Australian Broadcasting Corporation



Broadcast: 24/04/2005

Costello promises sustainable Budget

Federal Treasurer Peter Costello says the May Budget will be about sustainability, particularly economic growth that will benefit Australia in the long-term.

BARRY CASSIDY: The federal Budget is just 16 days away. We already know something about it: the Budget will change the Medicare safety net making it less generous, and that was announced ahead of time.

To discuss that and other issues we are joined in the studio this morning by the Treasurer. Good morning.

PETER COSTELLO: Good morning Barry, good to be with you.

BARRY CASSIDY: Just before we start, to your mind what will be the legacy of Sir Joh Bjelke-Petersen?

PETER COSTELLO: I think he will be seen as the outstanding premier of Queensland. I think some of his achievements will live for a very long time. I would say the abolition of death duties changed Australia. When Queensland abolished death duties, every state was forced to follow and, as you know, a great deal of southern money came into Queensland and fuelled the tourist growth and the property boom.

The other thing that I pay great tribute to him for was they funded their superannuation. Queensland is the state with the strongest finances and that is a direct legacy of Sir Joh. So he will be seen, I think, as the outstanding premier of the 20th Century, somebody who put in place some decisions which set Queensland up for opportunities over the decades.

BARRY CASSIDY: We will move on to the Budget now. It is two weeks away, as I said. What is the headline presentation going to be if you manage to get the headline that you are looking for?

PETER COSTELLO: I think this Budget will be all about sustainability. It will be sustainable economic growth continuing. We have had a long economic cycle and it's our aim to keep that going so that we can continue to reduce unemployment. Sustainability in terms of expenditures so that in 10, 20, 30 and 40 years time the kind of decisions we make now will set Australia up for the great change which is coming on our society, the ageing of the population, sustainability in respect of the environment and the use of our resources and energy.

I would like to see this very much as a budget that projects from the current time out through what we believe the great structural challenge, the ageing of the population, out through that in 10, 20, 30 and 40 years time.

BARRY CASSIDY: So you are putting the emphasis on sustainability, not the welfare to work, that one's the centerpiece?

PETER COSTELLO: Well, that's a big part of it. You see why do we need to encourage more people into the work force? Because the number of Australians of working age over the next 40 years will hardly change. The number of Australians of retirement age will double. So what we have got to do is we have got to encourage as many of those Australians of working age as possible to take part in the work force. Now we have had a huge growth in the number of people on the disability pension, if we can give incentives for some of them to rejoin the work force, that's great.

BARRY CASSIDY: And incentives to the employers?

PETER COSTELLO: And to them, to encourage them to be part of the work force where they can. There is a lot of disabled people who can work part-time, who want to work part-time, who with a little bit of help would be able to work part-time. When you have got your unemployment rate at the lowest level in 30 years, the opportunities are better than they have been for 30 years. So that is part of getting as many people as possible in this working age group into the workforce, participating and it's not just in that respect, it is also in respect of mature age workers.

BARRY CASSIDY: If you talk now about sustainability, there will be those who would say "about time". In the run up to the last election there wasn't a lot of thought given to sustainability when you knew the Medicare safety net had blown out to at least $1.3 billion and you went ahead with that anyway.

PETER COSTELLO: Well, Barry, the fact of the matter is, as you know, we proposed a safety net first time ever with thresholds of $500 and $1,000. The Senate wouldn't enact that. Now when the Senate wouldn't enact that, you are faced with this situation, aren't you. Do you have no safety net or do you take what the Senate has prescribed. That was the situation which the Government found itself in. Now the Medicare safety net will be better because we have got it on to a more sustainable basis.

BARRY CASSIDY: Couldn't you have said before the election, levelled with people and said well, this is getting out of control we are going to have to take a second look at it?

PETER COSTELLO: If you had left it on an unsustainable basis, in three or five years time there would be no safety net at all and that would financially break.

BARRY CASSIDY: My question is why didn't you make that point before the election when you first became aware of the blow-out?

PETER COSTELLO: Barry, I think there are two key facts here, one is that it never existed before and two, it was put into a shape by the independents in the Senate, which the Government never wanted. The reason we never wanted it, is we believed that it probably wouldn't be sustainable. As things worked out, unfortunately we were right.

BARRY CASSIDY: In the end Tony Abbott took most of the blame. Was that fair when really as Treasurer you control the expenditure?

PETER COSTELLO: It's a Government decision, everybody in the Government is part of it, no doubt about that, Tony, myself, the Prime Minister, the whole Cabinet. In a system of Cabinet Government, Barry, the whole Cabinet speaks as one and the whole Cabinet supports this decision. Now I am very much a part of that, absolutely.

BARRY CASSIDY: On the question of sustainability, the IVF program costs around $7,000 a time, unlimited access is available at the moment. Is that something you will look at?

PETER COSTELLO: The thing about IVF, and I wouldn't see this in a financial sense, this is not a financial issue. There is a lot of debate about the medical outcomes. What is the optimal medical outcome? There is no point in giving treatments where there is a very, very low chance of success and so there has been a lot of clinical discussion as to what the best chances of success are and taxpayers dollars ought to be directed towards those. That's something that the Government looks at. Obviously we actually looked at it first back in 1996 to be frank, and it's something that the clinicians and Health Department always have under scrutiny.

BARRY CASSIDY: You sort of make a judgment that if after say three cases of IVF and without success, that's about it, you draw the line on it?

