Subjects: : Australian dollar, economy, unemployment figures, Ryan by-election, petrol prices, beer prices, foreign debt
E&OE................................
SATTLER:
Good morning, Mr Howard, welcome to the programme.
PRIME MINISTER:
Thank you, nice to talk to you.
SATTLER:
Long time, no speak.
PRIME MINISTER:
Long time, no hear, I've missed you.
SATTLER:
I know you have, desperately, desperately. How are you going?
PRIME MINISTER:
I'm going very well. There are some challenging things for the Government at the present time. It's important that people adopt a reasoned, sensible, calm, not alarmist approach to what's happened to the dollar.
SATTLER:
There's a bit of panic around today, I'll tell you.
PRIME MINISTER:
There shouldn't be panic because the fundamentals of the Australian economy are very strong.
SATTLER:
I agree with you there, but why are they picking on us then? I mean, I've been reading today that our currency's travelling worse than all others apart from those of Turkey and Haiti. I mean, it sounds almost like there's a conspiracy against the Australian dollar.
PRIME MINISTER:
Well, I'm not going to engage in a tit for tat response to some of the comments that have been made by individuals who don't carry any particular responsibility.
SATTLER:
Currency dealers, you mean?
PRIME MINISTER:
I just want to focus on the fundamentals which, in the end, really matter. And the fundamentals of the Australian economy are we have low inflation, we have low interest rates, we have low Government debt. Do you know that our Government, the Federal Government debt is 6.4% of our annual national wealth production? In Japan it is 130%.
SATTLER:
So you're telling me that we are about 20 times better off in that regard than they are?
PRIME MINISTER:
Absolutely. And it is much lower than the United States. It's much lower than many other countries.
SATTLER:
Well, why are we losing ground against them then?
PRIME MINISTER:
Well, all currencies are losing ground against the United States' dollar.
SATTLER:
But we're losing ground even against the Yen at the moment.
PRIME MINISTER:
I understand that but you've got to bear in mind that when these things happen, when you get this world turbulence, the initial reaction is for the currencies of smaller countries, of which the Australian dollar is one, to suffer more than the currencies of larger countries. And, of course, there's a natural flight to the American dollar. And there's nothing magical about 50 cents in the dollar, 50 cents to the American dollar.
SATTLER:
It's psychological, isn't it?
PRIME MINISTER:
Well, sure, sure, but we have to keep a sense of proportion. We must also remember that with any currency variation there are pluses and minuses but the dollar is too low given the fundamentals of the Australian economy. The low level is not justified by those fundamentals.
SATTLER:
Well, what should it be?
PRIME MINISTER:
I can't, look, it is foolhardy of me to start talking glibly about particular levels. I have a special responsibility at a time like this to talk very carefully and very positively.
SATTLER:
But you can't do anything to get it up above 50, up to where it should be, can you?
PRIME MINISTER:
Well, we're operating in an open market.
SATTLER:
A lot of people are saying today, we're floating the Australian dollar, what is the good of all that?
PRIME MINISTER:
Well, we can have a long debate about it but if anybody imagined that moving back to a fixed exchange rate would do other than.further drive the dollar down, well, they're kidding themselves. Because even if you have a fixed exchange rate you still can't stop people selling Australian dollars. It's just that the mechanism they choose they have to follow in order to sell them, it's quite different. I mean, I remember as Treasurer when we operated a fixed exchange rate system and there were still judgements being made for and against the Australian dollar then and the only difference was that instead of the market doing it, the Government was constantly trying to pick the level of the dollar.
SATTLER:
Yeah, but what was the value of our dollar against the American then? I bet it was pretty well equivalent.
PRIME MINISTER:
It was higher than what it was now but that didn't mean to say that we were better off then.
SATTLER:
Well, I don't know, weren't they the good old days?
PRIME MINISTER:
Well, it depends how far you go back. If you go back to 20 years ago, I don't think we were better off. I really don't. And we're certainly better off now than we were 5 or 10 years ago because we have, well, if you look at it, our interest rates are lower, our unemployment is lower.
