JOURNALIST:
The first two are regional Queenslanders, Treasurer. I guess, why are you here? Why are you out and about talking to the people?
TREASURER:
Well, Peter Lindsay’s been putting the needs and the concerns of this area to us for a long period of time and wanted me to come up and to visit, to look at some of the projects that he’s been pushing. And he’s been pushing them very actively in Canberra, I can assure you of that. Doing a fabulous job down there. So we’re meeting with some of the business people here, talking about some of the introduction of the new taxation system, some of the announcements that the Commonwealth has recently made in relation to road proposals, which I think would aid the area considerably, and ensuring that we hear the concerns that this area has and the direction they want to see Federal policy go.
JOURNALIST:
How much money is going to be actually put into roads, Treasurer?
TREASURER:
Well, we’ve indicated that we think it’s a priority to rebuild regional and rural roads, and we are going to put a very sizeable sum in.
JOURNALIST:
Is it going to be close to the billion dollars that was flagged by the Prime Minister?
TREASURER:
Over a period of years it is going to be a very substantial sum. I expect that the actual amounts will be announced on the weekend. Cabinet discussed this yesterday, but it’s a one-off opportunity to re-build local roads in rural and regional Australia. We’ve not seen anything like it. This is going to be something that’s sort of once in a decade, once in a two or three decade opportunity, to rebuild those roads. And I think it’ll be very important for the infrastructure and economics of regional Australia.
JOURNALIST:
Queensland will benefit?
TREASURER:
Queensland will be a big winner … [inaudible] … the proposal to rebuild those regional and rural roads. There will also be, I should say, a capacity for those that are living in metropolitan areas to also enjoy an upgrading of their infrastructure. But the way in which these things work out, it will be rural and regional Australia in particular that will benefit.
JOURNALIST:
Do you hope that will placate the anger over the fuel?
TREASURER:
Well, I hope what it will do, is, it will give us the opportunity to rebuild the infrastructure. The problem with fuel prices, which are too high – fuel prices are too high in Australia because the world price of oil is too high, and the key variables that are influencing fuel prices in Australia is number one, the oil price and number two, the exchange rate. Anyone who comes up with plan which they say will take those prices off, and the plan doesn’t involve getting the world oil price down, they’re not being entirely honest. It’s the world oil price that has to come down before Australian motorists can get relief from high petrol prices. Now, we in this country, we work in all of the international fora. When I was at the APEC Finance Ministers’ Meeting, we took a very strong line on this. When the Prime Minister was at the Leaders Meeting. We raised it again at the IMF. We’re raising it on the diplomatic front with the nations of OPEC. And until you can get the world oil price down, you’re not going to get the kind of relief, the substantial relief, that we want to see for Australian motorists.
JOURNALIST:
What about the National Party leader in Queensland warning yesterday that petrol prices could cost the Federal Government the next election? What do you have to say about that?
TREASURER:
Well, look, it wouldn’t be a normal day if somebody didn’t have an idea of some kind or another, and obviously we take all these ideas on board. But we’ve looked very carefully at petrol. You’ve seen the US dollar price of a barrel of oil, go from about $10 to $33 in the last 18 months. You’ve also seen substantial movement on the Australian exchange rate. That’s what governs the price of petrol. The last indexation, everybody’s talking about indexation - the last indexation was 0.6 of a cent. It’s not the 0.6 of a cent people are worried about, it’s the 10 cents, the 12 cents, it’s the 14 cents, that comes from world oil prices. And if you want to do something meaningful about petrol, we’ve got to attack the real problem, which is the world oil price.
JOURNALIST:
So, Mr Lindsay about 12 months ago said a freeze on fuel excise would be a good idea.
TREASURER:
Well, he, Peter, put some proposals to me, which he’s perfectly entitled to do and right in doing. He represents his electorate, I can assure you. And can I make this point: You should know that he does it very actively. I don’t think anybody in Canberra is in any doubt, whilst this electorate is represented by Peter, what this electorate feels. And I pay tribute to him. I’ve been in the Parliament long enough to have seen a number of Federal Members from this area, and I can tell you this: the best one is Peter.
JOURNALIST:
That’s sort of like an election kind of statement.
TREASURER:
Well, I like to view it as a factual statement, myself.
JOURNALIST:
So you haven’t come into Peter’s electorate today to put a freeze on fuel excise because he called for that 12 months ago?
TREASURER:
The way in which fuel is excised in Australia is under an Act of Parliament which was put in place I think in 1983 - 17 years ago – by the Labor Party. And that legislation just guarantees the way in which indexation operates. The one thing our Government did, as you know, is we cut the excise on diesel for heavy transport by 24 cents a litre on 1 July. And that gave a lot of relief to people who are transporting long distances on heavy transport. So that’s one of the things we could do. But the way in which the indexation actually works in relation to petrol has been set in legislation since 1983.
