BARTLETT:
And we're joined by Prime Minister John Howard from the Canberra studios. Prime Minister, good morning.
PRIME MINISTER:
Good morning Liam.
BARTLETT:
Nice to talk to you, thanks for making yourself available to our listeners.
PRIME MINISTER:
Thank you. There's a bit of echo still.
BARTLETT:
Little bit of echo? Well we'll work on that as we go, hopefully it will disappear. Look you've been copping flack this morning around the country for the surprise package in the Budget, the tax cuts, that many are saying is not enough.
PRIME MINISTER:
Well tax cuts are never enough, I understand that. But are people who are criticising them seriously saying it would be better if we had not given them? I don't think they're saying that and I don't think that is reasonable. We worked out what we needed to spend on necessary areas, we wanted to keep the Budget in surplus because it's good economic management to do so and the Treasurer and I decided that we should return what was left over after providing for the surplus and the necessary spending to the people who really own the money and that's the Australian taxpayer. So I understand that people would like more, we would have liked to have given more, if we hadn't of had a drought, if we hadn't have had to fund the war in Iraq, if we hadn't had a number of additional things, maybe the tax cuts would have been larger but they do represent $2.4 billion a year, $10 billion over the period of the forward estimates.
BARTLETT:
But that's not really a lot considering the extra money you're getting, especially out of the taxpayers.
PRIME MINISTER:
Yes, but Liam you have to look at what you've got left over after you've made adequate provision. I mean people who are asking for larger tax cuts are really saying that we should spend less in the areas that we're spending in or that we should go into deficit. Now we're not going into deficit because we think that is irresponsible, it will push up inflation, it will push up interest rates. We're not doing that and that's a fundamental of our economic approach. So people are now saying the tax cuts should have been larger, they're really saying that we should not have spent money in some of the areas where we have spent money. Well maybe we could be told what the areas that our critics such as the Opposition, I mean the Opposition is saying it's not enough having asked for tax relief, well would the Opposition please outline the areas where we should spend less. Are they saying we should spend less on Defence? Less on security? Less on health? Less on education?
BARTLETT:
Isn't the criticism more about the cynicism of the move, or the possible cynicism. Well let's put it this way, the average worker in Australia as a result of these tax cuts picks up around about an extra $4 a week. Now that's basically what? A cup of coffee and a scone...
PRIME MINISTER:
You say it is cynical so therefore what you're really saying is that is unless it's a huge tax, it's $15 or $20 a week, we should never give a tax cut. I mean it's all very well for you to say it is cynical, I would have thought it's the opposite of cynical actually to provide...
BARTLETT:
... you don't think it's political tokenism?
PRIME MINISTER:
Well I mean in other words no matter what we do in this area we're wrong? If we hang on to the money, we're hoarding the people's money, if we provide a modest tax cut, well that's not enough so therefore it's cynical, I mean really.
BARTLETT:
Well I'm not selling the Budget Prime Minister.
PRIME MINISTER:
No but I am answering your criticism and I got to sell the Budget, I accept that, of course I accept that and I am reacting, quite properly I'm reacting and responding to what people have said by my responses. I mean I don't mind, (inaudible) come on your programme I'm perfectly happy to deal with the criticisms that you're passing on, I don't object to that at all. I'm just trying to explain in very direct language that the criticism of cynical is unfair, I mean we're halfway through our term, it's not a Budget bought down on the eve of an election, it's halfway through our term, some people are surprised. You know why a lot of the media are having a go at us over this because they didn't predict and it surprised them and when you're surprised in the media you've got to sort of find an angle and the truth is there's no angle to this...
BARTLETT:
Well I'm not asking you the question because I'm surprised, I'm asking you the question because...
PRIME MINISTER:
Most of your mates here are.
BARTLETT:
I'm asking you the question to try to get to the nub of the reason behind it, the thinking behind it because...
PRIME MINISTER:
I have already told you the reasoning behind it.
BARTLETT:
Because the whole point of the question about tokenism is that you and your Treasurer have made a lot since it was handed down last night about giving something about, that's the theme of your sell, giving something back. Now if you really wanted to do something substantial and appear to be serious why don't you take that substantive link and address bracket creep and index tax thresholds or something like that if you want to give something back.
