E&OE .............................................................................................
MCCLUSKY:
Prime Minister a very good morning to you.
PRIME MINISTER:
Hello, it's good to be with you both.
MCCLUSKY:
Your Government at this stage appears to be facing a bit of an
uphill battle. How can you can convince South Australian voters
not to desert the Coalition?
PRIME MINISTER:
Well, we can remind South Australian voters what the Australian
economy was like when we came to office. We had a $10.5 billion
annual deficit. We had $95 billion of Federal Government debt. We
had the highest interest rates for decades.
MCCLUSKY:
Yes.
PRIME MINISTER:
And we can tell them that for example housing interest rates in
the last two-and-a- quarter years have fallen by about $300 a month.
MCCLUSKY:
And why is it inspite of all that, they're relatively unforgiving.
I mean there are still South Australian families who are finding
it tough financially, unemployment is still very much a major problem
in this State. They seem less impressed by what you've done
as unimpressed by what you haven't done.
PRIME MINISTER:
Well you can never answer everybody's concerns on everything.
No Prime Minister can do that.
MCCLUSKY:
But unemployment's a big one isn't it.
PRIME MINISTER:
Unemployment remains a major issue, although we have created 290,00
jobs in two- and-a-quarter years. And it is lower than what it was
when we came to office. But it is still a challenge and in the end
they will have to decide whether they'll be better off bringing
back Mr Beazley and Mr Evans to run the economy, remembering that
they are the people who left us with that annual deficit of $10.5
billion and the highest interest rates in 30 years. Now that's
what democracy is all about. You do the things you think are good
for the country.
MCCLUSKY:
Right.
PRIME MINISTER:
You argue your case, you point out what the alternative stands
for and then you let the people make a decision.
MCCLUSKY:
One of the criticisms, and I'm sure you've heard it,
is people say look I don't know if John Howard and his Government
genuinely understands what I'm going through. Do they really
understand how tough it is for Mums and Dads?
PRIME MINISTER:
I know it is tough for a lot of Mums and Dads and that's why
we've focussed on reducing interest rates. Most Mums and Dads
have got a mortgage bill and it is much lower now than when Mr Keating
was the Prime Minister. Inflation is lower. And I can say to those
Mums and Dads that when the tax policy comes out, if you've
got children you'll be big winners. And most Mums and Dads,
on my last check have children....
MCCLUSKY:
That's true.
PILKINGTON:
Prime Minister, do you feel under more pressure now than you have
had any other time during your term of two-and-half years nearly?
PRIME MINISTER:
Oh, that's very hard to assess. You go through pressure in
this job no matter what's happening, there's a lot on
at the moment and there's an expectation now because we are
very close to the release of the taxation policy and people are
able to criticise us on tax without us being able to give the full
blast in return because we can't announce all the details.
But when we do announce all of those details you're going to
see quite a change in public attitude.
PILKINGTON:
When will you announce the details?
PRIME MINISTER:
Very soon.
PILKINGTON:
Just before the election?
PRIME MINISTER:
No not just before the election, very soon.
PILKINGTON:
Very soon, okay.
PRIME MINISTER:
And what we're going to do is let people have a look at it
before contemplating calling an election so that we can go around
the country explaining it.
MCCLUSKY:
Mr Howard, can we talk about tax because....
PRIME MINISTER:
Yes.
MCCLUSKY:
Because as you're well aware tax reform, everybody seems to
agree that there is a need for tax reform......
PRIME MINISTER:
They do overwhelming, they think the present system's unfair.
MCCLUSKY:
But, when you say tax reform it equates for many people as simply
a GST. Now you say "GST" and people run scared. Is that
the only option?
PRIME MINISTER:
Well, we are not going to bring in a GST full stop. We're
going to have a GST as part of an overall plan. We're not going
to put a GST on top of the present system. I mean at the moment
you pay 22 per cent wholesales tax on a whole lot of household goods.
