Subjects: budget, surplus, unemployment, private health insurance,
research and development, tax package
E&OE................................................................................................
PEACOCK:
Prime Minister, welcome to AM. Are you having sleepless nights wondering
how to spend the pots of money?
PRIME MINISTER:
No. I thought Peter's introduction was a touch over the top.
I don't think it's fair to categorise the situation as rolling
in money. Surpluses don't sit in the bank. They are used to pay
off debt and it's very important that we pay off our debt and
that we set ourselves up as a debt free nation at a federal government
level in the 21st Century.
PEACOCK:
Once you sell Telstra you'd be able to do that and still have
several billion left over for compensation for the GST would you not?
PRIME MINISTER:
Well you've always got to be on guard against hubris and complacency
and smugness. The world is a very unpredictable place economically.
The outlook at the moment is very good, but things can change. Things
could change in the United States, things could change in Europe.
I don't think they will, but they could. And a sensible government
doesn't spend beyond its capacity. A sensible government, to
use an old expression, always keeps something in store for a rainy
day. A sensible government always recognises that you should have
a bit in reserve in case things turn against you. And that has been
one of the pieces of reasoning behind the construction of this budget.
Look, let me make it very clear, economic times in Australia generally
are very good. They're the best they've been for 30 years.
Nobody denies that. But there are still pockets of underprivileged
in our society, and there is still areas of rural Australia which
are doing it very hard. And I want the people in those areas that
I understand that and that the relatively boom conditions of some
parts of Australia are not being universally and uniformly shared
throughout our nation. And it's one of the constant challenges
of my Government to communicate an understanding of that to people
in the bush, and to bring about measures that help them and promote
their enjoyment in future in time of the economic prosperity of the
rest of country.
PEACOCK:
And what's the message to the unemployed in this country? Work
for the dole and wait for Telstra and the GST?
PRIME MINISTER:
No. I think the message for the unemployed is that it is lower now
than it's been for ten years. If you have continued strong growth
we can maintain the gains of the past two years. But if you want further
major reductions in unemployment which we want, then we need to further
reform the labor market. Get rid of our stupid unfair dismissal laws,
entrench youth wages so that the cost of employing young people doesn't
go up and therefore you can employ more of them. And that immediately
throws an onus on the Labor Party and the Democrats in the Senate
to stop obstructing legislation which will further reduce Australia's
unemployment level.
PEACOCK:
Your Government says it's for choice. What choice does a young
employed person have today in terms of their health insurance? You're
saying insure now or pay the whole bill when you get sick when you
are older.
PRIME MINISTER:
You're probably saying to a young bloke in his late 20s, take
out private health insurance now so that when you're 45 and have
a family, and you might feel a greater need, it won't be as expensive
as if you leave it until then to join a private health fund. And I
think what we are essentially doing is providing a further incentive
for young healthy people to enter private health insurance at an earlier,
at age 30 or less. We're going to provide a period of grace at
12 months so that anybody between ,say 30 and 65, who's not in
a private health insurance fund can join during that 12 month grace
period without additional penalty through higher premium. And then
it will only be after that that the rise in premiums will begin to
take affect in relation to people who haven't joined by the time
they've reached the age of 30.
PEACOCK:
Is this the last major change that you think will be necessary to
save the private health funds?
PRIME MINISTER:
Well it is a further major structural reform. You can never say in
an area like health that you have stopped reform. It's always
silly to say this is the last thing we're ever going to do.
PEACOCK:
But you've done a lot for the private health funds.
PRIME MINISTER:
We have. But we're not doing it for the funds, we're doing
it for the system. And the public system needs a private system. Everybody
says to me, State governments, Labor, everybody says to me that you
need to get more people into private health insurance so as to help
the public sector to help Medicare. And everything we are doing,
it's not designed to help the private health funds. We have no
special brief for them. But we are trying to get more people into
private health insurance because we think it's good for the system.
That's why we provided a 30% universal tax rebate, that's
why we have provided this lifetime health cover. And I'm very
pleased at the reaction to it. It's a good solid ongoing futuristic
policy. It's not a gimmick, it's not a quick fix, it's
not a band-aid solution. It's something that over time will build
in the value that it adds to the strength of the health insurance
system.
PEACOCK:
Now you also appear to have picked health as the big winner for research
and development. What about other areas of research and development,
in industry? I mean that's at a serious stage of decline isn't
it?
PRIME MINISTER:
Well let's just come to that in a moment. But you can't
just slide over what we're doing in health and medical research.
