BEAUMONT: Prime Minister Kevin Rudd morning.
PM: Good Morning Simon, thanks for having me on the program.
BEAUMONT: Thank you for your time. Prime Minister, to pensioners first, why did your government not increase the basic fortnightly pension rate for aged and disabled pensioners in the last budget.
PM: Well, what we have done in the budget is provide an additional $5.2 billion for seniors. And let me just go to two elements of that. One is a one off seniors bonus and the second is to increase significantly what will be an annual increase in the utilities allowance from $107 a year to $500 a year.
Secondly, on the overall question of the long term handling of the pension, which is a major matter for seniors right across the country including in Perth, we have the Henry commission of inquiry examining this thoroughly, to report to us by February next year. We think this is the right way to go because what I understand from all the discussions that we have had from pensioners and seniors groups from right across the country, is how tough it is for people to balance their budget currently, given the constraints on their income.
BEAUMONT: So the Henry commission hand down will be early next year?
PM: That's correct.
BEAUMONT: Why, or do you concede that this actually means that you, you now understand that the increase in the utilities allowances, those quarterly payments or those one off payments weren't sufficient. Do you now concede that the ongoing fortnightly payment that goes into pensioners bank accounts needs to be increased?
PM: Simon the Henry Commission was established on the day of the Budget itself. We knew full well that we would have to look at three things for the future. One was, how we manage the overall taxation system, the second is, how do you manage the retirement income system, which is both pensioners and the taxation treatment of those receiving other forms of retirement income. And thirdly, other forms of income support. And these things always have to be considered together. But let's put it in context.
In the budget itself there is $5.2 billion additional for seniors compared with the previous budget. For carers, $1.1 billion additional compared with the previous budget. And for disability support pensioners, and these are a very important group of some several hundred thousand Australians, $1.3 billion over the previous budget. Now these do not of themselves solve the problem, I understand that. But in six months which this government has been in, to deal with what has been an accumulating set of very significant cost of living pressures for pensioners and carers over the last 12 years, it takes a bit longer than that to sort it through.
BEAUMONT: Why is it on the revenue side of things when the Government wants to increase a tax take like the alcopops tax take for example, that can become enacted almost immediately? Why is it when there is an outgoing, in other words, increasing the pensioner rate that it has to be done at budget time?
PM: But at the end of the day Simon, what I am saying is that in terms of these payments to pensioners, there is a significant increased allocation in terms of what the budget does overall. It is $5.2 billion additional in allocation to pensioners, compared with, for seniors, compared with what was there in the previous Budget.
BEAUMONT: But why do the outgoings always wait to budget time, but if you, it seems if the Government wants to bolster coffers, like with the alcopops tax, that can be enacted immediately. Why do the outgoings have to be (inaudible) at Budget time?
PM: I suppose where I disagree with you Simon is this, what I have said is, apart from that $5.2 billion for seniors, lets go to the other measures contained. There is something like a $54 billion package dealing with, also, families who are dealing with the childcare tax rebate, also the education tax refund and also significant changes in the tax treatment of low and middle income earners from the 1st of July.
If you put all those things together, and these are measures which directly affect the family budget, these are coming in as of 1 July. The measures I mentioned before for pensioners and carers and those on the disability support pension come in from 1 July. We have never said that any of these measures in themselves mean some full solution to the challenges which families currently face and pensioners and carers face with the rising cost of food and the rising cost of petrol. They are designed to help, but the overall point I am making is that there are a large number of measures contained in the budget which go towards helping directly - families, individuals and pensioners and carers under financial pressure.
But there is more work to be done.
BEAUMONT: What is your direct personal message to West Australian pensioners today, coming to you, well coming directly from you this morning?
PM: I think the first thing I would say to pensioners and carers is that we have a huge amount of work to do with them and their peak bodies over the course of the next six months or so while the Henry Commission goes through this with a fine tooth comb. To work out the basis on which we can deal with this effectively for the long term future.
My second point is this, it is very difficult for a new Government framing its first Budget within three or four months of taking office to deal in one hit with the accumulated cost of living pressures which have occurred for people on pensions which has built up over the previous 12 years. In six months, you can't fix what's happened within 12 years. But what you can do is say, ‘we need some more time', we've established a body to do it, and we're determined to get on it with.
BEAUMONT: Mr Rudd, given what happened in the US yesterday, do you now regret backing Hillary Clinton publicly like you did on Rove McManus' television show?
PM: Well you know something, have you ever done a Rove interview yourself?
BEAUMONT: No, I haven't.
PM: Okay, well it's all a bit tongue in cheek. You get ten rapid fire questions. And, I think one was, Hillary or Obama. I mean, my response was Hillary because the way in which I saw the question was, you know, who is going to win? Hillary or Obama. I think they're both fine individuals and I'm perfectly relaxed about whoever was to become the Democratic candidate for the President. And, for that matter, whoever becomes the President of the United States. I contrast that with Mr Howard, remember, who said that if Senator Obama, or any Democratic candidate was to become President of the United States, that would represent a victory for Al Qaeda.
So, a light hearted remark in the midst of a Rove McManus interview, which concluded with ‘who would you turn gay for?' is one thing. A considered statement on a Laurie Oakes interview, by the former Prime Minister, who said that if the Democratic Party was to form the next Presidency of the United States, it would represent a victory for Al Qaeda. That's something else.
BEAUMONT: Prime Minister, it has been reported this morning that you don't think Obama can beat John McCain. Is that right?
