Subjects: Interest rates; economy; Telstra; medical indemnity insurance; drug treatment
E&OE...........
JONES:
Prime Minister, good morning.
PRIME MINISTER:
Good morning, Alan.
JONES:
Prime Minister, on interest rates, I see you saying yesterday to the Reserve Bank not to be stampeded into lifting interest rates so far, too far. Is there a case for another increase in interest rates?
PRIME MINISTER:
The question of individual movements is a matter for the bank and given that it's meeting tomorrow I don't want to specifically answer that question. What I said yesterday and what I repeat this morning is that interest rates were taken very low last year and it should therefore be expected that some upward adjustment will take place this year. I said yesterday I didn't want anybody stampeded into that upward adjustment going too far. I'm not going to be specific, I'm not going to talk about amounts, I just want to state the principle.
JONES:
Right. What your electorate can't understand and my listeners is that all the figures are terrific, the economy's doing well and you've done a terrific job there with Peter Costello and then suddenly they say, well hang on, every time we're doing well we get belted over the head with increased interest rates. Does this highlight the problem that debt continues to impose on all governments that, of course, the better the economy, the higher the level of imports, we can't pay for our exports, so the debt goes up so you've got to cut that back by raising interest rates?
PRIME MINISTER:
No, I don't think it's specifically that. I think it's more that particular sectors of the economy, because it's going so well, could get a little overheated. It's a question as always of balance and moderation. You're coming off a very low base of interest rates and I can understand that reaction. Look, let me put it another way, nobody likes interest rates going up ever if you're a borrower, it doesn't matter how low they are.
JONES:
Self-funded retirees do.
PRIME MINISTER:
Self-funded retirees don't mind them going up.
JONES:
No.
PRIME MINISTER:
And one of the reasons we took measures in the budget last year to help self-funded retirees was a recognition that low interest rates had hurt them because they are lenders and not borrowers. So the very fact that we took that action last year, it was very necessary, was because the lower interest rates were giving them a hard deal. It's all a question of degree. I acknowledge that any upward adjustment in interest rates is unpopular with a borrower, I acknowledge that. I just make the point - and in the end the Reserve Bank and not John Howard sets those interest rates - in the end, however, we're starting from a very low base and some upward movement would be understandable in the interest of maintaining overall equilibrium in the economy and it not overheating, particularly the housing sector. But I just made the comment yesterday and I repeat it this morning, I wouldn't want them to go too far.
JONES:
Okay. Telstra, Prime Minister, you need four votes in the Senate to get T3, the third tranche of Telstra to be sold. You constantly argue the validity of that sale. Are you confident that you'll be able to offer to, for example, either the Democrats or the Greens some kind of environmental trade-off like, for example, combating dry land salinity and are you confident that we can afford the cost of that trade-off in order to get the legislation through?
PRIME MINISTER:
I believe in the end we'll assemble a majority in the Senate to get it through. It may not happen in the next few months, it won't happen in the next few months because we won't be putting up a further sale in the next few months. We'll be waiting for some more progress to be made in the bush. But when we get to the point where the bush is up to scratch we will then turn our attention to a further sale. Of course in the process of talking to people about the conditions on which they'd accept it we would be willing to look at sensible measures. We're not going to agree to something that's bad for industry. We're not going to agree to something that's bad for the environment and we're not going to agree to something that is unaffordable given our prospective fiscal position. But my sense, Alan, is that the ground has shifted on this issue over the past few weeks. The very fact that Bob Brown would contemplate it, even though he reversed it in record fast time, I saw Senator Lees' comments, I heard what Senator Harris, the One Nation Senator, has said this morning, all of those things are certainly straws in the wind. I think people are realising that you can't go on indefinitely having it half owned by the Government and half owned by the public and going back to a situation where it was fully owned by the Government is just out of the question. Nobody is advocating that, nobody. So, inevitably, at some stage and in our view, only after the bush has been brought up to scratch you have to turn your attention to a further sale and I think it would be good to have that outcome. There will be, obviously, discussions with people in the context of asking for their support. We will only agree to things that are both sensible and affordable.
