CLARK: Mr Rudd, good afternoon.
PM: Philip, thanks for having me on your program.
CLARK: Well, welcome to the program, it is going to be a busy time. Parliament is back and the Senate is already saying we are not going to pass anything, at least the Opposition in the Senate.
I mean how big a problem is this going to be for you, because you really are going to have to negotiate with a whole panoply of players up there. You have got Nick Xenophon from South Australia, you have got Family First, Senator Steve Fielding, you have got the Greens and the Opposition?
PM: Well I think our first focus is always going to be the Liberals, and that is whether they are serious about doing the responsible thing.
One of the reasons we are concerned about the legislation in the Senate at the moment is this: it is all about whether or not we are going to preserve the Government's Budget surplus, which is what we need to do in these uncertain global economic times.
And if you whittle that down, which is what they are proposing to do at the moment, by knocking off $3 to $6 billion dollars worth of measures, then it reduces the surplus, and what does all that mean? It means you have got, first of all, less of a buffer to deal with any challenges which may lie ahead, because the global economy is under real stress and the moment.
And secondly, it means that if you are going to reduce the surplus, it has the effect of putting more upward pressure on inflation, and therefore, more upward pressure on interest rates. And that is the last thing we want at present.
CLARK: Look, they are difficult economic times, I think you would acknowledge that, people are worse off than they were a year ago, would you agree?
PM: Well, what I have said today in the Parliament when asked about this is that it is just important to level with people. I mean, people are under real cost of living pressures. My predecessor went around the place and said that working families had never been better off. I just think you should level with people.
Everyone's circumstances are different. What we have done in recognition of the fact that there are pressures from rents, from interest rates, from groceries and from petrol prices, is through the Budget, deliver $45 billion worth of tax cuts, a further set of some $10 billion worth of other payments, including the increase to the childcare tax rebate form 30 per cent to 50 per cent. And $7.5 billion worth in additional payments for pensioners, carers and those on the disability support pension.
But, the truth is, these are difficult times for people and I am not about to try and guild the lily and pretend that it is not. But we are trying to do practical things to help on the way through.
CLARK: I have talked to a number of pensioners on this program who do it really hard in Sydney. You can't find affordable rent in Sydney any more. A rental of around $250 dollars a week, which is what we would call affordable rent for many people, is just unattainable in many parts of Sydney, perhaps most now with the current rental crisis. Pensioners in particular are doing it hard. When are we going to see some comprehensive approach to pensioner income?
PM: What we did, first of all through the Budget, is the $7.5 billion worth of additional payments that I just mentioned. One of those things, by the way, includes for the first time, increasing the utilities allowance for pensioners from a hundred and something dollars a year to $500 a year and now that is made as an annual payment.
But we have always known that this is simply step one. Step two is to go back to the fundamentals of how the actual pension is constructed. And so we have commissioned the Secretary of the Treasury, Ken Henry, to look at the future of tax, the pension system, retirement income system in general. He is due to report in February of next year, which is about six months or so from now. And we hope to have a proposal from him about how to provide pensioners, in particular, with better security into the future.
CLARK: So might we see something in next years' Budget?
PM: Well, if we report in February of next year, we'll then make a decision about when to implement. But let me put it to you in these terms, Philip. What you just said before about pensioners in Sydney and how difficult it is to try and survive, I fully get, I fully understand.
Because each time we go out with the Cabinet and do a Community Cabinet as we did recently in the southern suburbs of Adelaide and prior to that in the western suburbs of Sydney around Penrith, the stories that we hear are very direct, very personal, and really hard. So we want to try and act sooner rather than later.
But the only thing I could say to your listeners as well is the cost of living pressures which are putting such pressure on the pension, haven't just cropped up in the last six months that we've been in office. They've been building for many, many years.
And part of the problem we face is dealing with an area where, frankly, our predecessors didn't undertake any fundamental reform of the pension for 12 years they were in office.
CLARK: You've been accused of a bit of window dressing, too much possibly - this Grocery-watch site. I mean, it's a joke, isn't it? You could save yourself millions by canning this thing straight away. I mean, what possible use is it to anybody?
PM: Well, what we said from the beginning Philip is the idea was to make sure that within a given region, shoppers would have an opportunity to work out over time which of the supermarket chains -
CLARK: You don't seriously think this website does that, do you?
PM: Hang on. Let me just finish what I'm saying. What you've got is an analysis of I think some 600 plus supermarket sites across the country, spread across 62 separate regions, done against different baskets of goods, so that you can compare over time, for example, in a particular region, maybe the southern suburbs of Brisbane, whether it's Coles or whether it's Woolies, or whether it's one of the others like Aldi, who are providing the best deal and by how much.
It's one small measure to increase consumer power. And we've never pretended that it's anything more than that. The other thing is that in the short time that it has been operating it has already had about 3 million hits on its site. So, I think people are interested to know which of the chains overall is doing better by shoppers than others in their region.
But, I don't want to overstate it, and we haven't before overstated it. This is not an attempt to go out and say you can bring down grocery prices or anything like that. But it is to give consumers more information than they've got at present.
CLARK: Okay, I know you've got to go because it is Parliament and all that. I know today you've guaranteed the education funding into the future, this is despite the fact that the Education Union says you're going to cut teachers and cut salaries. That's not going to happen?
PM: Absolutely not. That's quite a dishonest statement out by the union, and I think they know it.
What we've done is provided funding for this year, that's 2008, and we're right now in the middle of a huge negotiation with the States and Territories on the future funding for schools for the four to five year period following that. And that will be finalised by the end of the year.
But what I spoke to the National Press Club on today, and in Parliament also Philip, was this: what we invest in terms of more money into the school system and into early childhood education and into vocational education - trades training - is one thing. But we've got to lift the quality of our school education as well.
What I put out there today was a proposal for new partnership agreements for the states to boost teacher quality. To also boost our funding for the most disadvantaged schools in the country. And also, to make sure that we've got the best school performance data out there into the community so you've got transparency about which schools are doing well, and which schools are not doing well.
These are major education quality reforms which have put out there today, and they are as important as injecting more money into the system overall as well.
CLARK: Okay, I know you've got to go. I appreciate your time. We'll look forward to having you in the studio shortly.
PM: I look forward to it Philip.