Subjects: Tasmanian Branch of Liberal Party; assistance to Tasmania; tax cuts; allegations against ministers; Singtel; visit to USA
E&OE................................
COX:
Prime Minister, good morning.
PRIME MINISTER:
Good morning, very nice to be with you.
COX:
And you as well. Do we find you well today?
PRIME MINISTER:
Very well. I've been out for an early morning walk with Tony Benneworth, the Liberal candidate for Bass. It's a great city Launceston.
COX:
Indeed. Now, if we could start with local issues, Prime Minister, while State Labor governments are on the march all over the country Liberals in our State seem further from government than ever before. What sort of advice will you be offering them this weekend?
PRIME MINISTER:
Well, my main focus, of course, is on the Federal election. I'll talk to Bob Cheek. I congratulate him. Obviously the Opposition has a lot of work ahead of it, all oppositions do, including the Federal Opposition and this week's been a pretty big demonstration of, they've got a lot of work ahead as far as their own leader is concerned in getting his facts straight before he starts trying to score cheap political points by involving his family. I'll naturally have a talk with Bob and there are a few ideas I've got but I'm not going to go into them. They have a tough fight ahead of them. I am, really at the moment.my focus is on the Federal scene. I'm here for a meeting of the Federal Executive. We're going to have a Federal election a long time before we have a State election and I have to say that my overwhelming focus is on reminding people that at the end of this year they have to choose between a Beazley Labor government, remembering the 17% housing interest rates, 11% unemployment and the $96 billion of government debt that the former Labor administration produced in the years that it was in office. And, quite honestly, my overwhelming focus is on the Federal political scene.
COX:
But Labor is obviously on a roll, electorally, with State elections, how do you explain that?
PRIME MINISTER:
Well, I'm not a political commentator and State elections and Federal elections are different. And what I'm focussed on, exclusively, I have to say to you, quite unapologetically, is the national political scene. The Coalition Government has brought enormous benefits to Tasmania. I mean, I'm delighted, for example, to indicate that as a result of initiatives in our innovation policy announced earlier this year and also as a result of a budget initiative to provide more regional university places the Education Minister will announce this morning more than 2,500 additional university places throughout Australia. There'll be 85 of those coming to Tasmania, both under the 'Backing Australia's Ability' programme and also under the expansion of the university places in regional areas of Australia. And Burnie will get 20 of the regional places and there'll be 65 new places going to other universities. So, overall, it's going to be a good news day for the universities of Australia.
COX:
You're being asked as well, Prime Minister, to kick in the can to find Tasmania's fox, $380,000 I understand from the State government, are you interested?
PRIME MINISTER:
I'll have a look at that but I've got to tell you that this Government has been particularly positive in supporting Tasmania's economic future. Tasmania has got, in the eyes of most other States, a very good deal out of the proceeds of the sale of the shares in Telstra, the environmental money and the money that has come under the 'Networking the Nation' programme, the call centres. The investment in Tasmania by this Government has been generous but it's deserved. I've always believed that Tasmania because of her status as an island state, her position does suffer disadvantages compared with mainland Australia and it's, therefore, very important that we work very hard as a Federal Government to try and address that disadvantage and any objective person would have to acknowledge that we've done that quite.to a very large extent.
COX:
As you'd appreciate, Mr Howard, the States are always after more from the Commonwealth. If I could, just for a moment, this is the Premier talking about funding for Tasmania in the run-up to the election.
Now we've seen Mr Howard, throw $100 million at the South Australian-Northern Territory railway, $60 million to the car industry in Victoria, God knows how much money to the car industry in South Australia, extra money the other week to the magnesium project in Queensland. All we're saying is don't forget about Tasmanians, we are Australians too.
COX:
So there's the Premier. Will there be further funding for Tasmania.
PRIME MINISTER:
Well, what of course he didn't say and didn't acknowledge and never does that Tasmania's share out of the proceeds of the sale of Telstra was way above its per capita entitlement, way above it. Everybody knows that. He knows that. Everybody knows it.
COX:
Was that, though to curry favour with Independent Senator Brian Harradine?
