MITCHELL: Mr Rudd, good morning.
PM: Good morning, Neil. Thanks for having me on the program.
MITCHELL: Well, thank you for your time. Mr Rudd, President Obama's here in a couple of weeks. Will you be recommending he becomes a Companion in the Order of Australia, as did the Indonesian President?
PM: The reason we've provided this to the Indonesian President is following on a precedent which was established by my predecessor, Mr Howard. He provided an honourary Order of Australia to the former Prime Minister of Singapore. President Yudhoyono, in his previous life, helped a lot in the response to the Bali bombings in 2002 and has done a lot, also to entrench democracy in Indonesia, so we thought this was an appropriate gesture to him.
MITCHELL: Is President Obama in line for one as well?
PM: Not so far as I'm aware, Neil.
MITCHELL: Well, it's your call, isn't it?
PM: Well, it is, but we are very mindful of what President Yudhonoyo has done over a period of nearly eight or 10 years now.
I mean, the Bali bombings went very much to the hearts and lives of many, many Australians, many, many Victorians, and his role, then as Coordinating Minister for Security, in responding to that tragedy, rounding up the terrorists and dealing with them, I believe was worthy of that recognition, together with his role in entrenching democracy in this vast, populous and important neighbour of ours, so that's the reason.
MITCHELL: President Obama's got a Nobel Prize. Maybe he doesn't need one.
PM: Are you in the queue for one, Neil?
MITCHELL: No, I'm an AO.
PM: No, I mean a Nobel Prize.
MITCHELL: Oh, I doubt that very much. The insulation disaster -
PM: - You and me together.
MITCHELL: - looks like costing upwards of $500 million. Hot water systems are being thrown at country footy clubs that don't need them, schools are getting new buildings at four or five times what the buildings should cost. Do you have any idea what this bureaucratic incompetence is going to cost the taxpayers in total?
PM: Well, let's put it in a bit of context, Neil. In responding to the global economic crisis, the Government introduced a national economic stimulus strategy. Our intention was this, and it's been realised: to keep the economy going, to prevent the economy going into recession and to protect hundreds of thousands of jobs.
MITCHELL: But that's not the argument - the argument's efficiency and waste.
PM: No, no, I'm going on -
MITCHELL: - But nobody's arguing about stimulus, they're arguing about, you know, $900,000 for a school building that should have cost $200,000, what, 17 hot water systems for a country footy club that's only got 16 players.
PM: On the implementation of various programs, of course there are going to be problems which have arisen and we have acknowledged those on the way through and we are dealing with them on the way through -
MITCHELL: - What's the total cost of the waste?
PM: The one that you just mention in relation to the heat pumps, the solar pumps, that was a program, actually, which existed, I'm advised, prior to this government taking office. The loophole which was identified in the program was closed in September of last year, and as I've said, anyone abusing programs like that will be met with the full force of the law.
On the question of the schools that you just referred to, we have a huge number of projects out there across 9,500 schools. The overwhelming majority of them are going really well. It follows logically that from time to time problems are going to arise. On the details of the school that you just referred to before -
MITCHELL: - I've got three. I've got one that's cost $931,000 for a library, another that's cost $850,000 for a two-room classroom and another that's cost $200,000 to move a sewer and stormwater drain, all outlined in The Herald-Sun today. I mean, it's just massive waste.
PM: Neil, right across Australia we have 9,500 schools currently benefitting from this program - every primary school in Victoria. And many schools, for the first time, are getting purpose-built libraries, they are getting, for the first time, improved classrooms, for the first time many secondary schools are having access to state-of-the-art language centres -
MITCHELL: - Prime Minister, that's not the argument. The argument is the waste. The argument is not that they need a library and should get one, the argument is that they're paying, you're paying, we're paying, five times as much for that library as we should. It's a waste of the stimulus.
PM: Neil, in response to any problem which arises in implementation, what the Deputy Prime Minister and Education Minister, Julia, has done, is deal with each case in its circumstances to make sure that it's dealt with.
If you're going to roll out a program like this, which, for your listeners has meant a huge amount of work for tradies right across Melbourne last year when the bottom was falling out of the economy, providing jobs for sparkies, for carpenters, for bricklayers, that was the economic driver of what the Government did.
Obviously, problems will arise, from time to time, as they do with any construction project. What the Deputy Prime Minister has done or has sought to do in each case is deal with each problem as it arises.
MITCHELL: But that's my question. You put together the insulation mess, upward of $500 million, you put it together with the other waste in the schools, how much have we wasted?
PM: On the implementation of these programs, obviously in the case of the insulation program there have been real problems. That is being dealt with now by Minister Combet.
