Subjects: National Servicemen's Medal; petrol prices; Woodside-Shell merger; economy; Peter Nugent; US-China relations
E&OE................................
McGRATH:
Mr Howard, thanks for joining AM this morning. The lobbying effort by the national servicemen has been going on for years, why now?
PRIME MINISTER:
Well, they've persuaded me. I did have some reservations about it at one time but I, as a result of a lot of representations put to me over a period of time by a lot of my colleagues, I've re-examined it in discussion with the Minister for Veterans' Affairs. The reason I was reluctant in the past was I didn't want, in any way, to diminish the quality of the medals available to people who'd served in particular theatres of war. But I believe that this medal will in no way do that and it does recognise the contribution that 325,000 national servicemen gave to this country. Quite a number of them were, of course, sent abroad during the Vietnam War and quite a number of them lost their lives and were wounded. But there are a very large number involved and I think they are entitled to a medal and it will rank alongside the other military medals and I think it will complement the medals that have been given in the past. And I think it is an appropriate recognition of people who've given a great deal of service to their country.
McGRATH:
So will this medal be free for them?
PRIME MINISTER:
Oh yes.
McGRATH:
And do you think that will heal some of the wounds that they've felt?
PRIME MINISTER:
Well, not all of them feel wounds. I mean, a lot of people who conscripted into national service in the 1950s did not regard it as something that they regretted. Many of them saw it as giving them opportunities in life and as part of life's experience. So I think it's important to, when you're dealing with 325,000 people, I think it's very important that you take a broader view. I think it's appropriate recognition. They will welcome it and I'm very pleased to be able to announce it. And the Minister for Veterans' Affairs will, later today, provide some more details about it. I'll make a formal statement later this morning. But I think it is good news and something that former national servicemen will very warmly welcome.
McGRATH:
Now, Prime Minister, we heard from some petrol station operators this morning. Prices up and down from a dollar today, even higher yesterday, do you think there's profiteering?
PRIME MINISTER:
There could be. I'm glad the ACCC is on the case and I would encourage Professor Fels to throw the book at the oil companies if there's been anything untoward done, if there's been any collusion. I mean, the main reason why the price of petrol is high is that the world price of oil is high. That's the main driver. But the extra bits that come and go around holiday times are very irksome and I can understand the anger of motorists on ANZAC Day and often on holidays or at weekends when they cop these sudden surges. And I think the ACCC has a responsibility under its act, under its charter, to very carefully investigate. Can I make the point that the one-and-a-half cent litre cut that we made two months ago, that has not been wiped out. The point is that if that had not been made petrol would now be one-and-a-half cents a litre dearer. And, of course, the other point I make is that in August of this year there won't be an automatic increase in the excise level as would have obtained if we had not decided to abolish that automatic indexation. So we have a situation now where, overwhelmingly, the price is driven by world forces. We will insist that the ACCC use its power to root out any collusion that is occurring between the oil companies. And people are entitled to be angry at these price surges at such sensitive times.
McGRATH:
But sadly for your and the Government people always get angry at the Government about high petrol prices.
PRIME MINISTER:
Well look, when you're in Government you've got to take the rough with the smooth. You've got to explain yourself. You've got to point calmly to what are the root causes of high petrol prices. And the root causes of high petrol prices is that the price of crude oil has gone up and nothing can alter that fact and, of course, I can't control that any more than a government led by Mr Beazley could control world prices. So we've got to be realistic and honest about the causes.
McGRATH:
But the price of the Australian dollar, also the value of the Australian dollar, is making that so much worse now.
PRIME MINISTER:
Well, the value of the Australian dollar does have an impact, yes. And I don't hear any policies from the other side of politics that would, if implemented, push up the price of the dollar. I mean, we don't even have a view from Mr Beazley, for example, on the Government, or the Treasurer's decision to block Shell's takeover of Woodside. I mean, I find it amazing that this is the biggest foreign investment decision to come before an Australian Government in more than a decade, perhaps for 20 years, and the Opposition doesn't have an opinion. I mean, they didn't have an opinion before the Treasurer took his decision and incredibly enough they don't now have a position after he's taken his decision. I mean, some time in the next nine months, eight months, Mr Beazley is going to ask the Australian people to make him Prime Minister, yet he doesn't have the courage to state a Labor Party position on the biggest foreign investment issue to face an Australian Government in 10 to 20 years. I think that is pathetic and weak.