PRIME MINISTER:
Can I repeat the reasoning, the process behind it? The process behind it is we worked out what we had to spend money on, we're going to spend more money on Defence, more money on security, we had to make the big provision for drought, we've put a billion dollars over four years extra into Medicare, we're putting extra money into higher education. Having done all of that and provided for an adequate surplus, not a big surplus and an adequate, I mean it's only $2 billion in a huge budget but we think that is sufficient cushion is to keep us out of deficit. But having decided all of those things we then worked out that we had an opportunity of providing a modest tax cut and I mean that is the process, I don't think that is cynical, I think that's just being very transparent and very open with people. Now you ask me about bracket creep, this will address part of the bracket creep issue, it doesn't address it all but we didn't have the resources to address all of that but I make the point that since the introduction of the new tax system three years ago, because so many taxpayers lie between $20,000 and $50,000 a year, fewer people are affected by bracket creep. I mean if you have a lot of steps in the tax rates covering most taxpayers then bracket creep is a bigger problem than if, as it (inaudible) now, you have really a $30,000 area where people's incomes can rise without them paying a higher tax rate.
BARTLETT:
Well this morning there's a tax analyst...
PRIME MINISTER:
Still getting that echo incidentally.
BARTLETT:
I'm sorry about that, there's not much I can do.
PRIME MINISTER:
No, sorry, it's okay.
BARTLETT:
I noticed you haven't given the ABC any extra money, maybe if we have a few more funds we could fix that.
PRIME MINISTER:
Oh yeah, come on. We had, no, no you raised it, you can't get away with raising something like that and then skipping onto something else. We promised in the last election campaign that we would maintain real funding to the ABC and we have kept that promise. So you know I don't want to say any more about it then that but you raised it.
BARTLETT:
Alright. Just coming back to bracket creep there was a tax analyst this morning saying that within six years, the estimate is that within six years any person currently with average earnings of $46,000 will pay the highest marginal rate of 48.5 cents.
PRIME MINISTER:
Well that is Liam, if the scales were not adjusted.
BARTLETT:
(inaudible) you have got something...
PRIME MINISTER:
No, it's no question of having anything up your sleeve I'm just making an observation. Look I'm not making presumptions about who's going to be making decisions in six years time, that's up to the Australian people, we've got several elections between now and then. But I make the observation...
BARTLETT:
You might still be there.
PRIME MINISTER:
Well let's just put that aside for a moment, I'm trying to answer your question. I make the observation that governments will adjust the tax brackets and our philosophy is, really as I outlined it a moment ago, you put money aside for necessary spending, you make sure you've got an adequate surplus and anything that is left over has to be returned to the people who own it. Now that is our philosophy and it'll be the philosophy of the government on this occasion and it'll be the philosophy that will govern our future budget because I'm not somebody who believes that if you've got a bit of money left over you should find something new to spend it on, I think that's the wrong way to go, I think if you've got something left over you should give it back to the people who gave it to you in the first place and that's your listeners. I mean I'd like to give more back but we didn't have more consistent with the other obligations we had. So there's really nothing cynical, it's very transparent, it's halfway through our term. It's just a case of we had something over and we returned it to the people who own it.
BARTLETT:
Do you expect this to be your Treasurer's final Budget?
PRIME MINISTER:
Oh look I'm not going to get into game, that's about my future and I'm not saying anything about that beyond what I've said in the past. All I can is that he's done an extremely good job as Treasurer and we've worked together very closely and very effectively.
BARTLETT:
You said on AM this morning Prime Minister there was no reason why this Government should go to the polls early. Now what if the Opposition could present you with a reason? Say for instance they block your education reform package in the Senate, which they're already making noises about, of course there's also the Medicare package. I mean are you prepared to go to the wall and force a double dissolution over either of those measures?
PRIME MINISTER:
Well I hope the Senate passes both measures, I really do and I'm not going to hypothesise beyond that. The point I was making on AM and I repeat it on your programme is that the public expects a government to serve out its full term and unless there's a very good reason for going early, a very good reason in the national interest as distinct from the private political interest of the government the public does get cynical and they'd be entitled to get cynical if we had an election for no good reason. Now no Prime Minister can put his hand on his heart and say there will never be circumstances in which I don't have an early election but all I can say to you at the moment is I don't want an early election, I'm not contemplating one and as far as the Senate is concerned I hope it adopts a constructive attitude towards our health and education reforms.
BARTLETT:
But how far are you prepared to back yourself in?
