Subjects: workers entitlements; petrol prices; GST.
E&OE...
JONES:
Prime Minister good morning.
PRIME MINISTER:
Good morning Alan.
JONES:
Prime Minister thank you for your time. Can you assure us that those
textile workers will receive all the benefits to which they're entitled?
PRIME MINISTER:
I can assure you that they will get $4 million from the two governments,
New South Wales and the Commonwealth government. They'll get $2 million
in retraining. And if the deed of arrangement is approved, the advice
is that another $7 million will be available so that they will get the
lot. I can't approve the deed of arrangement. That is up to the unions
and the creditors and that's what the law says. And our offer is
to make up the difference. Now the advice I have, and this is advice given
to the government by the administrator, is that if the deed of arrangement
is approved then it should be $7 million realised and that plus the $4
million being put in by government will mean $11 million is available.
Now in order for this to work we need the deed of arrangement approved
and that means that the workers themselves should support the deed of
arrangement. And if that occurs and my advice is that that is still likely,
more than likely, then they will within a reasonable period of time, and
our $4 million will be made available straight away but....
JONES:
Is that right, [inaudible]
PRIME MINISTER:
Our $4 million will be made available straight away. We'll be sending
people up to the Hunter to start talking to people about their retraining.
There'll be no delay with the government money. But it is, the whole
thing is conditional on that deed of arrangement being approved.
JONES:
If that were approved, and I'm sure it will be approved, but if
it were approved when will the $7 million be available?
PRIME MINISTER:
Well a lot of it would become available within weeks, and some will take
a little longer. I think you'll have close to 70% of it within, including
our own proportion, within you know quite a reasonable period of time.
Some more will take in the normal course a bit longer.
JONES:
Does this highlight also a weakness in what's been a failure by
successive governments, not just contemporary governments, to recognise
that the workforce is changing in its nature, and while we have people
who might be skilled in one particular area, we are really storing up
problems in the future whereby people don't have the capacity to
transfer to other employment?
PRIME MINISTER:
I think it does. I think what it does is to underline the fact that part
of what governments have to do in a global economy is to keep up the process
of economic change and reform, but be willing to give in appropriate places
a bit of extra help for people who are innocently damaged, damaged through
no fault of their own as a result of that change. And I felt very strongly
that these textile workers fell into that category. They live in an area
which although it has a lower unemployment rate than it used to have has
still got a higher unemployment rate than the rest of the country.
JONES:
What about.....sorry....
PRIME MINISTER:
Industry used to have very high levels of protection and now as a result
of decisions taken by the Hawke Labor government and also by our government,
has lower levels of protection. I think it's a defensible decision
because you can't have absurdly high level of tariffs. We still have
quite a high level of tariffs incidentally for textiles, much higher than
the community average. But because of that I think we do have a special
obligation to do a bit more. After all what is happening is that they
are getting what every man in the street would regard as their natural
entitlements. They're not getting some additional handout.
JONES:
Right. Now what happens about changing legislation to tighten the liability
on employers and directors to ensure that benefits owed to their workers
are met?
PRIME MINISTER:
Well we are going to tighten the law to create an offence where a director
behaves in a way that makes it more likely, or is designed rather to deny
to the employees their entitlements. I think there's been a bit of
loose talk about making directors liable for the debts of companies. Now
if you say that well you are in effect overturning the whole principle
of limited liability of companies which has been with us for hundreds
of years. And we're not proposing to do that. But we are proposing,
and I don't think anybody's seriously arguing for that, I haven't
even heard the union leaders argue for that, but what people want is the
law to be tightened so that if people set out to deny their workers their
entitlements, let me make it clear there's no allegation that that
has occurred in relation to National Textiles, then that should be an
offence and we're quite happy to tighten the law to that effect.
JONES:
But if directors were known to have given themselves significant salary
increases at the time that the company was in trouble, could that be regarded
as taking a position which in the end may well have denied workers of
entitlements?
PRIME MINISTER:
Well Alan I'm not going to give an on the run legal opinion. I'm
the Prime Minister, I'm not the solicitor general. And I think it's
very unwise for me to start saying, oh yes, that represents this and that
doesn't. We are going to create the new offence and let the law fall
where it may in relation to the current company. If people have allegations
of impropriety then they make those allegations to the appropriate corporate
law authorities and the law will take its course as it always does under
this Government.
JONES:
Mr Nick Brooke, from Price Waterhouse Coopers, is quoted today as saying
that he has a personal view that 100 per cent of employee entitlements
should be given protection and that could be achieved through a national
scheme. Under the scheme you have in train that won't be achieved
will it, 100 per cent effective?
PRIME MINISTER:
No, no. I think, I mean, Mr Brooke has the luxury, of course, of, you
know, having a personal view and he doesn't have to deal with all
the other demands that are made on the Treasury and on the Federal Government.