MITCHELL: How much will it cost?
PM: Well, what I'll say in response to that, Neil, is that the options we've provided for people in the case of foil insulation is to either have that insulation removed or for a switch to be installed. Now, the -
MITCHELL: - Well, that applies to foil, yeah.
PM: So the cost, therefore, that will arise from that will depend on the choices made by the individual householder. Secondly, we will also meet it within the overall funding which has been allocated for the original program. That's what I'd say in response to that.
MITCHELL: So how much is that?
PM: Well, as I said to you before, it will depend on the choice which individual households make between those two options. So, we accept responsibility for the problems with implementation, but I go back to my point -
MITCHELL: But that's only a small part of it, Prime Minister. What about the pink batts? I mean, in Sydney overnight there's another house fire linked to the insulation. We've had many in Melbourne. Are all these people going to be compensated? What is this going to cost? This is a problem unequivocally caused by your Government.
PM: Well, each of the individual circumstances has to be examined in terms of the cause of a particular problem. You know that it differs from case to case.
Of course, what the Government has said is we accept responsibility for the problems arising in the implementation of the scheme and we will deal with each of these on the way through -
MITCHELL: And do we know what it's all going to cost, all together? Do we know? Have we got a budget for it?
PM: Well, can I say in relation to the program you're talking about, what we have indicated is that we'll meet that within the framework of the budget which is already outlined. Secondly -
MITCHELL: So how much is that?
PM: Well, the program for insulation was originally announced as something in the vicinity between $3 billion and $4 billion over several years. These adjustments will be accommodated within what has already been budgeted for the program.
The other thing I'd say Neil, though, is that stepping back from the detail of each program, and you're right to be critical of any waste which occurs, I don't pretend that I'm happy with that at all, but we need to deal with each of these problems as they arise.
What I would also say, though, more broadly, to you and to your listeners, is that in dealing with these challenges we've also been dealing with the much broader challenge which was presented to our economy when every other economy, major economy, around the world went into recession and millions of people lost their jobs. We currently -
MITCHELL: Yeah but Prime Minister -
PM: We currently, Neil, have the second-lowest unemployment level of all the major advanced economies, and that's partly because government stepped in and stepped into the-
MITCHELL: But Prime Minister, we're not talking about the stimulus. We're talking about how much of the stimulus was actually wasted and could have been spent in another way, could have been spent better. Do you still consider yourself a fiscal conservative with all this?
PM: Neil, the responsible course of action in the face of a global economic crisis which is sending hundreds of thousands of people out of work is to step and to make a difference -
MITCHELL: It is not to waste money, Prime Minister, in a ridiculous way. I mean, seriously, $900,000 for a school library, which you could have built for - I could build a mansion for $900,000.
PM: Well, Neil -
MITCHELL: Well, a big house.
PM: Well, I'm not quite sure where you live Neil, so I couldn't comment on that.
On the individual circumstances concerning each school, what I know what Julia Gillard has done, the Education Minister, is intervene as each particular problem has arisen.
And can I say, if you have 10,000 schools across the country and the vast, vast, vast majority of these projects have proceeded well, can I say this is actually a great addition to the next generation of Australian's educational opportunities.
MITCHELL: At any stage will you sit down and work out how much has been wasted and tell us?
PM: Well, of course, the Auditor-General will go through all of these things appropriately with a fine tooth comb, and that is why we have a system of Government which is designed to do that.
The alternative, Neil, as recommended by our political opponents as the global economic crisis hit - do nothing, and therefore, for hundreds of thousands of your listeners to find themselves out of a job. We were not prepared to do that. We accept responsibility for any problems, however, of implementation on the way through.
MITCHELL: Well, what about, we've got a house fire overnight believed to be caused by insulation. We've got over 100 around the country. What do you say to somebody sitting in Melbourne today with insulation that's been put in their roof and they don't know whether it's dangerous or not? They don't know whether their house is going to catch fire or not? You put it there. What do you say to them?
PM: Well, in response to any concerns which any member of the public has, what Minister Combet has established is a range of services for the public which they can quickly access. Any general inquiries -
MITCHELL: Not quickly. It can take months, if not years, Prime Minister. Years. You can sit there with this stuff in your ceiling for years.
PM: Neil, can I answer your question, which you put to me, which was what can members of the public do? Firstly, they should go to a general inquiries number on 1800 808 571. If you are concerned about safety, on 131 792, and that deals with both foil and non-foil -
MITCHELL: And when will they be inspected?