McGRATH:
Well, on the Woodside issue, Treasurer Peter Costello made a very strong point of making that it was his decision and his alone. Did you really just stand back and let him do that? What were your thoughts.
PRIME MINISTER:
Under the Act the decision has to be made by the Treasurer. He can't be directed. And, of course, I observed the provisions of the Act and he took the right decision. I have no doubt about that.
McGRATH:
But the political pressure on him, the concern amongst many of your, in many of your marginal seats about so-called selling off the farm, I mean, you wanted this political decision in the end.
PRIME MINISTER:
This is the right decision. The question of whether it has this or that political impact is secondary to the national interest consideration. And there's no doubt that the sequencing issue, whereby the interest of developing the Australian reserves might be deferred to a world-wide Shell consideration of developing other reserves before Australia's, that was dominant in the decision the Treasurer took and he was absolutely right. That was always the problem with this particular proposal.
McGRATH:
Prime Minister still on economic issues, the Sydney Morning Herald business section today quotes a range of senior business economists saying that this budget might be an opportunity to run a small budget deficit to stimulate the economy.
PRIME MINISTER:
I'm not attracted to that. And in any event the economy is getting quite a bit of stimulus already with interest rate cuts. We've had $12 billion of personal incomes tax cuts. We are getting further stimulus on the first of July when under the tax package the financial institutions duty will be abolished. Company tax is scheduled to fall from 34 cents in the dollar to 30 cents in the dollar. And there's also going to be the abolition of stamp duty on share transfers and property, commercial property conveyances. So there's a lot of stimulus already there and look how the building industry is already responding to the doubling of the home savings grant for new homes. The HIA said yesterday that in March there was a 150% increase around Australia in the number of new homes. So there's a bit in the pipeline. I'm not attracted to the idea of us putting the budget balance into the red. I believe we need a balanced budget. We don't need a big surplus because we've paid off an enormous amount of Labor's debt, despite their strenuous efforts to stop us doing so. But we do need a balance and I think to go into the red would be to send the wrong signal.
McGRATH:
Well obviously all will be revealed in May.
PRIME MINISTER:
It will indeed.
McGRATH:
Prime Minister Peter Nugent's death. He was a moderate Liberal. He was often the voice of conscience to the Liberal Party pushing you and the senior leadership team on social issues. He'll be a big loss to the party.
PRIME MINISTER:
Oh, I was very saddened by his death. He was a very good conscientious member. He had a great interest in foreign policy issues and a great interest in Aboriginal issues. He served on the reconciliation council for a long period of time. And he was a good team man though. He was argue his case in the party room, he would disagree strongly with the Government on some issues. But in the end he would play the team game. And I admire people who do that.
McGRATH:
Now he was also a very popular local member. Within his electorate people say his popularity was worth 4 or 5%, it's going to be a very very tough by-election for you isn't it?
PRIME MINISTER:
Well Catherine I'd be very happy to talk a bit more about by-elections after Peter's funeral, which will be early next week. I'd rather not for reasons I hope you'll understand, out of curtesy and respect for his family, not go into the future in Aston until after we've all had an opportunity of paying our respects to him.
McGRATH:
Prime Minister, regional issues, regional tensions seem to be growing. This morning US president George Bush has said that the US would defend Taiwan if it was threatened. He said the US would do whatever it takes and he said that China must understand that. Are you concerned about that sort of language?
PRIME MINISTER:
Well I understand, and I'm sure China and the world understands the United States' position in relation to Taiwan. It's a fairly long held position and it's not surprising that it should be restated by the new president. From our point of view we urge calm and restraint on everybody. We don't want to see any aggression by China against Taiwan. We don't want to see any wide attention escalate between the United States and China. So from our point of view we would like calm and restraint on all sides.
McGRATH:
Just quickly though wouldn't Australia be implicated through the ANZUS treaty if there were threats.
PRIME MINISTER:
This is very hypothetical and on things as sensitive as this I don't engage in hypotheticals.
McGRATH:
You're happy that President George Bush understands the regional tensions and is fully across how sensitive.
PRIME MINISTER:
I'm sure he is, I think he's made a very impressive start.
McGRATH:
Prime Minister thanks very much for speaking to AM this morning.
PRIME MINISTER:
You're welcome.
[ends]