PRIME MINISTER:
You can't have it both ways and Jim Bacon can't have it both ways. It is either right to help Tasmania or it is not right to help Tasmania. When we point out that we do help Tasmania then, oh, that's currying favour with Brian Harradine, but when something is done for another State - and after all, I am represented to.I'm elected to represent all Australians, I'm not just elected to represent one or other part of the country. And I think if you look at the pattern of our decisions since I've been Prime Minister you'll find that I've been fair to all parts of Australia. You will always get rivalry between State Premiers. A State Premier can yell his head off for his own State and know that everybody will agree with him. A Prime Minister has to sort of balance up the yells and try and strike a fair thing between the different states. I mean, I was in Western Australia recently and Geoff Gallop was complaining about the fact that I said the submarine contract had to stay in South Australia. When we had to make a decision, or Holden had to make a decision about the engine plant Steve Bracks rang me up and said, now don't you favour South Australia over Victoria because South Australia's got a Liberal government. I said, no, I won't and in the end the engine plant did go to Victoria. So on that occasion it went to a Labor State because it was the right decision. And in the case of the submarine contract, it went to a Liberal State becaue it was also the right decision but Geoff Gallop said I was outrageous and Olsen, in relation to the engine plant, says, oh, terribly disappointing, our Prime Minister didn't do the right thing. I mean, you know, you can't win on that. I think most fair minded Australians know that and other fair minded Australians also know that when it comes to the money out of the Telstra social bonus, Tasmania has been very, very well treated. It really has. I mean, Tasmania was given disproportionately large amounts of money out of both of those things and Jim Bacon knows that and most fair minded Tasmanians know that too.
COX:
If we could move on to calls that would be good. Anne, good morning.
CALLER:
Good morning, Mr Prime Minister.
PRIME MINISTER:
Good morning.
CALLER:
I'd like you to address the problem or the premise of your proposed tax cuts as opposed to reduction in GST rates. Now, I pay little or no income tax but I do pay GST on my essentials of life like electricity, gas, telephone and insurance. How can I possibly benefit by a reduction in income tax as opposed to a reduction in the rate of the GST on these essential items of life?
PRIME MINISTER:
Well, it would depend, obviously it would depend on your level of income and you haven't told me that but you obviously do have an income. And if you have an income then you would benefit from income tax cuts if they were income tax cuts across the board. What Mr Beazley is offering is to roll back the GST. I don't think anybody wants a roll back of the GST, it will only make the situation very confusing. I think most people feel now that the GST is there, whether they supported it or not, we ought to get on with the future. If you roll back the GST all you're going to do is to reduce the capacity of the country as the years go by to provide the services we need for an aging population. One of the great things about the GST is that it grows with the economy and provides increasing amounts of revenue to pay for public services like public hospitals and government schools and we will need them into the future. Those people who argue for a roll back of the GST are really arguing to rob governments of the capacity to provide those services into the future.
COX:
Prime Minister, while we're on the subject of the GST, does the Minister for Small Business, Ian Macfarlane or the Treasurer, Peter Costello, deserve to be sacked or at least dragged over the coals for their handling of the alleged $800-odd tax credit fraud?
PRIME MINISTER:
Well, I'm glad you said alleged. There's been no evidence of any fraud. This is an organisational.look, the answer is, no, they have my total confidence. I mean, Mr Beazley's running around saying they ought to be sacked, well, I suppose if you've had the sort of week he's had you'd have to find something to say at the end of the week. I mean, he's the last person in Australian politics who can give lectures about candour, particularly this week, so I.
COX:
But if the Liberal Party can't understand the GST how reasonable is it of you to expect a small businessman to understand it?
PRIME MINISTER:
Well, the Party organisation handled this matter. I mean, I don't pretend to know all the details and if you want to find out the details of it talk to Lynton Crosby, the Federal Director. He'll be able to talk to you about that. I don't pretend to understand all the details of what occurred. I do know this, that the matter's been discussed in full with the Tax Office and the Tax Office has indicated complete satisfaction with the explanation. So I don't know where this business about fraud's coming from.
COX:
All right. Are you concerned, though, that one of your own State branches would have, you know, managed to make a mess of the figures?
PRIME MINISTER:
Well, when you say make a mess, look, I don't accept any of that. I think if you want the details of it you ought to talk to them. Look, there was a story a few months ago about a fundraiser involving Steve Bracks where there was apparently some confusion and now are you running around saying they're involved in fraud too.
