Subjects: road funding; One Nation; bank fees; fuel prices.
E&OE................................
MITCHELL:
Mr Howard, good morning.
PRIME MINISTER:
Hello Neil. Good to be back.
MITCHELL:
Mr Howard this could be described as highway robbery. Do you accept that your Government has illegally directed nearly $3 billion in fuel excise which is supposed to go into roads, into other areas.
PRIME MINISTER:
I am getting some further information about it. I wouldn't accept the allegation of illegality. But on the information that I've received this morning it would appear that there was an error made under both this government and the former government in that the Minister for Transport failed to have tabled in the Parliament a declaration of the amount of money that the government was going to spend on roads.
MITCHELL:
And what's the result of that?
PRIME MINISTER:
Well the result of that is that what is called a default amount, which is higher than the amount ultimately spent should have been spent. Now that is the information that I've received at present. Can I make it clear of course that if people are saying that over the last six years we should have spent another $2.9 billion on roads then those same people carry an obligation to say what additional taxes should have been imposed over that six year period.
MITCHELL:
Hang on you have to take account of it surely.
PRIME MINISTER:
No, no. Well, the money that wasn't spent on roads was spent on something else, it didn't disappear.
MITCHELL:
What was it spent on?
PRIME MINISTER:
Well hospitals and health, defence and all the other services of government. It didn't disappear. Let nobody think for a moment that there's $2.9 billion lying idle. What happened is that money is collected through taxation excise and everything else and it's spent on a variety of things. People have argued for a long time more should be spent on roads. But can I just go back to the point I was making that if somebody is saying that over the last six years we should have spent $2.9 billion more on roads, then what those people also have an obligation to do is to identify spending in other areas which should have been cut.
MITCHELL:
But that opens a massive hole in the whole tax system, by any definition it's money that's supposed to be spent on roads. It was supposed to be spent on roads, wasn't it?
PRIME MINISTER:
The requirement of the law, and bear in mind that I've just been given a very quick briefing on this this morning and I have to qualify what I am saying to you and your listeners with that because I'll be getting more information about it today. The information I have is that the law allows the government to spend whatever amount it decides to on roads as you would expect, but it is required to specify that amount on an annual basis by notification to Parliament and if it doesn't table that notification it is meant to spend a larger amount. Now what has happened is that both governments apparently have ignored that requirement.
MITCHELL:
Yes but since when.
PRIME MINISTER:
Six years.
MITCHELL:
So most of it is your government.
PRIME MINISTER:
Well in 1994 and 1995 and the law was apparently amended in 1999.
MITCHELL:
But is it correct..this is quoting the Auditor-General's report as reported in The Australian that only 3.1 cents/litre of the excise is spent on roads and under the system you've described, under the law it should have been 4.95 cents/litre.
PRIME MINISTER:
Well I haven't, that is, I haven't actually seen the Auditor-General's report but if that is correct, if that report is correct then that claim is correct, but can I just go back and say to you again that if people are saying that we should have spent more money - spent $2.9 billion more on roads, then of course those same people have to identify the spending in other areas that wouldn't have occurred. Because that $2.9 billion has been spent by the Government on other things.
MITCHELL:
Yes sure but that's part of the problem I see. Would you not have - if you'd been aware of this - would you not have spent the full 4.95 cents/litre, would you not have spent this $2.9 billion on roads?
PRIME MINISTER:
Well I tell you what Neil what this does underline is again and again that the Government's decision to put another $1.6 billion in four years into roads is right.
MITCHELL:
But that is about half of what we were owed.
PRIME MINISTER:
No, no I am sorry, that $2.9 - no I am sorry your maths is not quite right.
MITCHELL:
Well it's not far out.
PRIME MINISTER:
Well no hang on, $2.9 billion over a period of six years is what you're talking about.
MITCHELL:
Well that's what we're owed.
PRIME MINISTER:
That's just under $500 million a year. And the $1.6 billion is over four years, so that is $400 billion, million a year. So I mean don't say it's about half.
