E&OE...............................................
GIBSON:
John Howard, good morning.
PRIME MINISTER:
Good morning Mike, how are you?
GIBSON:
Pretty good thank you. You must have a smile on your face this
morning?
PRIME MINISTER:
Well I think all Australians ought to have a smile on their face
this morning because we are back in the black. We've turned
around a $10.5 billion annual deficit we inherited two years ago
into a surplus of $2.7 billion. That surplus won't sit there
moulding away. We are going to use it to repay the debts that were
accumulated in earlier years. But it really does lock in the economic
advances of the last couple of years, the low interest rates. I
mean, home buyers are getting a better deal now then they've
had for 30 years, the equivalent for an average home buyer of about
$3800 a year saving of his or her loan. We've got very low
inflation. We've weathered the worst of the Asian economic
downturn. It's affected us a bit, but just imagine where we
would be if we hadn't have taken the measures we have over
the last couple of years. And it does step the country up for a
relatively debt free third millennium and that is wonderfully confident,
reassuring message to be able to give to the people of Australia
that we're laying the foundations of sustained prosperity in
the next millennium because we're clearing the debts of the
past. We're paying off the bankcard, we're getting the
show back on the road in a way that householders understand and
people running family businesses understand. If you're a Government
you can't live beyond your means forever without paying the
piper and in the end the same thing applies with an individual and
I think people understand that.
GIBSON:
Inevitably, your critics this morning say this is a boring budget.
You haven't taken much from us but haven't given us a
great deal either. None of those public servants you sacked are
going to get their jobs back, 9000 more, in fact, are going to go.
Unemployment is unlikely to decrease. We still have a current account
deficit of $31 billion. Hospitals, childcare, education, continue
to suffer and your still hellbent on selling something that belongs
to us, Prime Minister - Telstra.
PRIME MINISTER:
Well we're going to sell it into the direct personal ownership
of the men and women of Australia. I mean do you think if you owned
shares in something, don't you agree that your sense of personal
ownership is greater than if the Government owns it? I mean I certainly
feel that if I've got shares in something, and incidentally
I don't have any shares, but if I did have shares, I would
think I would have a greater sense of personal involvement in and
ownership of something if I had shares in it....
GIBSON:
But not all of us are going to own shares in Telstra.
PRIME MINISTER:
I mean we have now got, as a result of the sale of one third of
Telstra, we saw 600,000 men and women, 600,000 Australians buying
shares for the first time in their lives. First time in their lives.
GIBSON:
Well those of us who won't be buying shares are concerned
as you know, particularly on the issue of timed calls.
PRIME MINISTER:
Well we don't have to worry about those, that will be guaranteed
by legislation.
GIBSON:
For how long?
PRIME MINISTER:
Well for as long as we're in office. I mean I can't answer
for any future government but I can answer for the Government I
lead and the Government I lead will guarantee that by legislation.
Now what happens after that is beyond my control so that's
another reason not to get rid of us of course. But what we do is
what I've said and so you don't have to worry about timed
calls. But just getting back to the Budget, the sense of relief
I believe people will feel that finally this mountain of debt has
been scaled and we're able to sort of look beyond it into the
future with, with a feeling that the past is not going to keep catching
up with us and slowing us down. I think that is a very important
psychological factor. It allows people to focus more on the national
future rather than be shackled by the past.
GIBSON:
Talking about the past catching up with you Prime Minister. The
greatest beneficiaries last night were the aged. Clearly, the policies
of your recent past, you threatened them earlier this year.
PRIME MINISTER:
We didn't threaten them.
GIBSON:
Well, I think the reaction of older listeners to this programme,
and older Australians right across the nation, they felt under threat.
PRIME MINISTER:
I think some of them got scared unnecessarily but that's behind
us. That's been fixed. The accommodation bond was scrapped,
nobody's home is at risk and we've moved onto something
new. And that new thing will have....we have the package to help
people stay in their own homes, which I released a few weeks ago,
and that was very, very well received. And last night I announced
the extension of the seniors card. That is a card that gives people
access to the pharmaceuticals at the concessional rate that pensioners
can have it at, that's $3.20. But the contributions of a maximum
$3.20. That will now be available to self-funded retirees up to
an aggregate income of a couple of $67,000 a year. It's a very
generous extension and about a quarter of a million self-funded
retirees will benefit. Now these are people who have been careful
and thrifty and have saved all their lives and are not a burden
on the taxpayer because they look after themselves. In the main,
they haven't got any real benefits in the fall in interest
rates because they tend to be lenders rather than borrowers and
I think it's a fair thing to say to them, you've made
a huge contribution because of your thrift and the community is
going to give you a little bit in return by extending this concession
to you.
GIBSON:
Are you confident that last night you bought back the trust of
Australia's older voter?
