E&OE……………………………………………………………………………….
JONES:
Well, the Prime Minister is with me in the studio. Prime Minister, good morning.
PRIME MINISTER:
Good morning Alan, it’s great to be with you again.
JONES:
Back on deck hey?
PRIME MINISTER:
I am indeed.
JONES:
And the big issue is the GST.
PRIME MINISTER:
Yes, it’s the major legislative issue when Parliament resumes. We put a detailed plan, we fought hard, we won and in a fairly simple-minded way we think we should be able to put it through. And I think most of the Australian people do because an election is really a compact between the electorate and the elected. And you put something forward, they vote for you, they expect you to do what you said you were going to do and that’s what we are going to try and do.
JONES:
The Democrats have run for years and years on this rather vulgar notion, I suppose, of keeping the bastards honest if I could be excused of that language but that’s what they have said. It seems that there are some who are determined now to keep you dishonest?
PRIME MINISTER:
That’s right. That’s right. Well, I plead to be kept honest. I plead, I say please to the Australian Democrats – keep me honest.
JONES:
So what do you need in the Senate in terms of numbers?
PRIME MINISTER:
We need 39 votes.
JONES:
And how many have you got?
PRIME MINISTER:
We have got 37.
JONES:
Right.
PRIME MINISTER:
….And there are two Independents. One of them is Senator Colston, the other is Senator Harradine and there are now two Greens and, what, seven Democrats. We need two more.
JONES:
We have developed this rather strange notion that someone democratically elected to the Senate is either not entitled to a vote or his vote is somehow inferior to that of others. Is that argument used in relation to Carmen Lawrence?
PRIME MINISTER:
Oh no, no, no. The argument about presumption of innocence has always been that if somebody, being a Member of Parliament is charged with an offence, until that person is convicted that person is entitled to exercise the full rights of a Member of Parliament. Now, I acknowledge that we adopted a harsher stance in the last Parliament in relation to Senator Colston than that conventional approach. Now, I acknowledge that and in going back to the conventional approach we are not adopting as harsh an approach as we did in the last Parliament but we are adopting the same approach as the Labor Party has always taken.
JONES:
But it does seem an extraordinary element to introduce into the currency of political voting that someone democratically elected and still not in fact prosecuted can have a vote which is regarded by those for political purposes as not being worthy as the same vote as someone else.
PRIME MINISTER:
Well, I mean, I have to acknowledge that what you say is right. It is the normal rule that if somebody is charged with an offence and that person is a Member of Parliament until that offence is proved against that person then his or her right as a Member of Parliament remain undiminished.
JONES:
The big issue about the GST seems to be, although I thought this was elaborated upon during the course of the election, what’s to happen to low income earners. Now, it doesn’t really much matter whether you have actually explained that. If they don’t really understand it, that’s the problem. Can you just rehearse again what you guaranteed low income earners if a GST were introduced at 10 per cent.
PRIME MINISTER:
Well, to start with, if you are a pensioner you will get an increase in your old age pension of four per cent from the 1st of July 2000, that’s the year, the date that the GST comes in. Now, that is guaranteed to be always 1.5 per cent more than the ultimate cost of living impact of the GST. Now, we estimate that cost of living impact to be about 1.9 or two per cent. But if it turned out to be a little higher, we don’t believe it will be, but if it did then there would always be a buffer over and above that of 1.5 per cent. Now, that’s the first and most important thing to do there for pensioners.
Now, if you are a low income earning taxpayer we are going to increase the tax-free threshold from $5,400 to $6,000. We are going to drop the bottom rate of tax from 20 per cent down to 17 per cent. We are going to significantly increase the family benefits. We are going to increase by $4,000 a year the annual income that a family can have before the special welfare supplements for their children begin to phase out. Instead of those amounts phasing out at a family income of, I think, $24,500 now, that will be increased to $28,500. And that means that a lot of low income people will retain more money in their pockets and be better off, significantly better off, before they start losing their increased family benefits. Now, see what we have at the moment is that everybody up to about $55,000 or $60,000 of family income a year gets a, what is a family allowance and then if you have an income below $24,500 a year you get a loading on that allowance. Now, at the moment that begins to be withdrawn that loading at $24,500. We are going to increase that amount to $28,500. Now, you are talking here about the battlers. You are talking here about people who don’t have big incomes, they have a number of children, they are trying to pay off a mortgage. And when you add all of those things….
JONES:
That’s your background isn’t it?
PRIME MINISTER:
Well of course. Well, it’s the background….
JONES:
I mean, there is a presumption somehow that politicians of both persuasions are out there trying to hurt poor people.
PRIME MINISTER:
We don’t….look, nobody wants to hurt, no matter whether you are John Howard or a Labor politician, you don’t want to hurt people who are struggling. Nobody sets out to do that. I am not setting out…and we are trying to be fair, we are trying to be fair to people. But at the same time we are trying to give people who are getting ahead and earning a bit more and aspiring to have a higher income and a bigger house and a four-wheel drive and a few of the other things, and it’s perfectly legitimate and desirable for Australians who aspire to have, we want to give them a bit of encouragement too. So what we are trying to do all the time is to balance fairness with incentive. I want a fair society, I want to look after the people who are doing it hard. But on the other hand, I want to give the achievers an incentive to achieve even more because if you don’t have achievers in our community you won’t have a successful community. So you have got to look after both.
JONES:
So you have got this inquiry now, it seems to me you have agreed to it. I am not too sure what there is that needs inquiring into that wasn’t debated….
PRIME MINISTER:
Well, we said we’d have a look at some of the technical aspects of the application of the GST to certain pharmaceuticals and other products and education and so forth and that’s being done now. We said we’d do that.
JONES:
And when will that be ended?
PRIME MINISTER:
Well, that will be ended at the end of next week.
