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Melbourne, 12 May 2000: transcript of doorstop interview [budget, Telstra]



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Transcript No. 2000/53 TRANSCRIPT of THE HON PETER COSTELLO MP

Treasurer

Doorstop

Melbourne Friday, 12 May 2000 12.40 pm

 

SUBJECTS: Budget, Telstra

TREASURER:

Last night we saw probably one of the weakest replies to the Budget that there’s ever been delivered by Kim Beazley - 30 minutes but not one policy. Opposition Leader for four years, but not one policy. A reply to the Budget, but not one policy from Labor. And this morning he was asked this question on radio about his rollback policy:

"If you give less money to the States from the GST", this is Jon Faine, "where do you get the extra money that you propose to pass to them?"

Beazley: "The same place you get the extra money that you’d spend on education and the other matters that I’m talking about."

What place is that? Mr Beazley is now going to get money to roll back the GST, and money to spend more on education, and money to spend more on infrastructure, and money to spend more on regional development, but he can’t tell you where it is because it’s coming out of income tax rises. And this morning he even said to Jon Faine, he asked Jon Faine whether Jon would write down on a sheet of paper some policies for him. You’ve now got the Opposition Leader asking radio journalists to write his policy for him. He’s just a blank sheet of paper wanting to be written, and he’s now asking Jon Faine to write his policies for him, because after four years, not a policy, not a proposition, not a proposal, not an idea, not a future.

 

JOURNALIST:

Treasurer, how do you respond to claims that there’s a $1.6 billion hole in your Budget because of the way that the State loans are being treated?

 

TREASURER:

Well, by saying what’s been agreed between the Commonwealth and the States, that the Commonwealth would give the States loans, which they’ve agreed, and asked for, and signed up for, and the Commonwealth is giving them, as it announced in its tax policy, as it has announced in its Budget, as it has announced in its Mid-Year Review. And some of the States might say, oh, we’d rather have grants than loans, but the agreement is that they have loans. That’s the agreement.

 

JOURNALIST:

Treasurer, could I ask you whether you’d respond to the Australians whose share prices you drove down earlier in the week by your comments on Telstra.

 

TREASURER:

Well, of course your question is falsely based. And of course I wouldn’t respond to a question which was falsely based.

 

JOURNALIST:

Don’t you think that those shareholders deserve an apology. Their share prices did drop, and analysts are saying it was off the back of your comments.

 

TREASURER:

Well, your question is based on a false premise. It’s one of those questions that is based on a false premise, designed to be unanswerable.

 

JOURNALIST:

Why do you say it’s false?

 

TREASURER:

Well, you assume something in your question. You want to ask a question that doesn’t make any assumptions and is a real question, we’ll answer them.

 

JOURNALIST:

Treasurer, what’s your response to the GST being blamed for the (inaudible) per cent price hike on light beer?

 

TREASURER:

Well, what’s happening in relation to that, is, that I understand that one of the States, possibly New South Wales, is now talking about removing a subsidy or a grant in relation to light beer. Something that it has never raised before in relation to the tax reform, and something which none of the other States have yet tried to get away with. And we won’t let the States get away with that. The State Governments are not entitled to withdraw their subsidies and to ask the Commonwealth to pick up the difference. The State Governments have had those grant schemes in relation to light beer all along, and they should continue them, and we will be requiring them to continue them. And if they require, if they do continue those particular grants and schemes, there will not be the price rise. The beer will rise by 2 per cent, which is the Government’s policy.

 

JOURNALIST:

Treasurer, could it be argued that your comments earlier in the week on . . .

 

TREASURER:

Sorry?

 

JOURNALIST:

. . . on Telstra did, could it be argued that your comments earlier in the week on Telstra did illustrate the difficulties of public/private ownership of that entity?

 

TREASURER:

I think that it’s an untenable situation to have a company which is 51 per cent owned by the Government and 49 per cent owned by private investors. And I don’t think there’d be another telecommunications company in the world in that situation. Now, if Telstra should be Government-owned, then the Labor Party should re-nationalise it. If that’s their policy, they should re-nationalise the 49 per cent which is held by individual shareholders. But if Telstra should have private shareholders, as I believe it should, then the whole of Telstra should be privatised .

. .

 

JOURNALIST:

So did you make those comments deliberately . . .

 

TREASURER:

. . . and whilst you . . .

 

JOURNALIST:

. . . to illustrate that?

 

TREASURER:

. . . whilst you have a situation where it is caught between the two, that’s obviously giving it a very difficult situation. The best thing you could do for Telstra today is you could fully privatise it. The legislation is there. That is the Government’s policy. We took that policy to the last election and the Senate ought to pass it . . .

 

JOURNALIST:

And did you make . . .

 

TREASURER:

. . . and that would be the . . .

 

JOURNALIST:

. . . deliberately to illustrate that?

 

TREASURER:

. . . that would be the best thing for Telstra shareholders.

 

JOURNALIST:

Are you worried that your surplus has had holes punched in it, when people like Chris Richardson from Access Economics are referring to things like smoke and mirror tricks to arrive at the surplus?

 

TREASURER:

Well, this year the Government will pay down $9 billion worth of debt. The test of whether a Government is running a surplus is whether it can pay for all of its expenses, and then out of its revenues pay down debt. Not only will we be doing that, but we’ll be adding to that asset sales and paying down $9 billion worth of debt. Now various people make various claims, and a lot of them, you know, are in the business of getting business. And I don’t decry them for doing that, but the truth of the matter is, that not only this year do our revenues exceed our expenses, not only is there a surplus in relation to the year, but we use that money to pay down debt, and we add to it asset sales. $9 billion worth of asset sales. You want one encapsulation of what this Government’s record is about - five Labor Budgets couldn’t pay for themselves and they ran up $80 billion of debt. Five Coalition Budgets pay for themselves, and the surpluses over that pay down $50 billion of debt. Five-eights of the repayment of the Labor debt after we’ve paid for all of our expenses. And the good news for Australians is this. As you pay down Labor debt, as you get the interest bills down, then you can spend on more important things. Thanks.