Subjects: GST; 36-hour week; petrol prices; East Timor/Interfet; defence spending; mandatory sentencing/United Nations; Royal Tour.
E&OE...............................................................................................
GATFIELD:
And Prime Minister John Howard, welcome to View Point.
PRIME MINISTER:
It's nice to be with you.
GATFIELD:
As I said, probably the biggest challenge you have ahead of you now is the introduction of the GST, only three months away. Does it concern you that out there in the great public of Australia there seems to be a growing resistance to it and more concern than ever?
PRIME MINISTER:
Well I don't think there is. It's natural with such a big reform to the system that you get a lot of questions and we're ready to answer them. We want to help people. But this is more than a GST. This is a $12 billion cut in personal income tax, it's cutting capital gains tax, company tax, it's making our exports more competitive because they'll be cheaper, it's reducing fuel costs in the bush, it's about delivering a top marginal rate of no more than 30 cents in the dollar for 80% of Australian taxpayers, it's about increasing family benefits, making it easier for men and women to choose their childcaring arrangements, abolishing provisional tax for self-funded retirees. The list goes on and on and I'm really quite looking forward to the 1st of July. I am because I believe that the Australian public when it comes in, when they get the tax cuts, when they realise that they've been spun a whole lot of fear stories without the full context I think people will see this for what it is and that is an honest fair dinkum attempt to give this country a better tax system.
GATFIELD:
But for so long you've been saying this and people still seem to feel that the cost of living is going to go up, and already now unions are saying we must have compensation for the increased cost of living that's going to come on the 1st of July.
PRIME MINISTER:
Well I'll come to the unions in a minute. But John, it's coming on the 1st of July and it will be good for this country when it comes. And when people actually get those tax cuts in their pockets, when they know that they'll be better off, and for the average person all it will mean is that some things will go up a bit in price, some things will fall, and everybody will have a tax cut. Now that has to be good for the Australian community. As for unions claiming compensation, my Government has delivered more increases in workers' pay than did the previous Labor government. Real wages have gone up under this government, and on top of that interest rates are much lower. So workers are a lot better off and there's more workers. There's 653,000 more workers now than there were four years ago because we've reduced unemployment.
GATFIELD:
But you also know the hip pocket nerve in this country, you know the way that people are going to approach this. They're going to say 10% tax coming on July the 1st, interest rates are now going up so I'm going to pay more on my mortgage, therefore I have to earn more, therefore my wage demands are going to be higher.
PRIME MINISTER:
John John, not everything goes up by 10%. In fact very few things will go up by 10%. Many things will go up by a lot less than 10%. Many prices won't change at all and quite a lot of prices are going to fall. But everybody's going to have a tax cut. But in a sense I can spend all day and all night between now and the 1st of July. It's the reality that matters. Reality will come on the 1st of July and in the days and weeks that follow and I believe that when that reality comes people will realise that this really is an historic attempt to give this country a decent tax system.
GATFIELD:
You mentioned the unions and their claims. You've also been critical in the past few weeks of the trade union movement negotiating 36 hour weeks, in particular the construction industry in Victoria of course. What's wrong with people negotiating shorter working weeks?
PRIME MINISTER:
Well providing there's a genuine productivity trade off. If there isn't it represents a wage increase for nothing in return. And that of course in time will lead to higher unemployment. I mean I want workers to be better paid but you can only base increased pay on higher productivity and that's what's happened over the last four years. I mean the building unions would have an argument if wages had fallen over the last four years but they've risen. And living standards have gone up. You've had had the double - higher wages, lower interest rates. That's a double that Labor couldn't deliver, it's a double that the Coalition has delivered.
GATFIELD:
But an agreement such as was reached in Victoria by the building unions is certain to flow onto the rest of the country and into other industries isn't it?
PRIME MINISTER:
Well if it flows on which I fear it will, to small business and small building sub contractors who can't afford it, it will have devastating impacts on them and I'm particularly worried about those small operators in the building industry who will be sucked into this agreement whether they like it or not. And that is why I'm so critical of it.
GATFIELD:
This is just like the 8-hour working day. How Dean Mile of the ETU put it to us. He said this is a breakthrough, this is a new revolution, the next step in working conditions and working hours. And the union movement is clearly designed, is clearly now absolutely committed to pushing for this right around the country and across all industries. Can you resist it though?
