Subjects: Mitsubishi Motors; interest rates; United States' election; electoral rorting inquiry; fuel prices; pensions
E&OE................................
CORDEAUX:
The Cordeaux Show and the court of public opinion welcomes the Prime Minister. Sir, how are you?
PRIME MINISTER:
I'm very well Jeremy and very good to be with you again.
CORDEAUX:
Good to have you on the show. The Mitsubishi news has been great for South Australia but I suppose really generally great for the whole country really.
PRIME MINISTER:
Oh it's a great announcement, particularly for the workers employed by the company - more than 3000 of them - who've had to put up with a lot of uncertainty. And isn't it nice that it's come on the eve of Christmas. It's given them and their families the assurance of a much happier Christmas. A lot of credit to the local management for the campaign they've run to get the investment - to the Managing Director of the company. But it is a measure of the international esteem of the Australian economy. You don't invest $172 million in the branch operations of a company in a country who's economy is staggering. There's no doubt that the tax changes, the introduction of the GST was always going to be beneficial for the car industry. There's also no doubt that our freeze on tariffs for five years has given stability to the industry and also the accompanying $2 billion competitiveness and investment fund. So when you put all of those things together you really do have a very welcoming economic climate and I'm so happy for Adelaide and for South Australia because the motor manufacturing industry has always been very important. South Australia has needed the motor manufacturing industry and isn't it nice to see it getting this level of support. I think it's something that everybody can take a great deal of satisfaction about but most importantly I'm grateful that a greater measure of security has been given to those 3,000 or more employees of Mitsubishi and their families on the eve of Christmas.
CORDEAUX:
Sounds very positive. Speaking about the economy, I don't know if you've seen the Australian Financial Review this morning - the story on interest rates where they say that the implied yield of the bank bills on the futures market which is sort of stretching out through 2001, seems to indicate, well they say here that they are discounting to the Reserve Bank of Australia's official cash rate which looks like the interest rate in this current cycle would have peaked and we're in for perhaps more stability and perhaps even a drop in interest rates next year.
PRIME MINISTER:
Well I'm always reluctant to speculate about the future course of interest rates. Certainly there haven't been any upward movements by the Reserve Bank over the last couple of months.
CORDEAUX:
But if the bank . . .
PRIME MINISTER:
One of the things that's adding to interest rate stability is that our Budget is in a strong state. If you've got a Budget that is in balance, and more than in balance, in surplus so that you're repaying more debt that takes some of the pressure off interest rates. That's one of the reasons why we've been so keen to repay debt. We've repaid about $50 billion of the $80 billion of debt that we inherited in March 1996. And that means that there are not only fewer pressures on interest rates, but there are also opportunities for additional expenditure in much needed areas.
CORDEAUX:
Yes well I don't expect you to comment on interest rates but at the end of the day if the banks are punting that the interest rates are going to be stable or lower that's got to be a good indicator for all of us.
PRIME MINISTER:
Well I think everybody likes a climate of stability with interest rates and preferably at as low a level as possible but I just can't be drawn into speculation as to what's going to happen.
CORDEAUX:
No I understand. What do you think of the American election. I mean it really does say something about Australia's system where we've got the little stubby pencil on the end of a string, it's a very basic system but it seems to work. Maybe you could export the technology or something?
PRIME MINISTER:
Well I offered to do so in a half-joking fashion when I saw President Clinton in Brunei at the APEC meeting. The fundamental problem in the United States is that they don't have a centralised system for national elections. I actually did say to the President, don't you have a Federal Election Commission and he said no, under our constitution it's not only run by the states but paid for by the states. And within each state you can have a different system again. And that really is the complication. I mean I am a great believer in local choice and decentralisation but you can carry it too far. I mean when we have elections in this country, we have an Australian Electoral Commission that runs it in a uniform way. You can get the results early and the contrast on election night in Australia with what I saw of election night in the United States is overwhelming. I mean we have a much more sophisticated radio and television coverage and our commentators are not informed by exit polls, they are informed by real figures. And those real figures are counted at local polling booths and then sent to state electoral commissions and then to the federal body and it all happens pretty quickly and as you rightly say based on the paper and the pencil. But can I just say having said all of that in defence of the American system the fact that it's taking a while to determine a result is not of itself evidence that democracy is not working. I seem to remember years ago it took a long time to determine the result of the 1961 election in Australia which the then Menzies' Government won with a majority of only two, one after providing a Speaker. So with a very close election it can take a long time and the important thing is to get the result that the public want. It does seem as though it's nearing an end but you can't be certain because it's a very litigious society. And you sort of talk to the lawyer before you have breakfast in the United States.
CORDEAUX:
Too many lawyers that's the problem.
PRIME MINISTER:
Well I think it's a lesson to all of us, I would hate to see Australia become as litigious as the United States but I fear we might be heading in that direction.
