Peter Costello

Media Transcripts

Floods, fuel, Woolworths chief, entity taxation, defence spending, reconciliation

Transcript No. 2000/108

TRANSCRIPT
of
THE HON PETER COSTELLO MP
Treasurer

Doorstop interview
Thursday, 23 November 2000
Walgett
2.00 pm

SUBJECTS: Floods, fuel, Woolworths chief, entity taxation, defence spending, reconciliation

JOURNALIST:

I’d like to ask what sort of impression you’ve had as you’ve been travelling around, particularly with the flood waters?

TREASURER:

Well, obviously the flood has been a terrible tragedy for all of those people that have lost properties and now cannot get crops, either harvest crops or plant crops for next season. It’s a terrible tragedy for them. I think the whole of Australia feels very deeply the sense of loss. The Government has announced immediately a $10 million programme to fill any gaps under the assistance packages. We’re moving very quickly to implement the assistance packages and we’re also talking to banks and other financial institutions to make sure they take an accommodating position. But I can just reiterate the Commonwealth Government stands willing to help and to stand by people at a time of need.

JOURNALIST:

What about the establishment of a national disaster plan that would cover these sort of things in future, like crop losses, for instance, that often don’t come under this assistance?

TREASURER:

Well, look, these things have been talked about from time to time but we’re actually finding that the arrangements which currently exist are meeting the needs. We’ve put an additional $10 million fund if there are problems that aren’t being met, but we are finding that that fund, plus the existing arrangements are meeting the situation. I think the important thing is to get on and start delivering the assistance as soon as possible. It’s a situation where we’ve got to help people get back onto their feet as soon as possible.

JOURNALIST:

Have petrol prices been, come up much as you’ve been travelling around?

TREASURER:

People have a genuine interest, I think, in petrol prices and we had quite a discussion about it in Goondiwindi last night, which are of interest to people all over Australia. And, like everybody in Australia, I think that petrol prices are obviously causing a lot of trouble for family budgets. And that is caused by the rise in the price of oil, which in Australian dollar terms has gone from about $18 to $64 in the last 18 months. And until there is some reduction in the price of oil, then we won’t be able to bring those prices down.

JOURNALIST:

There’s no other solution that the Government’s considering?

TREASURER:

No. The price rise has been caused by a rise in the price of oil. Until you bring back the price of oil, the barrel price of oil, you’re not going to be able to deal with those price rises – which are very high, very significant, but if you’ve got a price of petrol which has trebled, price of oil which has trebled, I should say, then your price of petrol is going to move accordingly.

JOURNALIST:

So do you think the Government’s message is finally sinking in, especially from the primary producers – that is, that it is world factors dictating these price rises?

TREASURER:

I think people who’ve looked at the issue carefully know that the big factor that’s occurred is that the world oil price has gone up. Anybody who says that this is a consequence of Australian conditions, would have trouble explaining why oil prices have gone up in the United States, why they’ve gone up in the UK, why they’ve gone up in France, why they’ve gone up in Germany. And I think people who’ve thought about things to that extent know that, because the world oil price rises, petrol price rises as well. There’ve been a few people who have run around and tried to make political capital to try and say that this must be a fault of something else, but you don’t have to think too long to realise what the cause of rising petrol prices is.

JOURNALIST:

Were you surprised last night that questions were more about fuel in general, and there was only one that only mentioned excise? Does it mean that maybe your message is getting across?

TREASURER:

Look, I find that because this is a complicated area - you’ve got world factors, you’ve got Commonwealth taxation regime, there’s an excise, there’s GST, you’ve got State subsidies – that people don’t really understand the way in which all of these factors interact. And if somebody comes along and says to them, well, you know, just blame Canberra, you can get a few people in for a short period of time. But once they sit down and have it actually explained that, in the petrol price, there’s the world oil price, the world oil price is set in US dollars, a big factor is the world oil price, another factor is the exchange rate. And that is the principal determinant of why prices have gone up. And then they say, well can’t we do something about Australian oil? And you explain that Australian oil is sold on world markets, this is a global commodity, we don’t have a separate price structure, we can’t maintain a separate price structure. People realise that these are international factors. And the best thing to be done in a situation like this, is for us to add our weight to every other country in the world – the United States, Japan, France, Germany, Britain – in calling for increased production so that the world oil prices come back. That is the most practical answer to this situation.

