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MAXINE MCKEW: Well, that end-of-term feel was given an added boost today with the latest unemployment data.
The jobless rate is now at 5.2 per cent - a 28-year low - and the Treasurer, Peter Costello, says it could go lower, to under 5 per cent.
Interestingly, another important figure is heading in the opposite direction.
National fertility is on the rise, up 3 per cent, the highest in 13 years.
And remember it was Peter Costello who advised families during the Budget session this year that they should have three children - one for Mum, one for Dad and one for the country.
I spoke with the Treasurer a short time ago.
Treasurer, I would like to start by talking about reproductive politics first.
Australian women, as you've seen by the figures today, are having more babies.
Now, clearly, they have taken your Budget advice.
PETER COSTELLO, TREASURER: Well, we welcome the fact that parents, if they see fit, feel confident about having children.
That will do something to arrest the declining fertility rate.
The most recent figures show that the fertility rate appears to have bottomed and moved up just a bit, not a great deal, just a bit.
And if we could move that fertility rate up a little more in the long-term, not in the short-term but in the long-term, that would do something about the ageing of the population.
MAXINE MCKEW: Do you see a direct link between some of the Government's recent financial incentives on the family front and this slight boost?
PETER COSTELLO: It's possible.
We would need some further evidence to flow through, but I think one of the things you can say is that because the economy has been stronger, people have felt more confident about starting families.
And there does seem to be a link between the pick-up in job opportunities, some of the family assistance measures and at least the bottoming of the fertility rate and hopefully the turning around of that fertility rate.
MAXINE McKEW: Now, I'm sure the women of Australia would want me to ask this.
What are you going to do for them in the 2005 Budget?
PETER COSTELLO: Well, we've still got that $3,000 maternity payment and, over the years, that is actually going to increase.
Now, I say that with some trepidation, Max, because I don't want people to hold off, but that benefit will actually increase over time, we've announced that.
MAXINE McKEW: Treasurer, you do know the biggest outstanding issue, certainly for working mothers, is the availability and cost of childcare.
Why not make childcare expenses tax deductible?
PETER COSTELLO: Well, we're going to introduce a rebate, a 30 per cent rebate.
Now, what that means is that you will be able to get 30 per cent of childcare expenses back.
If you happen to be on a 17 per cent tax rate, that's better than tax deductibility.
If you happen to be on a 30 per cent tax rate, as over 80 per cent of Australians are, that's the equivalent of tax deductibility.
If you happen to be on the top marginal tax rates, it's not quite as good as tax deductibility, but for middle- and lower-income earners, this is a benefit skewed to be delivered in such a way that it's even better than tax deductibility.
And that was one of the promises that we made in the election campaign, and it's one of the promises we will be introducing.
MAXINE McKEW: Let's move to the other good news for the day, unemployment at 5.2 per cent.
Do you think this puts the lie to any notion of weakened growth?
PETER COSTELLO: Well, it's interesting, isn't it, that we had national accounts last week which undoubtedly showed a slowing in the economy, but job creation is still very strong.
In the month of November, 28,000 full-time jobs were created.
That's nearly 1,000 full-time jobs a day were created in the Australian economy throughout the month of November.
And if you look back over the year, about 180,000 full-time jobs have been created.
So, these are extraordinary figures and it does show that there is a lot of strength in the economy.
The great news for Christmas is that more Australians are in work than ever before and fewer Australians are unable to find a job than has been the case for 27 years, in percentage terms.
So this is a 27-year low in the unemployment rate, and I think all Australians will think that's great news for Christmas.
MAXINE McKEW: And you're flagging today you think it can go even lower, to below 5 per cent?
PETER COSTELLO: Well, we ought to try.
We haven't been in this territory since 1977.
Some years ago, the international organisation the OECD was saying well, maybe Australia's full employment rate would be at 7 per cent, 6 per cent or 7 per cent.
We've bettered it.
We've bettered what the experts said could happen, and we ought to try.
I would only make a couple of points.
One is the economy has to keep growing.
If the economy stops growing, that's the end of reducing unemployment.
Secondly, it's important that these strong employment outcomes don't work out into unsustainable wage demands.
If we've got unsustainable wage demands, if inflation went up and interest rates went up, then that would cut it off.
MAXINE McKEW: Surely though we're getting to that point, Treasurer, because there are, as you know, some key skills shortages turning up both at the professional end and at the trades end.
PETER COSTELLO: It is true that in some areas we now have labour shortages, that is, there are more jobs than can be filled.
We have to address those areas.
They're particularly in the trades and the Government has announced we're setting up Australian technical colleges and we're encouraging employers with apprenticeships.
But I would just say we can keep this going if wages are based on productivity.
If inflation is kept low and if interest rates are kept low, then our economy will continue to grow.
And I would look forward - and I think this has got to be the goal - to a situation where every Australian who wants to work can find a job.
