Subjects: Telstra; Reconciliation; Interest Rates; Budget; GST; ACCC; Malcolm Fraser; Pat Dodson; Corroboree 2000; Australian economy; East Timor; Admiral Blair
E&OE..................................
LIEBMANN:
Well after a two week sweep through Europe and the Middle East Prime Minister John Howard returns home to face mounting pressure over fresh demands for an apology to Aborigines over the stolen generation and among his critics former Liberal Prime Minister Malcolm Fraser who is claiming the Government was provoking Aborigines and respected Aboriginal leader Lowitja O'Donoghue- she's accused Mr Howard of, "strutting the world stage" and grieving more about Australia's foreign history. Well the Prime Minister joins us this morning. Good morning. Welcome home.
PRIME MINISTER:
Good morning.
LIEBMANN:
I'll get onto that in a moment. But if you were holding Telstra 2 shares today would you be getting nervous? Would you be thinking of unloading them?
PRIME MINISTER:
Well what I would be saying about Telstra is that a lot of things have happened in the last few days to drive home the point that it would be in everybody's interests including the existing shareholders if the Government could sell the other 50%.
LIEBMANN:
So you still want to sell them?
PRIME MINISTER:
Oh yeah. Well did you see what those credit agencies said?
LIEBMANN:
Yes.
PRIME MINISTER:
They were very emphatic. Look one of the reasons why they've taken Telstra's rating down was the fact that the Government still owned 50.1%. So what an independent, respected independent economic body is saying is that it's bad for policy and it's bad for the existing shareholders for the Government to retain 50.1%. Mr Beazley and Senator Lees please take note, please have a regard and a concern for those hundreds of thousands of Australians who bought Telstra shares and agreed to the sale of the rest so more Australians can have an opportunity of owning shares.
LIEBMANN:
All right, on money matters, is your Government going to dump the Timor tax in next week's Budget?
PRIME MINISTER:
I saw that bit of speculation and that's what it is. And you know in the run up to a Budget no Prime Minister or Treasurer worth his salt is going to speculate and the answer is, I don't have any comment.
LIEBMANN:
I also happen to know though that when he was in opposition your Treasurer, Peter Costello frequently criticised Labor for using asset sales to improve a budgetary position. There'd be a degree of hypocrisy.
PRIME MINISTER:
Well I'm not going to talk about the speculation but I am going to say that we have introduced new standards in Australian Budget history or practice of separating assets from revenue. We have what is called an underlying surplus as well as a headline surplus - something Labor never had. They regularly used say the proceeds of the part sale of the Commonwealth Bank to finance ongoing expenditure and they never separated the two out. The last two men in Australia who can criticise our budgetary practices are Kim Beazley and Simon Crean. They left us with $2.5 billion deficit and they've tried to impede and instruct every attempt over the last four years to get the budget back into shape.
LIEBMANN:
All right, if the Government did sell though the G3 mobile telephone spectrum and did get something like $20 billion for it.
PRIME MINISTER:
Well there are a whole lot of ifs and ifs and ifs.
LIEBMANN:
What would you do with that money?
PRIME MINISTER:
Well let it happen first. Let it happen. We would. look any money we get from asset sales will be used in a very, very responsible fashion. But this Government has.
LIEBMANN:
Handy to have that in the lead up to an election.
PRIME MINISTER:
This Government has done the hard yards. We took unpopular decisions, all opposed by Labor. And when we inherited Labor's deficit we took the decision to get it into surplus. They not only left us with a deficit but they tried to stop us getting into surplus. And now they're presuming to lecture us on prudent budget management, you've got to be joking.
LIEBMANN:
Let's talk about personal budgets then. Should the Reserve Bank lift its gaze beyond Martin Place and was this week's rate rise too rushed?
PRIME MINISTER:
Well, the Bank has control of monetary policy. We allow as do most western countries now, the central bank independent control of monetary policy. They gave their reasons and one of those reasons is what's happening to interest rates around the world. We do as everybody tells us everyday live in a globalised economy and if interest rates are going up around the world it's very hard for Australia to step back from that and say well we're going to ignore the rest of the world. I'm not going to respond to individual rises, I point out of course that interest rates now are vastly lower, despite those increases than what they were a few years ago.
