PM: How are you?
MITCHELL: Ok. Would you allow him to spend five weeks with wombats at this time?
PM: How people choose to spend their leave is a matter for them privately. I imagine when you go off on leave Neil, you did the same.
MITCHELL: I tell you what, if there is a crisis Prime Minister, I would come back and we have got a crisis.
PM: Neil I don't know the individual circumstances concerning the secretary of the treasury's leave arrangements. What I do know is that the economy has been under significant international pressure and challenge since the day the Government was elected.
We had the global financial crisis, which continues. And we have had of course the global oil shock which has occurred over the last several months. And over that period of time, since we formed the Government, the Secretary of the Treasury has not been on any leave that I am aware of.
MITCHELL: Precisely Prime Minister, because it is important. I mean this is, we are in economic crisis and your main adviser is out of contact for five weeks. I mean sure, a week or so, fine. But you wouldn't go on holiday at a time like this, how can you let him do it?
PM: Neil, his individual leave arrangements are a matter for him....
MITCHELL: You are his boss, surely.
PM: Well actually, he works for the Treasurer.
MICTHELL: Ok, well the Treasurer works for you, where does the buck stop?
PM: Neil what I was about to say is, the Treasury is made up of a team made up of the Secretary of the Treasury, a number of deputy secretaries and a management team. When I work with the Treasury, I am dealing with the team of people around the table, each of whom has responsibility in key areas of the economy.
The Deputy Secretary shoulders as much responsibility in that respect, as does the Secretary himself. Therefore, when we are dealing with difficult economic policy decisions, working our way through, as we are at the moment, the emissions trading scheme debate, we are dealing with a range of senior officers from the Treasury and they are highly competent individuals.
And as we framed the Budget, we were as much dealing with the Secretary of the Treasury as Deputy Secretary of his department, of Finance and of the Prime Minister's Department, all of whom are senior and competent economists who have served Government's of both political persuasions.
MITCHELL: So you are quite comfortable with the head of Treasury, the chief economic adviser of the Government taking five weeks off at a time?
PM: What I can say to you Neil is that his individual leave arrangements are a matter for him to -
MITCHELL: There not Prime Minister, you are ultimately his boss. Now, If I am on leave and (inaudible) falls down, I come back and if I don't the boss wants to know why. If you are on leave and a major crisis erupts, you come back.
PM: Neil, I would appreciate the opportunity just to answer the question you asked me before, which is that any individual is entitled to have leave each year. And what we know in terms of the pattern of economic challenge over the course of the last seven months, there hasn't been any opportunity for this individual to take any significant leave whatsoever. Any individual to remain effective throughout the course of the year needs to take a break. On the individual details concerning his leave arrangements that is a matter for him to resolve with the Treasurer, I am not across that at all.
But what I have got to say is, any individual is entitled to ensure that they have appropriate balance in their own personal family life as well. Remember the Government was attacked most recently for working public servants to the bone.
MICTHELL: I understand all that, I just think it looks extreme to me and it is not, in my view, it is not a good sign of leadership in the middle of the crisis that your leader goes away. He's the leader of the treasurers department, you pay him a hell of a lot of money to do that job and he wont be there at a time like this.
Did you see the Wall St figures overnight? 358 points. What is going to happen to our stock markets today? Did you see the world oil price, a new record. What does all that mean? It means crisis Prime Minister.
PM: Neil, throughout the course of this year, the Treasurer and I have been through a whole range of reports from the global economy, including what was occurring in March this year, when the world economy was on the verge of a significant meltdown on the back of the financial crisis.
On the question of global oil prices, they have been going through the roof for some months now. If I was to project out for the rest of the year, there will be a series of adverse global economic events as well. That's the first point.
The second is, the underlying assumption in your question Neil, is that the Secretary of the Treasury is unique among the Government's economic advisers -
MITCHELL: That is not it all. Prime Minister, my point is that the economics as you well know, is about perceptions, about confidence, about appearance, about leadership.
One of our leaders is going missing.
PM: Neil the substance of economic leadership means getting decisions right. And if you are going to get decisions right it means having available to you, the range of economic advice across government.
That lies in the Treasury department, the Finance Department, the Prime Ministers Department and of course our continued dialogue with the Reserve Bank.
That is the way in which we frame, through a team of advisers, our position on a whole range of complex policy challenges from the beginning of the year on.
And that will be the case in the future. And I go back to the original point. There is never a perfect time for anyone to take leave. I understand that. I mean, I have found myself in the same circumstance as well and I am sure you do as well.
MITCHELL: Prime Minister do you accept that the average family is $30 a week worse off from when you became Prime Minster?
