Subjects: Senator Harradine, budget, GST, private health insurance,
education, self-funded retirees
E&OE................................................................................................
MILLER:
And your chance to talk to the Prime Minister this morning, welcome
to the studio Mr Howard.
PRIME MINISTER:
Very nice to be here, John.
MILLER:
Mr Howard, if I may just prime the pump a little bit first by asking
about your meeting yesterday with Brian Harradine. The reports are
this morning that yourself and the Treasurer, Peter Costello, held
a meeting of almost an hours length with Senator Harradine yesterday,
no advisers in the room, are you happy with the outcome of the meeting?
PRIME MINISTER:
We did have a meeting and we obviously discussed a number of things
including our taxation plan. I don't think there is any point
in my speculating about what the ultimate outcome of that meeting
would be and I've always taken the view that if I have something
to say to Brian Harradine I do it to him in a courteous, direct way
with a personal discussion and I don't then go and give him public
advice as to when and how he should react to anything I put to him.
I don't think that's courteous and I don't think that
is productive and I really don't have anything to add to the
earlier confirmation that a meeting took place.
MILLER:
Okay. But would you describe the meeting then as amicable?
PRIME MINISTER:
I always have amicable meetings with Brian Harradine. We don't
always agree, but he is a person for whom I have had a long regard.
We have different views on some issues, we have similar views on some
others. He is a very conscientious person, he's a true independent,
he thinks carefully and reflectively before he makes decisions on
issues. And I'm sure he will do that in relation to the taxation
plan as he does in relation to other issues. But I really can't
and won't say any more than that.
MILLER:
Alright, well then if you look at the newspapers this morning, The
Australian, for example, is saying that the fate of the GST is
set to be decided today when independent Senator Brian Harradine casts
his telling vote. Now, is that a possibility? Could it all be over
today?
PRIME MINISTER:
Well, look, the only person who can accurately reflect the views of
Brian Harradine is Brian Harradine and I'm not going to say what
I think he may or may not do about this or that on a particular day,
that really is a matter for him.
MILLER:
Well, I must say, you are looking fairly relaxed and comfortable about
the matter.
PRIME MINISTER:
Well, I'm always pleased to be in Queensland. It's always
a great pleasure to be here away from Canberra. And can I just say
that it's been a good week for the Government because it's
been a good week for the country. We've delivered a first class
Budget that reinforces the economic strength of this country and sets
us up very well for the next century. So, I feel that we have put
down another marker of the good government we've tried to deliver
over the last three and a half years and the budget has been, deservedly
very well received. It's a good economic Budget but it's
also got a lot of social provision in it. We're spending a lot
more on the future, on research, on medical and scientific research,
we're doubling the funding there. We're spending more money
in giving working people choice in the education of their children.
We're spending more money on health in country areas, getting
GPs into the bush. We're spending more money in providing fresh
apprenticeships in the bush. We're extending work for the dole,
we're doubling it from 25 to 50,000 places. But we're also
delivering a strong surplus. So, I have every reason to feel that
we've been able to deliver a very positive Budget for the economy,
but one that makes very careful, sensitive social provision.
PRIME MINISTER:
We'll get to what Kim Beazley had to say last night in reply
in just a moment. But first of all the very night of the Budget, Simon
Crean was saying, this isn't the real Budget, because so much
of what's in it is contingent upon the GST, the sale of Telstra,
etc. Now what's your view on that? I mean, can you deliver on
the Budget without, if one of those two things falls over?
PRIME MINISTER:
Well, this is about the next financial year and the GST doesn't
start till the following financial year. That was just a smokescreen
by Mr Crean to divert attention away from the Budget. Everyone knows
we went to the last election with a tax plan, it was the centre piece
of the campaign. You and I sat in these very chairs on a couple of
occasions during the campaign and debated the issue and I took calls
from listeners. We won that election. We told the public everything
of our plan, we didn't hold anything back, there was full disclosure
at every stage during the campaign. We also made full disclosure of
our plans in relation to Telstra. And what we are saying is that having
told the public what we intended to do if we won, having won we believe
we are entitled to implement what we told the public we would do.
A good feature of the Budget last Tuesday night was that we delivered
on every single promise that we made in the election campaign. The
Treasurer held up a document which listed every promise. They've
all been delivered. All of them. Because that is what elections are
meant to be about. They're about parties offering alternative
programmes and then if they win putting those programmes into effect.
And we're merely seeking the approval of the Parliament to do
what the public said it wanted us to do by re-electing us.
MILLER:
Okay, we've got a board full of calls and we would like to get
to them, but just very quickly, Kim Beazley last night said that you
were squandering a surplus because of your obsession with the GST
at the expense of jobs.
PRIME MINISTER:
Well, that's wrong on both counts. We are not squandering the
surplus. We use the surplus to repay the debt that Mr Beazley ran
up. Mr Beazley ran up $80 - $90 billion of debt as Finance Minister,
and that surplus doesn't sit in the bank and moulder away, it
is actually used to repay debt. If you repay your debts you are not
squandering the money are you? You are putting it to a very useful
service and you are removing your future obligation to pay interest.