PM: I don't know where that report is from. I've not seen that report anywhere. The great thing about the American political process is that it's fierce, competitive, and above all, democratic. And, whether it is Senator Obama who becomes the next President of the United States, or John McCain, I'm confident that in either of those individuals, we have a strong partner for Australia, a strong partner, in terms of underpinning the future of the Australia-United States alliance.
Remember, this alliance is neither the property of the Republicans or the Democrats or the Labor Party or the Liberal Party. All of us have been the custodians of this alliance since Labor formed it in 1941 when John Curtin, a great man from Western Australia, shaped this alliance with President Roosevelt in the depths of the last war.
BEAUMONT: Analysts have said that Barack Obama has already flagged protecting US trade interests. What impact do you think an Obama administration will have on our trade agreements with the United States?
PM: Well, I think it's very important that we don't get ahead of ourselves. First and foremost, I don't think Senator Obama has been confirmed as the Democratic candidate yet. Second is, in terms of the future shape of his trade policy, his foreign policy, his security policy, that'll all take some time to work through. In my conversation with Barack Obama when I was in the United States recently, we had a great conversation about the strength of the relationship, and, how we can take the relationship to new levels.
There'll always be argy bargy on trade policy. Guess what, there has been between Mr Howard and the Bush Administration on aspects of trade policy, including various US farms bills. There will be in the future as well. But the good thing about our alliance and our friendship is that we can deal with those things on the way through.
BEAUMONT: Prime Minister, you are honouring your election promises to bring Australian troops home from Iraq. Why did John Howard send an Australian contingent into Iraq?
PM: That's a question which of course should best be put to him. Or, those who served him in the Cabinet at the time including Mr Costello, Mr Downer and others. We have simply said that there is no graver decision for Australia to take -
BEAUMONT: You also described it as an abuse of intelligence.
PM: ... no graver decision for Australia to take than to send its troops to war. And when you are making that decision, the first responsibility is to make sure you properly consider all of the evidence before you. And what we know from the two Commissions of Inquiry established by Mr Howard himself and his Government - one, by Mr Flood of the bureaucracy and intelligence failure over Iraq and secondly, through the Parliament through what became known as the Joel committee - that there were significant areas of intelligence, where the Government was not transparent with the Australian people, about the qualified nature of that intelligence. What I'm saying is if you're going to take a country to war and put our men and women in uniform and in the front line and in harms way - that any Government has an obligation to be up front and level with the Australian people.
BEAUMONT: So was that intelligence at hand at the time. Was that abused?
PM: Well if you look at what was available. Let me give you one specific example, just prior to the war British intelligence provided the then Australian Government with a view that if you went ahead and attacked Iraq that it would not decrease the terrorist threat, but increase the terrorist threat.
That was provided from memory by the joint intelligence committee of the United Kingdom. Advice which came through to the Australian Government, through the intelligence liaison network. And this has been subsequently canvassed in one or other of those two reports I mentioned before. Remember the public position by the Government was at the time, was that we needed to go and invade Iraq in order to reduce the terrorist threat. What I'm saying is, that objectively in itself is an abuse of the intelligence information that they had.
BEAUMONT: Prime Minister just finally looking forward now. The alliance, our place in the Asian Pacific region and this notion of an Asian alliance, an economic alliance as much as anything. Why is that necessary?
PM: Well we're not talking about an alliance as such, what we're talking about is a possibility of setting an ambition for our region to have an Asia Pacific community by 2020. The reason is this, right now we have one body which is called APEC which deals with economic matters. And we have a range of other smaller bodies which deal with various bits and pieces concerning lets call it the political and security agenda. I think what our region needs for the 21st Century is a region wide body which we call an Asia Pacific community. Which brings together political, security and economic matters within a single framework so that we foster over time a common sense of regional community. Between countries as diverse as the United States, China, Japan, Indonesia and India as well as ourselves. And secondly that we don't succumb to any view on the part of some that there is something inevitable about conflict within our region.
I think we need to learn in part from the European example here. Remember France and Germany had been at each others throats for a couple of hundred years prior to 1945 and they managed to have sorted that through. We need to draw from some of that experience in shaping an Asia Pacific community.
It's a big idea, it will be controversial. Some people will not necessarily support it, but what I'm trying to do is to move the agenda forward so that we reduce the risk of conflict in the future and enhance the possibility of acting together on prosperity and environmental sustainability together.
BEAUMONT: Prime Minister would you like to see a common currency in the region?
PM: I don't think that's even faintly on the agenda at this stage. The key thing is to enhance security and political cooperation which at present is fragmented. Remember that the region is currently host to a whole range of unresolved territorial conflicts. The Taiwan straits, the Korean peninsula, Cashmere. Involving a whole range of nuclear weapon states. You can either just stand back and just allow things to drift, or you can say actually there should be a better way of handling this. And that's what we are putting forward as a ambitious proposal for the future.
As I said an Asia Pacific community by 2020. You have got to have something to aim for in this business, otherwise the alternative is simply to drift and part of the Governments overall approach is this. Not just responsible economic management on the home front, not just assisting working Australians, working families and those doing it tough, those under financial pressure at the moment. But also planning for the future - infrastructure, education and health, but planning for our future also in a region which will become the centre of economic gravity for the world in the 21st Century.
BEAUMONT: Prime Minister, thanks for your time today, thanks for talking to us.
PM: Thanks Simon, thanks for having me on the program.