JONES:
Medical indemnity insurance - is there any need for any doctor to be concerned in the immediate future about being at any risk performing any form of surgery simply as a result of an insurance policy not being honoured?
PRIME MINISTER:
There should be no concern of people now in relation to UMP/AMIL, and there may be some other circumstances of which I'm not currently aware, therefore, I can't give an unqualified, unlimited assurance, but in relation to the problem that's been brought to our attention, we have stabilised it until the end of the year. That gives us time to work through a longer-term solution. That longer-term solution will involve further changes to the law of negligence. It will involve other changes by state governments. It will involve a consideration by the federal government of some kind of direct financial assistance in relation to the very high premiums even in the better of worlds that some specialties like neurosurgery are subjected to. So there';s a whole lot of things that need to be done but….
JONES:
And you';re giving some breathing space for them to being done?
PRIME MINISTER:
Breathing space, but we';ve also laid out a road map and that was the advantage of last Friday';s statement. We not only stabilised the position and gave it breathing space but we';ve said look, this is our future plan, let us talk about it. I invite the doctors to talk to the Government. We';re trying to be constructive. We won';t agree with everything the doctors want but I think we have already agreed to things reasonably asked for by the doctors and by the medical profession. I';ve had some constructive discussions with some of them already and I and my colleagues Helen Coonan and Kay Patterson will go on doing that. I think we can work our way through this.
JONES:
Right. Just on one mathematical issue – UMP have allegedly 32,000 members and there would be a few doctors listening to you and me this morning who would be paying less than or even $10,000 in premiums. People are writing to me and saying you multiply 32,000 by $10,000 you get $320 million. Over three years that';s $960 million, nearly a billion dollars. Where the hell has all this money gone?
PRIME MINISTER:
I understand, I could be wrong, but I understand that for a lot of the GPs covered by UMP the premium';s about $4,000. I could be wrong on that but I don';t think the figure, I mean there would be….
JONES:
On the other hand some of them are paying $70,000 and $100,000. So it';s averaged at $10,000. It';s an awful lot money.
PRIME MINISTER:
Well it depends on what the weighting of numbers is. If the great preponderance of them are GPs then the average might not be around that. Look I would have to check those figures but I';m satisfied and there';s been no criticism made of the…there are some reservations about the levy proposal that will be put on doctors to fund any cost of the government underwriting the so called tail, but that will only apply to doctors who are in a medical defence organisation where there';s a shortage of funds. One thing I want to say to any doctor who is listening to us now who belongs to a medical defence organisation that doesn';t have a solvency problem, they won';t be affected by the levy. The idea that the levy would apply to all doctors irrespective of whether they belong….
JONES:
Yeah, [inaudible] only belong to funds who have a shortfall in funds who have a shortfall in funds to handle the contingent liability?
PRIME MINISTER:
Exactly. Very important that point you make because otherwise the impression might be created we';re going to sock all doctors. We';re not and we would do this levy over a period of five plus years so it would be strung out and not impose too great a financial burden
JONES:
Right. Senator Vanstone made a lot last week when you were otherwise engaged about the Commonwealth withdrawing funding for the Commonwealth State Disability Agreement unless the Senate passed the Government';s changes to the Disability Support Pension. She was quite strong in the language. Are you going to withhold money from the disability sector in Australia contingent upon certain things being passed in the Senate?
PRIME MINISTER:
Well what we are going to do is try and get the things through the Senate and I can say this that there are two things that were in the budget linked to the changes to the Disability Support Pension. One of them was additional funds called unmet need money, and the other was an investment in new services. Now in relation to the investment in the new services we can';t make that money available if the changes to the Disability Support Pension is blocked. In relation to the other issue that is something we';ll have to give consideration to.
JONES:
Why would you leave people on the Disability Support Pension as they are and then make changes to those coming onto the pensions….?
