Subjects: Economic climate; beer excise; Internet gambling; greenhouse gas emissions; Alice Springs to Darwin Railway; Commonwealth-State financial relations; drugs campaign ad
E&OE................................
FAINE:
The Prime Minister of Australia and the Member for Bennalong in the Federal Parliament, John Howard joins me in the studio. Good morning to you Mr Howard.
PRIME MINISTER:
Good morning Jon, good to be back.
FAINE:
And you're coping a broad side from most unlikely quarters in the paper this morning, the Business Council of Australia, one of your core constituents, the president John Shubert has written a piece for the Australian newspaper today. And it's a long piece, he says - and I quote one last paragraph here from the second to last paragraph - "important as politics may be to future national welfare the temptation to make political mileage out of bashing the main contributors to our national well-being and prosperity should be resisted at all costs." He says you're making cheap shots out of the business community when you should be targeting somewhere else.
PRIME MINISTER:
Well can I say if Mr Shubert means those remarks to be directed at the Government he's wrong. No Government in the last 30 years has created a better economic climate for big business than the Government I lead. Lower inflation, lower interest rates, a balanced budget, tax reform, industrial relations reform, extensive privatisation. All things that have created a better economic climate. If Mr Shubert and the Business Council is saying that that's big business bashing then they have I think got a very unbalanced argument. Can I make it very clear that I'm not interested in big business bashing as such, I'm not interested in taking on any one section of the Australian community. I endeavour to lead a Government that governs for all sections of the Australian community. We are unashamedly determined to keep creating a good climate for all sizes and shapes of business in this country. From time to time we will be critical of individual businesses over particular matters but that is how it should be. Although we are broadly sympathetic with the economic goals of business, we don't always agree with them, nor should we.
FAINE:
Because the conjunction, Prime Minister, of a number of things at the moment which make wonder if Mr Shubert's right.
PRIME MINISTER:
What are they?
FAINE:
A roll back on post office competition reform, competition reform in other sectors and in general..
PRIME MINISTER:
But hang-on, but hang-on, but hang-on, Jon.
FAINE:
. and Graeme Samuel there, the policy fighting with the Labor Party for supremacy on policy on the banks and we've had one way traffic for years and now you're trying to out do each almost to rein in what the community think of there excesses but the banks are feeling the pressure. On any number of fronts at the moment businesses are saying 'well hang-on, what's going on here'.
PRIME MINISTER:
Well but Jon, and I say Jon, John, to Jon Faine and John Shubert - are you seriously saying that our decision not to go ahead with the partial deregulation of the non-basic letter services of Australia Post represents the bashing of big business? It just represents the recognition that we wouldn't get the bill through the Senate. No, no let me finish. Because the Labor Party and the Democrats said they're weren't going to support it in the Senate, what is the point therefore of wasting our time in bashing our heads against a brick wall. As far as competing with each other in relation to the banks, I have said for the five years I've been Prime Minister and before that banks have social obligations, there's nothing new about that but we embraced the Wallis Committee recommendations on further freeing of the banking system. That has bought more competition and consumers and financial institutions of different sizes have benefited from that. I repeat, we have created the best economic climate for business to prosper in this country for 30 years. That hardly constitutes big business bashing. But like any Government we govern in the national interest and occasionally we'll have differences with individual companies. I mean I have a difference with the breweries.
FAINE:
At the moment a substantial one. Small business is calling for your guts for garters saying you've made it impossible for..
PRIME MINISTER:
I mean I recognise that when you are Prime Minister you get criticised quite a lot and I try and deal on the merits with that criticism, I'll come to small business in a minute, but I've been critical of the breweries over their campaign on excise. They know that the commitment in relation to 1.9% was for packaged beer, they know that. They've taken advantage of an ambiguous answer I gave in a radio interview but they know what was in all of the documentation, they know that but they have seized on that and they've driven a very strong campaign.
