HOST: It's been hailed as an historic agreement, bipartisan support as Queensland signed up to the National Disability Insurance Scheme yesterday. Though what a pity a flying sandwich seemed to have stolen the headlines in the meantime.
Prime Minister Julia Gillard, good morning and welcome to 612 ABC Brisbane.
PM: Good morning.
HOST: You had a little laugh about the sandwich, are you still laughing about it this morning?
PM: It has all got incredibly silly I'd have to say, so you've got to be laughing about it.
HOST: Well let's just clear the air on it now. You are still laughing about it. The accused teen says he didn't do it. He has been suspended for 15 days. Is it a bit harsh? Some have even suggested a prime ministerial pardon might be needed today?
PM: I have had a prime ministerial pardon suggested to me. I think though that this is a matter for the principal. I wouldn't want to undermine the authority of Principal Alan Jones, the well-named Alan Jones.
I wouldn't want to undermine his authority in any way. He seemed like a fantastic bloke and a great leader of that school because Marsden State High is now a leader around the nation in vocational education and training.
As for the sandwich, I didn't see a sandwich in the air. I did see half a sandwich on the ground.
What I actually saw were screaming, over-excited, enthusiastic kids being very warm, very friendly and it was a great event.
HOST: Is that the sort of reception you do get at schools? Not the sandwiches, I mean that excitement, that level of almost hysteria?
PM: Look, you often do. Kids are very pleased to see you, very excited to see you.
Obviously they see you on TV and so it's a big thing when you turn up at their school.
I love going to schools because I always leave feeling energised. Young people are just full of so much enthusiasm and passion and I get to conduct a lot of school forums.
Even primary school kids, secondary school kids, doesn't matter what their ages are, they give you some good ideas.
HOST: And the occasional sandwich, anyway we are moving on now. The NDIS of course, which was the main reason you should've been in the headlines yesterday.
Did it feel good to have bipartisan support with Premier Campbell Newman to announce that change yesterday?
PM: It certainly did because this has been such a long time coming.
And I think when people focus on the dramatic events of the last fortnight and how much momentum has been generated out of those events, maybe there are some people in the community are thinking ‘gee this happened quickly' but it hasn't happened quickly.
People with disabilities and their families have campaigned for decades and decades and felt for many long years that no one was listening to them.
And I am really pleased that we as a Government listened to them, that we did all of the patient work that took us to this point.
But then we had to break through with agreements and it's great that we are breaking through with agreements, including here in Queensland.
A good bipartisan moment, but a great moment for the people of Queensland because per head, less is spent here on people with disabilities than any other state, and now that's going to be changed.
HOST: A couple of people have asked, they're concerned that the NDIS package might cut out at the age of 65. If so, why? Would it?
PM: We're working on arrangements for people over 65.
The simple answer is because the Commonwealth plays more of a role already in the support of people over 65.
For example, we fund residential aged care, so there's different ways of working for people over 65.
HOST: But will there be provision made for someone who is disabled and is over 65? They've had the NDIS support up until 65. Will there be arrangements? Will there be a safety net for them that they can get another wheelchair, that sort of thing?
PM: Absolutely. This is not about giving people lesser standards of support.
It's just a recognition that we are already, as a Federal Government, more responsible for the support of older Australians.
If we look at disabilities overall, we've increased funding a great deal. But we're about a 30 per cent funder of DisabilityCare now.
We are going to change that through Disability Care, through the National Disability Insurance Scheme, so we end up funding half/half with States.
The shares here are in full year of operation we would be putting in $2.1 billion and the State would be putting in $2 billion.
HOST: You mentioned it felt good to have bipartisan support with the Premier, Campbell Newman. Did you use yesterday as an opportunity to perhaps bring up Gonski? Do you think you have got more likelihood of coming to an agreement on that one?
PM: We didn't have any substantial discussions on school funding reform yesterday and school improvement, that's not what the day was for.
But I certainly will be pressing Premier Newman to sign up to this new funding arrangement.
Put at its most simple, it means $3.8 billion for schools here in Queensland. And all of that money comes with an improvement agenda so the money is used to improve kids' education. I've seen it done around the country. It can be done, it should be done.
HOST: Speaking of money, we're looking ahead to next week and the Budget and the state of the economy. The budget black hole is around $12 billion and climbing and we now face national deficits as long as the eye can see according to one economist this week.
Where has all the money gone from the resources boom?
PM: It's much more complicated than that. The resources sector is continuing to grow strongly and it is doing what we expected it to do, which is that there would be a peak investment phase when people are constructing these huge new resources projects, and then there is a peak production phase when the mines are in operation over a life cycle like 40 years.
