E&OE....................................................................................................
JONES:
The Prime Minister is on the line in our studio in Canberra. Prime
Minister, good morning.
PRIME MINISTER:
Good morning Alan, nice to talk to you.
JONES:
You have been around a bit.
PRIME MINISTER:
I have indeed.
JONES:
Prime Minister, here we go again, 60 families hopelessly devastated
in the Southern Tablelands of New South Wales. You are aware they
have been hit by fires, some have lost everything. They are on the
brink of destruction and on their survival because they are small
country communities.....[problem with sound]...I was
just simply saying that these families in that area in the Southern
Tablelands have lost everything but on them depends a whole raft of
other jobs shearers, mechanics, bakers, auctioneers, wool classers,
fencers and so on. But still no national disaster fund to meet their
need.
PRIME MINISTER:
Alan, the answer to that is that there are disaster arrangements which
come into operation and over a year involve millions of dollars to
help people affected by all manner of disasters. There are joint arrangements
between the Commonwealth and the States and these arrangements have
worked pretty well. That's not to say they can't be improved
and it's not to say that governments don't give money over
and above what is available under them. But I am not sure that if
you had a national disaster fund you would necessarily over a longer
period of time end up having a better level of assistance than operates
at present.
JONES:
Well, I wish someone in your Government though, with respect, would
speak to the people at Katherine, Wollongong, Gunnedah....
PRIME MINISTER:
Well, I spoke to the people at Katherine.....
JONES:
Moree. Well, I have got a file a foot high, John.
PRIME MINISTER:
I know and I went to Katherine and....
JONES:
These people....
PRIME MINISTER:
There were millions of dollars put into....
JONES:
Yes, I know that.
PRIME MINISTER:
No, I have to defend the Government because I actually went to Katherine
and I spent quite a bit of time there and I saw that special arrangements
were made in relation to insurance and John Fahey got the relevant
companies together. I mean, we....and we did relax the rules in
relation to the payment of money for individuals who were in difficult
circumstances. I mean, I would....
JONES:
It comes nowhere near...like in Innisfail, they have just had a
$150 million sugarcane industry wiped out up there in flood. I mean,
to fence, just to fence those areas that have been absolutely damaged,
fences one farm alone $345,000 worth of fences have gone. $593,000
dead sheep, that's a stud sheep farm. It's gone, they've
gone. 1500 shot. $73,000 in yards and [inaudible]. I am telling you
Prime Minister, those people are getting no assistance for that.
PRIME MINISTER:
Well, there is assistance going under the arrangements to people in
Queensland and I spoke to the Queensland Premier on two occasions.
JONES:
He's asking you to create a national disaster fund.
PRIME MINISTER:
I am sorry, Premiers always ask for some structural change. I have
asked Mr Beattie to put certain proposals to me in relation to the
particular problems of Queensland and if they are reasonable and if
they are things that ought to be borne by the Commonwealth then we'll
have a look at them.
JONES:
But you have just been to New Zealand.
PRIME MINISTER:
Yes.
JONES:
They have an earthquake and damages fund and that covers areas of
risk which are excluded from standard insurance policies or where
individuals are faced with circumstances they cannot possibly control.
PRIME MINISTER:
Yes, I accept that but Alan you can't translate everything that
operates in another country to Australia. There's things New
Zealand doesn't have that we have. I mean, I accept your point....
JONES:
But these people in the Southern Tablelands are allowed to borrow
$80,000 at concessional interest rates for up to 10 years. They are
already borrowed to their maximum and anyway they now have no means
of repaying anything. They don't have a farm, a fence, a yard,
an animal, a stock, a bull or a merino ram.
PRIME MINISTER:
Alan, I am aware of that and....
JONES:
Well, what do we do?
PRIME MINISTER:
Well, John Fahey went to....
JONES:
John Fahey lives there.
PRIME MINISTER:
Well, he lives in part of it, he doesn't live in the area that
was most directly affected.
JONES:
No, no, no, but he is from the Southern Tablelands.
PRIME MINISTER:
Of course he is so he....
JONES:
[Inaudible]
PRIME MINISTER:
Alan, could I just finish please? He has visited areas that have been
affected and he will be in Cabinet this morning and we will be having
a discussion about it. And he will be reporting on what he saw.
JONES:
But see last week he was in the same Cabinet and issued a press release.
The same man, John Fahey, indicated that he would be refurbishing
the Australian Embassy in Berlin for $44 million. Now, PM, we are
not fair dinkum are we, we are not fair dinkum?
