Subjects: Ryan by-election; economy.
E&OE................................
JONES:
Prime Minister good afternoon.
PRIME MINISTER:
Good afternoon to you Alan.
JONES:
How big a day is this for you, your Government and your party tomorrow?
PRIME MINISTER:
Well it's a big day, but it's a by-election. I am concerned that some people might, even though they normally vote Liberal say 'well we'll lodge a protest vote and vote Labor'. My worry about that is that they'll be rewarding the negative approach the Labor Party's taken over the last five years and indeed what Mr Beazley's been doing in the past few days, talking down the Australian economy. He should not be uttering the word recession. He knows that the Australian economy is fundamentally strong. We have low interest rates and low inflation, low government debt, a very competitive economy and instead of even entertaining the possibility of a recession he should be saying to the world as the Leader of the Opposition, 'no this is a strong country'. Now if he cared about Australia's national interest rather than his political fortunes in Ryan, that's the line he'd be taking.
JONES:
Prime Minister let me put this to you. Is it or is it not valid to argue that as a direct consequence of the value of the dollar against the US dollar, that it has given an accelerated impact and lift to our export performance which may in fact be the sole contributing feature in preventing us going into or following America into a recession?
PRIME MINISTER:
Alan there's no doubt that although the dollar is lower than the strength of the economy would suggest, there's no doubt that a low dollar does boost our export industries. It particularly boosts our farm sector. For the first time we are now seeing stories in newspapers of farm machinery manufacturers with booming sales. We're getting very strong commodity prices and on top of that you have a highly competitive dollar. Now I think the dollar should be higher than what it is. I want to make that clear. But there is no doubt that a low dollar helps our export industries, there's no doubt that the adjustment in the level of the Australian dollar during the Asian economic crisis helped take Australia through that crisis without experiencing a slump.
JONES:
Prime Minister surely if the headlines of the last week are right then the unemployment figures of yesterday should have been diabolical. Do you have a comment on those unemployment figures?
PRIME MINISTER:
I do. They were actually very encouraging figures.
JONES:
They were indeed.
PRIME MINISTER:
Because it showed for the third month in a row, and we're talking here about the March quarter, that's January/February, or two months of the March quarter, for the third month in a row employment went up. Now the only reason the unemployment rate went up was that the number of people looking for jobs increased. Now that's interesting too because it demonstrates that job seekers are not as nervous about the economy and the economic future than some of the headline writers.
JONES:
Well you've been hammered with headlines, there's no doubt about that, haven't you, over petrol in the first instance and surely those headlines were a fair way removed from the truth. And now headlines over the dollar which seems to be in contradistinction to some of the statistics that really..
PRIME MINISTER:
There is no doubt in the world that the basics of the Australian economy are very sound. I mean if we were going through these experiences and we had high inflation, high interest rates, and high government debt, then there would be genuine cause for alarm. But people have to understand that..
JONES:
The Victorian figures I might just point out to our listeners because they are interested in trying to get the facts of this rather than some emotive push which may have some agenda attached to it, I see in the Victorian figures Victoria added 17,000 new jobs in February and have created 90,000 jobs in the past year. It's hard to square that up with talk about recession.
PRIME MINISTER:
Well it is. These are not the employment growth figures of an economy in recession. They are not. And bear in mind that you had the negative figure for the December quarter and that's October/November/December. Here we are just coming off the back of February figures and those February figures are still showing a growth in jobs.
JONES:
So why isn't that on the front page as opposed to what is on the front page? What is going on here?
PRIME MINISTER:
It's easier to write a dramatic story about the level of the dollar.
JONES:
But there must be some national consequence of alarming the public and worrying and frightening people.
PRIME MINISTER:
It is not helpful to the national interest when you read headlines such as the Sydney Morning Herald last week - "Australia hits the wall" in bold type. I mean Australia has not hit the wall. How can you say Australia's hit the wall when you have a very strong government debt position, we have low interest rates, we have low inflation, and we are still watching job growth when our unemployment rate is a couple of percent below what it was when we came to office.