PRIME MINISTER:
Well the big change in Victoria has happened because you've now got a Labor government that's weak with the unions, just as a federal Labor government would be weak with the unions. And I think there's a message in that. I mean we have had over the last four years, we've had a record low of industrial disputes, we've had rising wages, falling interest rates, falling unemployment. You can't in terms of job security and job prospects for the average worker, you can't ask for a better set of conditions. I would understand union militancy in the building industry if it had gone the other way - if wages had been cut and interest rates were rising and all of those sorts of things, and tax was going up. I'd understand it because you'd have a case to protect their living standards. But when living standards have been rising you don't have such a case do you? It doesn't seem sensible, it doesn't seem in the national interest when living standards have been going up. And I think there are a lot of workers perhaps listening to this program who would agree with me.
GATFIELD:
Let's go to the question of petrol which you mentioned earlier on. You've guaranteed that the price of petrol will come down in regional and rural Australia.
PRIME MINISTER:
No no. What I've guaranteed is that the price of petrol will not rise as a result of the GST. That's what I said and that's a very significant difference. I can't control the world price of oil which is the principle driver of the domestic price of petrol in Australia. But I can influence the impact of the GST on the price of petrol. And what we said was that the price of petrol need not rise as a result of the GST and we intend to deliver on that promise.
GATFIELD:
But is it sensible to have some form of subsidy going from the federal government as well as subsidies going from State governments which vary from State to State?
PRIME MINISTER:
Well I think it's sensible in these things to keep your promises and that's what I intend to do because you enter into a contract with the electorate. You say at election time that you're going to do certain things and you try and do them. And I said at election time that the price of petrol need not rise as a result of the GST and I intend to honour that promise and at the appropriate time the Treasurer will be announcing arrangements that give effect to that promise. And I don't want tonight to go into the detail of that.
GATFIELD:
But would you negotiate with the states over the subsidies that they give because they differ now where Queensland for example subsidises it far more than say NSW and you get that cross border difference.
PRIME MINISTER:
Well what we intend to do is to keep our word. And that is that as a result of the introduction of the GST the price of petrol because of that fact should not go up. We can't control the impact of other things on the price of petrol but we did promise something in relation to the GST and we'll deliver on that promise.
GATFIELD:
In the past week your predecessor, Paul Keating has come out and said that Australia is more marginalised than its ever been in Asia now and he's been critical of your attitude towards East Timor, the way in which we went into East Timor of course. What's your reaction to that?
PRIME MINISTER:
Well I'm astonished, I think most Australians will be including probably millions of Labor Party supporters. It's very clear from that that if Mr Keating had still been Prime Minister last year we wouldn't have stuck up for the East Timorese, we would have left them to their fate. It's quite plain from what he said that that's what would have been the case. I think Australia is more respected in Asia now than it's ever been because we have stood up for the right thing and there are many people in Asia and many people in Indonesia who believe that what we did in relation to East Timor was correct. I think Mr Keating shows a great misunderstanding and insensitivity towards what was at stake in East Timor.
We are rebuilding our relationship with Indonesia and that's very important but it's very plain from that statement that if he'd still been running the show last year he wouldn't have helped the East Timorese.
GATFIELD:
Can you understand why he would say that we are more marginalised than ever? Is there any evidence for that at all?
PRIME MINISTER:
Well there's no evidence at all for that. I mean we helped the Indonesians when they got into economic difficulty; we argued their case to the IMF; we helped the Thai's, we helped the Koreans; we led the Interfet force which was made up of contributions from a lot of Asian countries. John the difference is that we look at the world rather more broadly than did Mr Keating. He had an Asia-only focus, we have what I call an Asia-first focus and that is Asia's very important but so are other parts of the world. And we now have I think a more balanced foreign policy and we're getting benefits as a result; it's one of the reasons why we stared down the Asian economic downturn. If we'd have had an Asia only focus like Mr Keating wanted I think we'd have been knocked around by the Asian recession a lot more than we were.
GATFIELD:
But the East Timor issue also raised of course the weakness of our defence forces, difficulties in our defence forces.
PRIME MINISTER:
Well I think it's demonstrated how terrific the men and women of our ADF were. Absolutely the opposite.
GATFIELD:
No doubt about that but our preparedness and our financing of the Defence Forces.
PRIME MINISTER:
Well to be fair, to be fair we were ready for East Timor because the Government decided months before to get another battalion ready in case it were needed and nobody can say we weren't ready for East Timor and nobody can say that the men and women didn't perform quite magnificently.
