Happy New Year.
Well ladies and gentlemen today is the first Cabinet meeting of
the New Year and not surprisingly we will spend a little time reviewing
Australia's economic outlook, which is very strong and very
positive because of the corrective measures that my Government took
in place when it assumed the reins of office in March of 1996.
If those measures had not been put in place, if we had not eliminated
Mr Beazley's $10.5 billion budget deficit,
if we had not implemented other reforms that were opposed by the
Labor Party then the Australian economy would have been buffeted
and knocked around by the Asian economic developments of the second
half of last year.
It is also appropriate that I inform you that I will be visiting
Malaysia from the 22 to 24 February and then Papua New Guinea from
25 to 26 February. And that Mr Downer, the Foreign Minister, will
visit Jakarta early next week from the 25 to 27 January. In both
cases the visits are appropriate and directly relevant to the continuing
very close and important linkages that we have with the countries
of the Asia-Pacific region. Given the difficulties of our friends
and neighbours in the region this is not a time to reduce our association
with the countries of that region, rather it is a time to extend
the helping hand, to demonstrate, as we did in relation to the assistance
we gave for Thailand and for Indonesia and also for Korea, the fact
that Australia is a good regional neighbour. And most importantly
we are strong enough and economically powerful enough to give assistance
to these countries. It would have been otherwise if our opponents
policies had been in force we would have been in a weaker position
and we would not have been able to extend a helping hand to those
countries.
Could I just before taking your questions, could I just take the
opportunity, on behalf, I know of all Australians to congratulate
the Australian swimming team for the absolutely remarkable performance
that all of them put in at the championships in Perth. It was, as
so many have remarked, probably the finest performance at a World
Championship by an Australian swimming team for 30 or 40 years,
perhaps ever. And to all of them I extend, on behalf of the Australian
public, my very warm thanks.
And might I on a less happy note, say that I know that most Australians,
particularly those who have an affinity with surfing would have
been very touched by the tragic death of Mr Kelly, the Vice-President
of the Maroubra Surf Club. And it is a reminder of the immense sacrifice
that so many Australians in voluntary effort make towards making
many aspects of the Australian life safe for the men and women of
this country. And I know that I speak for all Australians in expressing
my sympathy to his family, to the club, to the surf lifesaving movement
of Australia. And once again on behalf of Australians I salute the
tremendous voluntary efforts of that magnificent organisation.
JOURNALIST:
On the Asian currency crisis. Will the Government consider underwriting
trade contracts for Australian exporters?
PRIME MINISTER:
There are some considerations in relation to insurance that we
will be looking at, and obviously we will take a sensible approach
which is helpful to our relations with the countries involved.
JOURNALIST:
Will that be for both Korea and Indonesia as well?
PRIME MINISTER:
It is a matter that is before the Cabinet and beyond saying what
I have said I am not in a position to answer.
JOURNALIST:
Is it of concern the way the exporters are saying that some of
their deals are drying up?
PRIME MINISTER:
Their deals would have dried up a lot more if this country had
not been seen as economically strong. This country has weathered
the Asian melt-down far better than would have been the case if
other policies had prevailed. The domestic economy is very strong
indeed and that is a direct result of the measures that we took
in 1996 and 1997, all of which I might say, was strenuously opposed
by the Mr Beazley.
JOURNALIST:
You have had Treasury officials and other officials looking at
the impact on the Australian economy of the Asian crisis. Have they
given you any indication of any need to change the mid-year fiscal
outlook?
PRIME MINISTER:
No.
JOURNALIST:
So there will be no changes to those forecasts?
PRIME MINISTER:
Look there will be another review. I mean, we had a mid-year review,
we don't change that. We will obviously bring out another review
at the appropriate time.
JOURNALIST:
Mr Howard, you talk about extending a helping hand. What have you
got in mind for Malaysia when you go to visit there?
PRIME MINISTER:
Well Malaysia's position, of course, has been a little different
from that of Indonesia, Korea and Thailand and therefore the question
of a package similar to what was put in place in relation to those
countries does not obtain.
JOURNALIST:
On another matter Prime Minister. The ALP has left a way open for
a popularly elected President in its republican model decided on
this morning. Do you think that is a dangerous idea?