MILLER:
Now, I must admit that I find the idea of paying of the national mortgage
as it were very, very appealing.
PRIME MINISTER:
Well, it is. Most people know very clearly the benefit for them of
that. Because the less interest, the lower the interest bill of the
government, indirectly the lower the interest bill of the citizen.
We have lower interest rates now than we have had for thirty years.
And one of the reasons for that is that the Federal Government, my
Government, has paid off debt and run budget surpluses. And not run
budget deficits. Because if you run budget deficits the government
is out there in the market borrowing money to pay for the deficit.
And that is increased competition for it for money and that pushes
up interest rates and that's one of the reasons why interest
rates are low, not the only one. And people appreciate that, people
know, the listeners know that they're $320 a month better off
because their housing mortgage has come down. And if you go back into
deficit you don't pay off the national credit card then you might
see your interest rates going up again.
MILLER:
Alright Prime Minister, we have got a very, very quick commercial
commitment here then we will come back and go straight to the phones
[COMMERCIAL BREAK]
MILLER:
Okay, as promised let's go to the phones now. Jeff, good morning,
you're speaking with the Prime Minister.
CALLER:
Good morning, Prime Minister.
PRIME MINISTER:
Good morning, Jeff.
CALLER:
Prime Minister, I'm a small business person. I've got four
children. My question is regarding supermarket chains and suppliers
of everyday necessities of life and how they're on costs, such
as provision of electrical, plumbing, air conditioning services, how
those costs will be reflected also in the price of food as well as
the cost of the GST will already add to it.
PRIME MINISTER:
Well, one of the consequences of the GST of course is that the 10
per cent will be reduced by the fact that taxes you pay on some of
those things you mentioned will be fully refundable. And because you
pay taxes now which are not refundable your tax position will be better.
And that, of course, is the reason why everything doesn't go
up by 10 per cent. And it's been calculated, for example, that
20 per cent of the cost of putting an item on a supermarket shelf
is fuel. Now, fuel is dramatically cheaper under the GST. Not only
have we brought in very significant reductions in the cost of diesel
fuel but because using fuel for business purposes will be a business
expense, and therefore any tax paid on that will be fully refundable
under a GST, on average the price of fuel will fall by seven cents
a litre for business purposes. And all of that adds up to a situation
where in the whole GST arrangement the cost of putting things on the
supermarket shelf will be reduced. And that is why, again I say, the
cost of items to the consumer is dramatically lower than the 10 per
cent.
MILLER:
Okay, Jeff, thanks for your call. Jim's on the line. Hello, Jim.
CALLER:
Yeah, g'day John. Good morning, Mr Howard.
PRIME MINISTER:
Good morning.
CALLER:
The question I'd like to ask you is that your Government, as
well as the previous government, is so hell bent on user pays for
everything but as a taxpayer and I send my daughter to one
of the best State high schools in Queensland that why do part
of my taxes have to subsidise other people who decide they want to
send their children to private schools? I thought this was a choice,
what we do with our lives [inaudible] and if somebody wants to send
their children to what they call is a better classed education which
is fairly expensive, very expensive as you possibly would know yourself,
why should I have to subsidise those people who make that choice?
I make a choice, so do they, they should pay for it.
PRIME MINISTER:
Yeah, well, look, I understand that argument but that's an argument
that, of course, cuts both ways. People who send their children to
independent schools and many people send their children to
independent schools not as an exercise in elitism but as a matter
of conscience because they believe the attitudes and values of certain
independent schools are important to them, to their lives and to the
lives of their children. And what they say is that they pay taxes
like you and me and I am a product of a government school and
I've educated my own children in both the government and the
independent sectors, so I have a familiarity and a sensitivity towards
both but what those people equally say is, if I pay my taxes,
I'm entitled to get some of those taxes back to help defray the
cost of me exercising my choice to send my children to an independent
school. And the funding arrangements that we have, which don't
discriminate against government schools and the people who've
criticised our decisions on independent schools ignore the fact that
it's the States that provide most of the funding for government
schools. So these comparisons of Federal funding for government and
independent schools are quite misleading. What we have tried to do
is to give the maximum level of assistance in the private area to
the poorer schools. The so-called wealthy' schools
and I say wealthy in inverted commas their parents get far
less and those schools get far less than the poorer Catholic parish
schools which are amongst some of the more disadvantaged schools in
our community. I think you have to have choice but it's got to
cut both ways. And the 30 per cent of the community who educate their
children in independent schools argue that they pay their taxes and
they should get some of the cost of educating their children back
from the Government. It's only some. The maximum level of assistance
for the most needy schools still only amounts to 70 per cent of the
cost of educating a child in a government school from a federal level.
So there's still a portion, even in those very poor schools,
there is still a portion borne by the parent.
MILLER:
Jim, thank you for your question. Hello, Carol.
CALLER:
Yes, I'm here.
MILLER:
Good morning, Carol. You have the Prime Minister.
CALLER:
Good morning, Mr Howard. Good morning, Mr Miller.