We think what we are providing is a basic and proper and decent safety
net. I think to have a situation where there's an open-ended guarantee
of the type he is proposing could produce the situation where arrangements
are deliberately made in the knowledge that the Government will pick up
the tab. Arrangements are made perhaps to load up redundancies as far
as industrial agreements...
JONES:
But if you tighten company law arrangements and punishment provisions,
as you have said, that would be prosecutable wouldn't it?
PRIME MINISTER:
No, that wouldn't be prosecutable. I mean, no, no, we are not...I
mean, I am talking here about an industrial agreement made between an
employer and employee where instead of perhaps a pay rise being given
they say, well look, we'll give you, you know, some extra weeks redundancy
because we know that if things fall over the Federal Government will pick
up the tab. I mean, you have got to have some kind of discipline of that
kind because we have got taxpayers to consider as well as workers. I mean,
we have to juggle priorities, we don't have the luxury of taking
a black and white view in each particular case.
Now, the basic scheme, I think, provides a fair safety net. In the case
of National Textiles what we have really done is we have applied the basic
scheme and we have said in addition because of the regional circumstances
and because it's textiles the industry has lost a lot of protection
and is going through a very competitive phase we are going to put in a
bit more. Now, that's the explanation for...
JONES:
I suppose Mr Brooke's argument was conditioned by the fact that
he was the receiver of the company which owned the Woodlawn Copper Mine
where 150 miners were owed $6.5 million and he said that in that case
the Government rejected a bid for compensation. There are still many workers
who haven't got that to which they are entitled aren't there?
PRIME MINISTER:
Well, look, there have and I accept that. I accept that people in the
past will look at some of these things and say, gee, I would like to have
been treated like that. I understand that. I mean, I point out, of course,
that the Labor Party was in power for 13 years and they never proposed
even a safety net scheme. They are now screaming in and saying we've
got to do this, we've got to do that. The union mates in the ACTU
never persuaded Mr Keating or Mr Hawke to have it, even a safety net scheme.
So, I mean, we are at least providing a measure of basic justice and entitlement
to workers that no previous government has ever provided. It's easy
for people who don't have the responsibility of juggling demands
on public money, and it is public money, to say, well, you know, you ought
to do this, you ought to go further. I mean, we'd all like to have
an ideal world and we have to try and find within the resources available
what is a fair and just solution and I think we have certainly found it
for the textile workers. This is a difficult area. They are not highly
paid men and women, I felt very sorry for them when I talked to them.
I spent an hour with them, they are decent people who have had a bad deal
and, you know, they've had a rough trot and I wanted to help them.
JONES:
Can you explain why petrol prices went up five to six cents a litre overnight
here yesterday? Yesterday morning on the Pacific Highway they were 85
to 86 cents a litre, the night before they were 79 to 80 cents a litre.
There's all this conjecture about whether petrol prices are going
to go up when the GST goes up. What is causing this massive fluctuation
in petrol prices?
PRIME MINISTER:
Well, the one thing I can tell your listeners, Alan, is that any fluctuation
now has nothing to do with the GST.
JONES:
We hope not.
PRIME MINISTER:
Well, it doesn't. I mean, Alan, it's just...
JONES:
I know but why does it happen?
PRIME MINISTER:
....common sense. It comes in on the 1st of July.
JONES:
But as an exercise in common sense, to use your language, none of us
can understand why it...
PRIME MINISTER:
Well, let me try and explain it very simply that the price of petrol
is basically affected by the price of crude oil and crude oil has for
24 years or 22 years been set at the world level. And the world price
of crude oil has gone up because the oil producing nations are rationing
their supply and that is having an impact on oil prices and therefore
petrol prices around the world. When you add to that the normal competitive
processes of discounting in any mass market like petrol you are going
to get fluctuations in price. Now, I don't like it and I know the
motorists don't like it but I can't control the world price.
JONES:
Okay. But let me take you another line on that then. You have promised
that the excise, the petrol excise will be cut equal to the GST impact.
Now, there are different GST prices, the difference between bush and city
is some 10 to 20 cents a litre. So surely either way you look the bush
people are going to pay more after the GST?
PRIME MINISTER:
Well, I think people should just wait and see when all the details of
it are unveiled.
JONES:
So what are you [inaudible] will happen?
PRIME MINISTER:
We made a commitment and we said that the price need not rise as a result
of the GST and I intend to deliver on that commitment. I made that clear
last night and I want to assure motorists that that commitment is going
to be met.
JONES:
So petrol in the bush and petrol in the city, petrol Australia wide will
not increase under the GST?
PRIME MINISTER:
No. The imposition of the GST is not going to produce an increase in
the price of petrol. That's the point. There are a few other things.
The world price, I can't control the world price. I mean there is
the same thing with cars.
