ABC Sydney
HOST: Julia Gillard joins us from our Perth studio this morning. Good morning Prime Minister.
PM: Good morning Linda.
HOST: The miners do have a lot of concerns don't they, should you have addressed them more directly head on yesterday?
PM: There's nothing more important to the future of Australian mining than people having the right skills to work in that industry.
I spend a lot of time talking to people from mining companies and what they talk to me about is ‘can we get enough engineers, can we get enough geologists, can we get enough tradespeople for us to actually get our projects up and running?'
Now for the future, whether or not we've got a strong mining industry, whether or not we've got a strong economy, is going to be defined by what's happening in Australian schools today.
There's nothing more important to our economic future, whether it's in mining or any other industry than the quality of Australian education, and that's what I spoke to the conference about.
HOST: Sure, but the miners do want to know about what is going to be done about a high-cost environment. Of course we've got Gina Rinehart again pushing that view that it's a high-cost environment, you need to act to make things a little easier for them.
Is there something you'll do for them, for example Gina Rinehart's idea about this zone across the top of Australia with a low-tax environment for miners?
PM: No we won't, and we have a different view from Ms Rinehart about whether or not the mineral bounty in our natural landscape should be shared with all Australians or kept for the profits of a few.
She's a well-known opponent of the Minerals Resource Rent Tax, I disagree with her. I believe our natural wealth should be shared.
She's also a well-known opponent of carbon pricing. Of course I disagree with her; I think we should be cutting carbon pollution.
And I would point to the facts here too Linda. We've got $500 billion of mining investment in the pipeline. More than $200 billion of it at an advanced stage.
We've seen billions of dollars of new projects announced by the mining industry since they knew that there was going to be a Minerals Resource Rent Tax, and since they knew that there was going to be carbon pricing.
Indeed business investment has gone up 20 per cent since we announced carbon pricing.
So let's be clear about the facts here. Strong investment pipeline, we are not going to have wage rates the same as wage rates in Africa, we're not going to compete on those kind of cost differentials.
We're going to compete on our great mineral deposits, our application of technology and high skills to the task. We mine differently than in other countries.
We're a world leader in some of the remote technology used, and keeping all of that going is going to require higher and higher skill levels and that's why I spoke about schooling yesterday to the miners.
HOST: But still at the same time we're seeing companies putting the brakes on planned expansion of mines, and of course Fortescue is just the latest, and they are concerned about the falling prices that they're getting for iron ore and about the high-cost operating environment, particularly the Aussie dollar obviously is a problem too.
You would concede, would you not, that they are operating under increasing constraints.
PM: There are some challenges out there, so let's talk about the real challenges. We've got still-continuing economic uncertainty out of Europe and particularly the eurozone.
We've got a sluggish US economy. We've seen some moderation in Chinese growth rates, and we've seen some moderation in commodity prices.
We've said very publicly that we think we are beyond the commodity price boom, but we are still to see the peak of the investment boom and of course we are still to see the peak of the production boom, because you only get production happening after all of the investment's gone in and the construction's happened.
So this is going to be a long-lived resources boom for our nation. The high Australian dollar is as a result of all of that economic activity. We've got a strongly growing economy.
Many people around the world talk of us as a safe haven currency that is keeping the Australian dollar high. That does put pressure on industries like manufacturing and tourism, and we are working with those industries because I want them to have a strong future as part of a well-rounded Australian economy.
We're getting the settings in place for us to be the big winners out of the century of growth we are seeing in Asia.
I view the resources boom as a down payment on all of that growth.
We'll see spectacular growth in demand for food, we'll see spectacular growth in demand for the high-end services - legal services, high-end manufactured goods - that's the future for our country and that's why we're doing things now like investing in infrastructure, the NBN, and driving skill levels up.
HOST: The education policy - you had a conversation last night I think with the New South Wales Premier - is the New South Wales Government going to be onside with your Gonski reform?
PM: I had a conversation with Premier O'Farrell actually on Monday, and he indicated that he is certainly prepared to talk through our school improvement plan and our desire to put a child's needs at the centre of the school funding system.
I met yesterday in Perth where I am now with Premier Barnett, and he also indicated he has an open mind - to use his expression - an open mind, and is prepared to talk further.
So I will be in the coming period talking to each Premier and Chief Minister so we can pursue these discussions. It requires all levels of government to take a step forward, and it requires us to work strongly together on a school improvement plan.
Understandably people are talking about the money.
I get why people are doing that, but the money matters if it is buying school improvement, and that's why my focus is going to be on lifting teacher quality, lifting the standards of people who go into teaching, empowering school principals, getting more information about what's going on; the combination of things we know has worked in schools.
HOST: Just on teachers - and the Prime Minister Julia Gillard is on the line from Perth - with us this morning, on teachers, do you think we have a strong enough culture of valuing teaching.?
I mean, we pay them an average of $47,000 - it seems to indicate that we really do believe in that old adage, ‘if you can't do it, teach'. It's a little bit of a downcast profession isn't it?
PM: I believe we've got to value teachers more, and I think that there's a series of things we need to do to show them that we value them more.
Part of addressing the issue of how we resource schools, talking about school improvement, putting this at the forefront of the nation's life, I've called it a national crusade, but whatever terminology you want to use I want every Australian focused on what's happening in Australia's schools.
