in Australian history?
TREASURER:
Well, extremely important. You have got the leader of the world's economically and military most powerful nation. You have got the leader of the world's most populous nation, China, and the world's most fastest growing economy. You see, as China comes out of communism - the whole economy of China was held back by communism - as it comes out of communism, its economy is starting from the very low base, a billion people but a very low base. As it opens its markets and moves away from communism, coming off that base the growth rates, are much higher than they are in developed countries, because we have already been through that stage of development. But this is a country which is coming through what has taken in the western world you know, maybe a hundred years, might be coming through in 20 years.
MITCHELL:
Just finally, the Australian dollar is high, you were warning about that yesterday, the dangers of it. We are not happy when it is low, we are not happy when it is high.
TREASURER:
Well, most people would be happy with a high Australian dollar. They will say to themselves, well isn't that great, you know, if we go overseas, the dollar will go further, if we are buying goods from overseas then they will be cheaper. And I think most Australians feel that a high dollar is, it bucks up their spirits if you like. But in reality, in economic terms - that is one side of the equation - the other side of the equation, it makes it harder for our exporters. The Australian dollar has gone up 25 per cent this year against the American dollar, and that means for out exporters, in US dollars terms, they have lost 25 per cent competitiveness.
MITCHELL:
So there are dangers for Australia.
TREASURER:
Well, the difficulty is for our exporters. It is going to make life much tougher for our exporters and if you make life tougher for our exporters that will affect economic growth. So, it sounds a funny thing to say because most Australians would say a high dollar good. The warning I am giving is high dollar, difficulty for exporters.
MITCHELL:
Well, thanks for coming in, I know it is a very busy day. Have you ever seen Canberra so tidy?
TREASURER:
Tidy?
MITCHELL:
Clean and tidy?
TREASURER:
Well, look it is generally a pretty tidy place as you know, I have never seen so many barriers on the streets and I have never seen so many security guards on those barriers, I think I can say that.
MITCHELL:
What about those fighter jets? Did they keep you awake all night?
TREASURER:
They did actually, they were pretty noisy last night, weren't they? I was counting the intervals between them as they went over.
MITCHELL:
What are you going to say to the President?
TREASURER:
We will talk about matters of interest between our two countries.
MITCHELL:
What do you call him, George?
TREASURER:
Well, formally, Mr President.
MITCHELL:
OK, Mr Treasurer, thank you.
TREASURER:
Mr Mitchell, thank you.