PM: In terms of the schedule for doing that, the details of that are being resolved by Minister Combet -
MITCHELL: We don't know, that means, Prime Minister. That answer means we don't know, and they're sitting with, 1.1 million houses, potentially, sitting there worrying about it, and we don't know when they'll be inspected.
PM: Neil, based on the initial survey of households out there in the community, the conclusion so far reached by the officials is that 92 per cent of those houses which have had insulation installed do not have any safety-related problems -
MITCHELL: Prime Minister, why should we trust them? They're the people who put it there. These are the very people who implemented the system, and now we're supposed to trust them when they tell us it's safe.
PM: Neil, what we do is we act in response to the information that we receive based on surveys and inspections of what has occurred on the ground. We will do this step by step.
The other thing I'd say Neil, to put this into context, is that when it comes to safety-related issues for insulation in ceilings, these pre-existed the implementation of this program as well. For example -
MITCHELL: House fires have increased dramatically Prime Minister. Ceiling fires have increased dramatically.
PM: The advice that I've received -
MITCHELL: Dramatically.
PM: - is that in 2008, prior to this program being implemented, there was something in the order of 80 or 85 fire-related incidents associated with insulation. In that year, there were some 60-70,000 insulation installations occurring across the country.
What we have had since then is a very large increase in the overall insulation program nationwide. My overall point to you is there have always been a degree of -
MITCHELL: But there's also been a significant increase in ceiling fires.
PM: Well -
MITCHELL: A very significant increase. In Victoria I think it's almost tripled.
PM: Well, the information that I have related to prior to 2008 - and I go back to my overall -
MITCHELL: But that's irrelevant. These are the things that have been put in our houses since under your scheme. Are you denying that there've been ceiling fires, a massive increase in ceiling fires caused by this insulation?
PM: Neil, what I've said is that plainly in the case of the implementation of this program there have been real problems.
I'm also saying to you that prior to 2009 there were also a proportion of homes which had safety-related issues arising from insulation.
And right now, as I'm advised by officials, the rate is something like a fire-related matter is something like 1 in 10,000 homes. Well, we will deal with each of these as we should. And we'll -
MITCHELL: Do you accept that the ceiling fires have increased significantly because of the insulation mess?
PM: We are dealing with the data as it comes in Neil. And we will deal with this systematically and properly, as I'm sure you would expect -
MITCHELL: Okay.
PM: - and we will deal with it step by step, house by house. Minister Combet has put in place a program to ensure that all those who have foil insulation will have their households inspected. Secondly -
MITCHELL: We didn't even know yesterday we've had live ceilings found in Victoria. That's how much your bureaucrats are across this. Didn't even know.
PM: - Secondly Neil, that what he's indicated is that in the case of each of those households, they'll be offered the option of either having that foil removed, or a switch installed. That is the appropriate course of action.
As I've said before, the Government accepts responsibility for any problems which have arisen with the implementation of this program. That is the right thing to do. And again, I make the overall point - the Government, in seeking to implement its overall stimulus strategy, was dealing with the huge challenge represented by the global financial crisis. Obviously, problems have arisen, we accept responsibility for that as well.
MITCHELL: Do you accept, as the Treasurer said, that there may have to be spending cuts because of the amount of money wasted?
PM: In terms of the matters that you've just been raising concerning insulation, they'll be met within the already budgeted amount of money for the program. There will be no increased allocation at all.
MITCHELL: Okay, what about other things? Will there need to be spending cuts because of them?
PM: In relation to the other programs, we have no information before us which causes us to believe that we have any budget problem arising with them at all.
Remember, remember it is very easy across 10,000 school projects across the country to point to individual problems here and there. These will be dealt with on the way through.
I would simply say to you Neil, ask your local P&Cs, P&Fs, parent bodies right across the state of Victoria, what they think about having new classrooms, new school libraries, new multipurpose halls, new language centres, new science centres - I think you'll find there's a lot of positive response out there in the community. I know that there -
MITCHELL: I'll pursue that. I'll pursue that.
PM: Well -
MITCHELL: I'm happy to pursue that. Can you guarantee there will not be tax increases in the budget?
PM: Can I say Neil, our position prior to the election, and since the election, has always been this - we will not increase tax as a proportion of gross domestic product compared with that which we inherited from the previous Government in 2007 -
MITCHELL: Does that mean there won't be tax increases?
PM: As I said Neil -
MITCHELL: For some individuals? I mean, you might, you talk about an overall grab. What about for individuals, or companies?
PM: Neil, our position is economy-wide. We've said that time and time again. You and I have discussed this on air a thousand times before as well. My position hasn't changed. And we won't violate that. We certainly won't be the same high-taxing Government as the one which preceded us.