GATFIELD:
But is that why we had to take pieces out of army engineers museums in order to build bailey bridges up there, they had to be flown up there.
PRIME MINISTER:
You judge on results John and the result was magnificent and a result that has won this country respect not only in the region but around the world.
GATFIELD:
Yes that's undisputed but was our military ready for this in equipment, in manpower?
PRIME MINISTER:
Well John I can only repeat the obvious and that is that months before, thinking that this might happen the Government decided to get another brigade ready and when it came we did it very well, very well indeed and it's won the admiration of everybody.
GATFIELD:
But now of course we have to pay more for our Defence Force preparations, for arming our Defence Forces, the East Timor levy.
PRIME MINISTER:
Well we have never pretended that if the need arose we wouldn't put more resources into defence and I've never disguised that and there's nothing wrong with that. I think it's a good thing that you rearrange your priorities to the country and putting more resources into defence is something that I foreshadowed months ago and I repeat it on this program, we do need to put more resources into defence and we're in the process of working out exactly where those resources and when those resources might be allocated.
GATFIELD:
Have some of our resources in the past been rather misdirected? And I think here in particular the submarine program and the Jindalee Radar Program both of which of course have their critics.
PRIME MINISTER:
Well the submarine program, which of course was started by Mr Beazley when he was Defence Minister way back in the 1980's, that submarine program has been difficult, very difficult indeed but we are persevering with it because we've already as a nation sunk billions of dollars into it and it would be a very false economy to turn our backs on it and if we do get the submarines up to speed so to speak then I'm sure they'll make a very significant contribution to the defence outlook and defence network of this country.
GATFIELD:
And the Jindalee over the horizon radar system that has its critics who say it's a white elephant.
PRIME MINISTER:
Well I think once again it's a question of persevering with something that had a. was a particularly imaginative concept and there isn't a country in the world that doesn't have a certain degree of tribulation with major defence projects. I mean Australia is no exception to that but the proof of the pudding is in the eating; when our forces were put to a test, and that's a few months ago in East Timor, they were magnificent.
GATFIELD:
They work of course very well with the United Nations, handed over to the United Nations of course, now we find that Australia is not in conflict with the United Nations but accepting some of its committees, some of its activities better than others. Why has that suddenly come about?
PRIME MINISTER:
Well because the committees have not behaved well. The Secretary General of the United Nations a few weeks ago said that Australia was a model member of the United Nations and so we have been. We've always paid our way, we've always met our obligations but the Committee on the Elimination of Racial Discrimination totally ignored what the Government put forward, it made a finding that was flawed, it based its criticism of mandatory sentencing on the ground that it was racially biased when plainly its not, it applies equally to all sections of the communities in the Northern Territory and Western Australia to which it applies. And what we've said John is not that we're going to walk away from the United Nations, of course we're not, what we've said is that we think the operation of the committee system where people who do not represent the entire Australian community go over to Geneva and argue a case against the Australian Government and against, I believe the Australian national interest, the committee seems to take more notice of them than it does of the elected government and we're not happy with that as an operation, as an arrangement and that's the basis of our concern. It is not a desire to walk away from the United Nations as such.
GATFIELD:
Does that mean that we will accept the conventions that we choose to, we will accept those conventions of the United Nations that suit us and not the others?
PRIME MINISTER:
I think what it means first and foremost is that all of these issues in the end are going to be resolved by Australian parliaments elected by the Australian people and not by committees of foreigners. I mean in the end, we make these decisions. The proposition that a committee sitting in Geneva or anywhere else should dictate the flow of law in this country and should actually persuade us to over turn a law that the Australian people have voted for. I mean if people don't like what we are doing, they vote us out at the next election and they have an opportunity of doing that every few years. I mean I am amazed at the way in which the Labor party genuflects towards these foreign committees. I mean we abolished appeals to the British privy council 40 years ago in the name of independence and yet we are now wanting in a sense to dance attendance on a committee that I think has used a very flawed procedure to reach its outcomes and that's really the thought process of the government on that matter. Not a desire to walk away from the UN from our support for the Humanitarian projects of the United Nations. I mean after all, Kofi Annan said we were a model member only a few weeks ago, so I think we come to this current debate with very good credentials.
GATFIELD:
But when you talk about some Australians going in and giving evidence against the national interest even. Do you really mean that? Do you really mean that some of those groups, the Aboriginal groups have gone over there and almost falsified their evidence?
