MITCHELL: Mr Rudd, good morning.
PM: Good morning, Neil.
MITCHELL: The Bali bombers will be executed soon, perhaps even this weekend. Has the Australian Government been officially notified of that?
PM: Not that I'm aware of, Neil. I've seen the press reporting myself.
MITCHELL: Can we just get this clear. Does the Australian Government approve the execution of all terrorists?
PM: Our position, as I've said I think on your program before and elsewhere, we're universally opposed to the death penalty. We make no exception to that. And that's been a bipartisan policy between us and the Liberals.
And secondly, the other part of our policy is when any individual is convicted with the death penalty anywhere in the world, we the Australian Government only intervene in the case of Australian citizens, that's our policy.
MITCHELL: But you are opposed, even opposed, to the execution of the terrorists?
PM: It's our universal policy. The Liberals policy, our policy, which is one of opposition to the death penalty. We've voted that way in the United Nations before, we'll continue to do so in the future.
MITCHELL: Does that mean that you do not welcome the execution of the Bali bombers?
PM: Well the Bali Bombers are murderers. I have said that many times before and many of the people listening to your program would have been directly affected by their murderous, cowardly and callous act. It's appalling. But I'm not going to pretend to you Neil that our policy on the death penalty has changed. It's always been one of universal opposition.
MITCHELL: But you have said in the past they are getting what they deserve - they're getting justice?
PM: Well, justice means being convicted of the offence, and these people were tracked down by a combination of the Indonesian national police, the Australian Federal Police and others, in order to establish their guilt. That has occurred, and their impact on the lives of all of these Australian families is there for us all to see.
I've been in the ceremonies and services we've had at Parliament House in Canberra and seen the huge impact on people's lives. It makes your heart weep when you see not just what happens a week later, but a year later and five and six years later. It's horrendous.
MITCHELL: I agree. I was at the anniversary, the first anniversary, up in Bali when we had that ceremony there. But just in very simple terms - does the Australian Government, or do you, support the execution of the Bali bombers or not?
PM: Well Neil, our policy is as I've said before. We oppose the death penalty universally. Secondly, we only make interventions in support of Australian citizens. And I think that policy speaks for itself.
MITCHELL: The United States has cut interest rates to one per cent, which shows how serious the situation is. Our Reserve meets on interest rates next week. Do we need another cut?
PM: Well, they make their independent judgments. I think the Reserve Bank were ahead of the curve globally last time when they took down official interest rates by 100 basis points, that's one per cent. And, I think following that you saw a number of other central banks act the same sort of way.
I think what is increasingly apparent, Neil, is this global financial crisis is a real threat to growth and jobs around the world. It's a real threat to growth and jobs in Australia. And, quite apart from stability in the financial system itself, which is what we've been working on for quite some time here, the real challenge now lies with growth and jobs for the future.
Coordinated action by central banks around the world to bring down interest rates is important. In addition to that, coordinated fiscal policy action, that is support through the budgets of the major economies of the world to add to economic growth, like what we did with our $10 billion package the other day.
MITCHELL: So does the United States cut down to one per cent, does that have a flow through to Australia or are we already ahead of that?
PM: Well, we're in a rolling and unfolding crisis. I think the US action is important because it's the world's largest economy. And, as we know, the United States economy has suffered reduced growth, significantly reduced growth, in recent times. And reduced jobs. Therefore, their acting on their growth affects the rest of the economy because what they buy from the rest of the world affects growth and jobs here.
MITCHELL: What is your most recent forecast on growth in the Australian economy and on unemployment in Australia?
PM: For the economy, our growth forecast is still with a 2, plus 2, in front of it. And with unemployment, of course, the Budget forecasts were 4.75 but we've also seen, of course, further pressure on unemployment as well.
I think the truth of it -
MITCHELL: So what's the latest forecast on unemployment?
PM: Well, as I said the Budget forecast was for 4.75 - but I'm simply being straight up and down with you that -
MITCHELL: You would have had another forecast since the Budget, though?
PM: Well, we're going to have the Mid Year Financial and Economic Outlook, which will be produced during the course of November. But, it's quite plain that unemployment is under real pressure. It's quite plain that growth is under real pressure. I don't wish to mislead your listeners at all. That's why we introduced that $10.4 billion economic stimulus package two weeks ago because we know, because the global financial crisis, that Australia is under real pressure.
MITCHELL: I see several respected economists, JP Morgan, Deutsche Bank, today saying that Australia is headed into recession. You don't agree?