MITCHELL:
Well it's sort of about half of what we're owed - $1.6 billion compared to $2.9 billion.
PRIME MINISTER:
Yes but it is over a different period, a longer period of time.
MITCHELL:
Okay.
PRIME MINISTER:
But you're saying it's the same figure, I mean fair go, I mean don't say . . . .
MITCHELL:
. . . fair go too.
PRIME MINISTER:
No, don't you say that it's half when the only way you can compare those two figures is to annualise them and one of them is just under $500 million and the other is exactly $400 million and $400 million is not half of just under $500 million.
MITCHELL:
Should the $2.9 billion have been spent on roads or not?
PRIME MINISTER:
Well we think the spending priorities that this government has had since it has been in office have been right, therefore the answer is no. What we, clearly what has happened is there was a failure to technically comply with the requirement of the act by the tabling of this instrument - that's clearly what's happened.
MITCHELL:
So it's a technical breach of the law.
PRIME MINISTER:
Well I would need more advice before I completely embrace those terms.
MITCHELL:
But if it's a failure to comply with the act, it's a breach of the law.
PRIME MINISTER:
Well I would like, I would like some more advice. I have not even seen the Auditor-General's report. I did myself know nothing of this until this morning and the information I'm giving is what I've been able to be briefed on in the couple of hours that I've been up.
MITCHELL:
Does it say anything about the tax situation though, this $2.9 billion which under that act should have gone into roads, it didn't it went elsewhere and I accept what you're saying, it was still spent in other areas it's not sitting in your back pocket. It's been spent in other areas. But we thought we were in a pretty good position with tax, given that we sort of found a $2.9 billion discrepancy, are we still in such a strong position?
PRIME MINISTER:
Well we are because the act requiring the tabling of this instrument has been changed, that's no longer necessary because we have a different accounting system. What . . .
MITCHELL:
I am sorry?
PRIME MINISTER:
No well what has happened is that it's been perfectly legal and permissible and legitimate for the government and the minister of the day to decide how much would be spent each year on roads but the act requires he table a document in Parliament saying how much that is.
MITCHELL:
And he didn't.
PRIME MINISTER:
And he didn't do that. And there was a failure by a minister under my Government and there was a failure of ministers under the Keating Government as well. Now leave aside the technicalities of it and let's look at the merits. The merits are that if we'd have spent $2.9 billion on roads, more on roads over the last six years than that would have been $2.9 billion less in other areas and you either would have had to cut spending there or increase taxes. So if you start getting a troupe of Labor ministers, shadow ministers trotting out today and saying this is outrageous and shocking, they might be asked where would they have cut spending or in what areas would they have increased tax to make up the $2.9 billion and doesn't it underline the wisdom of this government putting an extra $1.6 billion...well let me say $400 million each year into roads.
MITCHELL:
Mr Howard you must be a great spin bowler. I mean the spin on this is extraordinary. We have motoring organisations, we have state governments, we've had all manner of lobbying groups, and now we've got the Auditor General saying that the roads need attention, screaming that not enough of the petrol excise money was going back into roads. Here is confirmation, in a technical sense I accept, here is confirmation that that's right. And you're telling me it hadn't been picked up earlier.
PRIME MINISTER:
Well no I didn't say that. I mean..well what the Auditor General's report - sorry we're at cross purposes.
MITCHELL:
. not enough being spent on roads, now we sort of know why.
PRIME MINISTER:
Well Neil the Auditor General's report has only just been brought to my attention so I have to say I wasn't aware of this until this morning. I will be having a few words to say to a few people as a result. I was not aware of this until this morning and I've briefed myself on the details of it. And what I've told you is to the best of my knowledge correct. But can I just make the point again that we took a decision at the end of last year to spend more money on roads and I think it does underline the point doesn't it that that decision was surely correct. I mean surely it was better, against the background of everything you've just said, surely it was better to spend extra money on roads than to cut the fuel excise.
MITCHELL:
Well the Auditor General says money needed to be spent on roads..
PRIME MINISTER:
Yeah that's right. And you're saying that state governments are saying that, and you're saying the motoring organisations are saying...