We're certainly not going to put an x' per cent
GST on top of that. If we bring in a GST we'll get rid of the
22 per cent altogether.
MCCLUSKY:
All right, you talk about a GST. Now, people have been working
on a nominal figure of around 10 per cent. The question people want
to know, is okay, if I now face a GST of say 10 per cent, effectively
what does that mean in terms of income tax? If you give me a GST
of 10 per cent, what do I get back in terms of income tax cuts?
PRIME MINISTER:
Well, I'm not going to talk about what the GST rate might
be, but I am going to say that people will be fully compensated
and more, fully compensated and more for any price effects of a
goods and services tax.
PILKINGTON:
Prime Minister, would you agree though.....
PRIME MINISTER:
So they won't be worse off. They won't be worse off.
And I ask them to accept that now, if they don't believe it
have a look at the figures.....
MCCLUSKY:
See, they don't believe it though do they?
PRIME MINISTER:
Well, obviously it's hard for people to believe in it at the
moment because they haven't seen the figures and we haven't
announced the policy. But I'm saying now that when the policy
comes out....
PRIME MINISTER:
.....they will see, they'll be a nice table in the Adelaide
Advertiser that will show the position of families in particular
and people will find that they are not worse off and they will see
the benefit of the change.
PILKINGTON:
Prime Minister are there people in your party who are saying to
you now, "look forget the GST, forget the complete privatisation
of Telstra, if you drop both of those things we can win the next
election and probably win it easily"?
PRIME MINISTER:
There are very few people in the Coalition who are saying that
to me. Obviously the outcome of the Queensland election has unsettled
some people in the National Party in particular, but overwhelming
my colleagues accept for the sake of Australia we need a fairer
tax system. It's not for my sake. It's not because I've
got some kind of pride of ownership and I'm so stubborn and
inflexible that I won't shift. I know that Australia needs
a better tax system. I really believe that and my job as a Prime
Minister is to go out and argue for things that I believe are good
for Australia.
MCCLUSKY:
Prime Minister, where do you stand though? I mean there have been
various.....
PRIME MINISTER:
Where do I stand on what?
MCCLUSKY:
No... various reports, there was one recently by ACOSS, now
a group of highly respected social welfare groups that came out
and really bagged a GST. All right, not working on the absolute
final detail but they overwhelming said....
PRIME MINISTER:
They actually said that they would accept a GST providing it was
at a certain rate.
MCCLUSKY:
Yes but they also said...
PRIME MINISTER:
They didn't absolutely bag it, that's not right I'm
sorry.
MCCLUSKY:
But they said that families would be worse off, that low income
families would be worse off.
PRIME MINISTER:
I can only repeat to you what I said a moment ago, and the proof
of this won't be demonstrated until the package comes out,
but I would say to the families of Adelaide and South Australia
who are listening to this program, suspend your judgement, have
a look at the details, have a look at the tables in the Adelaide
Advertiser and so forth and you will find that you are not
left worse off by this tax change. In many cases people will find
themselves significantly better off and they will recognise that
for the good of Australia this is a reform we should have.
MCCLUSKY:
Mr Howard, you spoke earlier about it being a matter of choice
for the Australian public whether they go with the Coalition or
whether they look at the sins of Labor but it strikes me that many
people are not looking at either. There alternative is not Labor
or Liberal, there alternative for whatever reason is One Nation.
PRIME MINISTER:
Well, in a democracy people can choose anybody they like. And One
Nation has got a right to run. Mrs Hanson's got a right to
go around Australia putting her point of view. People who demonstrate
against her actually help her. I think it's quite, people who
don't like her policies shouldn't stage violent demonstrations
against her...
MCCLUSKY:
No, I mean what did you think of this weeks comments. I mean comments
about Aboriginals, comments about single Mums?
PRIME MINISTER:
Well what she said about the 1967 referendum was wrong, and I said
so.
MCCLUSKY:
Yes.
PRIME MINISTER:
The 1967 referendum was not about giving the Aborigines the vote.
MCCLUSKY:
That's right.
PRIME MINISTER:
Most Australian Aborigines have had the vote since Federation.
The 1967 referendum was about counting Aborigines and Torres Strait
Islanders in the Census. And that was really the very least you
can do to fellow Australians to count them as part of the Australian
community and also about giving the Federal Government power to
legislate in relation to Aboriginal Affairs. So she was completely
wrong, but she actually inferred in that comment that perhaps the
vote should be taken away from a section of the Australian population.
Now that's wrong in principle and I condemn it.
PILKINGTON:
Prime Minister, did you underestimate Pauline Hanson when she first
came on the scene.
PRIME MINISTER:
I believed that a lot of the publicity given to her by sections
of the media would have the result that it ultimately did, and that
is to give her a prominence that her policies did not deserve. But
what judgements you make about what people did a couple of years
ago are now irrelevant, it's a question of dealing with the
situation now and you deal with it by attacking errors of fact as
I do, attacking prejudiced attitudes whenever they arise, but you
also respond by promoting your own beliefs and your own policies
and telling the public what you believe is good for Australia.
PILKINGTON:
Prime Minister, is there a danger that you can attack her too much?
PRIME MINISTER:
Yes.
PILKINGTON:
...and the Opposition and other Politicians?
PRIME MINISTER:
I think it is wrong to attack people in a personal sense, whether
it's Mrs Hanson or Mr Beazley or anybody else, I think the
public is tired of that....
PRIME MINISTER:
....the public is interested in debate on issues and they want
us to address issues and address concerns.
MCCLUSKY:
Is that one of the problems though that even though Pauline Hanson
seems to launch from faux pas to faux pas, are you hamstrung because
you can't seem to land a blow, as it were on Pauline Hanson,
without a great majority of the Australian public rushing to her
defence. It doesn't seem to matter even when she's wrong,
they still seem far more forgiving of her than perhaps they would
be of either yourself or Mr Beazley.
PRIME MINISTER:
But that question betrays a misunderstanding, and that misunderstanding
is that in some way it's possible in politics to put somebody
out of the ring with one sort of single comment.
MCCLUSKY:
Yes.
PRIME MINISTER:
I mean that's not the case. You can't do that. It's
an incremental thing you argue over a period of time. She plays
on peoples vulnerbilities, if you are feeling insecure, if you've
lost your job, your business is going broke, you live in an isolated
community and somebody comes along and says I can solve all of your
problems by stopping imports. And if I can stop imports you will
be rich.
PILKINGTON:
It sound pretty good doesn't it.
PRIME MINISTER:
It sounds terrific and yet, you then think: yeah but the bloke
next door to me sells something overseas...
MCCLUSKY:
That's right.
PRIME MINISTER:
.......and if we stop imports, so I survive, the bloke next
door goes broke because people will no longer take his exports.
Trade is a two-way thing. We export and we import and if we stop
imports other people will stop our exports.
MCCLUSKY:
It's not that simple. Mr Howard we'll take a quick break
and we'll be back with the Prime Minister John Howard in just
a moment.
PILKINGTON:
Our guest this morning, of course, is the Prime Minister John Howard.
Prime Minister, very quickly can we talk about the economy for a
moment?
PRIME MINISTER:
Yes.
PILKINGTON:
I mean, some of the economists are using the word recession'.
And I suppose they're in particular talking about Japan and
the situation up there. How do you see our economy and how reliant
are we on South East Asia and in particular Japan?
PRIME MINISTER:
Well recession talk is wrong. We're not headed towards a recession;
our growth is still very strong. Our economy won't be unaffected
by what's happening in Asia, it's already been affected
to some degree and it could be affected more. But it would have
been affected a lot more if we hadn't done what we've
done over the last two- and-a-half years, if we hadn't eliminated
that $10 billion annual deficit we inherited and if we hadn't
have got inflation down and interest rates down and made other economic
changes. And can I say again it will be further affected if we don't
make our tax system better, because by changing our tax system we
can further strengthen the Australian economy against what's
happening in Asia.
MCCLUSKY:
Mr Howard, on that tax question, one of the constant comments we
get from people who call into the programme is to say, "Look
it's all very well to look at changing the tax system for the
PAYE employees but has the Government really cracked down heavily
enough on those, particularly well organised tax minimisers, the
large companies that while not doing anything illegal certainly
know every in and out of tax minimisation?"
PRIME MINISTER:
I ask them to have a look at the policy when it comes out.
MCCLUSKY:
You're going to keep us waiting aren't you?
PRIME MINISTER:
No, no, no. But you have to understand, I mean we are, I mean I
want to get it out as soon as possible but it's a huge exercise.
It's the first time...
MCCLUSKY:
So is that a word of warning?
PRIME MINISTER:
No, it's not a word of warning it is a statement of fact.
To change a country's taxation system and to make sure you
get it all right is a very big undertaking and we have to get it
right. And when it comes out people will see that it's fair,
the cheats won't like it, they won't like it all, average
families will love it.
MCCLUSKY:
Mr Howard, does your Government genuinely deserve another go at
running the country?
PRIME MINISTER:
Yes. I believe that we have done, in difficult circumstances, a
very good job of managing the economy. I believe that we have eliminated
a lot of the stultifying political correctness that existed in this
country under the Keating Government where if you disagreed with
their policies on things like Aboriginal affairs you were accused
of being a racist. I think that it is a very good thing that we've
got rid of that atmosphere of political correctness. But our management
of the economy has meant that we are less vulnerable and we've
been less punished by the economic downturn than ever before. And,
I mean we do have the lowest housing and small business interest
rates since the late 1960s. I mean that is an undeniable fact.
MCCLUSKY:
Absolutely.
PILKINGTON:
Prime Minister there's a concern out there and you'd
have felt it, you'd have talked about it, you'd have heard
people saying it to you about our health situation, about our health
scheme, just the general....
MCCLUSKY:
Public health.
PILKINGTON:
Yes, public health thing-a-me-bob'. What can you do
in this term or if you're elected again in the next term to
address the problems that obviously exist out there with our health
set up?
PRIME MINISTER:
No government, State or Federal, ever closes the book on health
policy, and never says "Look we've done everything that
needs to be done". Public hospitals are the responsibility
of State Governments; it's our job to give them money. We offered
them, and we are in fact delivering, a real increase of 15 % over
five years at a time of zero inflation so they can't argue
that they're going backwards. We put money into private health
insurance incentives. The number of people in private health insurance
has continued to go down, although it would have gone down at a
much faster rate without those incentives. All of these areas continue
to be, I guess, under almost weekly examination by the Government.
And I said a moment ago you can never close the book and say there's
no more to be done on health. But I do understand that it's
an issue the public is very involved in and very concerned about,
and the public regards a balanced provision of public and private
health support as being a very important part of their daily lives.
I do understand that.
MCCLUSKY:
Are you frustrated by this ongoing blue between Michael Wooldridge
and the State and Territory Health Ministers because while that
keeps going it seems that this perception of instability in terms
of public health funding doesn't go away? I mean the people
who are lying on trolley beds in emergency hospitals, emergency
wards rather, are saying, "Look what on earth's going
on here, why can't they just sort this out and get on with
it?"
PRIME MINISTER:
I would rather it were not going on, but in a Federation you always
get State Governments having a go at Federal Governments. No matter
who the Federal Government is and no matter what the political colour
of the State Government. It's an easy hit to say to your constituency,
"We'd love to give you more but ..."
MCCLUSKY:
Exactly right.
PRIME MINISTER:
"...the mean distant, remote Canberra-based Federal Government
won't give us the money." Forgetting sometimes, of course,
that that mean remote Canberra-based Federal Government is composed,
amongst other things, o