MITCHELL: Okay, you're saying the overall tax take won't change. But is there going to be a reshuffling of the way it's collected?
PM: Well Neil, obviously we're considering the recommendations for the independent tax review. But our overall discipline remains, we will not increase the overall tax burden on the Australian economy. That is the right way to approach it. And that is a principled approach.
I note my political opponent said on your program six weeks ago that he would not increase taxes. And six weeks later he fundamentally breached it -
MITCHELL: I agree. That was wrong.
PM: - with his great big new tax on everything -
MITCHELL: Okay, but you've had a bit of a -
PM: - I've been very clear on my position-
MITCHELL: - You've had a bit of a habit of taxing the rich, you're talking about the overall take here. Will you be changing the tax on the so-called rich?
PM: Well, I'll simply repeat our position Neil, and that is that prior to the budget and prior to our response to the independent review of taxation, we have nothing further to say on that, because we'll have to consider all the relevant options.
But the key thing is this - do not increase the overall burden of taxation on the Australian economy, and it won't be in aggregate terms any higher which our predecessors had.
MITCHELL: Prime Minister, just to - this might be helpful in the fire discussion - January to June 2009 in Melbourne, there were seven roof fires caused by insulation, the pre-insulation days, seven roof fires caused by various things. July to December 2009, 31 roof fires. This year, more than 15 already.
PM: Well, I'd go back to the figures that I referred to before. There were obviously fire-related events prior to 2009. In that year, I'm advised Neil, these are the figures I've been presented with, that some 60-70,000 insulation installations would occur in a given year. That has increased -
MITCHELL: Prime Minister, they've tripled in Victoria. Roof fires. Since you introduced this scheme, they've tripled.
PM: I was about to add to what I was just saying before Neil, is that in the period 2009-2010, the total number of installations across the country went from 70-80,000 of course to 1.1 million. Right now, the advice that I have is that you have a fire-related event for one in every 10,000. We will therefore monitor this very closely. And we will therefore deal with each individual circumstance as it arises.
MITCHELL: Meanwhile we live with it.
PM: Well, there are problems that we have had to deal with, and we will deal with the practicalities on the ground as we go through.
MITCHELL: I know you need to get away, one final question, and a quick one. About a month ago we talked about the kids out at Terang, under your new laws they're required to work three hours a day under the Award. They can only work an hour and a half because they're leaving school. They lost their jobs. More kids have lost their jobs. You had Work Fair Australia on to it. Nothing's changed. More kids have lost their jobs this week. What are you doing?
PM: Well, on that I'll take that question on notice Neil, I don't have those facts before me. But I will come back to it when we next speak on air.
MITCHELL: When will you release -
PM: - The reason I have to go now, by the way, is that I'm talking to the New South Wales Premier.
MITCHELL: I'm sorry. I'll let you go.
PM: That's fine.
MITCHELL: One question, when will the tax review be released, the Henry review, when will you release it?
PM: We'll sort that out in our own due season. I was asked yesterday whether it would be released before the next election. Yes, that of course will be the case. But we need to make sure we get it right.
I notice by the way that some of the Premiers, including the Victorian Premier, are saying that they can't provide a substantive response to their position on health and hospital reform until they have seen the Government's response to the Henry review or the Henry review being released. Can I just say this? There seems to be a different excuse every day as to why various state Premiers can't take a position on whether they're going to support national health and hospital reform.
And secondly, on your program, let me say this. In response to the independent review of taxation, no individual state will be worse off as far as that plan is concerned.
Therefore, let's put that to one side, get on with the business of health and hospital reform, which the good people of Australia want.
I'm seeing Premier Keneally in New South Wales right now. I'm seeing Premier Bligh in Queensland tomorrow. Premier Brumby wasn't able to see me in Victoria today. I understand he's free at 2pm on Sunday, I'll be flying to Victoria to see him on Sunday as well.
MITCHELL: OK, very final question, the Reserve Bank's accused the banks of gouging on interest rates, gouging extra money unfairly out of homeowners. Do you agree?
PM: The Reserve Bank is absolutely right. They are. And in response to that, watch very closely the impact of the new credit laws which the Government is bringing into force this year.
MITCHELL: Thank you for your time. I didn't get to ask you how you lost weight.
PM: Sorry?
MITCHELL: Everybody tells me you've lost weight. How'd you do it?
PM: I use a, you know, gym equipment, you know, I keep, you know, watching what you eat and you use the gym and all that sort of stuff.
MITCHELL: You could sell the diet to Woman's Day.
PM: Well mate, how's yours going?
MITCHELL: Not good. Not good, but I'm trying. Thank you very much for your time.
PM: Good to be with you Neil.