PRIME MINISTER:
No, I didn't say that - that is your words and not mine. I mean, it's .. they're arguing that laws are racially based in my view and they're not. I mean you take the native title issue. I mean that was debated for months and months and months and we finally resolved that issue and we got a compromise in the Senate with the assistance of Brian Harradine. Now that matter as far as I am concerned is resolved. And the idea that we should at the behest of this committee reopen the native title issue, I mean is Mr Beazley for example seriously saying that because of what this committee said we should reopen the native title issue? I mean that is absurd. I mean can't these things be resolved by Australians in Australia and not us having to dance attendance on the views on committees that are a long way away from Australia. I mean that's in the end what I am saying. I mean we are mature enough to make these decisions ourselves. We are a sovereign independent country. If people don't like what the government I lead is doing they will vote it out at the next election. We are a democracy. A lot of people do disagree with me. A lot agree with me. But that is a democracy. You don't need the advice from the council of a committee of people from other countries to tell us how to run our affairs. I think that is what I am saying and I think that's what millions of Australians would say.
GATFIELD:
Of corse you know as well as I do that come the Olympics there are going to be journalists filing stories all around the world on mandatory sentencing and Aborigines being gaoled. Juvenile Aborigines being gaoled. This is not going to reflect well on Australia is it if we can't settle this before then.
PRIME MINISTER:
But John there are some journalists that will file stories which are negative, no matter what the circumstance are and in the end we can't make our laws according to the harassment of foreign journalists. I mean in the end, no self-respecting government is going to be pushed around because a journalist from the United States or Britain or somewhere else might write a nasty story. In the end, we have to as a people make our decisions, according to our assessment of our national interest. In relation to mandatory sentencing, I don't as a matter of principal agree with mandatory sentencing but I do as a matter of principal believe that it is something that ought to be resolved by the local communities involved because this is a big country and the criminal law has always been run at a state and Territory level. It's not something the Federal Government normally gets involved in and it's ultimately.
GATFIELD:
But there again your critics would say you were quick to jump in on the question of euthanasia.
PRIME MINISTER:
Very different situation because that would have been establishing a national benchmark. People would have gone to the Territory to take advantage of that law if it had been changed. And you are dealing there with ultimately with the sanctity of human life which goes to the whole character of the society in which we live. Whereas with mandatory sentencing, although people feel strongly about it, it really is a question of the administration of the criminal law and as I say, I don't think its sensible. There are a lot of things of things the states do that I don't like. I don't like heroin injecting rooms, but I accept in the end that that is something the states can decide on. A lot of things the states do I am very critical of.
GATFIELD:
Regional services, that's become very much the catch cry of the past few weeks and months now. And the sale of Telstra of course. You face real opposition from within your own ranks on the further sale of Telstra, even though it might be softening somewhat amongst the national party members.
PRIME MINISTER:
Look I think there is quite strong support for the full privatisation of Telstra in government ranks. Can I just make one point about this whole debate. There is a funny idea around that when Telstra or Telecom, as its predecessor was named, was fully owned by the government, that the service was fantastic. And nobody got retrenched. Now both of those propositions are utterly wrong. Service levels years ago with the old Telecom were not better than what they are now. People were retrenched when Mr Beazely's government's party was in power between 1991 and 1995, 17 thousand of them by a fully government owned Telecom. So the idea that you can stop any retrenchment and you can stop any service faults by having a fully government owned Telecom or Telstra, or half owned by the government is completely wrong. The notion that governments runs things more efficiently, that businesses are run more efficiently when they are run by government, I mean that has whiskers on it. That is the most absurd proposition. It's totally disproved by the experience of government business enterprises all around the world so I think it is quite wrong to look at things in that way.
GATFIELD:
Is the notion wrong though that people in the bush should expect the same level of service at the same cost as those in the city. If for example I have a second telephone line put in so that I can have the internet and it cost me nothing or next to nothing, should somebody living on a farm, 200 kilometres from a settlement should they have that same privilege?
PRIME MINISTER:
John, I don't think that is silly at all and I support that and I am not happy with the current level of Telstra service in regional Australia, although it has improved and you have keep these things in perspective and you can't sort of grab one war story so to speak and represent that as being typical of the whole country. It's very important though that Telstra understands its obligations to the bush. I believe it does and I think the aspirations of people in the country to have the same level of service at the same affordability is a very legitimate aspiration and it's one we share. I am simply making the point that you don't achieve it by the government retaining majority ownership. I mean that won't improve things at all. It normally makes things worse because governments don't run businesses very efficiently.