COX:
But Steve Bracks didn't introduce the GST?
PRIME MINISTER:
Well look, with any new system there can always be some misunderstandings. I've never pretended otherwise. But the details of it are not within my grasp because I knew nothing about it until yesterday. I don't pretend to know every book entry in every branch of the Liberal Party in every part of Australia any more than Mr Beazley does the Labor Party branches. It's an organisational matter and people who want it explained ought to talk to the party organisation.
COX:
Let's hear now from Thomas who's with us from Blackburn's Bay with a question for the Prime Minister. Thomas, good morning.
CALLER:
Good morning. Congratulations on your achievements in office Mr Howard.
PRIME MINISTER:
Thank you.
CALLER:
I'm worried that Mr Beazley hasn't ruled out assets taxing directly or indirectly. Maybe.
PRIME MINISTER:
Assets taxing, do you mean capital gains tax?
CALLER:
Pay as you go capital gains, retro active capital gain. Or even lower asset limits for benefits and perhaps raising Medicare on higher assets and then bringing back maybe gift duties and death duties.
PRIME MINISTER:
That's a challenge that can be thrown out to him but I do know that in the last election campaign the Labor Party wanted to significantly tighten the capital gains tax. And that went very much against them particularly in rural areas of Australia and the other thing that I think that rural people should be particularly conscious of is that the Labor Party has not categorically ruled out some kind of punitive taxation of trusts. Wer've put that proposal aside and we have no intention whatever of interfering with the legitimate use of trusts by small business people or by farmers. There are some excesses in that area, but the legitimate use of them does not come into the category of excesses.
COX:
Mr Howard we go now to Ian who is with us from Somerset. Ian good morning.
CALLER:
Good morning Mr Howard.
PRIME MINISTER:
Good morning Ian.
CALLER:
You spent the first 15 mintues of this show blowing your trumpet about government achievements. That's fine. But how do you justify the millions upon millions of dollars that your government spends telling us about what you've done, and particuarly leading up to an election. Why can't you spend that money on something useful?
PRIME MINISTER:
Well many of the millions and millions of dollars that you are talking about are spent on routine government advertising such as recruitment for the armed forces. If you look at the content of the other advertising, none of it is of a party political character. There are no critical references in that material to the Labor Party. All governments of different political persuasions from time to time run campaigns designed to bring the public's attention to what's being done. I think providing it's not party political, and providing it is not critical of the Opposition, and providing it doesn't mention the Liberal Party, then it is legitimate. There'll always be argument about the volume of it. There was when the Labor Party was in power. I remember some advertisements run on Working Nation and they featured a well known Australian actor, Bill Hunter, who identified himself with the Labor Party which he has a perfect right to do as an Australian citizen. There was a lot of debate about those. I think you probably remember them, I think most people do. It's not as if it's something that we've done for the first time.
COX:
Sorry what was that Ian?
CALLER:
I wasn't impressed with those either. But what I'm getting at is that this government seems to have made an art form of spending our money telling us what they've done.
PRIME MINISTER:
Well can I challenge that. There was a lot of money spent in relation to the new tax system. We needed to spend that in order to explain it. A lot of the money that's referred to as advertising by the Labor Party in relation to the tax system was money that was actually paid to provide seminars, to fund seminars, to post out written material to people about the operation of the new system. Money was paid to organisations to instruct their members about the operation of the new system. Now you can't have it both ways. You can't on the one hand say it's a complex new system tell us about it, then complain when we spend a lot of money telling people about it.
COX:
Ian thanks very much for your call. Just returning to the GST again Prime Minister. In your opinion will it remain at 10% forever?
PRIME MINISTER:
As far as I'm concerned it's at 10%, it will not go any higher. There's no way we're ever going to increase the GST. What people forget about the GST is that it grows with the economy. And that's its great strength.
COX:
What it raises grows with the economy?