LIEBMANN:
Did you except the Governor's justification for this increase?
PRIME MINISTER:
I'm not going to give a comment on it. I don't think there's any sense in my sort of giving a running commentary. But the Bank controls interest rates, the Government doesn't and if you have a situation where an independent respected body controls it I don't think it helps the process for the Prime Minister and the Treasurer to give a running commentary on each and every movement.
LIEBMANN:
Well give me a comment on this then because since last November the average mortgage holder has been hit with about $100 worth of increases. Your GST cuts are looking a bit sick aren't they?
PRIME MINISTER:
Well if you're going to offset. if you're going to put the increases against the tax then please be fair and put all the reductions from the time we came into government against it. And that average home buyer is still more than $200 a month better off before the tax cuts.
LIEBMANN:
But there is this perception. I know you and the Treasurer keep saying you've got to keep these two parts of policy separate.
PRIME MINISTER:
No, no what I'm saying on this occasion is if you're going to put them together do the full bit and if you're going to hit us with the rate rises since last November give us credit for the rate cuts since March of 1996 that's all I'm saying.
LIEBMANN:
But should you not be saying that to Mr and Mrs Average well all right.
PRIME MINISTER:
Well I am doing it this morning I mean through your esteemed program and I'm saying to Mr and Mrs Average from the time we came into Government interest rates have fallen sharply, you're $225 to $230 a month better off on your mortgage even after the rises and in addition to that you're going to get a tax cut on the 1st of July. That's what I'm saying very directly to Mr and Mrs Average.
LIEBMANN:
What would you then say very directly to the business community who was warning that confidence is being stifled, investment is being threatened, you're going to cop the blame for all of that.
PRIME MINISTER:
Oh the Government always gets the blame whether it's responsible or not. I accept that but can I say to that business community that the economic conditions You're operating in at the moment are very good, still very good. You have low inflation, lower interest rates, a good investment climate, a budget in surplus, the tax reform which for twenty five years you've been asking a government to introduce, the industrial relations reforms that for twenty years you've been wanting, the competition policy and all the other things. Now we're not perfect and we haven't done everything business wants and we'll never do everything business wants because we don't exist just to please business. We've got to govern for the whole community but it's not a bad economic climate and I can tell you that is the view of people around the world. Every world leader I met said to me look you are running a very good economy in Australia. they wanted to know first and foremost how it was that Australia survived the Asian economic collapse.
LIEBMANN:
Right, but is that the sort of message you're going to preach at your next party room meeting because there are reports that the backbench is getting a little nervous, the GST's a couple of weeks. well a handful of weeks away, interest rates are going up, the business community says confidence is falling. Is your backbench getting nervous?
PRIME MINISTER:
No they are not getting nervous. Everybody knows that the tax reform coming in on the 1st of July is a huge step forward - it's a big thing, it's the biggest economic change this country's had for years and there's always going to be a nervousness, there's always going to be some difficulties in the run up to it but we've had the courage to do it and I'm very proud of the fact that I lead a Government that at long last after a generation of inaction by other governments. Now it would be amazing if there weren't some trepidation. It would be amazing if there weren't criticism. I mean it astounds me that the Labor Party's not a country mile ahead of us in opinion polls at the moment given the lead up to the introduction of a GST.
LIEBMANN:
Will your Government consider legislating to empower the ACCC to control any excessive price rises as a result of the GST? Because at the moment it looks like it is a paper tiger.
PRIME MINISTER:
Well that's not right Steve. The guidelines of the ACCC are on its advice and on my advice enforceable.
LIEBMANN:
So its got the power?
PRIME MINISTER:
Yes.
LIEBMANN:
And you would expect it to use it?
PRIME MINISTER:
I would expect it to use it, yes.
LIEBMANN:
Should Corroboree 2000 be postponed or even cancelled?
PRIME MINISTER:
No I think that would be a great shame. I think there's a lot of work been put into it and I hope it is a very positive event. It's not the be all and end all of the reconciliation process, that process will go on for years and I think it would be a great pity if it were other than an unqualified success and I will certainly do all I can as Prime Minister to make sure it is a success.