MITCHELL:
But they've been saying you've been taking too much out of it.
PRIME MINISTER:
Yeah but they've really been saying two things. They've been saying cut the excise and spend more money. Now that is what I might call the luxury of the irresponsible. I don't have that option. I mean it's terribly easy if you're running a motoring organisation to say Howard, spend more money on roads but cut the price of petrol. I mean what they're really saying is spend less money on hospitals and schools and defence and spend more money on roads. That's what they're really saying because governments have got to allocate priorities. I don't have a bottomless pit and that $2.9 billion of which you've spoken if it had have been additionally spent on roads over the last six years we as a federal government would have spent less money on schools and defence and hospitals. Simple as that, or alternatively increased taxation.
MITCHELL:
We'll take a couple of calls. Kim go ahead please.
CALLER:
I think we're missing the point. I understand this to be law, this is an act. If I fail to make certain declarations on my tax return I'm in deep poo poo. Who's in poo poo here?
PRIME MINISTER:
Well I'd have to look at the precise provisions of the act. I haven't had an opportunity this morning because it's only just been brought to my attention.
MITCHELL:
I guess the point is not the poo poo but the buck, where does it stop. Is it the Transport Minister?
PRIME MINISTER:
Well I have to get some advice on what's happened, I can't make a comment on that.
MITCHELL:
Michael go ahead please.
PRIME MINISTER:
Can I just make the point that people who make wrong declarations on their tax return, things like that, and I think that's what the caller was alluding to, are only in trouble if they're being deliberately dishonest. If you make a mistake you're not in trouble. There's no suggestion that the Transport Minister has been deliberately dishonest, and I say that not only of the transport ministers in my government but also in the Labor government that is equally involved in this. I mean it's not a valid comparison. You're only in trouble in relation to a tax return on something like that if you are deliberately dishonest.
MITCHELL:
If I made a mistake worth $2.9 billion, heaven forbid, whether it be a tax return or anything, if I confused $2.9 billion [inaudible] I'd be out of a job. Public company, $2.9 billion, imagine if somebody running a public company messed up $2.9 billion. Would they be out of a job?
PRIME MINISTER:
That would depend if it were messed up so that the company lost it. If they messed up so that the company lost it yes they would be out of a job and if a minister of mine messed up to the effect that the taxpayer lost $2.9 billion they'd be out of a job too. But that hasn't happened. The money hasn't disappeared. It's been spent on other things.
MITCHELL:
No no, I just suggest anybody in private enterprise, even if they didn't lose it, if they just misdirected $2.9 billion [inaudible].
PRIME MINISTER:
That would depend entirely upon the impact of that on the fortunes of the company.
MITCHELL:
Is this sloppy management, is it just sloppy bureaucracy?
PRIME MINISTER:
Well Neil, I want to get some more information. I can only say to you, and you have the advantage of interviewing me this morning and I always keep my appointments with you no matter what's in the news.
MITCHELL:
I appreciate that.
PRIME MINISTER:
And I've only know of this this morning, I've got a briefing on it and as best I could in the period available I'll be making some more inquiries. And there's some questions therefore I can't answer.
MITCHELL:
I sense you're a little angry about it.
PRIME MINISTER:
What's the next question.
MITCHELL:
Kim, hello Kim. Sorry Michael. Go ahead Michael.
CALLER:
Yes. Prime Minister, clearly you were unaware of this but were any of your ministers aware of this error when you made the new allocations for the road fund?
PRIME MINISTER:
I don't know. Well I don't, I'm not aware that they were but I really don't know because I haven't asked that question.
CALLER:
I think it would be worthwhile asking [inaudible] serious doubt on the decision to spend exactly that amount on roads...
PRIME MINISTER:
Well I think what I can say, Michael is it, I can certainly say to you that I wasn't aware of this at that time and, in fact, I can also say to you without fear of contradiction that I had a greater influence on the decision to allocate that additional money than anybody else.
MITCHELL:
All right. Thank you Michael. It's a very relevant question though isn't it? If somebody did know that this was happening when that $1.6 billion was decided to be spent then it turns into trickery.