SATTLER:
[Inaudible] brokers about that one.
PRIME MINISTER:
Well, I'm not going to speculate about those figures but I'd be very surprised if the figures, when they come out, alter what I've just said, that our unemployment now is a lot lower than what it was 5 or 10 years ago. I'm quite certain that the figures won't alter that.
SATTLER:
No, they won't. As you know, statements made by politicians can sometimes come back to haunt them and in 1995 your colleague, Peter Costello, Shadow Treasurer, said, a nation is marked on its currency. He said that in the Parliament. The dollar equivalent then was 70 cents. Do you reckon he regrets having made that statement?
PRIME MINISTER:
Well look, there's nothing to be served by my going back over those things again. I mean, what really matters at the moment is if the Labor Party has an alternative to handle the economy at the present time can we please hear it.
SATTLER:
But do they need to?
PRIME MINISTER:
Well, yes they do, they do, they do, they do need to. If they are putting themselves forward as the alternative government they do need to tell the Australian people how they would do things differently.
SATTLER:
But don't governments lose elections, oppositions don't win them? Isn't that what happens in the cycle?
PRIME MINISTER:
Well, you're asking me to adopt the role of political commentator. I'm adopting the role of a political advocate and I'm the advocate for this Government. We have delivered an economy whose fundamentals are stronger and better than what they were 5 years ago. Nobody can argue with that. I heard the Shadow Treasurer this morning criticise me for saying the fundamentals were strong and when he was asked to put forward his alternative he didn't say, oh well, we'd have a different deficit, we'd have a different surplus, we'd have a different this, we'd have a different that. He talked about investment in education and high technology. Well, that's fine, we're all in favour of that. We announced a $3 billion plan to tackle that only 6 or 8 weeks ago. So nobody argues with that, but that's not an alternative economic policy. I mean, where are the fundamentals of the Australian economy which would be better under a Labor government? How is it that a Labor government would be able to make the Australian economy stronger? When they were last in office they did leave us with $85 billion of government debt, they did drive interest rates, as your rural listeners will remember in particular, to 17%. Mr Beazley did deliver an unemployment rate of 11.2%. People should remember those things when they listen to the glib remarks being made by Mr Beazley and Mr Crean at the present time.
SATTLER:
Do you wish that there wasn't a by-election in Ryan at the weekend, that Mr Moore had hung into the next election. And why did he go so early?
PRIME MINISTER:
That is academic, he indicated he wanted to go and he went.
SATTLER:
But do you think politicians should go mid-term, I mean he was elected to his seat to serve a full time.
PRIME MINISTER:
Well there are always arguments for and against that Howard but.
SATTLER:
You wouldn't do that would you?
PRIME MINISTER:
Well I'm not contemplating any kind of retirement. I can assure you of that. I've never felt more enthusiastic about staying there and winning an election than I do at the present time. So I don't even contemplate retirement.
SATTLER:
But what I mean when, and you'll do it one day, if you did it you would do it in conjunction with an election.
PRIME MINISTER:
I'm not going to get into a debate about when I might at some time in the future .
SATTLER:
Any politician should go.(inaudible)
PRIME MINISTER:
...please leave me out of it, I mean I'd love it to go on forever of course, but leave me out of that equation. But sure it's a difficult by-election and in the end those people who are normally Liberal voters who are thinking of delivering a protest vote, I hope they bear in mind that if they do that they will encourage the Labor Party to continue this very negative approach that they've had over the last five years. I mean they opposed every attempt we made to reduce the Government debt they left us. They left us with an $85 billion government debt.
SATTLER:
People don't seem to care about that.
PRIME MINISTER:
Well I don't know in the end. You say that but (inaudible)
SATTLER:
(inaudible) the way the polls are going in Ryan.
PRIME MINISTER:
Well opinion polls don't elect Governments.
SATTLER:
I know but cripes you're a long way behind here.
PRIME MINISTER:
Howard, opinion polls don't elect Government's. This Government will stand or fall according to the judgement of the Australian people when the general election is held.