GATFIELD:
But there is only one in which you can sell the rest of Telstra of course and that is by having it passed through both houses of Parliament. Do you expect to win control of the upper house in the next election on that issue?
PRIME MINISTER:
Well the next election won't be fought, even predominantly on the sale of Telstra, it will be fought on a whole lot of issues and we will be continuing with our current policy and I mean people said we would never get a third of Telstra through the Parliament. In the end I believe that we will get the legislation through.
GATFIELD:
The Royal Tour. The Queen of course visited many regional areas too. How do you rate that tour in terms of its impact on Australia?
PRIME MINISTER:
Well I think it's been very successful. I think people have seen somebody who cares a lot about this country, who understands a great deal about Australia. She is a charming person who has been very well received. As to its impact, well I think that is hard to assess. I always took the view that people who wanted a republic and people who opposed a republic in the main would welcome her in a very warm and friendly fashion. The argument about the monarchy in this country is not an argument that people are unhappy about her or are critical of her role as a constitutional monarch. I think she has been a very good constitutional monarch and I think she is widely respected in the Australian community and this visit would not have reduced that respect in fact it probably has increased it. But as to whether it has any long term impact on the debate, I can't assess that and I haven't seen the visit in the context of that debate. My advice all along to her has been that any visit should be separated from any of the debates about the referendum or the lead up to the convention or the lead up to the referendum and that of course turned out to be the case and I am very pleased that the visit has gone so well and she's been able to see so much of the country. And she'll be back towards the end of next year for the CHOGM meeting in Brisbane and will then visit Queensland and South Australia.
GATFIELD:
Was it a conscious desire of yours that the Queen should go to outback Australia to meet aboriginal communities for example?
PRIME MINISTER:
Well she obviously received advice from the Federal and State Governments about where she went. But this tour was not structured that much differently to other tours, because it is normal that you visit a cross section of the nation. And a cross section of Australia is visiting the big cities and visiting the country. I don't think there was a disproportionate country component, but equally there was a due country component, and I am delighted that she was able to meet so many aboriginal Australians, they're part of our community, a very treasured, important part of our community. And it is very important that she talk to them and meet them.
GATFIELD:
Just a few other issues. While you were with the Queen at the War Memorial in Canberra you mentioned of course with Anzac Day coming up, the great debt that we owe our veterans. When will you extend the gold card to all veterans over the age of seventy?
PRIME MINISTER:
Well, we've extended it to Australians on active service. You are talking about people from, who fought in the armies of other nations.
GATFIELD:
Or those who did not necessarily go overseas or face hostile fire. Who through no fault of their own [inaudible] . . .
PRIME MINISTER:
Well, I can't make a commitment on that at present. I know that those people are naturally asking for it, and others are supporting them, and I also know that there are many tens of thousands of people who fought in the armies of our allies who now live here. But all of these things make claims on our budget and we thought the right thing to do was to extend it to people who saw active service, that was the priority of the RSL, a very strong priority of the men and women who fought in the war and we'll continue that and assess our other priorities as time goes by.
GATFIELD:
Just going back to the question of tax and in particular income tax. There does seem to be something of a brain drain going on amongst high earners, high income earners, particularly those people involved in technology, high technology, because they're earning more money overseas and they say we're not going back because income tax at the top level in Australia is so high. Do we face that prospect now of losing a lot of our brightest people?
PRIME MINISTER:
Well I don't think it's as severe a problem as perhaps some people paint it to be. We do pay talented people a lot of money in this country and there's, for example in the information technology area, there has been an incredible growth in the employment opportunities, so there seem to be plenty of jobs available in this country and plenty of people around to fill them. This is an issue that's a constant balancing act on the one hand you've got to reward effort, and we're cutting income tax in the tax package to do so. On the other hand you've got to try and help the battlers and direct as many dollars as possible towards the fellow who is struggling on 30 or 40 thousand with a number of children and only one income. And I think that person deserves a lot of understanding and help, perhaps a bit more understanding and help than somebody on $250,000 a year, no matter how talented that person may be. It is a balancing act.
GATFIELD:
Prime Minister Howard, thank you very much for your time on Viewpoint.
PRIME MINISTER:
A pleasure.
[ends]