PM: I have said consistently in the parliament and elsewhere Neil that what we have done through the budget is try and provide support for working families and working Australians, pensioners and carers under pressure. And they have copped a slug in terms of additional prices through petrol, through rents, through mortgages, through groceries and through childcare costs, not just over the course of this year, but last year as well.
We have tried through the Budget, to make that burden lighter but we understand full well, that in the case of many families, it is very, very tough.
MITCHELL: Does that mean your tax cuts which come in next week have already gone?
PM: Every individuals circumstances will be different, but what we do know is that in the first half of the year, we got all this advice from senior economic commentators, not to honour our pre-election commitment to introduce tax cuts. We honoured our pre-election commitments, we have done that.
They flow from the first of July. A typical young family with a couple of kids, one in preschool, one in school, they stand to be, through the measures introduced through the Budget, about $52 a week better off.
MITCHELL: And they have lost what about 30?
PM: They will be facing a whole lot of additional costs, I have never pretended that was not the case Neil.
It is a very difficult environment for families. And what I do know on top of that is one of the big additional slugs in the family budget bill each week, is the rolling cost of interest rates. Remember as of the time the Government took office, we had had 10 interest rate rises in a row, since then we have had two.
My concern, overall through the budget strategy is to do what we can through responsible economic management, not to add any fuel to the fires of inflation because if that occurs, interest rates continue to go up and if that occurs, the hole in the family budget gets much bigger.
MITCHELL: Is it inevitable that your carbon trading scheme, the emissions trading scheme will effect the price of oil, petrol?
PM: Well as with Mr Howard last year, my position is the same as his, that if you act on climate change and you act on the price of carbon through an emissions trading scheme, it does effect the price of energy and the price of oil.
That is the position which he has had, I have had, and Dr Nelson has.
The key question is, on the way through, how do you best support and compensate working families, working Australians, pensioners, cares, to deal with any price adjustment. The principle we have adopted is that we will be providing support, as we will be providing support to affected businesses and we will be working that through our Green Paper and White Paper process during the course of the second half of the year.
MITCHELL: Is it correct that you are looking at a cut in excise?
PM: A cut in excise, you mean of the type that Dr Nelson has been talking about?
MITCHELL: Well a cut in excise to compensate for an increase in petrol price because of the emissions trading scheme.
PM: Our approach to emissions trading Neil is that we will provide support, support to working families. On the form of support, on the form of support, the whole series of options which the government is working through at present.
MITCHELL: Does that include an excise cut?
PM: Well the form of support has to be worked through by Government. And I have got to say, it is a complex process. In terms of the petrol price, that is one aspect of it. The other is the general energy price and beyond that, for example, you know the costs of heating for people who are pensioners.
How do you deal with that? How do you deal with the roll on consequences of higher energy costs to other cost of living burdens for people at the lower end of the income spectrum? All of these things have to be dealt with.
So in terms of how you respond to that, how you deal with it, the means by which you do it, it is a very complex debate.
But the underlying principle is this: we are of the view that if there is an adjustment to the carbon price is to be brought into the economy, and the reason for it is to act on climate change, because the economic cost of inaction, longer term, is far greater than the economic cost of action - that on the way through, on the adjustment, which would occur, our principle is that we would be providing support to families, to pensioners and to carers as well as to businesses dealing with adjustment challenges as well.
MICTHELL: Yes but in that environment, is an excise cut on the table, is it one of the things you are examining?
PM: The Green paper process, White paper process will sort all that through Neil, that is just the proper and considered way of doing it -
MICTHELL: That means it is on the table -
PM: The Green paper and White paper process will sort all that through -
MITCHELL: I'm sorry Prime Minister, I don't understand what that means.
PM: It means that we have a whole range of matters to consider on this front.
MICTHELL: Including the excise, the possibility of an excise cut?
PM: There is a whole range of matters to consider on this front. And Neil if you get into the business of ticking things in or out -
MICTHELL: I am not asking your approval, I am asking whether it will be considered.
PM: If you tick things in or out, in terms of the various options on the table, both for compensation for families and for support for business, and frankly you are dealing with a huge problem long term of not having clarity delivered through this, through the white paper process at the end.
So I don't think its productive at all to speculate about inclusion of one aspect or another on the compensation machinery. The key question is this: will compensation be provided. The means of it, the means of it, is a separate matter.
MITCHELL: Well, no, the key question is how much compensation will be provided. Will you provide compensation that compensates entirely for the imposition of the emissions trading?
PM: Well, what I've said Neil, is that we will provide compensation to support working families -
MITCHELL: But aren't we going to be out of pocket in the end? Are we going to be out of pocket? Or will your compensation, be it an excise cut or anything else, will your compensation compensate us 100 per cent?