SATTLER:
Yeah I know, you're sounding like Joh Bjelke-Petersen, he used to say when he was 20 points behind "don't you worry about that, I'll win" and he often did.
PRIME MINISTER:
Do you want to keep going?
SATTLER:
Well, it is Queensland too we're talking about so who knows, you might.
PRIME MINISTER:
Well I'm not, I have great respect for my fellow Australians whether they live in Queensland or anywhere else.
SATTLER:
Can you take a call or two?
PRIME MINISTER:
Yes.
SATTLER:
Okay, we've got Fabian on the line. Are you there Fabian? Fabian?
CALLER:
Hello.
SATTLER:
The Prime Minister's listening.
CALLER:
Thank you. Hello Mr Prime Minister.
PRIME MINISTER:
Hi there Fabian.
CALLER:
I'm going to give you some free advice.
PRIME MINISTER:
I get that every day.
CALLER:
Yeah, this one is especially free. Please, if you want to win the election it's very simple. Listen to the ordinary people. A bloke that's got children, he's got a mortgage, the average bloke's got two cars, he's got to put petrol into it. And rates. The average person is really not interested to a degree in overseas debts, blah blah blah, we're interested in putting food into the children's mouths, interest rates on our mortgage, petrol in the car, our rates. That's all we're interested in, our families, and a little bit further, Australia.
SATTLER:
Well let's a response from the Prime Minister.
PRIME MINISTER:
Well can I ask a question. What's the biggest problem you and your family are finding at the present time?
CALLER:
By a long shot, petrol.
PRIME MINISTER:
Petrol. What further do you think I can do to get the price of petrol down?
CALLER:
Okay first of all show some compassion to people that have, especially the elderly people, (inaudible). I have a small business..
SATTLER:
Sorry to cut in Fabian, but what can the Prime Minister do tangibly to get the price down?
PRIME MINISTER:
Can I tell you I am desperately upset, I really am very unhappy about the high price of petrol. But unfortunately it is dominated by world influences. Tell me what I can do.
CALLER:
Okay here we go again. I live in New South Wales, I am paying a $1.09, across the border to see my children in Queensland I pay 82 cents. And are you telling me the Government can't do anything?
PRIME MINISTER:
Well the only Government that can do anything about, the Government that can make a big difference to that differential is, and I'm not shifting responsibility I'm stating facts, is the New South Wales Government. The reason it's much cheaper in Queensland is that the Queensland Government gives a rebate of 8 cents a litre, the New South Wales Government doesn't do that. Now can I say we cut the excise by as much as we could afford to and that excise reduction will cost $600 million next year and that will grow to $1.2 billion a year in two years time. Every time you cut excise by 1 cent, 1 cent it costs the budget $350 million.
SATTLER:
The high dollar's going to force the price.
PRIME MINISTER:
Exactly. The lower dollar, if it continues, and there's no reason in my view given the fundamentals in the economy that it should continue, there's no reason at all. None at all, but if it were to continue that could push the price up. Although working against that is the undoubted fact that as the American economy slows down there will be less demand for fuel in the United States and therefore that will act to bring down the world price of oil somewhat. But we are really hostage to all of these things. Can I say to you Fabian I have no doubt that petrol, the price of petrol is the biggest single bug bear of many families in Australia at the present time. I don't honestly believe that in revenue terms we can do more than what we have done without putting the budget into deficit, and that would not be responsible, and I'm not going to do that.
SATTLER:
Okay just very quickly a couple more calls. Hello.
CALLER:
Hello Howard.
SATTLER:
The Prime Minister's listening.
CALLER:
Mr Prime Minister, the price of beer. When are you going to do something about that?
PRIME MINISTER:
Well, what packaged beer or draught beer?
CALLER:
Draught beer. We're paying tax on a tax aren't we?
PRIME MINISTER:
Well the excise did go up, yes it did. The price of beer has gone up by about.
CALLER:
I'm not talking about that.
