KAFCALOUDES: Prime Minister, of course, the news today is very sad news, we've heard about that boat accident that happened on Sydney Harbour. What is your immediate reaction to this?
PM: This is terrible news. It's just stunning news. In fact, I had to be told twice about it this morning to make sure I had it right that we'd lost five people overnight on the harbour, and young people. It's one of those appalling tragedies that is every parent's nightmare to wake up and find that one of your kids, who has gone out for a bit of fun the night before, comes home dead. It's just appalling. My heart goes out to the parents of those concerned. It's just horrible.
KAFCALOUDES: Have you got any more information that you can tell us? What have you been told about the incident?
PM: No, I haven't as yet. I'm relying effectively on the public reports that we have seen, and plus, as I understand it, a statement by the New South Wales Police. These matters are under investigation, but this is just appalling. In Sydney, as I'm sure your listeners know, so much of that city's life and activity and celebration, recreation, occurs on or around the harbour. And so, when these sort of things happen, it's not just the immediate tragedy which affects the families of those concerned and those who are still in hospital, but, I think all Sydneysiders feel this because the harbour is the centre of their life.
KAFCALOUDES: Yeah, obviously there will be continuing investigations that will find out what exactly happened there between that pleasure craft and the fishing trawler, what the cause was, and we'll follow that up.
It has been a tough week actually, for you, hasn't it, Prime Minister? You've had to announce, go public, with the death of that soldier in Afghanistan, Jason Marks, and of then course, another soldier injured just a couple of days ago as well. It has been a tough week, hasn't it?
PM: It's tough for our troops in Afghanistan, they are on the front line, I'm not. And, they are an extraordinary, professional, bunch of Australian soldiers. I was there just before Christmas. I visited them at Tarin Kowt. I was briefed then by the Field Commander on how difficult these field operations were against the Taliban.
The Taliban are violent. They are dedicated fighters fuelled with some mad messianic zeal. And, it's a very tough operating environment. And, when we lose one of our own, it's an absolute tragedy for the family of Lance Corporal Jason Marks. It's felt deeply by the soldiers of the Australian Defence Force.
And there is just this sense of palpable loss across the nation as well, as another one of our young men gives up his life for the country. It's tough. As I said to the Australian people the other day, we need to brace ourselves for what is going to be a very tough year ahead. And, it is difficult, dangerous and bloody.
KAFCALOUDES: Well, on, I suppose, brighter news at least, you are in Victoria. You're heading down to Geelong. You've got some good news to announce?
PM: Well, yes, I'm in Victoria today. And, I'm heading down to Geelong. I'm also visiting Deakin University. And, at Deakin, we've got some things to say about new facilities there at the University. And we believe in an education revolution, and part of that means investing in our universities. And that means universities across the nation as well.
KAFCALOUDES: And there have been, well there is obviously a shortage of doctors, it's been a story that has been around for a quite a while. This is a new medical school?
PM: Well, that's right. We're going to be investing in medical facilities at the university to make sure that we've got, you know, the best capacity available. We think this is all part of an education revolution, investing in our early childhood education, investing in our schools, investing in our universities, and investing in our TAFE colleges as well. As well as higher end research.
It's all critical to make sure that we've got practical steps moving towards what is for our goal for the nation, which is to create an Australia over time, the best educated, best trained, best skilled workforce in the world. It's absolutely fundamental.
KAFCALOUDES: We'll be covering that issue a little bit further on in the program as well. But there was some news that came out of America overnight that growth, I mean, Australia's growth is sparking compared to America's, 0.6 per cent growth, which was actually better than expected. But, certainly this should have implications for the rest of the world?
PM: Well, as we move forward to framing this year's Budget, we are facing very tough global economic circumstances. We face, in Australia domestically, the highest inflation rate this country has seen in 16 years. And that's what we inherited from the previous Government. That's on the one hand.
On the other hand, what we face is downward revisions of economic growth globally, coming out of the US Sub-Prime crisis, and what has flowed out through global financial markets to Europe and, to our own part of the world in East Asia.
Now, framing a Budget in those circumstances is very difficult. But our job is to produce a Budget which reinforces responsible economic management by producing a substantial surplus.
Secondly, to honour our pre-election commitments to working families under financial pressure, on tax and child care rebates.
And also, to begin investing in Australia's long term future needs.
We're confident we can do that, but the sort of growth numbers you referred to coming out of North America and elsewhere, and their impact on the global economy, and therefore, long term economic growth in Australia, this makes the task of framing these Budgets very difficult.
KAFCALOUDES: Yeah. Obviously we've been hearing about how there has to be cut backs in the Budget coming up in May. Not the sort of thing you expected?
PM: Well, it's difficult to frame a Budget in these difficult economic circumstances. But, we believe we can produce a responsible Budget characterised by a deep sense of the challenge that we've got when it comes to domestic inflation. We don't want to fuel the flames of inflation. But, at the same time, we intend to honour our pre-election commitments to working families. Working families right across Australia, and here in Melbourne as well, are under financial pressure, real financial pressure, in terms of mortgage increases which have gone up 12 times in a row, grocery prices, petrol prices, cost of child care.
So, we intend to honour our pre-election promises on tax cuts for those families. And, to also increase the childcare tax rebate and other practical measures as well.
But, to do that, it means we've got to produce real savings in the Budget as well. And that's where I'm sure we're going to come into some criticism for a range of people for the sort of savings we make.
KAFCALOUDES: Just before we go, Origin, there is speculation this morning that Origin Energy could be taken over by an overseas (inaudible). Would that concern you?
PM: Well, with any significant investment, foreign investment, into Australia, that would fall subject to the Foreign Acquisition and Takeovers Act, and what happens under those circumstances, the Government then evaluates any such application under the national interest criteria.
On the details of this particular proposal, I haven't been briefed. I'm sure the Treasurer will be because he's the responsible Minister.
The Government welcomes foreign investment in Australia. It's good for the economy and good for jobs. But any significant foreign investment, including this one, has to satisfy the Government's overall national interest test, and they will be applied by the Treasurer in his evaluation of this proposal.
KAFCALOUDES: Prime Minister, thanks for coming on 774 ABC Melbourne.
PM: Thanks very much, and good morning to all your listeners.