PM: The reason we've embarked upon a green paper, white paper process, Neil, is to get...
MITCHELL: Prime Minister people don't understand green papers and white papers. They understand putting petrol in their car and the proposition that it could go up 30 cents a litre because of this. And then they say, ‘will we be compensated for that'?
PM: Well, I notice there Neil you simply take as a given the scare campaign taken by the Liberals of 30 cents a litre - what's the basis of that, Neil?
MITCHELL: This is what people are concerned about. Now it might be a scare campaign but -
PM: (Inaudible)
MITCHELL: Well you tell me, how much will it go up?
PM: Well, what we've said is that we've got a lengthy process to work through to adjust this economy to the reality that we have to better cost the price of carbon. And if we don't do that effectively, Neil, over the long term, look at your kids, look at your grand kids, look at the consequences for the planet and to the economy, it's all very bad. So what you can do -
MITCHELL: How much will it mean to me?
PM: Well, if I was going to irresponsibly provide a series of numbers here and now on this question, it would not add to the debate. The responsible course of action is as I've described. It may not meet the tabloid needs of the moment -
MITCHELL: Oh, come on. This is reality, Prime Minister. This isn't politics. This is people paying for petrol.
PM: No, politics, Neil, is when you take at first blush a figure given to you by the Liberal Party of 30 cents a litre...
MITCHELL: Well you give me an option - and you won't. What I'm asking is 30 cents, 20 cents, 10 cents - will you compensate us 100 per cent?
PM: And then inject that into the reality as if it's a given. That's not proven.
All we're saying is that the responsible course of action, Neil, is to do that on the basis that I just outlined.
MITCHELL: Jack, go ahead please Jack.
CALLER: G'day Neil.
My question is to the Prime Minister.
You keep shoving this working families down our throats as though it's some mantra from heaven. My challenge is to you to find one employer that wouldn't let any working person take four weeks of annual leave all in one hit.
Thanks.
PM: On the question of leave, I mean, everyone is entitled to leave, Jack, and it's a question of sorting it out with their individual employer, when it's the best time of year or not the best time of year to do it.
On the question of Ken Henry, which of course is what you're referring to, he's a first class public servant, works extremely hard. Rarely takes a break. And has always been there to assist the Government.
I think the key challenge is to ensure that all of our people are trying to get their own lives as best balanced as they can. It's difficult, it's hard, I understand that. But I've got to say, we need to have our public servants functioning at an effective level.
MITCHELL: We'll take a break and come back with more from our Prime Minister in a moment.
[Break]
MITCHELL: Mr Rudd we we're talking about tough times, and they are tough times. Is it reasonable in these tough times for you to use a VIP jet to fly yourself and your kids to the cricket?
PM: When it comes to the Boxing Day test, my understanding, Neil, is that the normal convention is that Cricket Australia invite the Prime Minister of the day to go down. And so I think I have followed the convention of previous Prime Ministers in so doing, and secondly -
MITCHELL: What's wrong with a domestic flight? Why VIP?
PM: The convention is, as I understand it, to use the normal air services provided for the Prime Minister. I understand there are security arrangements associated with that. I'll get you some further advice on all that. I simply acted on the basis of what the normal precedents were.
And the second point, is in terms of accompanying family, if there is a dependant child, then that child travels with me. There's a non dependant child, then of course we pay for them at normal commercial rates.
MITCHELL: Michelle, go ahead please Michelle.
CALLER: Hi Mr Prime Minister. I don't meant to be disrespectful to you at all but I'm an educated person and I have absolutely no idea what your talking about ‘Green Paper, White Paper'. It doesn't sound like English?
PM: Okay, Michelle, I understand your confusion about this because the emissions trading scheme is really, really complicated.
And, of course, what we are trying to do is this. Firstly, deal with the climate change challenge. What does that mean in practice? Bringing down total greenhouse gas emissions for Australia and the rest of the world.
How do we do that? One of the ways in which we do that is what's called an emissions trading scheme. What does that mean? It means increasing what is called the cost of carbon so that people make better choices across Australia about the use of carbon -
MITCHELL: I'm sorry Prime Minister, I think she's asking about Green Papers and White Papers, not about greenhouse gasses.
PM: No, no I understand that Neil. I'm trying to explain what they are about.
So, the challenge is dealing with climate change.
Therefore, what a Green Paper is, is the Government puts out some options for the community to debate and think about, about how we best respond to the challenge of climate change - that's the Green Paper.
The White Paper then follows after we finish the consultation process, which is, the Government puts out its own policy decision at the end of it.