JONES:
Sorry, what price isn't going to go up?
PRIME MINISTER:
No, there is going to be no price increase consequent upon the GST, that's
the point.
JONES:
But the petrol price might go up because of world prices.
PRIME MINISTER:
Well, that's happening now. But it might come down. I mean the OPEC
countries might...
JONES:
Petrol comes down, we never seem to get a reduction in oil through petrol
do we?
PRIME MINISTER:
Can I just finish, this is a very important issue. The world price of
petrol could go down. The point that I'm making and the commitment
we made was that as a result of the GST, there need not be a rise. We
have never said that we can control the price charged by OPEC countries
and the price variation you refer to on the Pacific Highway this morning
is a result of the world price changing. Now, that could go up further,
or it could come down.
JONES:
How do the poor people at the bowser know that it is a result of the
world crude oil price, not the GST?
PRIME MINISTER:
Well, there will be price surveillance mechanisms which will be able
to measure the impact of world pricing and the ACCC will have quite a
lot of resources to do this. And we will be doing all that we can to ensure
that that is the case.
JONES:
But, be fair, I mean the Labor Government introduced the excise indexation.
Surely to be fair isn't there the capacity with the GST to remove
indexation on smokes, and beer and the petrol bowser so that these things
don't become outposts of the tax office?
PRIME MINISTER:
Well, you could do that. But if you wanted to do that you then have to
cut into some of the tax cuts. I mean it's not a question of, I mean
you say to be fair, why can't we remove them? Well, we didn't
say that that was part of the arrangement.
JONES:
They're sort of hidden.
PRIME MINISTER:
Well, they're not hidden, I mean you know about them.
JONES:
I thank God I do.
PRIME MINISTER:
You talk about them very regularly to your listeners. There is certainly
nothing hidden about them. And I mean I get pulled up and asked questions
about them all day. So, look Alan, we gave out a plan. And that plan involved
a total revamp of the system. First and foremost it is going to cut personal
tax by $12 billion. We're going to cut capital gains tax in half.
We're going to reduce company tax from 36 to 30. We're going
to give the states an access to growth revenue which means they'll
have more money for schools, and roads and hospitals. Now, if you start
taking away individual struts in the scheme, it will imperil the overall
advantages. I mean too much of the argument about tax reform is focusing
on one tiny aspect. Instead of people seeing it as part of a total rewrite
to the benefit of economic strengthening of the country. And my mission
in life, if you like, over the months ahead is to keep pointing out to
my fellow Australians that this is a new system which is going to strengthen
our economy and overall bring great benefits. If we focus just on one
aspect then we will lose sight of all of those overall benefits.
JONES:
You are going to have to handle the detail aren't you? I mean .
. . .
PRIME MINISTER:
Alan, I understand and I am doing it now.
JONES:
Ok, well let me give you another chance. Coles-Myer, Woolworths, and
the large retailers want to use price tags that list both the pre-GST
prices on an item and the post-GST price on the same ticket, so that they
can avoid massive costs when the GST comes into place. Why are they being
denied the opportunity to do that?
PRIME MINISTER:
Well, we have, we're having discussions with them about that. And
those discussions are ongoing and we've pointed out that you know
that the proposals, the intent of the new scheme is to have a situation
where the price of the GST, the tax affected is included in the price.
And those discussions will go on and I am sure we can resolve them.
JONES:
So, you are sure that the ban on dual ticketing on price tags may not
stay a problem?
PRIME MINISTER:
No, no I am not saying that. Alan, there are a whole lot of these things
that are the subject of ongoing discussions and we've had some discussions,
I mean I haven't been directly privy to those discussions. And there
are reasons which the Treasurer has pointed out and the Treasurer's
argued that the price tags should build in the cost of the GST, should
build in the cost of the GST. Now, look we are discussing that matter.
We've got reasons for it and those discussions will go on and we've
still got four months to go.
JONES:
Ok, just before you go. On interest rates, what impact on for example,
a classic account paid .1% on a credit balance of just up to $5,000. If
it is up to $10,000, .2% and if you've got $99,999 in the bank you
get 1.5% interest. Isn't it appalling [inaudible] in your mind between
what you pay if you're a borrower and what you'll see if you're
a saver.
PRIME MINISTER:
Well, I guess it depends on the size of the account. I can't say
there's an appalling disparity.
JONES:
.1%, the battler gets for $5,000 a year.
PRIME MINISTER:
I know it's very low.
JONES:
Lended out at 8.
PRIME MINISTER:
I accept that. I mean I guess it all adds to the argument to have even
more competition amongst banks. Which is the Government's policy.
And we do have more competition in the financial system as a result of
our reforms. I mean, Aussie Home Loans, Credit Unions. That is our policy.
JONES:
Alright Prime Minister, I'd better say let you go. Thank you for
your time.
[Ends]