PRIME MINISTER:
Yes. As the economy grows the amount of it grows. That's its great strength. The system it replaced, the wholesale tax system was in fact going in the opposite direction from the economy because it didn't apply to services. And we had to have a new system. We are an aging population and we're going to need more services not fewer services as the years go by. You therefore need an indirect tax base that grows with the economy. If we persevered with the old indirect tax base that Labor wanted, that's the wholesale tax base, the contribution from indirect tax would have declined over the years. And you know what the result of that would have been? We'd have either had a decline in services or higher income tax in order to make up the difference. And that is why Kim Beazley says that he doesn't think Australians are paying too much income tax. Because right in here he knows that his philosophy on indirect tax means that you've got to make up the shortfall with higher not lower income tax. The great ongoing value of the GST is that it is a growth tax that will provide the nation with growing revenues to fund public services. All the money from the GST goes to the states. So every person. every time Mr Beazley rails against the GST he is railing against more money for public hospitals, and more money for government schools. Because they are essentially funded by the states.
COX:
Lets go to Tony now in Blacklands Bay, good morning.
CALLER:
Good morning Prime Minister. I really still have a big problem with the Singtel / Optus deal that's been announced. I really don't like the idea of a foreign government owning things which can allegedly spy on Australia. And it really think that just from our national point of view..
COX:
Prime Minister
PRIME MINISTER:
Yes Tony I understand that and we gave this enormous amount of thought. When we first got the proposal we knew that people like yourself would have very legitimate concerns. We got ASIO, we got all the agencies that operate in that general area which is so very important to our security. They ran the ruler over this very very carefully. We talked to the Americans because we have communications links with them as you know very important to our worldwide security network and something that we want to keep in good shape. And after a lot of exhaustive investigation we are completely satisfied that there is no threat to our national security. If there were we would have said no. We're completely satisfied that all the protections and all the safeguards are in place. It was run through the Defence Department, run through ASIO, it was run through all of those agencies and they all gave it a tick, the arrangements for it. So Tony if there had been any doubt we would have said no.
COX:
Does that answer your concerns Tony?
CALLER:
It doesn't answer my perceptions.
PRIME MINISTER:
I guess with some of these things Tony you can never completely quiet some people's concerns no matter how water tight the case is. I understand that. These are judgements we have to make. And the competitive benefits that a stronger carrier will bring as far as competing against Telstra and others are quite significant. Obviously the Singtel takeover will strengthen that carrier a great deal and therefore from that point of view it's very good because it will give us more competition, and I think we all want that. We just had to be satisfied about the national security point of view and we are and even the Labor Party accepts that. They normally just criticise everything that we do.
COX:
Tony thanks for your call.
[NEWS BREAK]
COX:
Prime Minister if I could ask you about your imminent meeting with George Bush, the US President.
PRIME MINISTER:
Yeah.
COX:
What sort of issues are you anticipating canvassing with him.
PRIME MINISTER:
The strength and the state of the alliance, 50 years after the signing of the ANZUS Treaty and it is a very strong alliance. I'll talk about the regional strategic and political position in our part of the world and my exchanges with the new Indonesian Government and he'll be meeting President Megawati in Washington a few days after I see him.
COX:
As you'd know a couple of Australians are.
PRIME MINISTER:
.and on top of that we're also going to talk about the possibility of negotiating a free trade agreement between Australia and the United States. So they're the sorts of things that are going to be on the agenda.
COX:
As you'd know there are a couple of Tasmanians, a couple of Australians, one of them a Tasmanian, Stewart Lennox, facing charges in the United States on federal charges. Will you be pleading for some leniency for those Australians?
PRIME MINISTER:
Well I think all Australians who are charged with crimes in another country, particularly a country that observes the rule of law such as the United States have to be dealt with by the courts. I wouldn't have thought in advance of any trial it's appropriate for the head of Government in one country to be lobbying in relation to those charges the head of another Government. I mean the American legal system like ours it's not perfect but it's an open transparent one. People get fair trials in the United States relatively speaking as they do in Australia and I don't think it's appropriate for me at this stage to involve myself when something is before the American courts. If a foreigner comes here and is charged we would not take very kindly to the President or Prime Minister of the country from whom that person came ringing up while the thing's before the courts and saying to me, well you do something about it, I mean we all live by the rule of law. Obviously if somebody is convicted and there are questions of the implementation of a penalty that might seem excessively severe, well in those circumstances a point of view may be put but if as I understand in this case the matter is still before the courts, it's just not appropriate for the executive branch of government to be involved in lobbying.
COX:
Prime Minister thankyou for your time this morning enjoy your time in our state.
PRIME MINISTER:
I will, nice to be here.
[ends]