JONES:
Well I had a young bloke sitting opposite me here, a panel operator, for whom housing affordability is the best it's ever been in the time that he's been wanting to buy a home.
PRIME MINISTER:
It's unbelievable. You've got interest rates now for the average homebuyer $270 a month lower than what they were in March of 1996 five years ago. So those headlines are damaging to the national interest, they are written to provoke gloom and despair in my view. They don't add to national confidence and they are, I think, quite wrong in the circumstances.
JONES:
The achilles heel still seems to be Prime Minister the GST, not the GST per se but the rigmarole surrounding it. And I just want to put it to you that are you concerned that your role as Government, or you have allowed this to happen that Treasury has overtaken the role of government? Now for example Mr Carmody yesterday seemed to be speaking like a Prime Minister when he told a major speech in Brisbane that the remaining instalments for the 2000 and 2001 financial year, and that goes right down to next July, will be based on the December quarter. Now you know that the December quarter is one of the most active quarters especially for retail. So built into that kind of statement, which I would have thought is a statement of policy that government ought to be making, built into that is a very significant burden for small business in finding cash to pay their GST.
PRIME MINISTER:
Except that with the changes Alan if the December quarter is too high you can vary it and maybe that wasn't reported in the rest of Mr Carmody's speech. Maybe he didn't say it but the change that the Government made stipulates that the advise you get will come off a December quarter. But if you think that is too high you can vary it and do a squaring up at the end of the year.
JONES:
But he says if there are any outstanding BAS lodgements the instruments option won't be available. This is the sort of, you know, the bullyboy stand, won't be available.
PRIME MINISTER:
I mean I can't answer for every single speech he makes but I can tell you what the position is and tell your listeners that the position is that if the December is too high you vary downwards.
JONES:
What about though, the whole problem..we've got a GST or a VAT whatever the hell you call it, all over the world basically. There's only a hand full of countries that don't have one. Why is it that there has been such a seeming problem here in implementation when that problem didn't seem to exist in any of the other comparable industrialised countries?
PRIME MINISTER:
Well I'm not sure that it didn't. I wasn't living in any of those countries. But my understanding is that when these changes were first introduced in other countries there were some teething difficulties. I knew that there would be some transitional challenges. I said before Christmas that if people had problems with the BAS we would make changes. We have made changes and we are always ready to fine-tune the administration of a big change like this. We're not going to roll it back. That would be stupid and confusing. Nobody wants rollback. Rollback will just reopen the whole debate about tax reform.
JONES:
Well if you rollback, have your rollback, just supposing you do, where does any party who promises to do that get the money to provide -fund it then?
PRIME MINISTER:
Well .... I'm asking Mr Beazley and I'll go on asking him until the election. Where's the money coming from? Rollback is when you take the GST off some items. It's not when you make administrative changes. He's trying to say that what we've done with the BAS is rollback. That's not rollback, that's administration. The changes we made with the BAS haven't meant that there are fewer items subject to the GST. That's what rollback is and if Mr Beazley is going to take the GST off some items he's got to tell us where the money's coming from. Is he going to increase the rate on the remaining items, is he going to cut spending - he says he's going to increase it - , is he going to increase income tax - he said he won't do that? Where is the money coming from?
JONES:
On the $14,000, I spoke to you earlier this week about the $14,000 and the banks. You said you'd be talking to the banks. I mean there is still this concern, and I have been in touch with these people still, still this concern that the banks are suggesting that you have to have a deposit record, you have to have been able to find the gap but they can't use this $14,000 as the basis of getting into a new home purchase. Have you had any chance to clarify..?
PRIME MINISTER:
Today I'll be having discussions on that very issue.
JONES:
Okay good to talk to you. Got a tip for tomorrow?
PRIME MINISTER:
It's going to be very tight. I just say to any potential Liberal protest voters - don't reward Mr Beazley's talking down of the Australian economy against the national interest.
JONES:
Good to talk to you.
PRIME MINISTER:
Thank you.
[Ends]