PETER COSTELLO: Well, I am not a doctor but doctors say that the older you are for the treatment, the less the chances of success and they also say that after a certain number of treatments, success rates decline and this is a matter to be discussed with the medical profession.

BARRY CASSIDY: Will you have to put an age limit on it?

PETER COSTELLO: Obviously there is. You know, as far as I know we don't treat 60-year-old women with IVF. I am not sure if we treat 50-year-olds. What is the reason, it's not a discriminatory reason, it's just that after certain ages these treatments aren't successful.

BARRY CASSIDY: You have prepared yourself for a debate on this no doubt because you offer a baby bonus to fertile couples but the people who need it most, infertile couples will be affected by it.

PETER COSTELLO: Nobody is going to stop IVF treatment. Nobody is going to stop IVF treatment where IVF treatment has reasonable chances of success. Let me make this absolutely clear. I think IVF is a wonderful technology, it has given a lot of people who wouldn't have been given the opportunity and I welcome it and I think it is wonderful. I know lots of people who have used it. The only point I would make now, it is better to get an IVF treatment in your 30s than in your 50s and your chances of success are going to be much greater. That's the only point I would make. I encourage people to get on with it earlier.

BARRY CASSIDY: That was the last Budget. On the GST negotiations, is there any room for compromise with New South Wales? Can you do better than $330 million in compensation or have you drawn the line?

PETER COSTELLO: There are two separate issues here, Barry. There is the division up between the states of the GST revenue and that is done on an equalised basis and that has been going since the 1900s. That has been there as long as Federation.

The second question is after the pie has been divided between the states, what do the states do with it? Now the states said that this would enable them to abolish other taxes but when we introduced the GST, by the way Barry let me make this point, no state premier introduced GST, not Bob Carr, not anybody else. When we introduced it, and principally me, we said to Australia GST will replace other taxes. That's why it came in.

BARRY CASSIDY: We are aware of the background but the question was is there any room to move with New South Wales? How do you do that?

PETER COSTELLO: You know, I made this point in relation to Joh Bjelke-Petersen, when Joh Bjelke-Petersen cut state taxes, Queensland boomed.

BARRY CASSIDY: Even today you are saying Queensland is leading the way in terms of economic management.

PETER COSTELLO: If you have a couple of states that say "Come into our state, we will make you pay stamp duty" when business can restructure transactions into other states where there is no double taxation, at the end of the day these states that want double taxation, they want GST and the stamp duties, at the end of the day they run the big risk, the really big risk that some of these businesses will just find it better to do business elsewhere.

BARRY CASSIDY: If there is a compromise in the wind you are not prepared to outline it now?

PETER COSTELLO: I think it is very straightforward. Six states, Victoria, Tasmania, South Australia, Queensland, Northern Territory and the ACT have all been able to cut indirect taxes within their GST revenues. The two high taxing states refuse to do it. They want double taxation, no double taxation. GST is there to abolish those other taxes.

BARRY CASSIDY: Okay, just a couple of quick issues. Are you at all troubled by what is going on in Gallipoli in terms of the road works?

PETER COSTELLO: Look, Gallipoli is something that is sacred to Australia and I think we all want to see it as much as it was. But when you have got 10, 15 maybe 20,000 people trying to get into a very narrow beach, obviously you have got to have a road. The only thing I would say is that we all hope that the road which can give access will be as unobtrusive or less intrusive as possible.

BARRY CASSIDY: It's too late for that by the sounds of it.

PETER COSTELLO: You know, the road down by Anzac Cove looks from the footage as though it is finished. Obviously it is cut into the shore line but I think what we would want, is we wouldn't want to see any widening or any further works to go on.

BARRY CASSIDY: Perhaps we should have been paying closer attention.

PETER COSTELLO: I make this point, Barry. It's Turkey. You know, it is Turkey. The Australian Government doesn't control Turkey. We don't control road works in Turkey. We have enough trouble controlling road works in Australia. Let's suppose Turkey asked for a road into some park here in Australia, would you expect them to be directing the construction from Ankara. You know, it is Turkey. It's very hard to run a Turkey road construction contract from Canberra.

BARRY CASSIDY: Just finally there is a play in Melbourne at the moment called Two Brothers. It's going to Sydney soon and let's face it - it's a thinly disguised and very thinly disguised go at you in fact, that the chief character is portrayed as a killer, a liar, an adulterer. Are you annoyed by this?

PETER COSTELLO: Well, what else can they say about you, mass killer, serial adulterer. You know, in some sections of the theatre any one who votes Liberal is just considered fair game. But I would make this point, that it's also apparently a thinly disguised author's view of the boat and basically she tries to push the line that the Government knew about this boat and what's more that the Australian Navy let 300 people drown. That's a lie. That is a complete lie and it impugns the Australian Navy. Forget about me, it impugns the Australian Navy and this is pathetic propaganda thinly dressed up as art and drama and outside of me, I think it denigrates every Australian serviceman and servicewoman, particularly in the Royal Australian Navy.[emphasis added]

BARRY CASSIDY: Putting this play to one side if you can, what can the art industry look forward to from Peter Costello whether he is Treasurer or Prime Minister into the future in terms of funding I mean?

PETER COSTELLO: I will always make a good subject for their plays, Barry. I would only ask they be a little more accurate in the future.

BARRY CASSIDY: Thanks for your time this morning.



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