PRIME MINISTER:
Well I can repeat I didn't know and I, you know, I think I had more influence on that than anybody.
MITCHELL:
Dave, go ahead please.
CALLER:
Hi. Two quick questions. Why can we trust you to spend the 1.5 cents we're getting on our excise now to be spent on roads when this has happened, and is it possible for a politician to answer a question yes or no or doesn't it become part of your vocabulary?
PRIME MINISTER:
Well I don't think anybody can accuse me of not being upfront in answering questions on this issue. I hear about it for the first time this morning, I appear on a radio program, I take questions from a respected journalist who doesn't sort of spare me on the issue and I take the open line. I don't know how much more open I can be.
MITCHELL:
Okay. But the latest excise isn't earmarked for roads anyway is it?
PRIME MINISTER:
No it's not earmarked. It's not hypothecated. I mean can I just go over that again. We had the decision to make, before Christmas, we either spent 1.5, 1.7 cents, we spent the money in reducing the excise or we spent it additionally on roads and we decided to put $1.6 billion or $400 million a year over a four-year period extra into roads rather than cutting the excise. Now, people will criticise us but I think one of the things that comes out of the discussion of the last 20 minutes is that people want more money spent on roads.
MITCHELL:
Well, that's an interesting point. What figure will it be set at now because obviously if this has happened as the Auditor-General says you have to go back and set a figure in the excise that goes to roads. What will it be?
PRIME MINISTER:
Well, I have to get some further advice on that, I just can't answer that question now.
MITCHELL:
Would it be likely to be higher than 3.1 cents a litre?
PRIME MINISTER:
Well, I think it would be.I don't want to say what that figure is because we take the view that you collect revenue from certain sources and you put that into consolidated revenue and then you spend it according to your priorities as a government and that's what we've done. And we've allocated a higher priority to roads than we did to cutting the fuel excise. And I think what's coming out of this discussion - a number of things are but one of the things that's coming out of the discussion is the view of people that we need to spend more money on roads. I mean, you can't simultaneously spend more money on roads, cut the fuel excise, keep the budget in surplus, not cut spending in other areas and not increase taxation, something's got to give.
[COMMERCIAL BREAK]
MITCHELL:
The Prime Minister's with us in the Canberra studio. Mr Howard, if I may, on another issue, ATM fees, this report by the Parliamentary Committee, automatic teller machine fees up by, driven up by collusion by 200% hiding the true cost of services from consumers, what can you do about it?
PRIME MINISTER:
Well, we've only just got the report and the Minister for Financial Services and the person responsible for consumer protection at a Federal level, Joe Hockey, will be having an immediate look at that. On the face of it the banks have got a case to answer.
MITCHELL:
Would you look at legislation to control it?
PRIME MINISTER:
Well, let's.we'll look at everything. I don't want to commit myself. It only came out yesterday. I want to get some advice on what can be done. I want to hear the banks' point of view. I mean, I think it's very important that the banks respond, I think it's very important that banks give an account of themselves, explain what their position is. And consumers are legitimately very sensitive about these things. A lot of people feel new technology is being foisted on them, a lot of people, and they get more angry and cynical when they hear things like this.
MITCHELL:
The other thing is they seem a bit slow passing on the interest rate cuts on credit cards. Do you think they should?
PRIME MINISTER:
They should pass on interest rate cuts as soon as humanly possible. I'm pleased they responded so quickly to the cut in interest rates by the Reserve Bank the other day which, of course, is going to save the average homebuyer about $42 a month.
MITCHELL:
They haven't done it on credit cards?
PRIME MINISTER:
No, well they should. They should be under pressure to do so. Banks have a very strong, privileged position in this country. They're very profitable. They're protected by strong prudential legislation and they have social obligations as big financial institutions. It's a view I've had for a long time and a view I'm not reluctant to repeat.
MITCHELL:
Have you ever been to the Holy Grail bar?
PRIME MINISTER:
About two-and-a-half years ago when a staff member, well no, a couple of years ago, when a staff member of mine left.