PRIME MINISTER:
Well I'm coming to draught beer. It went up by a higher rate than did other things, than did packaged beer and we've put some legislation into the parliament on that and the Labor and the Democrats have said they're going to vote it against it and they're going to force possibly force a refund of several hundred million dollars to the breweries and that's the particularly sensible thing to do at the present time. But we'll have further discussions with them on that but the parliament will decide in the end what happens.
CALLER:
I own a small hotel and we're down a third on our keg sales.
PRIME MINISTER:
Can I say that I've had some discussions with the Australian Hotels Association about that, I saw them in Canberra last week. But it's a difficult issue, but we've put a proposal into the parliament and we're seeking the support of the Labor Party and the Democrats and I guess they'll have further discussion on it.
SATTLER:
Okay. Sorry, I've got to leave you there and go to our next caller who I think is, if I've got this right, is Joe. Hello Joe.
CALLER:
Hi there, how are you going.
SATTLER:
Good.
CALLER:
Mr Prime Minister, can you recall back to the '96 election prior to Mr Keating being deposed, the Liberal Party itself made this mantra of the foreign debt - every question always put to Mr Keating was what was the size of the foreign debt. You don't hear much about that any more. How do you compare with Mr Keating's performance? What's the foreign debt at the moment compared to when you came in?
PRIME MINISTER:
Well we put not only the foreign debt, but we also put the government debt there too. The government debt was $85 billion when I became prime minister, it's now $30 billion and every single step we took to reduce the government debt, that's $50 billion we've taken off it, the Labor Party has opposed. Not only did they leave us with $85 billion but they tried to stop us paying it back and that is a double whammy on the Australian economy. The foreign debt which is influenced by exchange rate fluctuations, in dollar terms is higher now than it was in 1996. The foreign debt is a combination of the indebtedness of individual and corporate Australians to the rest of the world as well as the government sector. The government sector is lower because we've repaid a lot of it and on top of that our capacity to repay it has dramatically improved over the last five years. The ratio of foreign debt servicing to export income is much lower now than it was five years ago.
SATTLER:
Okay, we'll take one last call for the Prime Minister. He's got commitments as we know and it's David. Hello David.
CALLER:
How are you going? Mr Prime Minister I just want to talk to you, you said about unemployment, like I am in an area where it's over 10% and that's only just a moderate thing. I went for employment . yesterday for the first time in about 19 years. So how are you going to help us about the unemployment?
PRIME MINISTER:
What kind of work were you in David?
CALLER:
I was a at the abattoir at Grafton that went into receivership and with a lot of other blokes, I wrote an article a couple of weeks ago actually that the government helped out $3.1 million in you know refunding back the workers but we weren't one because we were under the 1998 when they went into liquidation.
PRIME MINISTER:
We brought a scheme in from the beginning of last year.
CALLER:
Exactly right.
PRIME MINISTER:
And that scheme provides a safety net and it would be a lot more generous if the state governments would match us dollar for dollar but so far they've refused to do that. I don't know the particular circumstances of your abattoir and I'll get some information on it if you'd like to leave your name and address with the programme. I may not be able to give you any solid information in reply, but I'll have a look at it. I do understand that unemployment is higher in some parts of the country than others. When I talk about unemployment being lower I'm talking about the national figure and I understand it is a little higher in the area in which you live than in other parts of the country.
CALLER:
Yes that's right.
PRIME MINISTER:
I do understand that. I am not, when I talk these figures, I am obviously talking about the whole country.
SATTLER:
All right, we'll have to leave it there. Thank you very much and Prime Minister thanks for joining us on the programme. Do you have a parting message for Kim Beazley running up to Ryan?
PRIME MINISTER:
No my message is to the voters of Ryan. Mr Beazley's not a voter in Ryan. My message to them is that if you think a protest vote is going to improve the situation bear in mind that it will only encourage the Labor Party to go on with its very negative, say nothing, do nothing approach to opposition.
SATTLER:
Right, I do appreciate your time. Talk again soon.
[ends]