JOURNALIST:

But don’t you get a sense that some people don’t believe the Government lines – I say you, the Government – appreciates how much of an impact it’s having on household budgets and family budgets? The cost of getting to work and back again if you live in western Sydney or western Melbourne?

TREASURER:

Look, I think people are rightly and justifiably angry about high petrol prices. So am I. Rightly and justifiably. I agree with them. And I suppose people will say, well, don’t tell me to complain to a Saudi prince.

JOURNALIST:

Precisely, I mean it didn’t work in 1972. Why’s it going to work in 2000?

TREASURER:

… let me register my feeling here in Australia, and that’s a fair thing. But then you move to the next step, and you say, well, if the cause is the international oil price and you want to actually do something positive about it, you better come up with an idea of dealing with the international oil price. And once you move to that stage, the stage of and now let’s think constructively about what can be done, that’s when I think people get a more serious appreciation of the issues.

TREASURER:

The boss of Woolworths today has, or yesterday, has made a very strong attack on the Government for not doing enough for the rural areas. What’s your response to that?

TREASURER:

Well, I haven’t seen his attack, but look, the boss of Woolworths is entitled to his views. It doesn’t mean that they’re right. He runs a corporation. He’s entitled to state his views. But I don’t think anybody would say that, just because you’re the boss of Woolworths, you’re an export on rural policy, Michelle. I don’t know if you’ve ever argued that before, if I may say so.

JOURNALIST:

On another matter, Peter Reith seems to have signalled his intention to oppose in Cabinet aspects of your entity tax legislation, apparently the profit first rule it’s called. Will you continue to fight for that or will you be seeking concessions as a result?

TREASURER:

I don’t know what Peter has signalled. I’m here in Walgett today. I was at public meetings in Goondiwindi. I’m dealing with the issues that are here and I don’t know what’s been signalled.

JOURNALIST:

So will you stick to your line, though, on that matter?

TREASURER:

Well, look, until I actually am told what Peter said ...

JOURNALIST:

I could show you, Treasurer.

TREASURER:

Well, I’d rather hear it from Peter, if that’s all right, Geoffrey. Until I’m entirely sure as to what Peter has said, until he reports his views to me, I don’t think it’s wise for me to, sort of, comment because he may have been misreported and I may compound that misreporting by commenting on that.

JOURNALIST:

Now there’s also been speculation that the low dollar will compromise the big defence money rise. Was that built into the calculations? In other words, by making [inaudible]?

TREASURER:

I think I can assure of this: that, when the White Paper comes out, it will outline the kind of defence capability that we will build in Australia, and we will fund that capability.

JOURNALIST:

So it’s dollar-proof, as it were?

TREASURER:

Well, we’ll fund it in whatever currency it’s either constructed or purchased. Some of these, if I may say so, some of these acquisitions are in five years time and 10 years time So, I think you’d be a brave person if you wanted to now forecast the exchange rate in 5 years time or 10 years time. But what I can say to you is that we will be delivering on that programme in the currency at the exchange rate that it happens to be at that time. You’ve got to remember that the Commonwealth actually does a lot of transactions, foreign exchange transactions, and whilst a devaluation can cost in some areas, it can produce gains in other areas, and conversely. So it’s not all one way in relation to the exchange rate.

JOURNALIST:

[inaudible] indigenous leaders, Mr Costello. Will you go on the walk in Melbourne, the reconciliation walk?

TREASURER:

Well, I haven’t looked at that yet. Somebody raised that with me today and I said I haven’t …

JOURNALIST:

One of the indigenous leaders?

TREASURER:

Yes. And I said I hadn’t actually seen it come across my desk. So I said it depends on what’s happening.

JOURNALIST:

So you’re not ruling it out at this stage?

TREASURER:

I’m not ruling anything in, and I’m not ruling anything out. I only really had it drawn to my attention today.

JOURNALIST:

Why do you have any doubts about doing that?

TREASURER:

Well, I don’t know what date it is, Michelle, and I don’t know what I’m doing on that date, surprisingly enough.

JOURNALIST:

If you’re free, will you go?

TREASURER:

We’ve been through these sorts of discussions before, if I may say so. Just calm down, you know. I mean, we’ll just all calm down and work out where we’re going, what we’re doing.

23 Nov 2000

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