PM: Well, the most recent numbers we have in front of us from the Treasury continue to have positive economic growth into 2009. But, the global financial crisis is a real threat to growth and to jobs. We recognise that when you've got so many other major economies around the world going into recession, this is going to be very tough, very tough indeed, for Australia. But, that's why we've acted early, again ahead of the curve, by injecting $10.4 billion into the economy in the stimulus package I announced Tuesday two weeks ago.
MITCHELL: I see some of these economists are saying they don't expect that to be spent?
PM: Well, put a tribe of economists into one room, Neil, and how many opinions will you get?
MITCHELL: Fair point.
PM: And, what I'll say is, if you were to speak to your listeners in terms of some of the real needs that they currently have, because families, pensioners and carers are under real financial pressure, if we're providing additional payments to pensioners, additional payment to families, as well as providing a boost to first home buyers, we believe that a fair proportion of that will find its way into real economic activity.
MITCHELL: We'll take calls for the Prime Minister as well. Paul, go ahead please, Paul.
CALLER: Yeah, good morning Neil, good morning Mr Rudd.
PM: G'day Paul, how are you?
CALLER: I'm well thanks. A couple of quick questions, if I might. One in relation to infrastructure, and the other in relation to bank deposits.
PM: Yeah.
CALLER: In relation to infrastructure, there's been a lot of talk about that, there's been a lot of talk about creating jobs. Is it as simple as maybe commissioning four or five large projects? Could you build a nuclear power plant to service every capital city? That would use up some of our massive uranium reserves and get us off brown coal. Could you commission a project that would convert cars to natural gas and get us off Middle Eastern oil?
MITCHELL: Hang on Paul, you've got too many questions. First, the nuclear power plants, Prime Minister?
PM: Paul, we won't be building a nuclear power plant. But can I say this, you're right on the money about the need for large scale nation building projects. We've set aside billions of dollars for big infrastructure projects for the future. Some of those will be focussed also on parts of the energy sector as well. But whether it's road, rail, ports, hospitals, schools -
MITCHELL: Tunnels?
PM: Tunnels are part of roads.
MITCHELL: Okay.
PM: And, also, what we do in building a national high speed broadband network. All of these require big long term investment. We're prepared to do that. The first step will be a bring forward by us in December, a statement on our first major set of infrastructure investments for the future.
MITCHELL: Okay Paul. And quickly, the second part was one on banks.
CALLER: A yes/no question. Does the Government guarantee on bank deposits only apply to accounts domiciled in Australia? So if I was an entrepreneur up in Manila or Jakarta and I thought I had my money in a shaky investment, could I front up to the National Bank in Singapore and deposit it into the NAB and benefit from the government's guarantee?
PM: Well look, I'm not going to go into the detail of off-shore investments. But can I just be very clear what's covered here. It's deposits in what is called Australian Prudential Regulatory Authority authorised deposit institutions.
What does that mean in layman's language? Banks, building societies, credit unions in Australia. As well as subsidiaries of foreign banks in Australia and foreign bank branches in Australia.
MITCHELL: So is money coming into Australia from overseas to take advantage of that guarantee?
PM: Well look, I have no advice or data on that, Neil. All I can say is that the guarantee extends to $800 billion worth of Australian mums' and dads' deposits in their bank accounts, their credit unions, and in their building societies. And what I know from mums and dads across the country is that they want that guarantee to be there. We've delivered it.
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MITCHELL: Prime Minister, your government today releases some detail on the emissions trading scheme. Now, we've got an economic crisis, continued drought, business uncertainty. Will you today still pledge to introduce the scheme by 2010?
PM: Our ambition remains as I've said to you before on this program, Neil, and that is to introduce the program in 2010. The reason for it is the economic cost of inaction and delay is greater than the economic cost of action. That's been our long standing view. And, we believe it's the right course of action, not just for the environment, but for the economy.
MITCHELL: But we've talking today about how quickly the situation with the economy is moving - surely the very modelling you are releasing today on this is already out of date? It's changing by the day.
PM: Well, you know something Neil, the economic circumstances are constantly changing. They have been in the past, they will do so in the future. But those who do economic modelling factor in as many variables as possible.
The key thing is when you introduce a Carbon Pollution Reduction Scheme, which is what we are doing, it's necessary long term for the environment. Otherwise the economic impact through rising sea levels, coastal inundation, further and more intense drought, as well as the impact on tourism in the wetlands and elsewhere, is huge. And that all costs jobs.
