Subjects: Federal Budget 1999
E&OE....................................................................................................
GRIMSHAW:
Prime Minister, good morning.
PRIME MINISTER:
Good morning, how are you, Tracey?
GRIMSHAW:
Very well, thank you. Any surprises for you in the response to the
budget today?
PRIME MINISTER:
No, I think the responses have been reasonable. It is a good budget
for the long-term future of Australia. It's very responsible.
It pays off a lot of debt. That's very important because if you
really want to set up our children for a strong 21st Century
we want to deliver them a government debt free 21st Century
and that's a very important element of the budget. We do have
a strong economy. We have performed a lot better than most people
expected but we're not complacent. And we've found room
for some very important initiatives in areas like health and medical
research, which is going to get a doubling of funding over the next
six years. We've put more resources into education. We've
put more resources into the bush. And we've introduced some very
good reforms in the private health insurance area that will provide
people with a greater incentive to enter private health insurance.
GRIMSHAW:
You have had, as you say, a reasonable response overall but there
are, of course, some voices raised in protest. One of the key points
of consternation is unemployment, that you are not doing enough if
you're prepared to have unemployment hover at around seven-and-a-half
per cent for the rest of the year.
PRIME MINISTER:
Well, that's the lowest it's been for a decade. And we can
make further progress on the unemployment front if the Senate will
pass legislation to reform the unfair dismissal laws and if the Senate
will agree to further changes to the labour market to make it more
flexible. We have come a long way. We've generated 400,000 jobs
in three years. We've got it down to its lowest level in 10 years.
We want to go further. We've set up the conditions for strong
economic growth but we need to make some more changes to the rules
that govern the employment of people so it's easier to take on
more staff without fear of facing expensive unfair dismissal suits.
GRIMSHAW:
You also want the Senate to pass a GST and you might have expected
to get Senator Harradine on side with some of the measures that you've
made in the budget: porn crackdown, Tasmanian schemes and expanding
the youth allowance. But, in fact, you seem to have irritated him
more by pinning the expansion of the youth allowance to the passage
of the GST.
PRIME MINISTER:
Well, I don't make a habit of giving a running commentary on
Senator Harradine's reactions. Senator Harradine and I have discussions
from time to time about matters of mutual interest and of concern
to the Government and of concern to him. I never believe in communicating
with him over the airwaves.
GRIMSHAW:
But you need Senator Harradine on side, don't you? You're
not going to get a GST unless you get Senator Harradine on side.
PRIME MINISTER:
Everyone knows that we need a majority in the Senate to get the GST
through. And everyone knows that we're coming to the decision
day, I guess, on that issue and it really doesn't achieve anything
for me to be endlessly speculating about this or that nuance of somebody's
reaction. If I want to say something to Senator Harradine or to Senator
Colston or to the Australian Democrats I'd prefer to say it first
in private to their faces.
GRIMSHAW:
All right, but does it alarm you when he makes comments that what
you've offered is too little, too late and you've improperly
pinned it to a GST? He's almost saying that you've tried
to blackmail him into voting for the GST.
PRIME MINISTER:
Well, I didn't hear him say that but beyond that I've got
nothing else to say.
GRIMSHAW:
Okay. The Opposition says that you're relying too much in this
budget on the sale of the rest of Telstra and the passage of the GST,
is that a fair point?
PRIME MINISTER:
Well, it is true that we want to sell the rest of Telstra in two stages
16 per cent first, then a review to satisfy us that all the
community service obligations are being met. That's true but
we went to the public saying that. That's our policy. That's
what we were elected to do. Governments normally go to the public,
they say this, if you re-elect us, we'll do this.'
And what we've done is, we went to the public last October. We've
said, if you re-elect us we'll do this,' and last
night we delivered on every single promise that we made in October
of last year. We produced a booklet saying, Keeping Our Promises
for a Stronger Australia.' Of course we want to go through with
our programme. Of course we want tax reform but we want it because
the country needs it. And if we can get our plans on Telstra through
the Parliament we can have, by 2003, that's in three-and-a-half
years time, we can have no net Federal Government debt and it will
be the first time for almost 100 years. Now, think what that means
to the future prosperity of Australia. Think what that allows future
governments to do by way of additional spending on schools, on research,
on all the sorts of things that you would like to spend money on but
you can't because you don't have enough of it. I mean, I
can't believe the resistance that this is meeting in the Senate.
I mean, here is a heaven sent, once in a generation, opportunity to
free this country from the shackles of government debt and these characters
are against it even though the Australian people voted for us.
GRIMSHAW:
It's a fine claim to say that we'll be debt free in 2003
if the remainder of Telstra is allowed to be sold and if the GST passes
but they are two huge ifs.
PRIME MINISTER:
No, well, the GST is not related. I'm sorry, the GST, Tracey,
is not so related to debt. The GST is related more to lower personal
income tax cuts and us being a more competitive nation.
GRIMSHAW:
You talk about the promises that you've delivered on in the budget.
Analysts are making the point this morning that many of your rural
promises rely on the further sell-off of Telstra and that's not
looking likely.