PRIME MINISTER:
We did this because it was the right thing to do. It wasn't
a question of buying back anything or buying anything at all. It
was a question of doing the right thing by and important section
of the Australian community. I think it's only fair that you
reward thrift. You reward a group of people who have taken a burden
off society by being careful and prudent during their lives and
have belonged to a generation who have believed in saving and thrift
and care and prudence. And I think they ought to be saluted and
rewarded and not ignored.
GIBSON:
At 9:13am my guest is the Prime Minister, John Howard. That yawning
current account deficit, which means that imports can only cost
us more, when do you expect that to start to decrease?
PRIME MINISTER:
Well, Mike it's a function largely of what is happening in
Asia, not totally but largely a function of our exports being affected.
And one of the differences between it and other occasions when the
current account deficit has got much higher, is that we now have
a budget surplus and not a budget deficit. We have very low inflation
and all the other economic fundamentals are very strong and that
means that we can handle it with relative ease compared with the
difficulties that we faced on earlier occasions.
GIBSON:
Now, after last night's easy Budget that took us down the
yellow brick road, according to the Daily Telegraph, after last
night's easy Budget, when are you going to announce your plans
for tax reform?
PRIME MINISTER:
Well that'll be some time over the next little while. I can't
tell you exactly when. We are obviously going to release it before
the election and in time for people to have a good look at it before
the election. Peter Costello and I have done a lot of work, the
broad architecture has been settled but there is still a lot of
work to be done on it. Now that the Budget is out of the way, and
after allowing a week or so for the follow-up meetings and speeches
and interviews that are involved in selling a Budget, we'll
then get back to the tax package and I hope we'll be in a position
to release it not too far down the track but I don't want to
start raising speculation about a particular period of time. It's
a very big reform. It will involve reductions in personal income
tax and it's very important that we get it right. And get the
mix right, and the mix of economic and other considerations right.
GIBSON:
As Prime Minister, our former Treasurer, you are a bloke who's
been seeking taxation reform for many years.
PRIME MINISTER:
It's one of my great goals.
GIBSON:
That's right.
PRIME MINISTER:
There is no doubt about that Mike. There are two things over the
last 10 or 15 years that I have really wanted to achieve so far
as reform is concerned. I have wanted to reform the tax system and
I've wanted to reform the industrial relations system. Now
we've achieved an enormous amount in reforming the industrial
relations system, and can I make the point, we are not going to
be blown off course on waterfront reform. It is difficult, we always
knew it would be difficult. We always knew people would try and
obstruct us. But our aim is to get a more efficient waterfront and
to get rid of compulsory unionism. Our aim is not to destroy the
Maritime Union or to hurt anybody in that union. Our aim has always
been to get a more efficient waterfront, and we are going to stick
at that.
GIBSON:
We've seen you in relation to your waterfront reforms and
the way you've gone about it. Taxation reform, as you say,
it's been on your mind for years and years. What sort of taxation
reform would you like to see.
PRIME MINISTER:
Well I want one that, first of all, is fairer. And I want one that
will not involve any increase in the overall tax burden. I want
one that involves reductions in personal income tax. I want one
that is an improvement on the existing wholesale tax system where
some things are completely untaxed and other things are taxed at
32 per cent and you get a very uneven and a very indiscriminate
effect. And obviously you have to look at a broad based, indirect
tax as one of the elements. I have to say to you that the present
system is seen increasingly by the community as being unfair and
it is seen as not very friendly towards families. I'd like
to see the tax system be more sympathetic to the cost of bringing
up children, because there is no doubt in the world that when people
have children, their expenses go up and their income earning capacity
goes down.
GIBSON:
All right, you'll be cheered because you want us to pay less
income tax. As you've been thinking about this for so many,
many years, what sort of figure, what sort of rate of GST would
you like to see instituted?
PRIME MINISTER:
Well Mike, I can't.....
GIBSON:
I was going to say if you were the Prime Minister, but you are
the Prime Minister.
PRIME MINISTER:
Mike, can you hear me, I seem to have lost you. But I am not in
a position, of course, to get into the specifics of particular tax
rates, but all I can assure you is that when the package comes out
the Australian community will see in this Government, a Government
that's been prepared to tackle reform in one of those areas
that people have wanted reform in for years, and I am a great believer
that you are elected to high office in this country to do things,
not to sit there and enjoy the prestige of the office. You are elected
to tackle the hard problems, and we've tried to do that. We've
tackled the Budget, we've tackled industrial relations reform,
we've tackled welfare cheating, we've introduced the principle
of mutual obligation with work for the dole. We are now going to
tackle taxation reform. Now this is a reformist Government that
believes in using the privilege of office to try and tackle the
difficult problems.
GIBSON:
Kim Beazley this morning says that you are lucky. You are lucky
to get the surplus that you got.