The reason we do it that way is that we have an opportunity to consult business and the community first, in an informed way, and then, having got all those inputs, then come back to a final decision at the end and that's called a White Paper.
MITCHELL: Okay, Michelle.
CALLER: How does that affect the petrol going into my car though?
PM: Well, on the question of petrol going into the car, there are two factors at work here. One is the global price of oil, that's huge, it affects everybody - that's massive.
What we're talking about here is something separate to that, and that is, how to deal with total greenhouse gas emissions and climate change and global warming.
Now, the global price of oil is hugely affected, that's because of supply and demand factors coming out of the Middle East, that's hugely affected the price of oil and petrol for you. And for all motorists in Australia. And that's really tough, and its really hard and that's why it's important that we try and provide as much support as possible through the Budget to help you in your circumstances.
On the emissions trading scheme, which is how we deal with greenhouse gas emissions, that is a longer term project going out half a century, and its all about how do we make sure that your kids and your grandkids have a planet that we can inhabit.
MITCHELL: Thank you Michelle.
Prime Minister, alcopops, I mean there's the threat now that it could be blocked in the Senate, you're alcopop tax. If it is blocked, where are you going to get the money? $3.5 billion?
PM: Well, this goes to the question of the economic responsibility of Liberal Party. Because you either have a responsible Budget in difficult economic circumstances, and we've budgeted for a $22 billion surplus to put downward pressure on inflation and downward pressure on interest rates. Or, you go the populist route, which is what the Liberal Party have done, said yes to any pressure group that comes around, block things in the Senate, and that blows a $22 billion hole in the surplus. So the responsibility lies with them.
MITCHELL: So where will you get the money? If it's blocked? $3.5 billion.
PM: Well, we will continue to apply pressure to the Liberals and we will see what they do at the end.
MITCHELL: Did you Australian Hotels Association, the new head of it, saying that we're becoming to puritanical. We're lecturing people about drinking. Frank Devine in The Australian today, a very funny article about his life as a drinker. Are we becoming a bit wowserish here?
PM: Well I've always said Neil, I don't regard myself as a wowser at all -
MITCHELL: Well, she did say you were an exception because of previous history?
PM: Well I haven't read the article. Who she -
MITCHELL: The new head of the Australian Hotels Association. She said you're not a wowser.
PM: Well, I certainly am not, and I've made that point in multiple interviews over the years.
The question here is one of balance. You know this as well as I do, Neil. You're concerned about your kids and what happens in the middle of Melbourne on a Friday and Saturday night, and the discussions I've had with Christine Nixon, her equivalent in New South Wales, Mr Scipione the New South Wales Police Commissioner. You either say, ‘okay, that's all just normal' or, we try and do something about it.
There's no magic solution here. There's no single solution. But one of the ways which you handle it is in this category of drinks, which we know from the health reports, are particularly attractive to younger women and have led to a huge spike in the take up rate of alcohol by younger women. And because the Howard Government created a massive tax advantage for this category of drinks alcopops back in the year 2000 we closed it.
Are people reacting badly against it? Yep. Do they like it? No. We think it's the responsible course of action? You betchya.
MITCHELL: The Qantas dispute, Prime Minister, do you support Qantas taking maintenance offshore?
PM: Well these are difficult corporate decisions for every company. I can't again say the individual corporate decisions of any major company across the country. We would hope that every Australian company would do their absolute best to source their requirements on-shore because its better for Australian jobs. But we're not in the position, nor were our predecessors, to dictate what individual companies do.
MITCHELL: Were you given any warning that the tyre factory was going to close in Melbourne in the state of the tyre industry in the country?
PM: I was unaware of that personally. What the industry Minister may have been aware of, I don't know.
Of course, that loss of that particular plant is bad news for Australian manufacturing. One of the reasons why the industry Minister and myself were in Japan recently was to negotiate an arrangement with Toyota to have hybrids manufactured in Melbourne, and in Australia, for the first time.
MITCHELL: Several cases with neglected children in Adelaide and Canberra over the past few days which are just horrendous. I saw the parliament debating it yesterday with Jenny Macklin talking. Do you agree with Barnaby Joyce that neighbours have got a bit of responsibility here? If you see this going on, dob them in?
PM: I think the whole community's got a responsibility. And to act sensitively and responsibly. I mean, I think the basic principle here is the protection of the most vulnerable. Little children together with our most aged and infirm Australians, are the two groups who are the most vulnerable. And I think, frankly, that's just a higher call. It sort of goes across everything else so that if you have a reasonable suspicion, or reasonable concern, that a young child is the subject of abuse, I think you've got a moral responsibility to act.
MITCHELL: Thank you very much for your time
PM: Appreciate it