PRIME MINISTER:
Well, that was said last October. I mean, we didn't say last
October they were unconditional and now, seven months later, we're
hitching them to Telstra. What we said were unconditional last October
have been delivered unconditionally in this budget. Those that were
subject to the sale of 16 per cent are still subject to the sale of
16 per cent. We haven't changed our position. We've kept
our faith. We've delivered on our promises in full, on time,
without exception.
GRIMSHAW:
You said you weren't going to offer any more compensation to
families and to low-income earners who are adversely affected by a
GST and you haven't but will some of that $5 billion surplus
end up going in that direction inevitably, do you think?
PRIME MINISTER:
Well, there's always, there's already been a very big provision
for families in the tax package. Our position on the GST, Tracey,
is that we're not going to put and take the essential principles
of it. I've always said that we would be willing for some fine-tuning,
as I've put it, but it is already a very significantly
it's a generous package. There are $13 billion of personal tax
cuts, 80 per cent of the Australian community will be on a top marginal
rate of 30 cents in the dollar. You'll be able to go through
about $20,000 to $30,000 of increases in income without passing into
a higher tax bracket. Now, that will really be a ripper incentive
for middle Australia. And that, in many ways, is the nugget of gold
in our taxation policy.
GRIMSHAW:
Can we talk about education? State schools are screaming about the
education measures announced in the budget. Sharon Burrows from the
Australian Education Union quoted some figures last night. She said
that private school students will get between $76 and $220 each out
of the budget measures while 70 per cent of Australian children who
attend State schools will get just $10.
PRIME MINISTER:
Well, that's a very dishonest comparison. You know why? Because
in our country, State governments are the principle sources of funding
of government schools. That's the arrangement. And it is quite
dishonest, absolutely dishonest of anybody just to look at the direct
Commonwealth payments to independent schools and the direct Commonwealth
payments to government schools. Because it has traditionally been
the responsibility of the Federal Government to provide the great
bulk of direct government funding for independent schools and it will
always, on a per capita basis, look bigger. I mean, the States are
getting a five per cent increase in the general tax revenue from the
Federal Government this year. And the major call on State government
budgets and, therefore, the major call on that money is government
education. It has always been the case in this country that State
governments provide the lion share of funding for government schools
and the funding that is provided from governments to private schools
comes from the Federal Government. Now, that's the system obtained
under my Government and obtained under the Hawke and Keating governments.
And these statistical comparisons which always occur on a per capita
basis between government schools and private schools according to
the Federal Government sourcing, they're quite dishonest and
they ignore the fact that the great bulk of funding going to government
schools is at a State government level. I mean, we have helped the
needy independent schools significantly. The poorer systemic Catholic
schools and some of the poorer country schools and newer schools whose
parent population are only able to pay annual fees of $2000 or $3000
a year, we've helped them significantly but in the process we
haven't disadvantaged any of the others.
GRIMSHAW:
I guess the main argument, though, is that you haven't really
advantaged the others in as much as private schools seemingly enjoy
a greater I mean, private schools have a revenue stream, for
example, from fees that State schools can't access.
PRIME MINISTER:
Well, that's the nature but nobody has to go to a private school.
But, hang on, that's the principle of our society that you have
free education, well, it's not totally free, nothing's totally
free, but it's more or less free for everybody. If you choose
to go to a private school then you have to carry a financial burden.
I mean, the purpose of this is to provide parental choice. That's
the principle. That is the goal to be achieved. That is the interest
to be served. Not the ideological views of people who support a private
or a government system. Why we support independent schools and government
schools is that we believe in freedom of choice. We think that parents
should have the right to decide where they send their children. Now,
if you are paying very high fees at a so-called very well off school,
you don't get much help from the Government and you have very
high fees. Now, I think that is probably fair enough, although perhaps
some of the parents in that situation wouldn't agree with me.
But we provide a lot of help to the poor parish schools because they
need it and the State government support government schools that are
available to everybody. And over and above their support we provide
literacy and numeracy support. I mean, we're putting almost
this budget will provide an additional, I think, $300 million of additional
support to government schools over and above the money that is typically
provided by State governments.
GRIMSHAW:
Okay. Let's talk about health insurance. The consensus is that
you have indeed provided an incentive for membership but the gap will
still encourage people into public hospitals despite the fact that
they have private health insurance.
PRIME MINISTER:
Well, Tracey, we're working on that. One of the understandings
we essentially reached with the medical profession when the private
health insurance rebate was brought in earlier this year was the progressive
elimination of the gap. And for a lot of procedures in some parts
of Australia the gap has now been all but eliminated and we continue
to work on that. It is true that what we announced last night will
provide an additional incentive for people to go into private health
insurance and that is good. And the message out of it last night to
young people is join now while you are fit and healthy and not likely
to make any claims so that when that changes at some stage in the
future it won't be as expensive for you. A great incentive for
30 year olds to join.
GRIMSHAW:
Would you agree, though, that you're not going to ease the burden
on public hospitals until you fix the gap problem?
PRIME MINISTER:
I wouldn't agree that that is the only thing that constitutes
a burden on public hospitals. The fall in membership of private health
insurance funds is a problem for private hospitals. That's why
we brought in the 30 per cent rebate. All of these things play a part
and no one thing dominates the others.
GRIMSHAW:
All right. We'll leave it there. Thanks for your time this morning,
Prime Minister.
PRIME MINISTER:
A pleasure.
[ends]