There has been some variability in commodity prices. They came off more sharply than many were expecting. But overall resources are going well.
So you ask, well why then is there this issue with the budget. That is about less tax money coming in to the government than was expected.
It's not about expenditure; it's about less tax money coming in. And that is happening because we've got an overhang of the global financial crisis, weak global growth, and we've got a hugely strong Australian dollar putting a lot of pressure on parts of the economy; businesses making less profits, so paying less tax.
HOST: Shouldn't a well-functioning treasury department be able to take into that in their predictions of future forecasts?
PM: Treasury is a well-functioning department and full of professionals.
What is happening in our economy now - and it gets quite complicated because it's about the difference between real GDP, the work that's happening in our economy, versus nominal GDP, which is all of that work times by price.
What is happening with these economic indicators at the moment is something that has never been seen before; it's unprecedented.
So your question to me is really, should highly professional forecasters have forecast something that's never been seen before in the economy?
I think a common sense person would say ‘gee, that's a pretty rough characterisation isn't it, if they haven't seen these circumstances before'.
But what those circumstances end up meaning is the high dollar is constraining profits because it is weighing on our exporters.
It's also constraining profits because people who compete with imports are now competing with imports which are cheaper because of our high Australian dollar.
It all adds up to less company profitability, and I think people know that it's been pretty tough for business, and therefore less tax money coming into the government.
They're the circumstances we're dealing with. Any government siting in the chair now would be dealing with those circumstances.
It's not about Labor Governments, Liberal Governments, what have you. Any government would be dealing with those circumstances.
What you can control is how you respond, and we are going to respond by putting a priority on jobs and growth.
HOST: Also as part of your response to the budget has been going back on some key promises like the compensation for the carbon tax for working families and the family tax part A benefits.
Weren't there other options you could've looked at instead?
PM: Well, let me just go through that. Every dollar of assistance that we are paying to families around the country because of carbon pricing will continue to be paid.
People will get the benefit of the tax cuts, they'll get the benefit of the increased pension and family payments and they will be indexed.
The only risk to them is actually the other side of politics that wants to take them away.
HOST: But you have built up an expectation that people will have more money in their pocket down the track.
PM: What we said down the track is when the carbon price goes up then there will be the need for more assistance.
Now we know that the carbon price is not going to reach that higher level for some time to come, so the assistance for that higher carbon price will be paid at the right time when the carbon price gets there.
HOST: But between now and September, that is difficult to sell. A lot of people will just get the message about broken promises, that the Opposition will continue with, and that will be what's ringing in their ears when they go to vote.
PM: I think what will be ringing in their ears when they go to vote is we've cut tax, we've increased the tax-free threshold so you don't pay a dollar of tax until you have earned more than $18,200.
That's taken a million people out of the tax system and Mr Abbott is on the record, his Coalition is on the record, as saying they would take that away, people would pay more tax.
They're also on the record as saying that the other benefits that have flowed, increased pensions increased family payments, would also be taken away.
So the decision on 14 September is very simple; do people want to keep that money?
HOST: Jobless figures out today. What are you expecting?
PM: I don't make predictions, and I don't get the figures in advance. So we'll see the figures when they come out today.
Overwhelmingly our economy is continuing to create jobs.
There are pressures around because of the high Australian dollar, but compared with nations around the world at this time, in the global economy, we have a relatively low unemployment rate.
HOST: It's the Reserve Bank's reasoning for dropping interest rates again to take pressure off the high Australian dollar. What if that doesn't work? What if things are still flat-lining? How many more interest rates do you think could be in the future?
PM: Things aren't flat-lining. Our economy is continuing to grow.
So it's important that we understand the pressures that are here. We neither overestimate them nor underestimate them.
So we have a growing economy, we have sections of our economy under pressure from the high Australian dollar.
We have low interest rates by historic standards in this country, but compared with a number of nations around the world that effectively have interest rates at zero or a quarter of a per cent, if you've got a lot of money and you're a global investor, Australia is a good place to put it, and that is bringing money in, and that is boosting the value of the dollar up.
That is bringing pressure on, and the Reserve Bank was acutely aware of that. They said they had scope to reduce interest rates. There is further scope there should the Reserve Bank choose to use it. So that's one of the ways we can support industries like manufacturing at this time.
Another way we can do it is the plans the Government has, plans for Australian jobs working with manufacturing, working with other industries, to innovate and to make sure that we keep the jobs we've got now, and we're adding to them through innovation.
HOST: You are going to apparently make an announcement today about constitutional changes and perhaps putting a referendum to the people when they go to vote in September. What does that relate to?
PM: Yes, today I will be announcing with the Minister for Local Government Anthony Albanese that when people vote in September, they will also be asked to vote on a referendum to recognise local government in the Australian Constitution.
