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Treasurer discusses Woodside takeover; Mitsubishi and tariffs; and death of Peter Nugent.



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Transcript No. 2001/042

Transcript of

Hon Peter Costello MP Treasurer

Interview with Jeremy Cordeaux, Radio 5DN Tuesday, 24 April 2001

E&OE

SUBJECTS: Shell/Woodside, Mitubishi Tariffs, Peter Nugent

CORDEAUX:

Shell’s hopes of a Woodside takeover were dashed yesterday when the Federal Treasurer, Peter Costello rejected their $10 billion bid. A lot of money, $10 billion. The Treasurer said that it was the hardest decision he’s ever had to make and he defends his action as being in the national interest. Treasurer, good morning. Can you hear me Sir?

TREASURER:

I can hear you. Good morning.

CORDEAUX:

Well, you made the papers today.

TREASURER:

Well it was a hard decision. It was a very complicated deal. It had people on different sides, the companies of course had different views. At the end of the day it was my responsibility to decide whether this was in the national interest and I took the view that Australia’s national interest lies in exploiting the North West Shelf resource, Australia’s largest energy resource, to the full and making sure that when we market the resources in Asian countries, every opportunity is given for those exports to triumph over competing exports from other fields.

CORDEAUX:

Well just for the record, Treasurer, I think you did exactly the right thing. But people are going to say that you’ve done not only the thing in the national interest but you’ve done the thing in the political interest as well.

TREASURER:

Well, there’s a statute here, Jeremy, and it’s a Foreign Acquisitions and Takeovers Act and it says a bid can be rejected if it’s not in the national interest. And there have been court cases on this and the law is that you’re only allowed to consider the national interest which is what I did. It was hard. Somebody had to make the decision at the end of the day. I spent a lot of time on this. I went through it in great detail and I came to the conclusion that Australia’s national interest lies in having an operator on our largest energy resource who is going to be developing it to the full and maximising our export income.

CORDEAUX:

I think the thing that people forget is that the criticism that we all throw at politicians is that they think about Budgets from one year to the next. (inaudible) the current political term which is 3 years or in the best case 4 years. You really, I mean the statesman-like thing is to think 10, 20, 30 years out. That’s the whole point. That’s what’s in the national interest.

TREASURER:

Well this is Australia’s largest energy resource and we hope it can become one of Australia’s largest if not the largest export earner. If we can market liquid natural gas out of the North West Shelf into China and Japan and Korea, it would be a fantastic export earner for Australia. The North West Shelf is going to be there in 10, 20 and 30 years. It’s going to be there long after I’ve left the political stage. And I had to make a decision as to what would be in the best interest in 10 and 20 and 30 years. That’s the way I approached it. I wasn’t looking at this as to what would be in the best interest in the next 5 minutes or the next 50 minutes but what would be in our interest for decades to come and that’s why I came to the conclusion I did. You, some people say you’re right, some people say you’re wrong. At the end of the day someone had to make the decision and it was me.

CORDEAUX:

You know, you say that it is in the national interest. Being the Treasurer, you’re going to get decisions like this to make all the time. I guess the next one on the horizon is going to be Mitsubishi saying to you about tariffs and protection, otherwise if you don’t increase tariffs or at least hold tariffs they’ll pull out of Adelaide. You are going to get that sort of decision to make as well. What might you decide if that was put in front of you?

TREASURER:

Well I’d say two things on the car industry, Jeremy. The first is, we have slashed taxes on cars. There used to be a 22 per cent wholesale sales tax on cars and now there’s a 10 per cent GST. And the car makers have been at the Government for years to slash taxes on cars, to help sales. And we have. And that’s been very positive for Mitsubishi and others. The second thing I’d say is we’ve slashed taxes on the export of cars. There is no tax on the export of cars now. There used to be under the wholesale sales tax system but there is now no tax and the slashing of the tax on the export of cars has been better for the car industry than any of these tariff decisions. So I think we’ve gone an enormous way in rearranging the tax system to help motor car manufacturers.

CORDEAUX:

But you know they’re going to want tariff protection. That’s the thing that they’re going to want as a gift if you like to stay in Australia.

TREASURER:

Well, look any company is entitled to put it’s case to us. And we give them a fair hearing. But I’d make this point, the tariff arrangements have, the motor car manufacturers asked for certainty and the tariff arrangements were put in place for 2005, 2010, years ago, so everybody’s been on notice. But what the Government has done which has never been done before and is of enormous benefit to the car industry is that we’ve slashed the tax both for domestic and we’ve abolished all tax for export of Australian cars.

And frankly Jeremy the value of that is much greater than any tariff.

CORDEAUX:

Peter I know you’ve got to run, but just quickly, the $25,000 compensation for ex POWs, will that in fact be given to the, let’s say the POW has died, will that go to his next of kin or her next of kin?

TREASURER:

Jeremy, I’m not handling that matter. Rather than give you information which may not be entirely accurate I think it’s probably better to leave that to the relevant Minister.

CORDEAUX:

All right, well we’ll pursue it. We did have a question on it earlier on the day. And I’m terribly sorry to see Peter Nugent died of a heart attack.

TREASURER:

Yes.

CORDEAUX:

Very young, 63 I think.

TREASUREr:

Yeah, Peter Nugent was Federal Liberal MP in Aston, in Melbourne. He died of a massive heart attack. This was a terrible a shock to all of us. He was a friend of mine. A colleague of mine. We came into the Parliament together in 1990. Our heart goes out to his widow Carol and their family. Our thoughts are very much with them at this time.

 CORDEAUX:

And on a housekeeping front, you’ll have a by-election to fight in that seat.

TREASURER:

Probably will but now is not the time to think about it. It’s been a terrible shock for all of us.

CORDEAUX:

Peter Costello, thank you very much for your time. I know how busy you are.

TREASURER:

Thank you.