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Minchin discusses Govt's technical colleges p -

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Finance Minister Nick Minchin discusses the Government's election promise to build 100 more
technical colleges over 10 years and drive down unemployment.


ALI MOORE: Well, as you heard on Lateline, the Prime Minister stepped up his election campaign
today with a multi-billion-dollar promise on training, the plan being to build 100 more technical
colleges over 10 years and drive down unemployment. While the PM talked jobs, others were more
focused on the environment, and reported divisions between Coalition ranks over Kyoto. These and
many more issues, including that one of industrial relations, are key for Finance Minister Nick
Minchin, who joined me from our Adelaide studio earlier today.

(To Nick Minchin) Senator Minchin, welcome to Lateline Business.


ALI MOORE: Let's start with today's announcement by the Prime Minister of $2.1 billion for more
technical colleges to help get unemployment down to 3 per cent within two years. How firm is that 3
per cent? Is it a promise, or an aspiration?

NICK MINCHIN: That's a goal, Ali. We have set ourselves the goal that if re-elected at this
election, we would hope to achieve the goal of getting Australia's unemployment rate down to 3 per
cent. And now that's, I think, a great aspiration for us to have, for the Australian people, to
continue to ensure that everyone Australian that wants a job can get a job.

ALI MOORE: But as a goal, it's far from a guarantee?

NICK MINCHIN: Ali, with a variable like unemployment, obviously what a government can only do is to
say that that's what we would like to achieve in terms of unemployment rate for this country if
we're re-elected, and that our policies will be directed at achieving that goal if at all possible.
Now of course there are all sorts of circumstances that can intervene, but what the Australian
people should know is that that is our goal and that our policies will be directed at achieving
that goal, so that we can get even more Australians into work.

ALI MOORE: If we can turn to interest rates, do we need a rate rise next week?

NICK MINCHIN: Well, that's a matter entirely for the Reserve Bank. And as you know, one of our most
significant policy initiatives was to grant the Reserve Bank the independence that it now has to
adjust monetary policy so as to ensure that inflation over the cycle remains in that 2 to 3 per
cent band that we've set. Now, the facts are that the CPI (consumer price index) to the year to
date is 1.9 per cent, just below the band. The Treasury in its forecast in the pre-election
economic and fiscal outlook, otherwise known as PEEFO, is forecasting inflation to remain below 3
per cent for at least the next two years, and of course, there are a whole range of issues which
the Reserve will need to take account of, including the instability in world financial, at least
the US financial markets, the possibility...

ALI MOORE: So, I take it from this Minister, that figures you're picking up on, the figures you're
choosing to highlight, you don't see a need for a rate rise?

ALI MOORE: I'm not seeking to do the Reserve Bank's job for it, Ali. That is its job. All I'm doing
is pointing out as an observer, that there are a range of issues the Reserve will need to take
account of in deciding whether or not to adjust the official cash rate.

ALI MOORE: Well, especially against the background of previous assurances by the Prime Minister
about keeping interest rates low, how much damage would an increase next week do to your campaign?

NICK MINCHIN: Well, that's a matter for the political commentators. I'm part of the Government's
economic management team and...

ALI MOORE: And part of selling your team, so how do you sell a rate rise in the middle of a

NICK MINCHIN: Well, you're putting to me a hypothetical. You're assuming that there'll be a rate
rise and then asking me that if that assumption comes to fruition, then how do we handle it?

ALI MOORE: Well, we've got a market that thinks there is an 85 per cent chance of a rate rise. It's
probably a pretty fair hypothetical to put to you?

NICK MINCHIN: Well, I'm not going to indulge in speculation at all, one way or the other. As I've
said, it's a matter for the Reserve. They'll make, I'm sure, a responsible decision, and it's their
decision to make. We'll get on with the job of campaigning on the basis of the extraordinary
position that the Australian economy is in with the lowest unemployment in 30-odd years, very
strong economic growth, relatively low inflation, and relatively low interest rates, and these are
the foundations for the plan we have for Australia's continuing prosperity.