FAINE:
Have they won?
PRIME MINISTER:
Well we can't get it through the Senate. I read in the paper this morning that I've backed down on beer excise.
FAINE:
That's how it's being interpreted.
PRIME MINISTER:
Well, that's a wrong interpretation. If you can't get something through the Parliament and you accept the reality of that it's hardly a back down it's just a recognition of reality. We have not been able to get things through the Parliament from the time we were elected because we don't control the Senate. And we therefore have had to accept as part of political life from time to time we have to compromise with the Democrats in order to get legislation through. That's how we got the tax package through. I mean you hardly call the tax package a back down. It was in the end negotiated with the Australian Democrats because we don't control the Senate. We are talking about the beer excise issue with the Australian Democrats. It will result in a - if a deal is reached - it will result in money coming out of this year's budget and next year's budget.
FAINE:
$150 million?
PRIME MINISTER:
It could be, it could be in that order. I don't like that.
FAINE:
Another hole in the budget.
PRIME MINISTER:
Yes but not by me. But curtesy of the Australian Democrats and the Australian Labor Party as a result of a quite dishonest campaign run by the breweries.
FAINE:
The breweries would say 'well it was $150 million you never should have tried to get your hands on in the first place'.
PRIME MINISTER:
Well that is their argument but my argument is is that they know that the proposal that we took to the Australian people was a 1.9% increase in packaged beer, they know that. I've talked to them about this, I've had lengthy discussions with them. But they decided to run that campaign, well that's their right in a free country and I deal with that. But any suggestion that we're backing down or voluntarily walking away is quite wrong. We just have to face the reality that in our system of government to get legislation through you have to get it through the House of Representatives and the Senate. And if you can't get it though the Senate then the sensible thing to do is to try and negotiate a compromise which at least leaves you in a better position than you would otherwise be if you just keep pushing it up with no hope of success.
FAINE:
So why are you pushing ahead with trying to ban gaming on the Internet when the Democrats have said they will oppose it. You've got no hope of putting it through the Senate but there you are in the newspaper today writing a piece for the Age saying well that doesn't mean we shouldn't at least try.
PRIME MINISTER:
Well I'm not certain that the Democrats have said, all of them.
FAINE:
The Democrats have said they won't support it.
PRIME MINISTER:
No, no that's not right. Some Democrats have said they will support it. Senator Woodley has said he'll support it. My understanding is that the Democrats are not speaking with one voice on this issue. I don't know finally what the Democrats' position is on this and I don't know what Senator Harradine's position is.
FAINE:
But the principle's the same. You said in the newspaper today that even if you can't get it through the Senate it's a point of principle. You'll still do anything you can, in fact you specifically.
PRIME MINISTER:
They are different issues.
FAINE:
But the principles still the same.
PRIME MINISTER:
No no no it's not. The principle is not the same.
FAINE:
You said why waste time with something I can't get through the Senate in relation to one issue, on the other issue you're saying well on the point of.
PRIME MINISTER:
Can I tell you what the difference is? That if I adopted the Internet gambling approach to the beer excise proposal I could end up having an even bigger hole in the budget.
FAINE:
Well you might have a big hole in the budget from gaming as well because there's now already claims for compensation for hundreds of millions of dollars.
PRIME MINISTER:
They are not valid claims. Can I just go back? There's a difference principle involved in the case of the beer excise it's a general excise measure and there are other excise things involved in it so therefore if you pushed ahead and that you could end up with an even bigger hole. But look there's no, there's no law of politics that say's that the.
FAINE:
That you have to be consistent.