PRIME MINISTER:
Well, I suppose you could, you could criticise....using that kind
of argument, Alan, with respect, you could criticise every single
item of capital works expenditure by a government, Labor, Liberal,
State or Federal. You could always say that buying an embassy building
is not as important as something else. You could literally let every
single building that Australia owns overseas run down. You could never
have any residences in which....
JONES:
I don't hear anyone saying that. The $44 million when farmers
are out there on the absolute [inaudible]. $30 million for a Constitutional
Convention. $15 million for funding a....
PRIME MINISTER:
Democracy is always expensive because if you're to give everybody
a say you have to spend money. I know the Constitutional Convention
was, the cost of it was criticised by a lot of people but it was a
commitment and....
JONES:
$30 million.
PRIME MINISTER:
I know that. Well, we are having a referendum at the end of the year
and people can have their say.
JONES:
How would you like to be a farmer with only 740 acres and the lot
burnt out? Every animal destroyed. 500, you only had 500 sheep, they
are all gone. Where does that bloke find any money tomorrow to be
able to afford a loan or anything?
PRIME MINISTER:
Alan, I don't deny for a moment just how difficult it is. Of
course it's difficult and we'll be getting from John and
also from Mark Vaile who has been to Queensland an assessment of both
of those disasters. But your listeners should understand that there
are standing arrangements that automatically come into operation that
provide people with financial assistance in these circumstances. And
those arrangements every year involve the outlay and it's money
fairly and properly and well spent outlays of millions of dollars
each year. The idea that absolutely nothing goes to people...
JONES:
I am not saying nothing.
PRIME MINISTER:
Well, sometimes one can get the feeling from....
JONES:
From people like Alan Jones?
PRIME MINISTER:
No, I would never say that. Sometimes one can get the feeling from
some reports of these issues that the Government are completely insensitive,
indifferent and cold.
JONES:
Well, you ask in Cabinet today, you ask in Cabinet today how many
forms a farmer will have to fill out, you ask to put all the cards
on the table. How many forms will a farmer have to fill out before
he can actually be considered for this sort of limited relief? I mean,
this bloke has got, I am sorry to bore you with this, but....
PRIME MINISTER:
Alan, this is not boring.
JONES:
Right. Well, this bloke has got to replace, he has got to replace
his water crops, he has got to replace his gate, he has got to re-establish
pastures with fertiliser, he has got to find the cost of replacing
stock, he has got to replace the loss of his earnings on the wool
because it's gone. Then there's an economic loss to the
community. There will be no hearing, no wages to wool classers. He
has got to try and find off-farm income to somehow keep him going.
He has got to find alternative sources of heating because all the
firewood has been destroyed and winter is coming up. I am glad it's
him and not me.
PRIME MINISTER:
Well, Alan, I think every Australian sympathises with the farmer particularly
in a time of drought or a time of fire or flood. And that issue will
certainly be canvassed this morning.
JONES:
Do you know that in every insurance policy, some of these people aren't
insured because they couldn't afford the insurance, they couldn't
even afford to go to the dentist, some of them, and they've done
it very tough. And you know what commodity prices have been like.
PRIME MINISTER:
Very low.
JONES:
Very low. And a policy of one farmer who rang me yesterday
and farmers are pretty tough people and his voice was quivering and
he was in tears - $1580, but $227.44 of that goes on government charges
and there's a stamp duty component on top of that as well. I
mean, government levies are $227.44, stamp duty, $180.67.
PRIME MINISTER:
Well, I hate to intrude a political element into this but one of the
advantages of our taxation policy is to remove many of those State
government charges. But putting that aside...
JONES:
If those same fire-fighters, just so that you know, down here where
this has just devastated them, these people at these people
at Crookwell supply their own vehicles, their own petrol, their own
motors and pumps. They financially support the bushfire brigade with
a voluntary levy. They say we give billions of dollars in foreign
aid to countries in need and it's all in cash, why can't
these people get a slice of that action?
PRIME MINISTER:
Well, Alan, the answer to that is they do. And the answer is also
that we do not give a disproportionate amount in foreign aid. We give
I think 0.27% of our GDP in foreign aid which is not high by historic
standards, many people argue we should give me. We try and get the
balance right. There is a national interest in having stable countries
around us because they are more likely to be able to buy things from
us, including the produce for farms. The idea that it is just giving
money away with no return for Australia to have foreign aid is wrong.
The more prosperous those countries are the more they can buy from
us. So there is, as well as a genuine altruism and a genuine humanitarian
component, there's also a national self-interest involved in
foreign aid. So, once again, I think it is simplistic to say, well,
because there's a difficulty here you cut out all foreign aid.