PRIME MINISTER:
I am very surprised that the Leader of the Opposition hasn't
declared his position on it. I thought he was a man who was willing
to state his views on any issue, where they seem to have great trouble
telling his party who it's President ought to be. He spent
a great deal of his speech talking about leadership. If he is such
a strong leader of his
party why doesn't he just tell them in plain terms that Barry
Jones ought to be the President of the party for the next 12 months.
I mean, we like Barry, we have even made him Deputy Chairman of
the Convention. We all know that Kim likes Barry. Why doesn't
he just tell them to choose Barry and why doesn't he get Mr
Sword to withdraw?
I think an elected Presidency would undermine Australia's
Parliamentary system of Government. I am not reluctant to state
my view on that. I am prepared to say to the Australian people,
despite the fact that surveys suggest that there is a lot of support
for an elected President, I am prepared to say to the Australian
people that if you want to fundamentally undermine the present Parliamentary
system of Government, have an elected President. But then perhaps
I shouldn't be talking about this issue because I heard Mr
Beazley say on the radio this morning that the republic and Wik
were second order issues. I might remind the Australian people that
both of those second order issues were put on the political agenda
by Kim Beazley and Paul Keating.
JOURNALIST:
Mr Howard, will the Government consider any measures to boost Australia's
tourism marketing in South East Asia given the drop-off in numbers?
PRIME MINISTER:
It would be a very big mistake for anybody to engage in a knee-jerk
reaction about what has happened to this or that industry as a result
of the developments in the Asia-Pacific region. The tourist industry
is a very resilient industry, it can focus very heavily on other
markets. I am not going to get into the business of giving running
responses to the understandable entreaties of different industry
groups when they believe their circumstances may have been adversely
affected. We were told a few months ago that the utterances of the
Member for Oxley had damaged our tourist industry. That didn't
turn out to be the case. I am not suggesting that the situation
is analogous to that, but I simply make the point, that you shouldn't
react in a knee-jerk fashion to these particular matters.
JOURNALIST:
Mr Howard would the Government consider talking to Australian banks
about rolling over their loans to South Korean and Indonesian companies?
PRIME MINISTER:
What the Australian Government did at an official level was to
give assistance as part of the IMF package. The question of the
relationship between commercial banks and borrowers of those banks,
as always, is a matter between the banker and the customer. We were
strong enough and we were willing to provide assistance to Indonesia,
to Thailand and to Korea. We did it in an official way through participation
in the IMF package and we believe that is the appropriate way in
which to provide assistance to countries in the region that stand
in need of help.
JOURNALIST:
Mr Howard, we are heading into an election year probably. Will
Cabinet look at the timing of the election? Specifically will you
be discussing the timing of the release of your tax policy?
PRIME MINISTER:
No. But I can say now that you have reminded me of tax. I can say
something about taxation. I noticed when he was interviewed yesterday
on one of your programmes, that Mr Beazley said that he was going
to reach back in that time-honoured Labor antidote when you have
got a fiscal hole and that is you start talking about taxing the
rich. Well I have got to say to Mr Beazley that that is the oldest
thimble and pea trick in the political business. For example, if
you put a five per cent tax surcharge on everybody in Australia
who earns over $100,000 a year, you would collect the princely sum
equal to half of one per cent of the total amount of revenue collected
by the Federal Treasury at the present time. And that is $650 million
is the extra money you would collect. And that is half of one per
cent of the total amount of money collected by the Federal Treasury
at present.
So I want you to keep that in your mind when over the next few
months the elastic of that generalised promise is stretched beyond
breaking point by the Labor Party whenever it is asked: well how
are you going to pay for this or that promise? Tax the rich. Well
even if you do tax the rich, by the tune of putting a 5 per cent
tax surcharge on everybody earning $100,000 a year, then what you
will be doing is collecting no more than another $650 million or
half of one per cent of the total amount of revenue the Treasury
now collects.
So perhaps Mr Beazley will have to invoke the definition of the
rich of the latest convert to the Labor Party, Cheryl Kernot, who
believes that anybody who earns more than $50,000 a year falls into
that category.
