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Treasurer and Shadow Treasurer debate the costs of 'The Things That Matter' -

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PRUE LEWARNE: The Keating Government has stepped up its attack on Alexander Downer's statement The Things That Matter. According to Treasurer, Ralph Willis, what really matters is 36 unfunded spending proposals, adding up to many billions of dollars. From Canberra, Paul Lyneham is speaking with the Treasurer and his Shadow, Peter Costello.

PAUL LYNEHAM: Ralph Willis in Sydney, Peter Costello in Melbourne, thanks to you both for joining us.

Mr Costello, if you were Treasurer and your opponents issued yesterday's document, wouldn't you be asking where is the money coming from?

PETER COSTELLO: Well, it's very interesting, isn't it, because something must have happened on the phone between Tokyo and Canberra. Mr Keating says there's nothing in this statement, and Mr Willis can cost it down to the last dollar. Now, they better get their lines straight on this one, because you can't have both of them saying those two mutually incompatible arguments.

RALPH WILLIS: Well, what they've done, of course, is to release some details of some promise, about 36 promises to increase expenditure and make tax cuts, but no promises at all about how they would pay for them. In that sense, it's a totally distorted package and gives you no idea of the real priorities. What this thing should tell us is not only the things that matter to the Opposition, but the things that don't matter; that is, those areas where they'd make expenditure cuts.

PETER COSTELLO: Oh look, Paul, there's clearly waste right throughout Commonwealth expenditures, and the Government has actually been using taxpayers' money in the most exploitative way to buy votes. Look at the 'sports rorts' affair. You can just go through them - incident over incident over incident, and you can see that the Commonwealth Government hasn't been tight with its own expenditure. It's been screwing down the States, sure, but it hasn't been doing anything about its own purpose outlays, which have risen as a percentage of GDP of 3 per cent over the last decade. That's where the money is going.

RALPH WILLIS: Now, the reality is that this package has billions and billions and billions of dollars attached to it, although unspecified in the document.

PAUL LYNEHAM: Can you work out how many billions?

RALPH WILLIS: Well, of course you can't, because they don't specify the promises, but let me just give you one, in relation to taking the tax off savings, that is, off the interest on savings. Now, Mr Downer said in that document that this was unfair to have interest on savings taxed and, therefore, the implication is it would be removed. He said on your program last night that this was something he was contemplating, but to do that would cost $3 billion for one promise alone, and there's another 35 of them.

So what he's trying to say to the Australian people is: 'Here we are. Here's our priorities. Here's what we're really on about'. But you can't give the whole picture of that unless you're also showing the people the things that don't matter to you. They're the things that you will cut, that you will eliminate and get rid of in order to pay for the things that you want to do. That's what a balanced program does. And what we've got from the Opposition is a totally unbalanced picture, one where they just try to look good to the electorate trying to restore their battered image, and to try to pretend that there is some easy way of paying for all these promises in addition to the $5 billion reduction in the deficit they also say should happen.

PAUL LYNEHAM: Mr Costello, have you done any costings? - private back of envelopes even.

PETER COSTELLO: Let me take that point up that Mr Willis just made. Pardon me for trying to look good to the electorate. Pardon me for talking to the electorate about the things that matter.

RALPH WILLIS: Well, do it sensibly.

PETER COSTELLO: Pardon me for talking to the electorate about the way in which families feel hard pressed, they way in which they see their communities breaking down.

RALPH WILLIS: Well, don't try and delude them.

PETER COSTELLO: And the way in which they see foreign debt detracting from economic sovereignty. Pardon me for talking about a plan to get 830,000 people who can't find a job, back into work.

PAUL LYNEHAM: And pardon me, Mr Costello, have you done any costings?

PETER COSTELLO: Look, Paul, in relation to the announcements that we've made, we've indicated the direction that we're taking. We're going to be .. and we've made this absolutely clear. We're going to be making the final proposals during the election campaign. We have an idea of all of the amounts that are involved in this, and I can tell you that these amounts are matters that are achievable and these amounts are matters that if the Government itself had any idea of the things that matter to Australian people, it would have already taken into account, but it doesn't. It's run out....