And wouldn't that be a wonderful situation?
MAXINE McKEW: This being such a rosy picture, Treasurer, I'm just wondering how can the Government argue that our present industrial laws are acting in any way as an employment inhibitor?
PETER COSTELLO: Well, there are two factors here.
There is what we call the cyclical unemployment.
That follows the economic cycle.
And because we've had such strong growth, I think in cyclical terms, unemployment is probably as low as it can go.
Then there is what we call the structural situation.
That says that given the structures, they actually determine the highs and the lows of the cycle.
If we change our industrial relations laws, we can actually change those structural limits.
We can actually maximise the potential that we have for lowering unemployment, and changing industrial relations laws is one of the key structural changes, which would help employment growth in this country.
MAXINE McKEW: Treasurer, there is also the economic downside and you alluded to those recent quarterly figures.
Poor export performance is continuing to show up.
If this doesn't turn around, how do we address the current account deficit?
PETER COSTELLO: Well, exports have been disappointing, I make no bones about that, and I would prefer Australia's current account deficit to be lower.
And we have challenges in our economy and that current account deficit is one of them.
Exports are not being helped at the moment by the exchange rate which is making it harder for our exporters.
MAXINE McKEW: But that's quite recent, isn't it?
Up until recently we've had the best terms of trade we've had in a long time.
PETER COSTELLO: Oh, yeah, we've got good terms of trade at the moment, there is no doubt about that.
And I think there are also some capacity constraints in relation to exports.
I think particularly in the mining industry, there was under-investment in the mid '90s and the late '90s.
And if you speak to our miners, they have incredible demand coming out of China and Korea and Japan and they can't get the amount of product which is demanded out into their markets.
So, we've got to clear those capacity constraints, clear those supply bottlenecks at the rail and the port.
We have an AusLink program which is dedicated to clearing up transport links into the ports, so we can give those exporters in particular a better go.
MAXINE McKEW: Does it worry you, though, that we've wasted some of this prosperity?
At a time when prices have been so good, the volumes haven't been able to keep up?
PETER COSTELLO: Well, that's right.
I think there has been some capacity constraints, some under-investment, some bottlenecks in the economy.
We're focusing on the bottlenecks.
The investment is coming through.
It is disappointment that it has taken the time that it has, but we have to continue with them.
When you say "wasted the prosperity", what we've been doing over recent years, of course, is taking the opportunity to reduce Commonwealth debt.
Our debt to GDP is now around about 3 per cent, which puts Australia in one of a few, select groups of countries in the world with such a low position.
And we haven't wasted that, we've been actually strengthening the position of the Commonwealth and strengthening the financial position that it finds itself in.
MAXINE McKEW: So how do you see the prospects for next year?
Because I remember you came on the program just after the recent election and you were concerned that in fact Treasury forecasts were a bit on the optimistic side.
PETER COSTELLO: Well, we will be putting out our mid-year review forecasts probably in the week before Christmas, and we will be looking at that.
It's true that in the light of the national accounts, there does appear to be some challenges to growth.
How do I look at the economy?
I look at an economy which has survived a lot of challenges over the last eight years but which has still got more to survive.
We've got high oil prices.
We've got an exchange rate, which is not helping our exporters.
We've got the instability in the world, particularly in relation to the Middle East.
We've still got pressure on some of our rural commodities with climatic conditions.
We've got challenges to go, but I would say we've met the challenges of the past.
With good policy, we could meet the challenges of the future and we, as a country, ought to see how far we can go.
MAXINE McKEW: Treasurer, just a final couple of points as the political year has wrapped up.
What has been evident this week is the one person who seems to be struggling in the house is in fact the new Speaker, David Hawker.
Is he going to be taking some remedial lessons over the summer break?
PETER COSTELLO: No, I don't think so.
I think it has been a pretty willing period in the house, the last two weeks.
I think there are reasons for that on both the Government and the Opposition side.
I think the Opposition has taken a very aggressive attitude towards David Hawker and I think he has actually sailed through it pretty well, but...
MAXINE McKEW: You don't think he is struggling with standing orders and a few things like that?
PETER COSTELLO: No, I think he has earned his money, Maxine, and I think he has done well in the circumstances.
MAXINE McKEW: That just leaves one obvious question, Santa. Treasurer, what have you asked Santa for Christmas?
PETER COSTELLO: (Laughs)
MAXINE McKEW: We all want to know!
PETER COSTELLO: Well, I've been saying to people that they should be careful with credit card debt over Christmas and I've said that Christmas is a season of goodwill and love, so just a little bit of love will do me, Maxine.
MAXINE McKEW: Oh, well, that's very nice.
Oh, does that mean another baby?
PETER COSTELLO: (Laughs)
MAXINE McKEW: Treasurer, for that, happy Christmas.
Have a good holiday.
PETER COSTELLO: Thank you very much, thank you.
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