JONES:
The New South Wales Government has stuck $50,000 into the Crookwell
bushfire appeal. Will the Commonwealth be matching that?
PRIME MINISTER:
I'm told, yes. I'm told Mr Fahey announced it yesterday.
JONES:
Okay. So we have more disasters down the track somewhere and we'll
just still keep going, jumping through these same hoops. Carr and
Beattie have asked you to look into the issue of a national disaster
fund, will you at least consider it?
PRIME MINISTER:
We have considered it in the past and you never close your mind to
something like this. But the arrangements we have in operation at
the moment whereby once the expenditure of a State on disaster relief
goes beyond a certain level the Commonwealth comes in to top it up,
those arrangements have worked well. And over and above that, in appropriate
circumstances, the Commonwealth provides more money. Now, I am yet
to be convinced that the sort of fund being proposed by Mr Beattie
and Mr Carr, which would have to be additionally funded from somewhere,
I'm not convinced that that is going to be any better than the
arrangement we now have.
JONES:
Okay, just on to the announcements yesterday, which of course are
only consultation, it's only a consultative paper there'll
be input from a lot of people before a final report on business tax
reform is issued in June. A capital gains tax do you agree
that we should have a lower rate of tax or at least a tapering rate
of tax for capital gains so that if you've hung on to the asset
for a long time you'd actually pay a lower rate of capital gains
tax than the bloke speculating on 24 hour turnover of something?
PRIME MINISTER:
Alan, it's an option. I don't want to say yes and no what
I support at the moment because we are in a consultative process.
And in fairness to my colleagues and in fairness to people involved
in that process I'd like to hear all the arguments before we
make a decision. What I can say about the capital gains tax is that
we want to make certain that the existing capital gains tax is not
acting as a disincentive to investment. We want to make certain that
the existing capital gains tax is not making us less competitive than
other countries, and particularly it's not hurting the accumulation
of capital for new ventures, for higher risk areas where frankly we
need people to take risks, to put a bit of money on the line in order
to achieve something. Now, that's the ruler than I'm going
to run over this and if the existing system is found wanting then
the existing system will be changed.
JONES:
Right. Well, just on that basis, you would be aware that the United
States have recently reduced their capital gains tax rates and countries
like Germany and Singapore and South Korea and Taiwan, with whom we
compete, have no capital gains tax. So we are at a competitive disadvantage.
PRIME MINISTER:
Well, that is right. It is also true that the corporate tax rate in
some of those countries is higher than it is in Australia. And it's
also true that in some of those countries there are other taxes that
don't exist in Australia. So you have to look at the aggregate
taxation mix. But I do not want a capital gains tax regime that discourages
investment and I do not want a capital gains tax regime that discourages
risk taking. But exactly what changes we make is something that ought
to await a full examination, not only of John Ralph's excellent
paper but also the submissions that are made in response to it.
JONES:
Right. John Ralph had no sooner finished issuing breath yesterday
than Prime Minister Harradine got on to the front foot you're
only the de facto Prime Minister - Prime Minister Harradine saying
that any changes to business tax reform will have to be approved by
him. I mean, how much longer to Australians have to cope with Brian
Harradine and Meg Lees on the television every night telling us that
this country must be run according to their dictates.
PRIME MINISTER:
Well, I think you can draw some distinction between Brian Harradine
and the Democrats. And I don't see Brian Harradine on the television
every night. And Brian Harradine has, over the last three years, taken
a more reasonable approach to many of the proposals we've put
up than has either the Australian Democrats or the Australian Labor
Party. Alan, I think the way the Senate collectively reacts to our
taxation package will be a very interesting moment for the Australian
people because if ever a government was upfront and honest and forthright
about a policy change it was us in the last election about taxation.
If ever a government deserves to implement something that it took
to the people, it's the government I now lead in relation to
taxation. And how the Senate behaves will, I believe, have quite a
significant impact on the longer term attitude of the Australian people.
There's a role of the Senate.
JONES:
Those people are sick and tired, I can tell you, of Meg Lees and Brian
Harradine. If we can have a gun summit and an economic summit, can't
we have a national drug summit to put all the cards on the table,
cast away bias and prejudice and just see how on earth we can do better
than we're currently doing?
PRIME MINISTER:
Well, I don't rule anything out in this drug area and I made
plain yesterday that I'm not interested in political division.
I'm quite sure that there are many areas where Bob Carr, for
example, and I can could work together very constructively. I suspect
that on some of the issues our views are similar, perhaps they're
different on other issues, I don't rule that out. I'm always
careful in talking about summits because no matter what the issue
is or no matter how well prepared, some people do grandstand at summits.
JONES: