E&OE.............................................
GATFIELD:
Joining us now is the Prime Minister, Mr John Howard. Mr Howard,
this morning are you happy with the reaction to last night's
budget?
PRIME MINISTER:
Yes I am. People have seen the long term good sense of getting the
country back in the black. It gives people a great sense of confidence,
continuity, consistency and hope about the future. It helps to lock
in those low interest rates which are so important to homebuyers,
the low inflation which is so important to business confidence.
GATFIELD:
Getting the budget in the black, is that the single-most important
thing?
PRIME MINISTER:
It's the most important thing but not the only thing. I think
the benefits for self funded retirees and the elderly in the community
are a very important social component of the budget but when you
are paying your way again, you open up almost limitless possibilities
because you have the freedom and the capacity, it's like a
family that's paid off the mortgage. They can then turn their
attention to spending their resources on something else.
GATFIELD:
It does of course have its critics and chief amongst those, the
Opposition are saying, nothing here whatsoever for the unemployed.
PRIME MINISTER:
That's not right because business confidence will reduce unemployment
and I just say to Mr Beazley, you presided over the highest level,
11.2 per cent of unemployment since the great depression. Since
we've been in office we've generated 280 000 new jobs
and unemployment is now at its lowest level for eight years.
GATFIELD:
But it's not going to get any better in the next 12 months?
PRIME MINISTER:
It will get a little better and the important thing is to go on
generating new jobs and in the last two years we've generated
280 000.
GATFIELD:
There's also the current account deficit which is projected
to rise to $31 billion. Is that good enough?
PRIME MINISTER:
Well, we naturally want it lower but it is largely a product of
the downturn in Asia and the impact that that's having on our
exports and having a very low inflation rate and having a budget
surplus, we have in fact delivered the very budget that is needed
when you have a rising current account deficit.
GATFIELD:
One of the most important areas of course is health care. The critics
say there's nothing there for health care. In real terms, there's
no benefit.
PRIME MINISTER:
That's just wrong. I mean, for example, we're giving the
states a 15 per cent real increase over five years. That's
in a time of zero inflation. That's not nothing. That's
a 15 per cent real increase.
GATFIELD:
Most of them aren't accepting that?
PRIME MINISTER:
Well, states tend to be a little bit like that. They always want
more.
GATFIELD:
Do you still think they're going to come around?
PRIME MINISTER:
Well, whether they come around or not, we will honour the promise
we made at the Premiers' Conference but a few of them have
signed up since the Premiers' Conference and I think we might
get one or two more but even if they don't their citizens will
not be hurt. The people living in New South Wales and Victoria,
two of the states whose Premiers are holding out, can I say to the
citizens of those two states, we won't let you down. We will
honour in full the promises we made at the Premiers Conference.
GATFIELD:
I spoke last night to Senator Bob Brown too who expressed very,
very grave disappointment at the lack of incentive there for environmental
issues.
PRIME MINISTER:
Heavens above. We are providing a tax incentive for land care, the
most generous tax incentive in history for land care, he says there's
nothing. I mean, really, he's just on automatic, on automatic
whinge.
GATFIELD:
He says the sale of Telstra obscures.
PRIME MINISTER:
It doesn't obscure. Look, it doesn't obscure anything.
The sale of one third of Telstra has delivered the largest capital
fund ever for Australia's environment. We are spending more
than any other government in capital on restoring Australia's
environment and we're doing it where it matters. Land degradation
repair and things of that kind which are really of great ongoing
significance.
GATFIELD:
Older Australians appear to be the biggest winners out of this budget,
don't they?
PRIME MINISTER:
They have done very well out of it. The extension of the Seniors
Health Card which means that everybody in that self-funded retiree
bracket practically up to a combined income of $67000 a year will
get the free pharmaceuticals that are now available to pensioners.
GATFIELD:
Was it a deliberate strategy on your part to actually target older
Australians?
PRIME MINISTER:
They are entitled, belonging to a generation that was very thrifty
and saved for their retirement, they are entitled to get some recognition
of that. You've got to also remember that while low interest
rates are great if you are buying a home, if you are lending money
then it's not so flash and I think we've recognised that
in relation to many of those self-funded retirees who really have
seen the more negative side of lower interest rates.
GATFIELD:
I suppose the big thing missing out of the budget last night was
the question of tax reform.
PRIME MINISTER:
That's coming.
GATFIELD:
Of course, it is. When?
PRIME MINISTER:
At the right time.
GATFIELD:
Have you got a timeframe, on that though?
PRIME MINISTER:
The Treasurer and I have got a few scenarios in mind but we are
still working on the package but it will be good and I am sure it
will be widely applauded by the Australian community as delivering
incentive and also delivering a great deal of fairness because I
think what the great bulk of the people in the middle want is a
tax system that gives them a break and makes sure that those people
who aren't paying their fair share do so in the future.
GATFIELD:
That was implicit in Mr Costello's remarks last night, about
a glowing future. So we can expect major tax cuts?
PRIME MINISTER:
You will certainly get personal tax cuts, absolutely. There will
be significant personal tax cuts within the framework of a total
restructuring of our taxation system.
GATFIELD:
And your comments yesterday, or reported comments yesterday to the
Party Room about this possibly being the last session of Parliament
before an election?
PRIME MINISTER:
Just a customary, cautionary words from the Prime Minister at this
time of the political cycle.
GATFIELD:
Not going to read any more into it than that?
PRIME MINISTER:
No, no more but no less.
GATFIELD:
Ideally, when would you like to go to the election?
PRIME MINISTER:
At the right time.
GATFIELD:
Will it run its full term, this Parliament?
PRIME MINISTER:
I don't know, I don't know that yet. That will depend
on a lot of facts.
GATFIELD:
You just haven't made up your mind?
PRIME MINISTER:
No I haven't.
GATFIELD:
Does reaction to the budget come into that?
PRIME MINISTER:
Part of it. There are a lot of other things that come into it as
well.
GATFIELD:
Such as?
PRIME MINISTER:
All the other things that will happen between now and when I decide
to call the election.
GATFIELD:
Mr Howard, thank you very much.
PRIME MINISTER:
Thank you.
ENDS