Local government plays an important role. Here in Queensland, right round the country, people interact with their local councils almost every day.
We work a lot with local councils. We've had more than 6,000 projects to build infrastructure that local councils need.
More than 16,000 times we've worked with local councils for Roads to Recovery, black spot funding to help with roads.
We want the role of local government recognised in the Constitution. I trust that this will also be bipartisan politics and I know it's very strongly supported by the Premier of Queensland.
HOST: What does that mean though on a practical level when local government is recognised in the Constitution? How does that play out?
PM: It's just catching up our Constitution with today's reality, which is that local government is an important area for service provision and local government is a level of government we want to have a direct relationship with as a Federal Government.
HOST: Our guest this morning is Prime Minister Julia Gillard who can't unpack her bags for very long in her role, in fact this afternoon is flying off to Papua New Guinea.
Your first visit as Prime Minister, tell us about the importance of this.
PM: PNG is an incredibly important nation to Australia. In fact PNG is the nation closest to us in geography and we are also tied by some very important history - including the history in World War II, which so many Australians want to feel the experience of by going to Kokoda and other locations within PNG.
I know Prime Minister O'Neill from PNG well. We've met on a number of occasions before. We strive to have annual exchanges between our two countries, so it's our turn to go there.
So I will be there talking about our economic relationship with PNG, our aid and development relationship with PNG, the people-to-people links, the education links between our two countries, and the arrangements that we make for visitors to move as unimpeded as possible between our two nations.
You've still got to have visas and the like, but the way that you can deal with those visas and how they can be given to people makes a difference to how easy travel is.
HOST: Speaking of leaders, coming the other way of course we're counting down until next year when Brisbane hosts the G20.
PM: You certainly are, very exciting.
HOST: Well, it's exciting on one level and also a little bit anxiety-causing on another for people who live in Brisbane wondering how it's going to transform our city in the short term as far as security measures. Will we be able to get to work, will life go on as usual.
How does something like this work in a city for that short amount of time? Can we have a normal life while the G20 is here?
PM: To be frank, inevitably there will be some changes to normal life. You can't have people like President Obama come to your city without appropriate security arrangements being made. I think people get that.
And so people will have some things that they'll have to work with and go with.
But I've been to an Australian city in the middle of hosting a huge event. I was in Perth for many days as we hosted the Commonwealth Heads of Government Meeting there.
And there was some disruption for the people of Perth, but there was actually a sense of delight and pride that they were getting to show their nation off to the world.
Many people turned out for example to see the Queen when she did an open access public event, a barbecue in a great Aussie spirit.
So I think Brisbane will bring that same spirit to the G20. There will be moments of inconvenience, but I think more than that there will be some moments of great delight as people see this beautiful city on the world stage.
HOST: Well it was on the world stage 25 years ago when we had Expo, 25 years. This was a time when as they say Brisbane really grew up. Did you actually come to Expo?
PM: No I didn't. I would have liked to have done, I'm sure it was an incredibly exciting time, but we weren't great travellers the Gillard family, so no I didn't get to Expo.
HOST: Speaking of the Gillard family, it's a big family time this weekend of course moving into Mother's Day territory. Will you be back in time to give your mum a quick phone call?
PM: I won't be able to be in Adelaide where my mother is, but I spoke to her last weekend and we had a chat about me not being able to be there for Mother's Day, so she's forgiven me in advance which is lovely, and I'll have a chat with her on Sunday.
HOST: I wonder if she has forgiven you some of the presents you've given her over the years. I was having a chat with my son last night. He's forgoing the school Mother's Day stall this year. He figures he can get better value for money and buy me a much nicer present.
And I had to pick out the other day on the internet a necklace that glows in the dark. Apparently that's what I'm getting, so that's right up there! Can you think of any gifts you've given your mum that you are sure she treasures even today?
PM: Well I don't know about treasures, but I do remember we learned pottery at primary school.
HOST: That was big in the 70s, wasn't it?
PM: I'm trying to remember whether it was the upper-end of primary school or the early years of secondary school. But I was quite young and I'd have to say despite my best efforts on the wheel, it really wasn't a circle. It wasn't symmetrical. It was a bit squished to one side.
But as mothers do, she was delighted.
HOST: She was delighted, she said it was beautiful darling, and just what I needed!
PM: She absolutely did! And it's still hanging around somewhere I'm sure.
HOST: Next time you pop in you've got to get her to bring it out.
PM: It's hopefully in the back, in the very, very dark back of the cupboard.
HOST: Prime Minister Julia Gillard, thank you for being our guest this morning here on Mornings. And good luck in PNG.
PM: Thank you.