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Thursday, 20 September 2001
Page: 31138


Mr CAUSLEY (2:26 PM) —My question is addressed to the Treasurer. Would the Treasurer advise the House about what challenges Australians face in the wake of the US terrorist attacks?


Mr COSTELLO (Treasurer) —I thank the honourable member for Page for his question. Obviously, Australia faces the question of terrorism, both amongst its neighbours and around the world, and will be making a contribution on the military and foreign affairs front to combat terrorism wherever it arises. But, in relation to economic issues, I report to the House that overnight the New York Stock Exchange fell further. It is now approximately 8.8 per cent below the level that it was prior to the terrorist attacks in New York. During today, most of the Asian stock exchanges have fallen, including some falls on the Australian stock exchanges. The good news is that oil prices seem to have stabilised overnight and have actually returned to levels lower than what they were prior to the terrorist attacks. Whilst that will be good news for economies and the petrol price, it does no doubt reflect to some degree an assessment that world growth will be slower and demand for oil lower. As a consequence, the price of oil has come off.

I have already informed the House that the US economy had stopped growing prior to these terrorist attacks. There will be immediate damage to American airlines and insurance, and second round effects in relation to consumer and business confidence. Here in Australia we had a strong growth quarter in June of 0.9 per cent, stronger than the United States, Japan and Europe. Our interest rates are as low as they have been in the last 30 years and, with accommodative interest rates, there is no reason for consumers to interrupt their buying patterns. I make that point very carefully: there is no reason for consumers to interrupt their expenditure patterns. There is nothing that has changed in an underlying sense. Monetary policy is still very accommodative and there continues to be robust growth in the housing industry.

I am also asked what effect this is likely to have on Australia's budget position. Plainly, new pressures are now coming to bear on our budget position which were not anticipated in May. Of the three pressures that are coming, the first is the number of unauthorised boat arrivals. The measures that the government has had to take, including additional patrolling in the waters off the territorial sea, will lead to larger expenditures than was the case as expected at the time of the budget.

Opposition members interjecting—


Mr COSTELLO —The suggestion that Australia should spend $2 billion building a coastguard is laughable. It is the kind of laughable proposition that the now Leader of the Opposition when he was Minister for Finance—and he was not much of a minister for finance—had the logic to reject when he was in government. To have suggested that a coastguard would in some way compensate for the patrol of Australian naval vessels off the territorial sea is laughable. It is a laughable proposition.



Mr COSTELLO —No, you're truly hilarious. The Leader of the Opposition says, `The US is truly hilarious.' No; as it turns out, you are. That is the proposition. The second point in relation to expenditures is that obviously Australia's contribution to the allied military response to terrorism will bring with it costs. Until Australia's contribution is known it will not be possible to actually quantify that in budgetary terms. The third budget pressure is in regard to the government's commitment to ensure that Ansett employees' entitlements are protected. The government anticipates that up to $400 million may be required in order to justify those entitlements. The government will be putting in place a $10 ticket levy to guarantee the Ansett employees' payments. We welcome the fact that the Labor Party has indicated it will be supporting that levy.

Opposition members interjecting—


Mr Martin Ferguson —It is a new tax!


Mr Crean —It is a new tax!



Mr COSTELLO —The Leader of the Opposition just interjected, `Yes, we will support it.' So we welcome the fact that the opposition has just committed itself to the support of the $10 levy.



Mr SPEAKER —The Deputy Leader of the Opposition is warned!


Mr COSTELLO —We take it therefore that the policy in relation to the ticket levy is a bipartisan one and will not be attacked; therefore—


Mr Beazley —Don't be silly. Stop being silly about it.


Mr COSTELLO —The Leader of the Opposition said he will be supporting it but now quibbles with the fact that it is bipartisan. He either supports it or he does not. He either flips or he flops. We would like to know whether it is the flip or the flop, quite frankly. And we would like to know whether the flip or the flop can hold his position for a week on this occasion. He could not hold his position for a week on border protection. Can he hold his position for a week in relation to a $10 levy? He has indicated to this House he will be supporting it. That being the case, we welcome the fact that this is now a bipartisan position in support of the Ansett employees. He has said quite clearly—it will be on the Hansard record— that he is supporting it, and whilst he continues to support it we welcome his bipartisan position. It is important, of course, in relation to protecting those Ansett employees that we do underwrite those entitlements. This is the government that has a scheme to meet them. It will go through with that levy and, if the Labor Party can support that levy as the Leader of the Opposition has indicated, we will welcome it.