JOURNALIST:
Mr Costello, welcome to the programme.
TREASURER:
Good morning, it is good to be with you.
JOURNALIST:
Are you encouraged by that response from Dr Cullen yesterday or would you have expected him to be more enthusiastic?
TREASURER:
I think that is the appropriate response and it is something that now the two countries will have to negotiate in more detail. The way in which this arises is that Australia has entered into a Free Trade Agreement with the United States, under that we exempt certain levels of American investment from screening under Australia’s foreign investment laws so that the American investors don’t have the level of screening that New Zealand investors have. And as far as we are concerned our first class friends, the New Zealanders, should have the same access as the Americans do and we would like to have a similar agreement between Australia and New Zealand as we have between Australia and the United States and that is the offer that we have made to New Zealand and we look forward to a response.
JOURNALIST:
Obviously this would require New Zealand to change its scrutiny of Australian investments by the overseas investment commission?
TREASURER:
Sure that is right. These things work in a way, you make an offer as to the advantages that you would give New Zealand companies in Australia and in return New Zealand makes an offer as to the advantages it would give Australian companies in New Zealand.
JOURNALIST:
Are Australian companies telling you that they want more access to invest in New Zealand that they find the Commission is frustrating them?
TREASURER:
It is not a big problem for Australian companies, as you know a lot of Australian companies do invest in New Zealand and it is a welcoming regime. It doesn’t really arise out of any perceived problem there, the way it arises is because we have gone down this path with the United States because US companies now have these advantages it means that US companies are now getting preference in the Australian market as against New Zealand companies and we regard our New Zealand ally as close friends, first class friends just like our American ally and as far as we are concerned each should get privileges in the Australian market, that is the offer we have made, it is up to New Zealand now to respond to it.
JOURNALIST:
Mr Costello, I wonder if CER is down to you coming here and making us offers to things we haven’t necessarily asked for, whether or not there is some problems with keeping with CER relationship fresh and vital and moving ahead.
TREASURER:
Well this is the way you keep the relationship moving ahead. The CER when it was first brought in and bear in mind a lot of people would have been critical at that time on both sides of the Tasman, was an agreement for free trade in goods. But in a modern society goods are just one part of the trade, services are a much bigger part and investment is part of the service market. Now, you either recognise that economies move on and you take your relationship into new areas or if you don’t, your agreements fossilize in relation to economic conditions which are past and that is why you take a goods agreement into services, into investment to keep it modern and fresh and recognise new economic realities. JOURNALIST:
Just another couple of things I want to deal with quickly, are you going to be talking about imputation tax regimes even though we are still working ours out, and private retirement savings being transferable across the Tasman?
TREASURER:
Yes, we have looked at all of these things and we think we can make progress particularly in the retirement savings area because we have a different retirement saving system on each side of the Tasman, people cross the Tasman for a few years of work, they feel that they get disadvantaged in the retirement savings area and we have said that we are going to look at enhancing affordability there.
JOURNALIST:
Any progress on apples, finally?
TREASURER:
Well as you know Australia has opened its market to apples subject to the quarantine issues and those issues will be worked through and I expect that the market will open up in relation to apples.
JOURNALIST:
Thank you very much indeed for joining us.