JONES:
And that means all the cards by then will be on the table.
PRIME MINISTER:
All of our cards will be on the table.
JONES:
Right. Would there be any circumstances in which you might increase or modify the benefits to low income earners in order to get it through?
PRIME MINISTER:
Well, we don’t have anything in contemplation. I mean, if people put propositions to us then they get considered. But I don’t….look, I mean, we did push the envelope, you know, fairly far to the edges in putting the plan together and we think it’s quite generous. But you never in this business say: under no circumstances would you refuse to consider X, Y, or Z. But we are not interested in any fundamental change to the plan.
JONES:
So in other words there will be, if a GST is to apply it will come in on food.
PRIME MINISTER:
Well of course. If you don’t Alan you are pulling away at [inaudible]…..
JONES:
Once you create exemptions you just create complications.
PRIME MINISTER:
….because then you push the border elsewhere, people say: oh okay, they’ve taken it off food, they should now take it off children’s clothing, they should now take it off suits, they should now take it off shoes, they should now take it off this, that or the other, and you’re back where you are now and what’s the point of doing it.
JONES:
Now we’ve got the Premiers’ conference coming up next week. Prime Minister, there’s going to become an argument about funds being available to various States. How are you going to address that?
PRIME MINISTER:
Well we’ll tell them the truth and that is that they’ll all be better off as a result of the GST and there’ll be more money for every State government to spend on schools, and hospitals, and police.
JONES:
And you’re taking some of the political odium away from them. They can remove some of those taxes that cost them.
PRIME MINISTER:
They can get rid of their stamp duties, their financial institutions duties in those States where they apply. They can get rid of their stamp duties on business conveyances, they can get rid of it on cheques and higher purchase agreements, and all of those things. They will all go as well as the wholesale sales tax, all of those taxes will go as well and they will have an ever rising flow of revenue because the GST will go entirely to the States. Now there’ll be an argument between the States as to who gets what share of the GST pie. Now I’m going to ask the Commonwealth Grants Commission to do that. That is an independent body that always has determined allocations of Commonwealth money between the States. Commonwealth money all goes into a pool and then the States get a share of the pool. Now the Grants Commission will decide how much Queensland gets, how much New South Wales and Western Australia get. I’m not interested in arguments between States about who’s….I’m an Australian and as far as I’m concerned all Australians should be treated equally no matter where they live. I’m not interested in arguments from a State Premier that he’s carrying somebody else’s load. I think Bob Carr is running advertisements which frankly are a waste of his taxpayers’ money. He’s basically saying that we’re not all meant to sort of look after each other…..
JONES:
[inaudible] federation.
PRIME MINISTER:
It is.
JONES:
Just two things before you go. There has been some discussion this week that public servants may be in line, for departmental heads, for increases in salaries up to three times their current level. Are there any circumstances where you as Prime Minister would continuance a senior public servant being paid $500,000 or $450,000, or three times what you get?
PRIME MINISTER:
Well I’m not worried about, you know, my salary, whether it’s lower than the salary of people who carry lesser responsibility is a…..[inaudible]
JONES:
But your departmental head is paid more than you are.
PRIME MINISTER:
Yeah well I understand that. But I mean I didn’t go….
JONES:
There’s something wrong with the system.
PRIME MINISTER:
Yeah I know Alan but I didn’t go into it for money.
JONES:
No, I know that.
PRIME MINISTER:
And I think by community standards I’m well paid and I’m not interested in a pay rise for John Howard, I’m just not interested in that. However there is a problem, frankly in holding within the Commonwealth bureaucracy a lot of the people we need. They are being taken out of the Commonwealth bureaucracy by State bureaucracies that pay them higher salaries, by the private sector. There has been a traffic jam on the road from the Federal Treasury to the central business district of Sydney, of high quality people who are being taken out of the Treasury by very large salaries and they are now working for banks and financial institutions. There is a case for saying that the salary levels for senior bureaucrats at a federal level have fallen behind those of their State and private sector counterparts.
JONES:
Just another one which is going to be a big issue for you and that is in relation to the banks. I mean the Bank of Switzerland could come in and take over ANZ.
PRIME MINISTER:
Well, they would need to get foreign investment permission.
JONES:
Yeah sure but technically they can….
PRIME MINISTER:
Yes but [inaudible] run the gauntlet of the authorities.
JONES:
But you’ve got rules where the four, big four can’t merge. If you could be persuaded that the merger would provide better or as good a services as exist now and would not result in increased costs for the consumer, which is the two big issues that consumers worry about with the banks, would you give consideration to?
PRIME MINISTER:
We have always said Alan that our four pillars policy is not there for all time. We’ve said that if we could be persuaded that there’s greater competition, there would not be a diminution in service, costs would not rise, all of those things that you say, and if we felt the community would go with that and would accept that that was the case then we would consider some change in the policy.
JONES:
Also a concern though that if the head is put on someone like Don Argus from his board, and says: well listen, we’ll relocate. Boards decide all that for the very reason that you’re talking about the public service looking for a better return on their efforts by going out of the public sector, than they could relocate overseas at massive cost to us.
PRIME MINISTER:
Well I acknowledge that that can happen although I’m not certain that I would take at face value the proposition that it wouldn’t be a cost for a large company like that in relocating. I mean they have a pretty strong customer base in this country. But I thought that was a fair comment for Don Argus to make. I mean his first obligation is to his board and his shareholders. My first obligation is to the generality of the Australian people and you’ve got to keep a number of balls in the air. But this is a thing that will…this is a debate that will go on and it’s question of common sense and reason. At the moment there’s a policy which says no more mergers and that’s a very soundly based policy and we’ll need to be satisfied that things have changed a lot before we’ll consider relaxing it.
JONES:
Good to talk to you.
[ends]