MITCHELL: I guess nobody is really debating that any more but is now the time to do it? Is now the time when we have drought, when we have massive economic uncertainty, when we have business confusion and nervousness, when we are seeing international recession, is now the time?
PM: I suppose what I am saying to Neil is, it is important to act, both for the immediate term and for the long term. You cannot simply delay the challenges which are rolling down the railroad tracks towards us as well.
On the immediate term, what we have done in terms of stability for the financial system, you are familiar with - the guarantees on bank deposits, guarantees on bank lending so that credit continues to flow to businesses.
For the economy and growth and jobs, what you and I have been talking about, that is why we have brought in the $10.4 billion stimulus package recently, with payments to pensioners and families and the rest. But you know something? The medium term challenges of how do you lift productivity growth in the economy, how do deal with the challenge of climate change and energy efficiency and infrastructure such as Paul, your caller, referred to before, they don't go away.
They are still there. You have got to act on them.
MITCHELL: Hello Vic, go ahead please Vic.
VIC: Yes hello good morning.
PM: G'day Vic how are you?
VIC: Morning and good morning Mr Rudd. Listen I have a, just a question about, all this talk about home, you know reducing interest rates on home loans, making it easier for families or whatever. Over the last sort of, couple of years, and I am one of them, you have to use your credit card basically to live especially if you have got a significant home loan or a significant loan.
Now fortunately the rates are starting to come down and hopefully they will come down a little bit more, on the home loans. But credit card rates are around 18 - 20 per cent and no one seems to be talking about those.
MITCHELL: Yeah that is a good point, Prime Minister?
PM: Well you are absolutely right Vic. Credit cards are a huge part of the way in which many people have managed their finances in recent years. Secondly, on the numbers of credit cards, or credit card products out there, the last advice I got was there was something like 500 or 600 different types of credit card products, with interest rates ranging from something in single digits to something like 28 per cent, depending on which credit card firm that you are referring to.
In terms of the responsibility of the banks or those credit cards linked to banks to bring down their rates appropriately as well, yes that should happen. Is it happening as fast as it should? Well I think we would all like to see faster action on these questions. But can I say, out there in the credit card market and I just say this to you as someone who uses one, there is a huge variety of cards offering a huge variety of interest rates. It's really important also to shop around.
When I saw these numbers which said that rates can vary between 8 per cent and 28 per cent on cards, this is a huge difference.
MITCHELL: That would indicate there is a bit of profiteering going on though wouldn't it if there is that sort of range?
PM: Well I am concerned about the effective regulation of the credit card industry in the past and we will have more to say about that in the future, because we have been in government for nine or ten months and when I have seen this extraordinary spread of interest rates being charged on credit cards, I have become concerned.
But we will take a measured approach to this and we will have more to say about it in the future.
MITCHELL: In the future you are looking at regulating credit cards?
PM: No what I am saying Neil is that we looking at the existing regulations on credit cards. They don't exist in complete sort of free range chickens out there, but at the same time, I am concerned about the extraordinary spread of interest rates out there.
And of course consumers can choose, that is what I am urging Vic to do as well. But we are having a very close look at the extent to which this is being properly regulated.
MITCHELL: Prime Minister the estimates are 250,000 people have got money frozen in managed funds. Are you one of them?
PM: My own circumstances are these: I am a part-owner in a house with my wife. I have super and as far as my wife is concerned, she has her funds in a blind trust. And that has been the case since 2007.
MITCHELL: So you don't even know if they are in managed funds or not.
PM: It is a blind trust and it was established for the very reasons which form the basis of your question. We have no idea.
MITCHELL: Ok, the funds don't seem to happy about the proposition of being turned into banks. They say it is not a short term solution. And some of them it doesn't appeal at all. I mean it is changing their business entirely.
PM: Well let's put it into context. First of all, for mums and dads out there, and pensioners and carers, $800 billion of bank deposits, credit union deposits and building society deposits have been guaranteed by the Government. Secondly, for those financial institutions regulated by the Australian Prudential Regulatory Authority, we have also guaranteed what is called their term funding.
That means, their ability to raise funds around the world to provide continued loans to small business.
We have guaranteed $1.2 trillion worth of that. Now these are two fundamental underpinnings of stability in the financial system. But what we have sought to underpin with the Government bank deposit scheme is deposits, not to guarantee people's investments.
When you are talking about investments, investments are a different category of beast. The Treasury however, ASIC and APRA, the relevant regulators are working daily with each element of the finance industry, whether it is with managed funds, whether it is with mortgage funds, whether it is with cash management trusts et cetera, on the details of their individual industry sectors, and frankly, the details of individual firms.