PRIME MINISTER:
Good morning.
CALLER:
I would like to firstly say how proud I was of you last week greeting
our overseas visitors.
PRIME MINISTER:
Thank you.
CALLER:
You did very well. I was very proud. Now, I'm a self-funded retiree.
You did not mention us at all, Mr Howard, in your budget. I have scanned
everything that I can see. I will never be on an old age pension.
We feel that we fall between the gap. We have to pay our taxes. We
don't get any allowances for rates or electricity or phone or
any of those things. I have been in a health fund since I was 15 and
I am now 57. There is nothing there for us. I mean, there's still
provisional tax. I only earn $25,000 a year, which isn't a great
deal. Couldn't you not have made some provision for what you
call the aging population who are trying to not ask for anything very
much? I just felt, Mr Howard, there should have been a little bit
because I didn't see the word self-funded retiree mentioned at
all.
PRIME MINISTER:
Well, the budget doesn't, of course, announce everything that
the Government does. We did and you mention you're in
a private health fund we did bring in a 30 per cent rebate
for private health insurance and that would no doubt have helped you
to the tune of 30 per cent of your premium. And that came in at the
beginning of last year. Once the appropriate age is reached all self-funded
retirees below a certain income level are entitled to get the benefit
of the seniors' card and it sounds to me as though your income
range would entitle you to that. Under the GST, of course, like all
other taxpayers, you will get a tax cut. You will enjoy the benefit
of the abolition of provisional tax. There will, at age 60, I have
to say, be a special one-off wealth or savings compensation payment
of up to $2000 for self-funded retirees. There will be some other
adjustments which probably won't affect you because they relate
to people who are part-pensioners in relation to the earnings limits.
So it's not accurate to say that self-funded retirees have been
ignored. We are very conscious that self-funded retirees are not as
enthusiastic about lower interest rates as people who are paying off
housing mortgages. I understand that. And that's one of the reasons
why we've taken a couple of decisions. We were very heavily influenced
on the decision on the health insurance rebate by the position of
older and retired Australians because of many of them have been loyal
members of health funds over a long period of time and felt, quite
understandably, that they hadn't got much in return. And that
particular measure, which has been of great benefit to a lot of people
over the age of 50 who've been in health funds for a long time,
will of course help them very significantly.
MILLER:
Okay, Carol, thank you for your call. Hello, Greg.
CALLER:
Yeah, good morning, Prime Minister.
PRIME MINISTER:
Good morning.
CALLER:
Prime Minister, I've just one quick question. Will the Federal
Government continue to review its resources that it is allocating
to fighting the drug problem, in particular, law enforcement because
it appears to me that some of the resources that your Government has
allocated over the last two years are beginning to show results?
PRIME MINISTER:
Well, the answer is that we will keep on allocating a high level of
resources. We've now committed more than $500,000 to our Tough
on Drugs' strategy. And I announced the second part of that at
the Premiers' Conference and I got strong support from all of
the Premiers, Liberal and Labor alike. This is a non-political issue,
fighting the drug problem. We are putting more money into the Federal
Police. We're providing a lot more money for treatment. We're
going to introduce a new diversion scheme whereby people who have
a drug problem and who are apprehended by the police must be compulsorily
assessed and then offered a treatment course as an alternative to
being caught up in the criminal justice system. This has the support
of Mr Beattie. It has the support of Mr Carr and Mr Kennett. All of
the States think it's a good idea. But on top of that we continue
to pour resources into the Federal Police and Customs, a record level
at a national perspective. And we'll continue to work very closely
will all State governments. It's a terrible problem. It touches
the lives of thousands of Australians and we are concerned to work
with anybody of goodwill who wants to reduce the scourge of drugs.
MILLER:
Okay, thank you very much for that question. We can one more in. I
think we've only got about two minutes left and my apologies
to those who've been waiting on the line. Hello, John.
CALLER:
Hello, yes. Good morning, Prime Minister.
PRIME MINISTER:
Good morning, John.
CALLER:
A quick one on private health insurance. I work in the private health
insurance industry as an independent adviser. One of the things we're
continually working at without a lot of success is to try to get companies,
corporations, etc, to provide health insurance for employees. The
main thing against that is fringe benefits tax.
PRIME MINISTER:
Yes, Yes.
CALLER:
Now, I don't see that the Government would suffer in any way
in removing fringe benefits tax from that because there's very
little of it coming through at the moment but it would bring a lot
more people into private health insurance if it was removed.
PRIME MINISTER:
Well, John, we looked at this. We decided that the cost that would
be involved would be better used being put into the 30 per cent subsidy.
I know the argument but that subsidy is costing about $1.5 billion
to $1.7 billion a year. And we felt that we couldn't justify
putting even more money, over and above that, into private health
insurance given that we wanted to increase, which we have, the money
we've given to the States for public hospitals. Like schooling
this is an area where you've got to balance. You've got
to support the public system but you've also got to encourage
and subsidise choice in the private system and we made a decision.
So at this stage we don't think we can afford the additional
resources. And it would cost us a little more than you suggest but
it's