PRIME MINISTER:
No, no, there's no law of politics that say's you have to take exactly the same approach to each piece of legislation in dealing with the upper house. It depends upon the ingredients of the legislation and in the case of the beer excise the most sensible thing to do, you're dealing here with a revenue item, you're not dealing here with social policy, you're dealing with a revenue item and the sensible thing to do is to work out a compromise with the Australian Democrats. Because they've made it perfectly clear and they haven't done so in relation to the Internet gambling. The Democrats have not said with Internet gambling, I'm not saying they're going to support it, I don't know what they are ultimately going to do but it is still possible that that legislation could get through the Senate. I don't know. But bear in mind Senator Woodley of the Democrats has said he'll support it. Senator Harradine, I don't know what he's going to do, that's a matter for him. There is a One Nation Senator, Senator Harris, I don't know what he's going to do. Senator Brown has said that he would support it if it were changed, but I don't see any grounds for changing what he wants. The rest of the Australian Democrats I understand Stott Despoja is against it. I don't know what the other Democrat Senators are going to do so you can't say at this stage that this is going to be rolled over.
FAINE:
But you say even if I can't get it through the Senate I'm still going to have a try. That's just politics isn't it Prime Minister, you'll know you'll look good for trying.
PRIME MINISTER:
...no it's not politics because I won't know whether I can get it through the Senate until I put it up. Given that the Democrats haven't said in advance how they stand on the measure where as in relation to the beer excise they have said where they stand and they've made it very clear in private discussions with me that they are not going to support it in it's present form. So the circumstances are quite different.
FAINE:
If we can move on - just before we move on I should ask you to confirm with you, are you worried about the prospect of massive compensation claims from the horseracing industry around Australia if you go ahead and ban Internet gaming because they're already saying this is going to cost us at least $100 million. The Brisbane and Victoria racing clubs are saying we're going to claim compensation.
PRIME MINISTER:
Well, they can claim compensation but our advice is that those claims won't succeed. And there's no ground to those claims going ahead. I mean, I don't know what the legal basis of their claims are.
FAINE:
They say we get revenue from all forms of gaming if you did go and legislate to deprive us of one form of gaming, which is therefore one form of income, you're taking away a source of revenue.
PRIME MINISTER:
Well, I don't think that, on the advice I have, I don't think that claim would stand up.
FAINE:
And you'll go ahead anyway.
PRIME MINISTER:
Yes.
FAINE:
The Kyoto decision announced by President Bush - first of all, are you surprised?
PRIME MINISTER:
No, the republicans indicated before the election, indeed, as far back as 1997, that they had reservations about the Kyoto approach. What President Bush is concerned about and it's an understandable concern is that you can't really have a comprehensive agreement unless you get the developing countries inside the tent and that's his argument. That doesn't mean to say that we shouldn't all continue to try to get comprehensive agreement but his argument is that without the developing countries it's very difficult to implement an effective worldwide agreement.
FAINE:
Is he wrong?
PRIME MINISTER:
He's not wrong on that point, no.
FAINE:
But we have voted to support the agreement in part.
PRIME MINISTER:
Well, we have voted to support the stages that have been reached but, of course, the whole Kyoto thing involves getting further understandings.
FAINE:
Senator Hill, yesterday, said he'll be going to the United States to try and speak to American Government representatives [inaudible] change their mind.
PRIME MINISTER:
Well, we're going to have.well, they won't change their mind in relation to the involvement of the developing countries. But I don't think you should see what the Americans have said, and I haven't had any discussions with the Administration about it, but I don't think you could see what the Americans have said as them turning their backs completely on trying to reach a worldwide agreement. What they're saying is that unless you get developing countries involved then it's very difficult to have a comprehensive agreement.
FAINE:
So would you like to see President Bush soften his stance?
PRIME MINISTER:
Well, this sort of thing where you use sort of nebulous words like soften and harden, I mean, one has to be a little more precise than that because those words can mean different things to different people. I want to see.
FAINE:
What, was he wrong?
PRIME MINISTER:
No, well I don't think he's wrong in relation to wanting the developing countries involved. He's not wrong about that. But we are right, Australia is right in continuing to work to get an agreement which includes developing countries.
FAINE:
If there is no agreement now because the United States pulls the pin, what does the Australian Government think should take the place of the agreement that's just collapsed?
PRIME MINISTER:
Well, domestically, we'll continue to pursue policies that bring about reductions in greenhouse gas emissions. We'll continue, domestically, with the policies that we announced after the Kyoto Summit in 1997 and we'll continue, at an international level, to argue and advocate a comprehensive agreement that involves everybody.
FAINE:
So for us it's no change, is that what you're saying?
PRIME MINISTER:
I'm saying that it's no change as far as trying to get a worldwide agreement but we certainly recognise the desirability of including the developing countries, which is the point President Bush made.
FAINE:
The Alice Springs-Darwin Railway on the brink of collapse again this week and rescued by the South Australian Government, putting at risk another $125 million of South Australian taxpayers' money.
PRIME MINISTER:
I thought it was 26.
FAINE:
Well, they're now up for hundreds of millions of dollars worth of.
PRIME MINISTER:
But the extra bit they put in was 26.
FAINE:
Just this week.
PRIME MINISTER:
Yes.
FAINE:
Thank you for the correction. Prime Minister, this is a project that's got serious doubts about its viability. Why are governments now doing what they said they wouldn't do when it was first announced, which was put public money in - it was supposed to be a private sector, principally private sector project?
PRIME MINISTER:
Well, we didn't say, when it was first announced, that we wouldn't put public money in because when it was first announced we announced public money was going into it. I know that it's been criticised. I also know that quite a number of projects of this type in years gone by were criticised, yet they were persevered with and, in the end, they proved beneficial. It's one of those projects that will, in time, service a huge port and trade link with Asia out of Darwin.
FAINE:
Over what period of time?
PRIME MINISTER:
Well, it will take a number of years. It won't be economically viable for a number of years but it will.
FAINE:
Decades even.
PRIME MINISTER:
No, I think that's an exaggeration. But if governments take the attitude that they never invest public funds in infrastructure you would never have developments that most people would regard as desirable. I mean, not everything in this country can be looked at completely from the point of view, does it deliver a profit and does it add up from day one, not everything. I mean, governments do have obligations in relation to nation building infrastructure. And the Alice Springs to Darwin Railway is one of those things. That's why I've been a strong supporter of it.
FAINE:
And even if it takes a long time, so long that the private sector are losing interest and walking away. You should still go ahead if.
PRIME MINISTER:
Well, nothing is open-needed, Jon. We have made a very significant commitment, I think, over $160 million, $170 million over a period of years. We're not going any further and this is it but I understand.
FAINE:
That's what they've said before, Prime Minister.
PRIME MINISTER:
Not quite in those terms, no.
FAINE:
The South Australians are debating.
PRIME MINISTER:
Well, you go and talk to the South Australians about what they're debating. I'm speaking for the Commonwealth. The Commonwealth has been very generous with this project. It is a nation building project. It is one of those things that I believe will deliver benefits over time. It will bolster the defence capacity of northern Australia.
FAINE:
John Olsen faces an election in the next 12 months. If this doesn't go ahead, his Government, the last mainland, the last State Liberal government, is virtually guaranteed to lose the State election and then there's an election in the Northern Territory as well in the next 12 months. I mean, this is straight out pork barrelling the critics are saying.
PRIME MINISTER:
Well, it's a commitment that has been there for a number of years. So you can't say that it's pork barrelling for the next South Australian election or the next Northern Territory election. The commitment to build it was made about four years ago.
FAINE:
So you deny that there's any political influence being placed on the taxpayers' funds going into the Alice Springs to Darwin link?
PRIME MINISTER:
Well, we made a decision four years ago to support this project. But, Jon, from that point of view you can say any decision any government ever takes, State, Federal, Liberal, Labor or whatever is political. I mean, of course governments bear in mind political considerations but they also bear in mind social and infrastructure considerations. I believe in the Alice Springs to Darwin Railway. I believe in it very strongly because I think it will strengthen the defence infrastructure of northern Australia. The potential for Darwin to build as a great export outlet to Asia as a great port is enormous and that's why I'm supporting it.
FAINE:
Prime Minister, the treasurers meet in Canberra today for the annual argy bargy over carving up Commonwealth money, which used to be the preserve of the Premiers but now it's the Treasurers that are doing it. I thought the whole idea of the GST was that the States no longer needed to argue about financing arrangements. That was supposed to be something that disappeared with the GST.
PRIME MINISTER:
Well, if you were dealing with reasonable people that would be the case. But in the main at the moment the Commonwealth is dealing with a group of people who are very happy to help themselves to all the GST revenue and all of them, they are very happy to get the revenue that's flowing under the GST to the States and yet they publicly criticise the GST. And the Treasurer pointed out yesterday that the amount of GST revenue that Victoria now gets is enough to totally support and more the entire education system of the State of Victoria. So every time the Victorian Labor Government attacks the GST they're really attacking the revenue base of a basic service in Victoria. They are really playing pathetic politics on this issue. I was there when all the Premiers signed up for the agreement and they fell over themselves trying to get to the table first to sign the agreement to get the revenue because they're all going to be better off. Queensland next year's going to be better off under the GST revenue than it is under the present arrangement. And in a few years time Victoria's going to be better off. The financial institutions duty, which raises about $1.2 billion, is going to disappear entirely under the new tax system on the 1st of July. And the States, in the years to come, will have more money than they would have had under the old arrangement, to provide more hospitals, more police, more schools, more roads, all the sorts of things that State governments are meant to supply to the public.
FAINE:
The community's reaction to the new drug campaign and, in particular, the new television ad, are you pleased with the community's support?
PRIME MINISTER:
By and large, yes. I expected to be criticised by some but overwhelmingly the public reaction, the reaction of parents, the reaction of people who are concerned in a non-political way about a campaign against drug abuse, they're very supportive. Jon, most of what we're doing in this area has quite wide support and it's one of those areas where I'm happy to say governments are working together across the political divide. I've signed diversion agreements with Mr Bracks and Mr Beattie and Mr Carr and we're working together very closely. And the television ads are direct, they're quite hardhitting, but they're realistic and the booklet that's going out to every household contains very valuable information and the whole message is to further encourage parents to engage and communicate with their children in relation to this issue.
FAINE:
What's the next step?
PRIME MINISTER:
Well this is one of a series of steps. We'll continue to provide additional resources for rehabilitation. We'll continue under our $500 million Tough on Drugs Programme, continue to provide resources for the federal police and the state police for drug seizures. It's a three-pronged approach - education, law enforcement, rehabilitation. And of course we need the help of the states and we need the involvement of community organisations.
FAINE:
You're in Victoria this weekend Prime Minister to address the State Convention of the Liberal Party. The State Opposition, the Parliamentary Liberal Party here need all the help they can get. What message will you give them? They're languishing in the polls. They're not quite as low as the Liberal Party in New South Wales, your home state, but they're not doing much better.
PRIME MINISTER:
Well they're going through a difficult period, but the early years of opposition after a reasonably long stint in government are always difficult. But Denis Napthine is a very tough, gutsy leader. I admire the stance they've taken on the attempt by the Labor Government to re-regulate the workforce in Victoria. And they're running a very strong campaign on the additional imposts through workcover and workers' compensation and land tax.
FAINE:
But you ..
PRIME MINISTER:
The Bracks' Government is proposing in relation to small business. I mean the Bracks' Government is imposing a whole raft of additional taxes and imposts on small business in this state and over time that I believe will form the base of a very strong comeback by the Liberal Party in this state. But it's difficult at the moment.
FAINE:
Do you despair? The Liberal Party lost government in Western Australia, almost wiped out in Queensland, languishing in New South Wales, can't take a trick off Bob Carr and here in Victoria, Denis Napthine really struggling as the Leader of the Opposition here. What does that mean within Liberal circles?
PRIME MINISTER:
We have a lot of challenges ahead of us, but do I despair? Of course not. We have before us an alternative government in Canberra which when it was last in office gave us an $85 billion national debt, 17% interest rates and under Mr Beazley as Employment Minister, 11.2% unemployment. The Australian people as they come towards the end of the year to make their decision federally will begin to identify the choice. And small business and other sections of the community will remember that those three things were hallmarks of the years when Mr Beazley last held a responsible position in government in this country.
FAINE:
And you may find yourself of course in the same situation as Rosemary Kilburn, who at the same age as you has found out that within the ranks of Telstra where she's worked now for nearly 50 years she can't get a job and she's been retrenched and she's contemplating filing a complaint of discrimination, age discrimination against Telstra. The plight of older workers in the community, I don't know whether this is something you do or don't turn your mind to in a personal sense, but certainly one that troubles people, across the board.
PRIME MINISTER:
Well I don't reflect upon my own position, that's a matter for the voters and .
FAINE:
What are you going to do if you lose office?
PRIME MINISTER:
Well I don't contemplate that now because I don't intend to. But in relation to Mrs Kilburn, I saw that article and she has written to me, apparently earlier this month. I haven't seen the letter, I get about 20,000 letters a week, something like that, but I will as a result of that article, I will have the letter dug out and I'll give her a prompt reply.
FAINE:
But what are you going to do?
PRIME MINISTER:
Well if I can finish. We have in fact passed laws which have repelled the compulsory retiring age in the public service. I mean we've actually done that.
FAINE:
But what she's talking about is that no-one will even give her an opportunity to show anymore that she can fill ..
PRIME MINISTER:
Well I don't know all of the circumstances and I think it's a bit unreasonable to expect me to know the individual circumstances of every worker in Australia. I can but investigate what the lady has raised with me and I'll try and give her a helpful response. I can't promise to find her a job, but I will try and give her an understanding, sympathetic response and say on behalf of the Government, we're totally opposed to discrimination on the grounds of anything in the workforce except commitment and ability. If people are prepared to give a commitment and are able, then they're entitled to get the job. People who aren't prepared to give a commitment and aren't able, obviously aren't entitled to get the job. Now Mrs Kilburn obviously falls into the former category, but equally we can't force firms to employ more people if they can't afford to do so. I'll try and respond.
FAINE:
And you say you haven't turned your mind to what might happen after politics because you're going to win the next election. I must say you must have at some stage contemplated when you read in the newspapers that Dr John Hewson, one of your predecessors has just resigned from another board of another company that didn't work too well. He's involved in all sorts of commercial activity. Nick Greiner's involved in the world of commerce and business. Jeff Kennett obviously has taken up board positions around town. Is that the sort of future that you'd like to see after you leave politics?
PRIME MINISTER:
Jon, I don't think any of those three gentlemen contemplated when they were still in politics that they were going to end up where they are now. I can swear to you they didn't, because I know them all well. I am just focused on winning the election and I'm determined to do that. I've got a lot of years of energy and commitment left in me to give to the Australian public and if they want me to go on serving them, I'll be very happy to do so for quite some time. It's going to be tough, but I said that before other people were saying it. And I may have said it to you last year on a number of occasions. I kept saying it's going to be tough. It always is tough when you're trying for a third term. One of the differences is that I've known for a long time that it's going to be tough and I'm therefore quite conditioned for some of the reverses the Government has suffered under the, under the circumstances of the past few weeks.
FAINE:
Well there might be all sorts of things you've been wrong about lately Prime Minister, but there's no doubt you're right about that one. It is going to be tough and we'll speak I am sure between now and whenever it is you decide to call the next federal election. Thank you for your time this morning.
PRIME MINISTER:
Thank you.
[ends]