PAUL LYNEHAM: So there are some sums somewhere? There are some columns of numbers, are there?

PETER COSTELLO: Look, Paul. Paul, a lot of these proposals have been costed. Various proposals have been costed by independent finance houses in relation to all sorts of things. For example, the ANZ has put out a savings proposal. Mr Willis is actually working on his own savings proposal at the moment. After 11 years he popped out at a press conference the other day that he's had Treasury working on this very idea of the Opposition's.

RALPH WILLIS: I said it months ago.

PETER COSTELLO: Yes, well, you popped it out a press conference, didn't you.

RALPH WILLIS: I said it months ago.

PETER COSTELLO: Did you have any detail? Did you have any costings?

RALPH WILLIS: No. No, I haven't.

PETER COSTELLO: You popped it out at a press conference. And you ought to be taking into account the criticisms that you're hurling. You ought to be looking for the logs in your own eyes before you try and find specks.

RALPH WILLIS: Can I just say on that point that I haven't promised anything about a tax preferred savings initiative; I just said we're looking at it. Mr Costello is saying that they will do it; they will do it. And what Mr Downer said last night on your program is that what he's looking at is taking the tax entirely off interest received from savings, and that will cost $3 billion.

PAUL LYNEHAM: And he says he'll do it by cutting government spending. He won't do it by running up the deficit. Now, we do need to save more. This is a bad idea?

RALPH WILLIS: Well, $3 billion is just the start of the expenditure cuts he'll have to find, plus the $5 billion to reduce the deficit, plus billions more for all the other promises that have been made, and that takes you back to the Fightback level of savings. That is Fightback proposed some $10 billion worth of expenditure cuts, and this involves horrendous cuts for unemployed people, for the sick, for the disabled, for single parents, for Aboriginals, for the ABC dare I say, for foreign aid, I mean, for public housing, for public health.

PAUL LYNEHAM: The document specifically talks about preserving the ABC, as a matter of fact.

RALPH WILLIS: It surely says they'll....

PETER COSTELLO: Don't confuse him with facts.

RALPH WILLIS: He says they'll preserve it. He says they'll preserve it. He doesn't say he'll preserve the expenditure levels. What they said in Fightback was they cut it by $50 million. Now, they'll have to get back to Fightback level of savings to make any sense of this program; that's what it really means, and that is the hidden element of this whole proposal.

PAUL LYNEHAM: Mr Costello....

PETER COSTELLO: Can I just say I'm sorry to confuse Mr Willis with facts, but all of those things that he's just outlined in fact don't sit in the direction's document at all.

PAUL LYNEHAM: Well, Mr Downer, talking with John Laws on Sydney's 2UE, did seem to leave the door open when it was put to him that welfare spending might be cut.

PETER COSTELLO: Well, hang on, Mr Willis has just taken you through about eight or nine items - none of which are mentioned in the document.

RALPH WILLIS: That's my point.

PETER COSTELLO: Yes. Well, that's exactly my point that you're making it up; you're absolutely making it up and you know you are.

RALPH WILLIS: Well, you tell us how you're going to cope....

PETER COSTELLO: You open it up and tell what page it's on.

PAUL LYNEHAM: Mr Costello, he says you cannot make the spending proposals without having to cut other things, and he lists possibilities, some of which were in Fightback.

PETER COSTELLO: Well, hang on. Hang on. Here's somebody who comes out, puts an inflative figure on something, then makes up a whole lot of information that's not in the document. Do you expect me to take that seriously?

PAUL LYNEHAM: But you have put no figures on this. That's the other side of the problem, isn't it?

PETER COSTELLO: Look, in relation to this, we've put forward a number of initiatives. Mr Willis can't even tell you whether they're his policy or not. He says they're looking at them. So, do you want me to put a figure on what he's looking at? He can't even tell you whether it's his policy or not in relation to savings. We've put out here some firm proposals which would make Australia better and are the things that matter to the Australian people. And these are proposals that will make an inroad into all of the problems that have defeated Mr Willis, and the rest is pure political propaganda.

PAUL LYNEHAM: Gentlemen, thanks to you both very much for joining us.