MITCHELL:
Are you aware of this.
PRIME MINISTER:
I went there for about a quarter of an hour for a party to say goodbye to a.
MITCHELL:
It sounds like there was a bit of a bar room brawl with one of yours, Christopher Pyne and a couple of Labor people.
PRIME MINISTER:
Well, I wasn't there and I wasn't even in Parliament when the business was raised. I was briefly up in Queensland. I think it's something that I'll leave to the Speaker to deal with.
MITCHELL:
Okay, Michael Wooldridge and [inaudible] the drug company running Michael Wooldridge's or some of his speech in the Economist. Was the Minister aware the drug company was doing that?
PRIME MINISTER:
I don't know. I've only just heard about it. I saw it in The Age this morning and I haven't had a chance to.
MITCHELL:
Does it concern you?
PRIME MINISTER:
Well, I just want to get more information about it before I respond to that. I mean, I've been talking to people about something else this morning, haven't I?
MITCHELL:
Well, it does concern you enough that you want to find out more about it.
PRIME MINISTER:
I will certainly find out about it. But, can I say, generally on the issue, it's an incredible beat up to complain about one person out of twelve being on a committee. And the idea that one person out of twelve is going to pervert and suborn the other eleven is extraordinary.
MITCHELL:
But why is it a beat-up? I mean, here we have, it's the 'old poacher in the sanctuary' argument, isn't it? I mean, the very least you [inaudible] at the table, talking to the top.
PRIME MINISTER:
But that's not always wrong, is it?
MITCHELL:
I don't know, an independent body ?
PRIME MINISTER:
Yes, an independent body. But this person is there as an individual. He's not there as the surrogate of the industry. He may have had an industry background. I find it extraordinary that..are the other eleven men and women so intellectually feeble that they can't handle, even if the industry representative put outrageous propositions - and I'm not suggesting for a moment he would - I mean, why is it that somebody who has had an association with industry, why is that person automatically tainted and diminished and different. I just find this prejudice by some people against others who've had a commercial association. I find it quite extraordinary. I mean, isn't an instinct for honour and decency just as strong in somebody who's worked for a company? Aren't there honest people working for commercial organisations? I just find this idea - I think it's got a very narrow, it evinces a very narrow, prejudiced view.
MITCHELL:
Can I ask you about One Nation, I know you've just been up to Queensland, are One Nation on the way back?
PRIME MINISTER:
Well, that's a matter for voters. It oughtn't to be because it's now been inexistence for, what, three years and has offered no policies, no solutions, no alternative ways to more effectively deal with some of the challenges of people in regional Australia. Now, the question of whether it's on the way back or not, well, I'm not going to get into the role of the political commentator on the eve of a couple of State elections.
MITCHELL:
Well, do you accept there should be no deal between the Liberal Party and One Nation?
PRIME MINISTER:
Well, the Liberal Party has put One Nation last on its 'How to Vote' cards both in Western Australia and in Queensland.
MITCHELL:
And you agree there should be no deals done ?
PRIME MINISTER:
Oh, certainly not, no. Definitely not.
MITCHELL:
You're happy to see One Nation disappear.
PRIME MINISTER:
Well, I'm more concerned, frankly, about addressing the areas of concern that people have in rural areas. That's far more important to me because, in the end, political parties should be judged on the policies they offer, the solutions they present and the way in which they conduct themselves. That's more important than sort of who's there.
MITCHELL:
If I may, do you accept that there's price manipulation by the oil companies on petrol?
PRIME MINISTER:
Well, I can understand the people of Australia wondering about the fluctuation of prices in different parts of the country, even within different parts of a suburb, certainly within different parts of a city.
MITCHELL:
Is that what it is, is it price manipulation?
PRIME MINISTER:
Well, the oil companies would deny that. They would argue that the natural interplay of market forces and the competition between franchise sites and direct selling sites will produce variations in price. But I'm a little bit sceptical of that.
MITCHELL:
Thank you very much for your time.
PRIME MINISTER:
Okay.
[Ends]