We are doubling, doubling it. Not increasing by 50% but doubling the
amount of money that this country will spend on health and medical
research.
PEACOCK:
Picking it as a winner?
PRIME MINISTER:
Well we are very good at it. I mean very good, for a nation of 18
million people, we are world class when it comes to the quality of
our doctors and our medical researchers. And as we go into the 21st
Century, we really do have to take ourselves to the forefront of some
of these leading edge areas. If we are ready to continue to grow and
expand and prosper, we have got to build on our strengths. And one
of our strengths is that we are very good at medical research. We
have superb doctors, wonderful surgeons, dedicated researchers. So
we're going to double the funding, that's another $600 million
over a period of 6 years. I think the first 25 years of the next century
is going to see an influence of gene technology for example, comparable
to the influence of information technology perhaps during the last
25 years of this century. And we have to be right up there at the
front. And what this budget has done in relation to the money for
health and medical research, and the commitment to gene technology,
what we have done is to make it possible for this country to be a
world class player and performer, and for the great intellectual asset
that we have. This budget is very much about husbanding and building
on the intellectual capital and the intellectual resources of our
nation. Very much about that and that is very much about the future.
PEACOCK:
Some of the reaction this morning though from the players in R&D
is quite critical. It's saying well you've got health, yes,
and you've doubled that, but there's a whole area of industrial
research and development. I mean BHP just cut it in half. Are you
concerned about the decline in R&D in other areas?
PRIME MINISTER:
Well you can always provide more in the industrial area, and we provided
additional support in our investing for growth statement in 1997.
But our aim last night was very much to focus on those areas of health
and medical research where traditionally the government has carried
the lion's share of the responsibility.
PEACOCK:
Now if I could hark back to the points made by Peter Martin at the
start of this programme, we have the GST package of course, but here
we have this huge surplus. I mean if the taxation system is not broke,
why fix it. You know, it's hardly an eroding tax base with that
surplus is it?
PRIME MINISTER:
Matt, we have a strong economy now, we have a big surplus now, and
therefore out of that surplus we're able to pay debt. Because
we reformed the system a few years ago, today's strength is a
product of yesterday's reform. Tomorrow's strength will
be a product of today's reform. And if we want to protect our
position we need to do better in exporting, and you can do better
in exporting through a GST, you take $4.5 billion of our exports.
We want to make our domestic industries more competitive against imports
and you can do that through a GST, you take $10.5 billion off the
costs of doing business in this country. A huge nation like Australia
should help its farmers by reducing the fuel bill by $3.5 billion
which we'll do through a GST. And the nugget of gold in that
tax reform package is that 80% of all Australian taxpayers will be
on a top rate of 30% or less. The only way you can deliver that is
through the GST reform. I mean I can't think of anything better
for a booming optimistic forward looking Australia in the 21st
Century than to have a tax system where you say to 80% of people,
you can work and know that you've got a top marginal rate of
30 cents in the dollar. Now that is a huge injection of incentive
to middle Australia.
PEACOCK:
And you're going to need a huge injection of enthusiasm from
the sounds of things from Senator Brian Harradine to get his vote.
Let's hear what he had to say.
SENATOR HARRADINE:
I must say how I feel, I feel that I, because of what I did last
year, have let families down. But I did so only after being given
quite clear assurance that there would be adequate compensation. There
was no mention, and in my mind no thought, that it would be tied in
with the GST package.
PEACOCK:
That was Senator Harradine talking about what he says was a promise
by you to compensate low-income families over the youth allowance.
Whose idea was it to tie it to the GST vote?
PRIME MINISTER:
Well I'm not going to get into a public dialogue with any of
my colleagues surrounding the GST.
PEACOCK:
But he doesn't sound like a happy man.
PRIME MINISTER:
Well Matt, I'm not....if I have something to say to Brian
Harradine, or indeed any Senator, I'll do so to them. The Government
keeps its promises, I keep my promises. Last night we delivered every
single promise we made to the Australian people in the last election.
But beyond that I'm not going to respond on your or any other
programme to anything that Brian or anybody else has said in relation
to that particular issue.
PEACOCK:
But presumably you'll be meeting with him very soon. You've
only had, what, two or three weeks, sitting weeks left before the
deadline of June the 30th.
PRIME MINISTER:
Matt I meet lots of people.
PEACOCK:
Prime Minister, thanks very much for joining us.
PRIME MINISTER:
Pleasure.
[Ends]