And if we harness that kind of national culture, then increasingly we will view teachers as the most valued profession in our nation doing the most important work to make us a strong and fair nation in the future.
HOST: If you pay teachers more, Prime Minister, doesn't that mean - isn't that a good way of getting some of the best and the brightest into the job?
PM: Linda we've already started. We have a program for providing rewards for great teachers. We've got a great program - it's operated in New South Wales in partnership with the Government of New South Wales to pay the best teachers more to go to the schools that need them the most, the most disadvantaged schools.
So I do agree great teaching should be rewarded, and our national conversation and national spirit should be one of valuing teachers.
HOST: You've talked about having higher entry scores, I think, as one way of getting the best and brightest into teaching. But the Universities Australia Chief Executive says this morning that that's not the best way to do it, that raising salaries is a better way.
Do you agree with that?
PM: What we want to do is see people who are highly proficient themselves in literacy and numeracy go into teaching. Teachers are going to go into classrooms and teach kids to read and write and do maths.
If they're struggling with those things themselves, then it's not possible for them to teach them and teach them with the kind of passion that then sparks the light in a kid's eye and that child then goes ‘Gee, I really love maths' or ‘I really love reading'.
So we are going to insist on higher literacy and numeracy standards for people who go into teaching.
We also have the Teach for Australia program in operation now, which has been one way of getting the best and brightest graduates out into some of the most disadvantaged schools around the country.
We also want to support new teachers more. The evidence tells us that a lot of people who start with real enthusiasm for the job drift away from teaching over five or six years.
We believe that's about getting them more practical experience when they're training, and also more support in those early years of teaching when they might be struggling with the reality of managing a class and dealing with one disruptive child who's making it really hard for the rest of the kids to learn, or dealing with the challenges that face teachers now like cyber-bullying.
HOST: You need to find the money for all this and of course that's been a lot of the discussion this week after your announcement that you would go with the Gonski proposals largely.
What will you do to find the money? What are you targets for cutting?
PM: We'll take the same kind of approach as we have in earlier budgets that has seen us find $100 billion of savings and redirect that money to things that we think are more important for the nation's future. And it hasn't been easy.
You know, when we've pursued measures like means testing the private health insurance rebate, when we've done things like get rid of the dependent spouse tax offset, plenty of radio interviews like this one Linda have gone fairly combatively because people have been angry and upset, but they've been the right decisions for the nation's future.
We'll take that kind of spirit to our future budgets.
HOST: Your budget will be looking all the worse for wear won't it, if iron ore prices continue to slump and mining companies continue to cut back on operations. Just how tight-
PM: Once again Linda, let's go to the reality. Yes, Fortescue has made an announcement yesterday, but the mining sector, the resources sector is far bigger than any one company.
I remind you again - $500 billion of investment in the pipeline, more than $200 billion of that at an advanced stage, so we will continue to see strong investment in mining.
In terms of the Government's revenue streams, our revenue streams are about those companies that are in production now and are at the most profitable phase of being in production.
HOST: A quick Sydney question if I may Prime Minister. The O'Farrell Government has put out a draft transport plan for a city that is screaming for solution, I think everybody would agree. No money attached to it at this point.
Should this be - the future transport planning in our cities - more a collective federal enterprise, than just state governments who after all don't have huge sources of revenue to fund this sort of infrastructure?
PM: We've made record investments in infrastructure, I mean we're very focused on getting cities new infrastructure developments.
We've been the first government since federation, for example, to be prepared from the federal level to invest in public transport and new public transport routes - incredibly important to the shape of our cities and to taking pressure off the roads system.
HOST: Sure but in the New South Wales context, Prime Minister, the argument over the funding of the Pacific Highway, the argument over the second airport-
PM: We've been record funders of the Pacific Highway, we've done more - much, much more - in our period in government since 2007 than was ever done under the earlier government, and there are as we speak Linda people out there working on the Pacific Highway because we've made the funds available.
HOST: I'm just seeing also Prime Minister that you've ditched the talks to close down high-emitting coal-fired power plants. What's happened there?
PM: Minister Ferguson will deal with this during the course of today.
HOST: What's happened with the coal-fired power plants? Are you unable to fund sufficiently, what's the context?
PM: I'm not in a position Linda to deal with the details of it, it needs to wait for Minister Ferguson's announcement.
HOST: The Prime Minister's with us. Just obviously we're heading into election zone broadly speaking, we're a year out roughly on the timetable, and we see news this morning in the Fairfax press of the formation of an election policy committee.
Will you run a full term, Prime Minister?
PM: Yes we will.
HOST: That's an absolute commitment regardless of -
PM: Yes. There are some days where you wake up to the newspapers and you think to yourself ‘where on earth did all that come from?'
I know that there's some early election speculation in some of today's newspapers. There is no need for such election speculation.
I have always said that the Government will run full term. Lots of journalists along the way have disagreed with me and said that's not possible and a minority parliament won't work and she'll never get legislation through, and on and on its gone.
And here we are, two years later, more than 300 bills passed, and guess what Linda, I'm still saying the Government's going to run full term, because we will.
HOST: Prime Minister, enjoy my home town of Perth. Thanks for joining us today.
PM: Thank you.
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