CORDEAUX:
Prime Minister, just before we go to some calls which I hope you won't mind taking, the Australian Democrats, we were talking with Senator Andrew Bartlett this morning about a Government plan to make welfare recipients pay for Centrelink mistakes and even allow Social Security to go into people's private bank accounts. Do you have a comment on that? It seems . . .
PRIME MINISTER:
Well there's no intention. I've heard about the Senator's remarks and I got some quick advice and the advice I have is that the amendments do not make welfare recipients pay for Centrelink mistakes. And I can assure you I will have further investigations made of the claim. That is not the intention of the legislation.
CORDEAUX:
And . . .
PRIME MINISTER:
And the idea of interest and administrative charges so I am told would only operate where the person in question has failed to make any arrangement to repay the debt and over three months will elapse before those charges would be applied. But you're not talking there about a Centrelink mistake. You're talking about the fact where for a combination of reasons a person may have been given something to which they were not entitled. And I am told that the impact of the amendment will be that if no arrangement is made for the repayment of what a person is not entitled to and a period of three months has gone by, then and only then will the interest and the administrative charges be imposed. Now that is a far cry from saying that people are going to be charged for Centrelink's mistakes.
CORDEAUX:
All of this stuff about election rorting and irregularities, I don't know if you've caught up with the fact that John Tingle in Sydney has said . . .
PRIME MINISTER:
Yes I heard Mr Tingle on radio this morning. That of course is a matter that would have to be dealt with by the party organisation in New South Wales. And I think inquiries on it should be directed to the party organisation but my understanding is that something will be said about that later on this morning.
CORDEAUX:
So do you think in the light of all of this maybe no party is above reproach?
PRIME MINISTER:
No I don't. I don't. I mean there's an attempt being made by the Labor Party to sort of anaesthetise the Swan incident by saying oh well you know everybody does it. Well I am not aware that any of my frontbench colleagues or indeed any of my colleagues in Federal Parliament at the present time has been involved in those practices.
CORDEAUX:
Even . . .
PRIME MINISTER:
Well you have a straight admission from Mr Swan.
CORDEAUX:
Yes, but is there a need to tighten things up?
PRIME MINISTER:
Well I think we ought to sort of get to the bottom of things that are in front of us at the present time and by far the most serious element of this whole thing is the allegation, and in the case of one person who's gone to jail, clear evidence, that members of the Labor Party in Queensland were involved in criminal behaviour in relation to the electoral roll. It's a criminal offence to enrol in somebody else's name and then to vote. I mean that is a criminal offence and that is the most serious issue involved in this whole matter as far as I am concerned and I think we have to direct our minds to that. These other issues are important and they need to be investigated but it is the illegal use of the electoral roll which is the most serious issue because that is a serious matter.
CORDEAUX:
John you are talking to the Prime Minister.
CALLER:
Yes good morning Prime Minister. A year or maybe two years ago you put a surcharge on leaded petrol of two cents a litre because the leaded petrol was polluting the atmosphere. I am buying petrol now which has got three cents above the unleaded petrol rate and I believe according to all information I can get that the new petrol is going into super petrol, going into leaded cars, does not create pollution it is in fact the same as unleaded petrol for pollution. Do you intend to take this two or three cents a litre off?
PRIME MINISTER:
John, when you say you want me to take the surcharge on the leaded petrol off, well I am not sure that I would automatically agree with you that the polluting effects of the two are now the same. I've not had that put to me, I will get some advice on that. But my understanding is that leaded petrol is still more polluting than unleaded petrol and I am not aware of any scientific evidence which has altered that view and therefore would justify removing the differential.
CORDEAUX:
But if you find that it is not leaded petrol, you . . .
PRIME MINISTER:
Well I would obviously have a look at the situation. I don't for matters of ordinary caution give on-the-run commitments. I will have a look at what John has said and I would be surprised if the scientific evidence were now saying that the polluting qualities of unleaded petrol are the same as leaded petrol.
CORDEAUX:
All right John. I think [inaudible] here's the Prime Minister.
CALLER:
Hello Mr John Howard I want to [inaudible] diesel fuel. I am wondering why it's in petrol stations and everything else why it's ten cents dearer than leaded, than leaded petrol with diesel. Because I run a diesel van, I am a courier by trade and I find it very, very difficult to make ends meet with the higher diesel costs.
PRIME MINISTER:
How large is your, you just run a small van do you, or is your courier.?
CALLER:
I've got a small courier van and I'm just finding it very difficult to make ends meet with the...
PRIME MINISTER:
Well the reason it is high, the reason it's high is that the world price of diesel is high. It's not because of the imposition of any additional excise. It's because the world price is high. And diesel is fixed by world market forces in the same way as petrol. And my understanding is that the sort of oil grade that is used for heating purposes is also used in relation to diesel. And when you have the northern winter, the European winter that puts an upward pressure on the price of that particular grade of crude and that flows through to the price of diesel. Now I'm very conscious of how high the prices are. We don't like it and like everybody else we would like to see the world price come down because that's the reason why petrol is so expensive and it's the reason why diesel is so expensive. I know it's of no comfort to somebody in Adelaide for me to say that in Britain for example the price of fuel is $2.20 to $2.30 per litre, with 75% of that going in taxation.