JOURNALIST:
Mr Costello, the perception out there, though, and the anger in the community which you may have heard, is that the excise indexation is costing motorists money and quite significant amounts of money out of their pocket. Is the Government prepared to lose seats over this issue, over a couple [inaudible]?
TREASURER:
The excise indexation was 0.6 of a cent.
JOURNALIST:
I understand but the perception [inaudible]
TREASURER:
Well, that’s the point. If perception is that rises of 10, 11, 12 cents, which we’ve seen, has something to do with indexation, that’s not the right perception, is it? That’s why I think it’s important that we always go over the facts. The indexation factor was 0.6 of a cent. People aren’t complaining about 0.6 of a cent. People are complaining, rightly complaining in my view, about 10, 11, 12, more cents, a litre and the 10, 11, 12, more cents a litre is a consequence of a rise in the oil price which goes to make petrol, which has nearly tripled. And anybody who tells you that you can solve petrol prices by dealing with indexation, is not giving the facts. The facts are that if you want to do something about petrol prices, and we do, gee we do, of course we do, it’s the oil prices – the thing that actually governs it – that you have to deal with.
JOURNALIST:
What about this roads stance, though, making better roads [inaudible] especially the bush, here, because the roads are pretty ordinary.
TREASURER:
We’re building better roads. That’s a consequence, really, of good economic management. Can I make this point: If we were still running a budget in deficit, of $10,000 million per annum - which is what we were running before the Coalition was elected, before I became Treasurer - if every year we had to pay the interest bill on another $80 billion worth of Commonwealth debt, which we did, you just couldn’t afford to build roads. The reason the roads weren’t built under Labor was that their economic management was such that it couldn’t be afforded. Now, as you improve your economic management, get your budget into surplus, you pay down your debt, one of the consequences is that people can share in benefits of good economic management. In this case, one of the benefits of good economic management will be improved roads. That’s the kind of improvement you see from economic management. But it starts from the management. If you don’t get the management right, you can’t do these things.
JOURNALIST:
Whispers in the bush this week are a way to, because this is probably one of the most marginal seats in Australia, you haven’t been here before. Is this [inaudible]
TREASURER:
No, I’ve been here before.
JOURNALIST:
To Townsville?
TREASURER:
Yes I have.
JOURNALIST:
As Treasurer?
TREASURER:
Yes. I’ve been here before as Treasurer. But that’s neither here nor there. I try and come to north Queensland as much as I can, just as I try to go to northern New South Wales as much as I can, just as I try and go to all parts of Australia as much as I can. Your question is, is it part of an election push? It’s part of one, backing up good policy, two, making sure that we’re in touch with the needs and the aspirations of the locals and, three, it’s a consequence of supporting my friend and colleague, Peter Lindsay, who’s been after me to come here probably on a yearly basis, on an annual basis.
JOURNALIST:
Will welfare groups expect to get something out of the Government before Christmas or is it with road announcements and other announcements, is there likely to be a welfare announcement? Support pack?
TREASURER:
Well, we’ve got on the table what’s called the McClure report for reforming welfare and the Government is dealing with that. That’s a longer term proposal. I think we said re-designing the welfare system could take quite a long period of time. Look, we’ve just redesigned the tax system. The argument about redesiging the tax system started I think, in 1974 and it’s finally been accomplished in the year 2000. And it hasn’t been fully finished yet. So, once we’ve finished reforming the tax system, we move on to the welfare system and that will be a longer term project. But we’ll announce that [inaudible].
JOURNALIST:
Are you happy with the OECD’s report on [inaudible]?
TREASURER:
The OECD reported that it expected the Australian economy to grow at about 4.2 per cent, from memory, this year and about 3- for the next couple of years. Faster than the United States, faster than any of the G7 countries – France, Germany, Japan. It reported that it expected our inflation to be low and for unemployment to fall. And that’s the kind of economic management that we want to keep occurring in Australia. Since our Government was elected, there have been 800,000 new jobs. It doesn’t mean you can stop and give up the game. You want to create more jobs, give young Australians the opportunity to find work. If we keep good economic management, we can do it.
JOURNALIST:
Will the Government be offering zone allowance tax breaks for people in remote areas in the lead-up to the next election?
TREASURER:
Well, for obvious reasons I’m not going to detail what our election policy would be now, so, I wouldn’t take that as a yes or a no. Obviously, if we announce an election policy, we’ll announce it during the election. I don’t think there’ll be an election before Christmas. I think I can tell you, you can all relax. I don’t think there’ll be an election before Christmas.
Thanks very much.