E&OE...................................................................................................
JOURNALIST:
Mr Howard, is it becoming Government policy to criticise the Reserve
Bank for its decisions on interest rates given the comments by Mr Reith,
Gary Nairn and David Hawker?
PRIME MINISTER:
Well, the Reserve Bank independently sets interest rates. I heard Mr
Reith this morning and I thought he was just saying what I guess everybody
feels and that is they'd rather the interest rate rise not occur.
I think it is important to understand that the Reserve Bank sets interest
rates and the Reserve Bank gave an explanation as to why interest rates
were adjusted. People have argued that you should have an independent
Reserve Bank and I guess the flip side of the coin is that from time to
time if the bank is regarded as independent, people feel they have some
capacity to express a view. I think we should all be mature enough to
recognise that. I think interest rate adjustments are sensitive issues
and I think everybody has to behave in a sensitive manner and I don't
think the perception that, inaccurate though it is, the perception that
interest rates are driven by the strength of the economy in one part of
Australia, namely Sydney, is helped by the imagery of people in the dealing
room of a bank cheering the announcement of a rise in official interest
rates. That's seems a very insensitive, negative signal to people
in the regions of this country who are struggling. I think everybody has
got to understand that perception in these things is very important and
the view that the equilibrium of monetary policy is an important thing,
and it is, has to be tempered with a recognition that at the sharp end
people who are struggling lament very much any upward movement in interest
rates. That's if you are a borrower. But I have to say that a few
self-funded retirees have said to me today that they are not the least
bit unhappy about the adjustment in interest rates.
JOURNALIST:
Did you see Mr Reith's view that the interest rate rise of 50 bases
points will hurt small business?
PRIME MINISTER:
Well, Mr Reith was echoing the views of small business as it came to
him. Well, I don't think you can make that definitive judgement on
that until you see things working their way through. My view is that the
Australian economy is very strong, it's not overheating. I would
expect there to continue to be quite strong employment growth and a quite
strong contribution from the small business sector. But I go back to the
point I was seeking to make a moment ago that the national prosperity
is being felt in most parts of the country but in some it isn't.
And it's very important that people understand the perception of
these things and that I don't think it's particularly positive
for people to be cheering the announcement of an interest rate rise. And
if financial institutions worry about their image perhaps they should
look at things like that as one of the reasons why some people in the
community feel that there is an insensitivity on their part to the difficulties
of others.
JOURNALIST:
They seem to be suggesting [inaudible]...we were right, you were wrong.
PRIME MINISTER:
Well, I don't know what the circumstance was. What the explanation
was in a sense is immaterial. What is important is the impact it has on
the rest of the community. I don't think it helps the image of the
financial community to have people in the dealing room cheering about
an increase in interest rates. I think it's really quite counterproductive.
JOURNALIST:
Is the Murdoch media's ferocious anti-GST campaign hurting the Government?
PRIME MINISTER:
Well, in the end whether any campaign hurts the Government or not is
a matter for the Australian people. I am not going to get into the business
of whether something is hurting the Government or not. I would imagine
that when it's all shaken down people will make the judgement and
I will accept that verdict. I think sections of that campaign are unreasonable.
I can think of, sort of, successive front pages which, well at least two
of the cases, where an advert in relation to the impact of the GST, for
example, the impact on season tickets for the Australian football league,
that was demonstrated within an hour to be inaccurate. I think there has
been a bit of a campaign on that issue but we'll leave it at that.
But, you know, I am not...put it in context, as I indicated last night
if I think treatment of an issue by a newspaper or a radio station or
a television statement is unfair I'll say so. I was critical yesterday
of the Sydney Morning Herald's treatment of the Job Network
story so I don't think you should get over excited about my reference
to the Murdoch press.
JOURNALIST:
Were you personally angered by the treatment of your son [inaudible]...
PRIME MINISTER:
Well, look, I'd prefer at the moment not to say anything publicly
about that.
JOURNALIST:
What do you think is motivating them?
PRIME MINISTER:
Oh, well, you are employed by them, so you should ask them.
JOURNALIST:
Do you think it is payback for the digital decision?
PRIME MINISTER:
Oh, come on, we are lapsing in the balm of Maclean sunlight into all
sorts of things.
JOURNALIST:
CARE Australia, is their reputation as a humanitarian aid organisation
damaged?
PRIME MINISTER:
Oh look, I haven't looked into all of that. I'd be very surprised
if the enormous good work that CARE does is dented by this, I'd be
very surprised. But look, I don't pretend to have looked into it.
JOURNALIST:
Do you accept that your Government's decision in 1996 [inaudible]
regional affairs department has had an adverse...[inaudible] of providing
services to the bush?
PRIME MINISTER:
Oh, I don't think in the sweep of things it has because it was part
of getting a budget in order which has got interest rates down and strengthened
the national economy. You have got to put that into balance.
JOURNALIST:
[Inaudible]
PRIME MINISTER:
Well, I stress...
JOURNALIST:
[Inaudible]
PRIME MINISTER:
No, no, not necessarily.
JOURNALIST:
[Inaudible]
PRIME MINISTER:
Yeah, but that doesn't mean that that was its function. I mean,
decisions made by individual departments have a greater impact on services
in the bush than decisions made by a department rejoicing in the name
of regional services.
JOURNALIST:
Do you think the cuts [inaudible]...
PRIME MINISTER:
Oh Michelle, I don't for a moment think that the cuts made in the
1996 Budget went too far, I think that the cuts made in the 1996 Budget
put this nation in very good shape. And I am dealing with the here and
now and the here and now is that there is a concern about maintaining
existing services and there's a desire where it's possible to
do so to improve the quality of service delivery.
JOURNALIST:
Mr Howard, is this latest interest rate rise going to cut into
your personal income tax cut when the GST comes into effect?
PRIME MINISTER:
Well, no, it doesn't affect the personal income tax cuts in any
way. Even after these increases the average mortgagor in this country,
the average homebuyer will be $266 a month better off than he or she was
in 1996 when Mr Keating was voted out.
JOURNALIST:
But the 80 per cent of income earners below $50,000 a year are they going
to have their tax cuts now reduced because of the interest rate?
PRIME MINISTER:
No, the tax cuts are unaffected. I mean, interest rates can rise or they
can fall but the tax cuts are unaffected.
JOURNALIST:
And do the fuel excise increases make it any more difficult for the Government
to deliver on its promise post-GST of the petrol price decrease or that
petrol prices need not rise after this?
PRIME MINISTER:
No, no, that's unaffected by that.
JOURNALIST:
Can I just ask one question on Telstra. The Communications Authority
has announced an inquiry into the new mobile phone technology, CDMA in
response to numerous concerns mainly from the bush. Does that hamper or
undermine your campaign to try and sell the remaining 50.1%?
PRIME MINISTER :
No, no I think it reinforces how serious we are about seeing that there
are adequate services provided in the bush. I think that is a demonstration
of our concern. Thank you.
[ends]