CORDEAUX:
Thanks Isaac. Maria.
CALLER:
Good morning gentlemen. Prime Minister, on behalf of the public of Australia, we the people remember the GST promotional ads - unchain my heart. But the Howard, Liberal and Lee's Democrats ripped our hearts out with the lies that were being touted. Please Prime Minister ease the burden on petrol excise. It is in your power. It is a tax upon a tax. People are hurting out there because of the GST. I have experienced the GST over in New Zealand and I know damn well what's going to happen. In regards to the competition investment fund to your business..make in the petrol industry, you have the power of ten to bring them to heel. Now everyone is hurting in Australia because of the GST and my plea to you today on behalf of all Australians, once upon a time..
CORDEAUX:
Maria, listen, let's not do once upon a time. Just come to the point.
CALLER:
[inaudible] Jeremy please. Once upon a time we had honourable politicians that put their policies on the table for the people to know what was going on.
CORDEAUX:
Now what's the question Maria?
CALLER:
They led by example and they didn't, pardon the expression, bullshit to the people and didn't lie to the people. Now Prime Minister, please, on behalf of all Australians, don't have a tax upon a tax. Don't lie to us. You can remove the excise tax that is hurting the truckies, the farmers, the mums and dads of this country, and the elderly, because they cannot afford to go around.
CORDEAUX:
All right. Now let me get the Prime Minister in on this.
PRIME MINISTER:
Well thank you. We did put our policy before the Australian people at the last election. Nobody can say that we didn't tell the public that we were going to introduce the Goods and Services Tax if we won the election, and we did. We had to make some changes to accommodate the concerns of the Australian Democrats to get it through the Parliament. As well as introducing the GST it also included $12 billion worth of personal income tax cuts. It also included a lot of increases in family benefits. It included significant increases in pensions. It provided for aged person savings bonuses. The list is very long but we did lay all of that out. And you can maintain as you do an opposition to our policy, and I respect your right as a fellow Australian to have a completely different view on tax reform from mine, but nobody can say that we didn't tell the public that we were going to introduce tax reform. I mean we laid it out in painful detail. I don't agree Maria, I think it is, I don't agree that the public is against the new tax system. The evidence I find, and it does seem to be supported by published research, is that people support the new system. I do understand that the price of petrol at the present time is very high. I don't like that. But that is due overwhelmingly to the increase in the world price. I mean that is the reason. If we were to do as some people are arguing, and that is freeze the indexation in February, you're looking there at one or two cents at most. The daily fluctuation in the price of petrol within the city of Adelaide can be up to one cent a litre. You can drive from one end of the city to the other and you can pass through price variations at petrol bowsers which are often four, five, six cents a litre. It just would not be accurate for people who would suggest that an adjustment of one cent is going to take the price back to what people regard as a more acceptable one. And the only way in which you can bring about a price which people would find attractive would be to see the world price fall.
Now we do have a stronger surplus and we think it's a better investment of that surplus to upgrade the nation's road system because that lasts for decades, for years. Whereas you can have an adjustment of excise that would disappear overnight whereas roads last for decades. And we think in the long run that is a much better use of the larger than expected surplus. With great respect, and I understand your concern about the price of petrol, it is not fair to say that we didn't tell the people about the GST.
CORDEAUX:
A quick call from Ron. Hi.
CALLER:
Good morning Jeremy, good morning Prime Minister. One point I'd like to make, earlier this year the government raised taxes...sorry, raised pensions for one off, special one off of 4% to account for GST. Is that right?
PRIME MINISTER:
Yeah, that was part of the package..
CALLER:
How can you justify paying 50,000 pensioners who live overseas a 4% pay increase to adjust for the cost of the GST which costs us $20 million a year. They do not pay, their cost of living did not go up 4%, but we pay them automatically 4% increase overseas. That costs us $20 million a year and it just doesn't make sense. Who was the fool, who is the person who threw away our money like this?
PRIME MINISTER:
Well I understand the point you make. But if you take the view that you have to adjust the pension paid to Australians living overseas who've paid taxes for the requisite number of years, to entitle them to the aged pension, if you take the view that you don't compensate them for the GST then you should also take the view that you should adjust that pension according to the different cost of living levels in the various countries in which they live. Why stop at the GST? I mean some people living overseas would argue that they might be entitled to a higher pension because the cost of living overseas is higher than it is in Australia. So you can't really, you either pay them the pension or you don't. You can't pick and choose according to a particular increase.
CORDEAUX:
Prime Minister, let me wish you and your family a very merry Christmas and thank you for all the time that you've given us throughout the year. And a happy New Year.
PRIME MINISTER:
And to you and all of your listeners, and particularly to the employees at Mitsubishi who've had a great Christmas present.
CORDEAUX:
Thank you Prime Minister. All the best to you.
PRIME MINISTER:
Thank you.
[Ends]