PRIME MINISTER:
I could be so lucky. Mr Beazley says I'm lucky? I mean thanks
Kim, you left me a deficit of $10.5 billion. I'd hate to think
how that deficit would be if I was unlucky. You make your own luck
in politics. We've had an Asian economic downturn. If we hadn't
of had an Asian economic downturn, the rate of growth would have
been higher. If we hadn't of been left with a Budget deficit
of $10.5 billion a year, budget making over the last couple of years
would have been easier and we wouldn't have had to take difficult
decisions. The Labor Party had 13 years to fix the waterfront and
didn't. It had 13 years to fix the tax system and didn't.
It had 13 years to fix all the other things that it now claims to
have the magical solutions to. You make your own luck in politics.
I think this has been a good Government. I don't accept that
it's been a lucky Government.
GIBSON:
All right, a man who perhaps didn't make his own luck, John
Hewson, 1993, a GST. When it comes time for you to announce your
package, will there be any question that any Australian might ask
you that you won't be able to answer?
PRIME MINISTER:
Well I hope not. But I always have great admiration for the perspicacity
of my fellow Australians. And I don't have any inflated idea
of my own ability. I do my honest best to answer questions that
are put to me, my honest best, but nobody can run around the country
saying he's got the answer to everything.
GIBSON:
Your honest best. When are you likely to call an election?
PRIME MINISTER:
I don't know yet Mike. I just don't know. The options
are pretty well on the table. If it's to be a double it's
got to be called, the Parliament has got to be dissolved before
the 29th of October. If it's not to be a double, well we can
have the election after Christmas. I just don't know yet. There
is nothing I can do about the election speculation because I keep
getting asked the question because I have honestly not decided when.
And I won't be making up my mind for some time yet.
GIBSON:
When you do call an election, where do you see yourself directing
your preferences in regard to Pauline Hanson?
PRIME MINISTER:
Well that's something where there are a whole range of views
across the country. Some divisions of the Liberal Party want her
put last, others have different views, and we will be discussing
that at an organisational level when we get a bit closer to the
election. In Victoria there is a view that uniformly it ought to
be last. In Queensland, there is a different view. In New South
Wales, there is a different view again and it is something that
I have to manage as Party Leader and I have to pay regard to views
in the party all around the nation. And, of course, I will be contributing
my own view when those discussions take place. I'm going to
make the point Mike, that Liberal Party preferences, of course,
don't get distributed. The only preferences that really count
in elections are the preferences of minor parties. It's really
where the preferences of minor parties voters go that are important.
And I will certainly be saying to people who are former Coalition
voters who might be tempted to vote for Pauline Hanson, don't
waste your time because we can address the legitimate concerns you
have without some of the baggage that goes with voting for her.
The stupid anti-Asian remarks that she's made and the very
insensitive remarks she's made about Aborigines. I mean, all
the people who are a bit attracted to her because they think she's
got simple answers to life's difficult problems. Nobody has
got simple answers to difficult problems and nobody has a magic
wand. And I don't think we really want anybody in this country
making remarks that are in any way related to the racial background
of people. So I say to people who are attracted to her, you can
have your concerns about economic security and employment prospects
and ensuring that Governments govern for the mainstream you can
have those concerns met by the Coalition but without having the
baggage of supporting her.
GIBSON:
You said you'll make your thoughts quite clear as far as preferences
are concerned, obviously before the next Federal election. What
were your thoughts when you heard that the Libs in Queensland had
directed her preferences to go before the Labor Party?
PRIME MINISTER:
Well I'm not sure that they have. My latest mail on that and,
incidentally, I was not consulted about that because it is purely
a State election.
GIBSON:
What would you have said if you were consulted?
PRIME MINISTER:
Well that would be a matter between myself and the Queensland division,
and my position, my understanding at the moment is that they are
going to look at it on a seat by seat basis and in some seats they'll
put Labor last. In other seats they'll put her candidate last.
But I repeat, Liberal preferences don't matter. They don't
get distributed. The only preferences that matter are the preferences
of minor parties and I mean it's a completely costless political
exercise as far as the Labor Party is concerned in saying we'll
put her last because they don't hold many marginal seats any
more and they're in an entirely different situation.
GIBSON:
Closing on the subject of Mrs Hanson, and I'm sure you'll
be delighted that we do. Is there one quality about Mrs Hanson that
you admire?
PRIME MINISTER:
No.
GIBSON:
That was quick. Your last word on the Budget because I know it's
something that you want to sell this morning.
PRIME MINISTER:
Well I think it is a Budget that has set up Australia's future.
It's given the Australian community a huge sense of relief
that the monkey of debt has been got off their backs and it makes
people feel a lot freer and a lot more open and a lot more hopeful
about the future and that's very important.
GIBSON:
So what do you do for the rest of the week besides selling your
Budget......
PRIME MINISTER:
Not much at all.
GIBSON:
Is there a celebratory lunch today Prime Minister?
PRIME MINISTER:
No, no celebrations. You never stop in this business particularly
in the wake of budgets.
GIBSON:
I thank you for your time this morning.
PRIME MINISTER:
Thanks Mike.