LIEBMANN:
Can it be an unqualified success, what's the point of going ahead with it if you're not going to say I'm sorry?
PRIME MINISTER:
Well Steve, this question keeps being asked of me. I am sorry. I have said that I am sorry. Millions of Australians are sorry for any past injustices inflicted on Aboriginal people. But what I am not willing to do is to apologise for things my Government and my generation of Australians didn't do and yet that's the point of difference. It's not a question of my not willing to say that I am sorry. I mean I'm, you know I'm sorry about a lot of things, they distress me greatly and they distress all of us but you know as well as I do that you apologise for something for which you are responsible, you are sorry in relation to the pain and suffering people have suffered in relation to the things you are not responsible for.
LIEBMANN:
Malcolm Fraser has named nine national Governments that have apologised and says an apology does not imply guilt.
PRIME MINISTER:
Well Malcolm is entitled to his view and you don't measure. . .
LIEBMANN:
Not yours?
PRIME MINISTER:
No well my view is the one I've just stated, I have said that very plainly. I have had this view all along. I don't hold it in any kind of anger or rancour, I just simply hold the view that the current generation of Australians can't be formally held responsible which a national apology implies for the actions of past generations, particularly when those actions in the case of separated children were sanctioned by the law of the time and thought at the time by many people to be the right thing to do. Now we now have a different view and I think a better informed view and a right view and I'm as an individual, I'm sorry for any suffering and I remain and I'll continue to express that view. People keep saying why don't you say sorry but I've said it a million times but there's a difference . . .
LIEBMANN:
They want a formal . . .
PRIME MINISTER:
Yes of course they . . .
LIEBMANN:
Your Government apology. Fraser says there's no obstacle to it.
PRIME MINISTER:
No and if you think it is the right thing to do there's no obstacle to it but I take a different view from Mr Fraser on this as I have on some other things, and a lot of things we agree on, a lot of things we disagree on.
LIEBMANN:
He also says that our influence in international human rights forums is being eroded because of your Government's slow response to the Stolen Generation is it . . .
PRIME MINISTER:
Well I don't agree with that. Steve, the biggest human rights test this country has had in the last five years was East Timor. We stood up to the human rights of the people of East Timor in a way that the predecessor Labor Government if it had remained in office would not have done. I don't think you can therefore say that our international credentials on human rights are in any way weakened or diminished.
LIEBMANN:
Is Pat Dodson sabotaging the reconciliation process?
PRIME MINISTER:
Well I'm disappointed that he's not coming. He could still have been the Chairman of the Reconciliation Council if he had chosen to do so. I remember having a meeting with Pat at the Lodge one Sunday night for an hour and a half, just the two of us. I asked him to stay on as Chairman of the Council and he said that he wouldn't unless we changed our view on the apology and Native Title. Well of course no Government, no Prime Minister can bargain with anybody in that sort of sense and I hope he changes his mind and comes and that's obviously the view of people like Aden Ridgeway.
LIEBMANN:
Final question on Foreign Affairs. The Commander in Chief of the United States Pacific Command, Admiral Dennis Blair is saying America wants your Government to maintain a high technology Defence Force. Are you prepared to do that at what is implied as a risk to our defence relationship with America if you don't?
PRIME MINISTER:
I don't think he's threatening our defence relationship. I will be seeing Admiral Blair this afternoon. We do have a high technology Defence Force as far as Taiwan is concerned, which is the context in which those remarks were made. My message to him this afternoon and indeed to the Chinese will be to exercise maximum restraint. I don't think we should be talking about the possibility of conflict over Taiwan. I think what we should be doing as a very close ally of the United States, also a country having a constructive relationship with Beijing, is to say to both of them it is in everybody's interests that we all exercise a great deal of restraint. And I'm not going to get into hypothetical situations about what we may and may not do in the event of something happening, I don't think that's helpful.
LIEBMANN:
Good to see you again. Thanks for your time.
PRIME MINISTER:
Thanks Steve. [ends]