PRIME MINISTER:
I was going to go on to say that there are two disability issues running at the moment. One of them is in relation to the SACS Award and the other is in relation to the Disability Support Pension proposals announced in the budget. Now in relation to the SACS Award I have asked for an examination to be made of the issues in that. I';m having a look at some of the concerns that have been expressed regarding that. There is a mixture of Commonwealth and state responsibilities and I';ve already discussed the issue with Senator Vanstone. She has put some proposals to me and we';re working through that issue and I hope that we can have a sensible response to it that maintains services but also respects the particular and individual responsibilities of state and federal government. Now the other matter which Senator Vanstone and you discussed and you and I have discussed which is the Disability Support Pension, we';re not going to see people who are gainfully employed who have a disability, we don';t want to see them disadvantaged and we won';t see them disadvantaged and once again in that area the Senator has had some discussions with me and there';ll be something further said about that in the not too distant future.
JONES:
Good. And in relation to group homes, I know I wrote to you about this…..
PRIME MINISTER:
Group homes I think falls into that first category.
JONES:
Can I just make one point there – why wouldn';t you think of considering, of looking after disabled people in the same manner as looking after elderly people? The problem about group homes seems to me to have failed, I mean when you put six people into a home. We look after the elderly by putting say 50, 60, 70 people. It works well. They share facilities whether it be the garden or the pool or the gym or the physiotherapy or whatever and the facilities are fairly up to speed compared to standards around the world. That';s not true of the disabled people. Has the group home system failed?
PRIME MINISTER:
Well I';ve got an open mind on that. I mean it is something essentially decided by state governments and it all started years ago I think with the Richmond report in New South Wales, deinstitutionalising. I';m not sure that those changes have been all that successful myself. I';m not an expert on it because I';ve not had a direct government responsibility for it but if you';re saying to me there are some question marks over that approach they have certainly been expressed to me by constituents over the years and they continue to be expressed.
JONES:
Has it come across your radar screen the Commercial Nominees of Australia Ltd. They are an outfit of course who have managed about 485 small superannuation and rollover funds, they were the trustee. They';ve gone belly up to some extent and people are writing to me saying superannuation is compulsory and if you're paying compulsorily and then someone becomes the trustee of that fund and we lose money what cover, what guarantee do we have? It seems to be a legitimate question doesn';t it?
PRIME MINISTER:
Yes. The answer to your question has it come across my desk – no it hasn';t, but it sounds as though it will and I';ll have a look at it. But I mean you make a legitimate point. If people are compelled to make a superannuation contribution they ought to be able to rely on it. I don';t know the circumstances.
JONES:
One other thing as well if I could raise with you, the question about Glivec, this cancer tablet for chronic myeloid leukemia [inaudible] I mean Argentina, Bulgaria, Canada, Chile, Colombia, the Dominican Republic, Equador, Malta, Nicaragua, they all provide this. We are saying to people who were on a trial and it was working look you can';t have it in the chronic phase, you can only have it in the advanced phase. People are very concerned….
PRIME MINISTER:
Alan we are…..the experts are talking to the company about that right now. I don';t know what the outcome is and you will understand, I';m not a doctor, I have to rely more than usually in an area like this on medical advice and it is I';m told the subject of detailed discussion right at the moment.
JONES:
And one final thing – mass marketed tax schemes. There';s been any amount of publicity about it but I don';t know whether your attention was drawn to that poor woman who lost the case in the court, the celebrated Vincent case. But at the same time she simply said that she took advice from professional people as she was given the okay on self-assessment. Now we';ve got a self-assessment system brought in in 1991, used by the Tax Office, people have been ticked off then miles down the track someone says sorry about that we did give the okay five or six years ago, now you owe us $160,000 and they';re going to the wall. There';s got to be a better way of handling people than that.
PRIME MINISTER:
When people are given a ruling by the Tax Office they are entitled to rely on that ruling. If they';re given private advice and that advice turns out to be wrong that unfortunately is a different matter.
JONES:
Is a tick off on self-assessment equivalent to a ruling from the Tax Office?
PRIME MINISTER:
Well it would depend a little on the circumstances. If there were any deliberate misleading or fraud it wouldn';t, you know, I don';t think you could hide behind that. I would have to look at the circumstances of that person.
JONES:
Okay. We';ve run out of time but it';s good to talk to you.
PRIME MINISTER:
Thanks Alan.
[Ends]