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Costello accuses Labor of being 'slippery' -

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TONY EASTLEY: A lot of talk about the Coalition's plans, its future and perhaps even the latest
Newspoll figures. We have the Federal Treasurer, Peter Costello, on the line. Asking the questions
of him, Chris Uhlmann.

CHRIS UHLMANN: Peter Costello, good morning.

PETER COSTELLO: Good morning, Chris.

CHRIS UHLMANN: Peter Costello, you're going backwards in the polls. Are you losing this election?

PETER COSTELLO: As I move around the key battleground seats, it's clear to me that this is a very
tight contest and I think the choice is becoming clearer.

The choice is now crystallising between those people who have experience in policy to manage the
economy, and Mr Rudd and his team who have yet to really announce any substantive policy that
hasn't been copied from the Coalition.

And I think people will be asking themselves, after four weeks, Mr Rudd has been saying that he had
new leadership, but we find out his policies are all Coalition policies and he's offered nothing
new in this campaign, so I actually think in key battleground seats, as the choice becomes clearer,
it's becoming a tighter race.

CHRIS UHLMANN: You and the Prime Minister keep making this argument, that this recourse to
experience, but of course that experience didn't stop interest rates from going up last week, did
it?

PETER COSTELLO: Well, let me say, Chris, with an interest rate of 8.5 per cent, we've got lower
interest rates than at any time during the previous Labor Government, including in the depths of a
sixty year recession. Now, you've always got to judge the interest rate at any particular time on
the unemployment rate. The fact that unemployment is as low as four per cent, or a little above,
and where interest rates are at 8.5 per cent, is miles away from the last time, when Labor had its
unemployment low at around six and interest rates at 17 per cent.

CHRIS UHLMANN: In fact, you cast all the way back to the Whitlam Government in your ads. Why do you
leave out the Fraser Government's record on interest rates?

PETER COSTELLO: Well, we'd like people to know that this has been a recurring theme of Labor
governments over the last thirty years and the important thing, to go back to the Whitlam
Government, is it was under the Whitlam Government that unemployment was last this low, before
Whitlam got to the economy.

You will recall unemployment had been about two or three per cent during the period of the late
sixties and early seventies. Whitlam got to the economy, he drove it up to four, interest rates
were about 10.5 at that point. That's the last comparable period of four per cent unemployment. We
like to compare where interest rates were the last time we were on four per cent unemployment...

CHRIS UHLMANN: But if we are to have history lessons, why not look at John Howard as treasurer? The
market cash rate went to 22 per cent, and the only thing that stopped housing, home loan rates from
following them was that they were capped, they were regulated at 13.5 per cent.

PETER COSTELLO: Now, this is an important point because Kevin Rudd falsely and repeatedly claims
that interest rates were higher under John Howard. They were not. Home...

CHRIS UHLMANN: He stopped them from going up. He regulated them. That would work for anyone,
wouldn't it?

PETER COSTELLO: Well, it wasn't just him.

CHRIS UHLMANN: But it was the Fraser Government.

PETER COSTELLO: No, all governments prior to the 1980s did that.

CHRIS UHLMANN: So you are not comparing apples with apples, then.

PETER COSTELLO: So you are not comparing apples with apples!

CHRIS UHLMANN: No, you are not comparing apples with apples!

PETER COSTELLO: No, no, you are not comparing apples with apples! If you want to compare business
interest rates, compare business interest rates and I'll do that with you. But if you want to
compare home mortgage interest rates, the all-time, world record, holder of the highest home
mortgage interest rates in Australia is the Labor Party at 17 per cent.

CHRIS UHLMANN: Treasurer, do you think there is a housing affordability crisis and will the Prime
Minister be saying something about that today?

PETER COSTELLO: Well, I think because the price of homes has gone up, it's making it much harder
for young buyers to get into the market, yes I do. And that's because the value of homes has gone
up and people are borrowing more to buy them. But we will be making some measures, which will
assist young people with getting into the market.

Don't forget, we were the government that introduced the first homeowners grant of $7,000, which
has now gone to a million young home buyers. We know that it's important that supply be increased,
because if you want to have more homes available for young people, you've got to have more homes
built and we think buying a home is a very important thing for young people and Australians
generally.

In fact, Australia still has one of the highest home ownership rates in the world.

CHRIS UHLMANN: Will you be doing something on education, particularly tertiary education? It has
been a key point of attack from the Labor Party against you all year.

PETER COSTELLO: Well, our Government values education. And our government has actually been very,
very keen on lifting standards.

CHRIS UHLMANN: But we have seen the money spent on tertiary education going backwards.

PETER COSTELLO: Well, no, you haven't. Again, this is not true. The money has been rising. There
are...

CHRIS UHLMANN: The money has been rising but the proportion that you're spending as public money is
going down.

PETER COSTELLO: Well, you've got to be very careful when you see the old slippery Mr Swan and the
even slipperier Mr Rudd say education spending is...

CHRIS UHLMANN: Are you not artful yourself with figures sometimes, Treasurer?

PETER COSTELLO: Oh, hang on, Chris, that is not true, and you've corrected yourself, quite rightly
corrected yourself, if I may say so. But let me say, it is very important that we invest in
education.

We've been lifting standards in schools, we want to have literacy and numeracy improved, we want to
have national testing, we want to have grants to improve the training of teachers, we want to have
teachers who get more time in practical experience before they become teachers, and we want to make
sure that our education institutions are not run by the providers, you know, the teachers, they're
run for the benefit of the parents and the students.

The teachers are going to be a very big part of that and we need good teachers to be a part of that
but we need to make sure that the educational systems are run for the benefit of the students and
the parents to get the best education that we can possibly give them.

CHRIS UHLMANN: Finally, briefly, Treasurer, can you win this election?

PETER COSTELLO: I think that in key battleground seats, as the choice becomes clearer, the margins
are narrowing. And I think that as the debate goes on over the next two weeks, people are going to
say, "Well, here is a government, which has a fine track record, but it more importantly strong
plans for the future and policies." And against that is an Opposition that has no experience, but
worse than that, no real policies. If it... if we hadn't have been writing the policies in this
election campaign, Rudd would have had nothing to copy. And that's a problem for him.

CHRIS UHLMANN: Peter Costello, thank you.

PETER COSTELLO: Thank you.

TONY EASTLEY: The Federal Treasurer, Peter Costello, speaking with our chief political
correspondent, Chris Uhlmann.