There are hundreds of these out there.
MITCHELL: Okay you have been critical of excess in corporate life. Are you therefore comfortable with the chief executive of Australia Post Graham John collecting a one million dollar bonus?
PM: My position up until, in recent statements Neil, has been about executive remuneration packages in the finance sector, because the financial sector is absolutely fundamental for the stability of the entire economy.
And when you have had executive remuneration packages in financial institutions, in investment banks, like that bloke at Lehmans, frankly, and where you have got those financial packages linked to high risk behaviour, that is a systemic problem for all of us and affects mums and dads.
In the general economy beyond the finance sector, people should exercise restraint, I have said that before, but my comments most recently have focussed explicitly on what you do within the finance sector.
MITCHELL: So are you comfortable with the chief executive of Australia Post getting a one million dollar bonus given it is approved by a board that you appoint?
PM: Well hey, I haven't appointed that board.
MITCHELL: Oh well the Government appoints it.
PM: Presumably I have inherited that one from Mr Howard. If you asked me who was on the board, I couldn't tell you.
But secondly, this is an independent board appointment and they should make remuneration packages consistent on performance. I think Australia Post from what I have seen has performed well over many, many years, and performed responsibly over many, many years.
And that's in stark contrast to what I think we have seen with many merchant banks, other financial institutions around the world, where these exorbitant packages of hundreds of millions of dollars, linked to very risky behaviour which then affect the rest of the economy for the rest of us.
MITCHELL: So you support the Australia Post bonus?
PM: I support the independence of the board to make its decision.
MITCHELL: Just quickly I know you need to go away, the internet, the internet change, the filtering of the system you have promised, I see the Greens are opposing it, but one thing that surprised me, will this slow down the internet for the rest of us? If you have this filter on the providers which stops nasty stuff getting into the country, will it slow down the system?
PM: Well we support proper protections out there because as you would know there are a whole bunch of predators out there. But secondly on speed, rather than just give you a glib answer on that, can I come back to you and give you a detailed answer?
MITCHELL: I also, I understand, and I was talking to one of them earlier, you met with a number of the young people in Melbourne who are trying to run a campaign to clean up the streets, to stop the violence on the streets of Melbourne.
They are an impressive lot aren't they?
PM: Yeah they are really good kids, well they are not kids anymore, they are in their twenties. But ‘Step Back, Think' is their campaign slogan and as you know they have done so in response to one of their mates being basically king hit and rendered in a terrible state a couple of years ago.
They have a given us a couple of practical proposals to work on as a Government about education in the schools and about public education through the media. We are now working on that within the Government and I said I would get back to them by the end of the year on what we will do on those two measures that they have given us.
MICTHELL: So it is interesting because it basically a state matter but you think the federal Government might be able to help with a Melbourne problem?
PM: Well Melbourne's problem is also the nation's problem. And one of the things that, I think it was Olivia, from that group and another bloke there was Clancy, who I remembered from the overflow.
MITCHELL: And Dan.
PM: And Dan, and I can't remember the other bloke, Jonathon?
MITCHELL: Jono.
PM: Yeah, that's ok, Jonathon. A few nights ago now.
MITCHELL: A few meetings since.
PM: Yeah a few meetings since. But they made a very good case about this: what do you do in terms of boys in particular in the classrooms of Australia during the secondary school period in particular, to change their attitude to the acceptability of violence.
And what I have asked the Deputy Prime Minister Julia Gillard to do is to put this on the agenda for the Education Ministers meeting of the nation to see what can be done in terms of formal programs within the school system on this.
And secondly, public information campaigns more broadly.
MITCHELL: That's terrific. I thank you for seeing them. We are off to the US tomorrow to broadcast from there for a week including election day. Are we going to report a Barack Obama win?
PM: I was about to ask you, who is going to win?
MITCHELL: Well he is so far in front, what do you think?
PM: No you give me your opinion.
MITCHELL: I think yours is more important.
PM: Look, you know what I have learned in this business, it is not over till the fat lady sings. So let's just wait and see what happens with the election. Can I just say both these candidates who I have spoken to a couple of times now, Senator Obama and Senator McCain are fine individuals, fine human beings, Australia will be well served by the election of either.
MITCHELL: So you could work with both, or either rather.
PM: Yeah, yeah. Well not both, I think that is constitutionally problematic.
MITCHELL: I think that is right, you could work with either. Thank you very much for your time.