We are going to hear quite a bit about soaking the rich but let's
understand that not only is it a dubious proposition, economically,
but in terms of providing the revenue to fund the promises that
the Labor Party is going to make over the months ahead and has already
made, it will be an abysmal and total failure.
JOURNALIST:
Mr Howard, assuming that the Skase tapes are authentic, do you
think they vindicate the Government's decision to keep funding
the efforts to get the money back?
PRIME MINISTER:
I think what the Government has done in relation to pursuing Mr
Skase is absolutely correct. It is appropriate that resources be
spent in pursuing somebody who plumbed the depths of robbing ordinary
Australians and as far as I am concerned I think there is a great
feeling in the Australian community that this man ought to be pursued
with all of the vigour which is available of the law, both here
in Australia, and elsewhere.
I can't comment on the individual tapes because I have neither
heard them nor do I have any direct evidence of authenticity and
I am not going to comment on them. But I strongly support the measures
that have been taken by Mr Donnelly to recover resources belonging
to Mr Skase and his family and also to otherwise bring him and the
members of that family to justice.
JOURNALIST:
Prime Minister, are you concerned that international financial
markets tend to lump Australia in with some of the other countries
in the region, particularly in terms of dealing with our dollar?
Is that a problem?
PRIME MINISTER:
I don't want to talk about the level of the Australian dollar.
I never have. I don't think it is appropriate to do so and
I don't intend to break my rule. There is no doubt, in my mind,
that foreign investors know the strength of the Australian economy.
They know that it will probably be the fastest growing economy in
the industrialised world this year. They know that it will probably
out perform the G7. They know that if another Government had been
in power it would not have been nearly as strong as it is now and
the strength of the Australian economy and the extent to which we
have been able to withstand the impact of the Asian downturn is
very strong evidence of the wisdom of the policies that my Government
has pursued since March of last year.
I had a quick read of Mr Beazley's speech to the ALP Conference
this morning and I didn't notice any apology to the Australian
people for the $10.5 billion deficit that he left behind. I didn't
notice any apology from Mr Beazley for the vulnerable state in which
he left the Australian economy nor any apology for the fact that
if his policies had been in force at the end of last year the Australian
economy would now be weaker, the employment prospects less and the
outlook for investment and the outlook for Australians, generally,
would be a lot poorer and a lot weaker.
JOURNALIST:
Just going back to the start of the announcement, what is the reason
behind the trip to Malaysia and Papua New Guinea, what message will
you be taking to those...?
PRIME MINISTER:
Well, this will be my first visit to Malaysia as Prime Minister.
In a sense it reciprocates the hospitality that I extended to Dr
Mahatir last year but it is appropriate given the close relations
between the two countries, the developments in the region and my
desire to maintain the association between the two countries that
the visit take place.
I think it is also important that I should visit Papua New Guinea.
The Bougainville peace talks have reached a very important stage.
Australia is playing a very helpful and very constructive role in
those peace talks and it will be an opportunity for me to renew
my dialogue with the Papua New Guinea Prime Minister.
JOURNALIST:
Just coming back to the economy. Some of the market economists
are saying that we underestimate or we are being to complacent about
the taxable income with the Asian turmoil, particularly in the next
financial year. Have you had any advice on that matter?
PRIME MINISTER:
No. I don't believe we are the least bit complacent. In fact all
of our actions are the epitome of a Government that took cautionary
measures when it came to office.
I mean we were criticised for cutting the budget deficit. Mr Beazley
reminds me of somebody who sets fire to the building and then says
don't bother to call the fire brigade and then when it does
arrive, he tries to cut off the hose and then says it would have
burnt itself out any way.
I mean we were criticised by the Labor Party for cutting the budget
deficit, we were criticised by others for being too severe in the
measures that we have taken but if we had not fire proofed the Australian
economy in the way that we did we would now be facing a far bleaker
outlook than is the case.
JOURNALIST:
What do you make of Mr Keating's comments last week....?
PRIME MINISTER:
When he boasted about inflicting pain on the Australian people?
It was just a reminder of one of the reasons why he was so resoundingly
rejected in March of 1996. I mean it was an extraordinary comment.
He was actuas an extraordinary comment.
He was actually boasting about the fact that he hurt people. And
his Deputy Prime Minister is the current Leader of the Labor Party.
[Ends]