ALI MOORE: Another big election issue, the environment, and the apparent differences in Cabinet
about whether or not to sign Kyoto. Where do you sit? To sign or not to sign?

NICK MINCHIN: Well, I sit strongly with the Government. As a member of Cabinet, I support
wholeheartedly the Cabinet position on issues, and the Cabinet position on issues is that we see
Kyoto as a failed agreement. I note the remarks in the latest issue of Nature, the most widely
respected science magazine, I think, around, which does demonstrate the complete failure of Kyoto
as an agreement purporting to deal with climate change.

ALI MOORE: So Minister, how vigorous a debate was there in Cabinet?

NICK MINCHIN: Well, I'm not going to comment whatsoever on Cabinet discussions of that or any other
matter. All I can comment on is Cabinet positions, Cabinet decisions. And the Cabinet for a very
long time has held and continues to hold the position that Kyoto is a failed agreement. And we've
now been endorsed by reputable scientists in Nature magazine who have set out exactly why there is
no point in a continuing debate about an utterly tokenistic agreement which achieves nothing.

ALI MOORE: Senator, are you happy with the way the campaign is running?

NICK MINCHIN: I'm very happy with the leadership which John Howard and Peter Costello...

ALI MOORE: I didn't ask you that. I asked you whether you're happy with the way the campaign is

NICK MINCHIN: Well Ali, I can't sit here as a commentator. I can only say to you as a participant,
as a member of the Government which is seeking re-election, that we are determined to use every
minute of every day until November 24 to advance our cause and explain to the Australian people why
they should renew our contract with them, and return us to government.

ALI MOORE: Is there any pressure from senior ministers to change tack?

NICK MINCHIN: I'm not aware of any such pressure. The Cabinet discussed the program that we would
take to this election on many occasions. The policy announcements that we've made have all been
done with that blessing, and consistent with our plan for Australia's future. And we're all out
there advocating our case. We know we're the underdogs in this election and we have to work very
hard to persuade the Australian people that we have a lot to offer them, and that we have a very
exciting plan to sustain Australia's prosperity and they should stick with the devil they know.

ALI MOORE: A final question. Last year, you foreshadowed another wave of changes in industrial
relations. Do you stand by those comments?

NICK MINCHIN: I'm very proud of the changes we've made, and it's one of the reasons that I think a
Labor government would be very bad for this country.

ALI MOORE: But if the Coalition is re-elected, will you make more changes, more changes to
industrial relations, which you have been in favour of?

NICK MINCHIN: The Prime Minister has made very clear, since WorkChoices was enacted, that we
propose no further reforms of the Australian industrial relations arrangements. The reforms we have
made have been very important to ensuring that we continue to have prosperity in this country. We
don't propose any further changes. But we will certainly fight against any rollback of the changes
we've made, because they are just so important to Australia's continuing prosperity.

ALI MOORE: So, where does that leave your comments last year to the H R Nicholls Society, when you
did see a need for another wave of reform?

NICK MINCHIN: Well, to the extent that those remarks were reported, they are dead and buried, and
the Prime Minister has made it abundantly clear...

ALI MOORE: You've been told to be quiet, and that's it?

NICK MINCHIN: No, no, no. The Government, and I support the Government in this, has made it
abundantly clear that the changes that we've made are it, and we want to lock those changes in. We
have no further changes planned, and we will fight against any rollback of those changes, because
they would be so detrimental to Australia.

ALI MOORE: That wasn't your view in the first half of last year.

NICK MINCHIN: My position is the same as the Government's. And that is that there will be no
further industrial relations changes, but we do want to lock in the changes that we've made, and
not see them rolled back by a Rudd Labor government.

ALI MOORE: Senator Minchin, many thanks for talking to Lateline Business.

NICK MINCHIN: Pleasure, Ali.