PRIME MINISTER:
Well I'm just not going to start speculating on that at the present time, I mean to start talking about what we might do if the Senate blocks our legislation when it hasn't even been put up is getting altogether too premature. Let's see what the Senate does when we put the legislation up and let's see what the independents and the minor parties end up doing.
BARTLETT:
It hasn't been too premature for them to say they don't intend to let it pass.
PRIME MINISTER:
Well I don't think all of them have been quite as adamant as that. That's not what I've heard.
BARTLETT:
The education package, HECS fees could increase by up to 30 per cent, universities are setting their own fees. Are we creating an enclave for the elite?
PRIME MINISTER:
Certainly not because there are still the provision of the HECS funded places, and there's increased money for that. Clearly in some cases there will be a greater student contribution but the idea that that's going to create an enclave for the elite, we tried in the Whitlam years and really until the late 1980s we tried this idea of kidding people that you could have totally free university education. And it didn't work.
BARTLETT:
Why didn't it work?
PRIME MINISTER:
Well it didn't result in a significant, a really significant change in the socio-economic enjoyment of a university education.
BARTLETT:
Did you enjoy a free university education?
PRIME MINISTER:
No, not entirely no. I attended university at a time when fees were charged unless you had a Commonwealth scholarship. I mean the first year I was at university my mother as it was, my widowed mother paid my university fees in the first year and then I was fortunate enough to pick up a Commonwealth scholarship for the second, third and fourth years and like people for time in memorial I had a part time job in the first couple of years that I was at university when I wasn't articled and then I got a job as an articled clerk at a pittance but very good training. I mean most university students now have part time jobs, and I think we've got to remember also that 70 per cent of boys and girls who leave school don't immediately go into university. Many of them don't want a university education, they have to pay taxes to fund the provision of university places for those who do go to university and I think it's only fair that people who get a university education and then earn considerably higher incomes as a result of that training, make a contribution. Can I make the point to your listeners...
BARTLETT:
[inaudible]
PRIME MINISTER:
But what is unfair about that - if you are advantaged by something which is largely funded by the State, why shouldn't you make some contribution? What people lose sight of is that even after the contributions, the HECS contributions, the taxpayer is still funding about 70 per cent of the cost of educating somebody at a university.
BARTLETT:
But presumably using your logic, those people go on to become the highest taxpayers. So is that a clever thing for the country to do?
PRIME MINISTER:
I think it's a very clever thing to have a university system where there is some contribution made by the person who enjoys the income benefits of that education. I think that's not only logical, I think it's fair. You've not only got to be fair to that person, you've got to be fair to all the people in the community who pay their taxes and who don't go to university.
BARTLETT:
14 to 9. We're talking with the Prime Minister from Canberra. And Prime Minister, let's take some calls. Matthew is on the line. Hello Matthew.
CALLER:
Hi.
BARTLETT:
Matthew, the Prime Minister is listening.
CALLER:
Prime Minister, I have a question about the surplus. What I want to know is that given that the States are all having to increase their taxes to pay for principally their health budget because of the lack of funding coming through from the Commonwealth, and then obviously [inaudible] as is the fight against salinity and as Liam mentioned, the ABC, and welfare could use a bit more money. How can you justify having a surplus, let alone actually giving tax cuts?
PRIME MINISTER:
Well Matthew, some of your facts are quite wrong. The States are not getting less money for health, they're getting more.
CALLER:
But they still need more than they're getting.
PRIME MINISTER:
Yes, but hang on. You said they had to increase taxes to provide more health spending because they're getting less money from the Commonwealth. Now that statement is just wrong. They're not getting less money from the Commonwealth. If you look at the funding of public hospitals, our contribution to the funding of public hospitals over the last five years has risen, and in the case of a number of States it has fallen. The new public hospital funding arrangement that we have announced, which will operate from the 1st of July this year, involves a 17 per cent real increase in Federal Government support for public hospitals around Australia. We're guaranteeing the States a real increase, provided they match our increase with their increase. They run the hospitals. We fund them more than they do, although they run them, and we're offering them even more in the future provided they match our increase. So this canard that in some way the States have got to put up their charges because we're cutting money, is just not correct in relation to hospitals. It really isn't. Now, as to the other argument - how can we justify having a tax cut when you argue that we should be spending money on other things? Well, that's a more legitimate debate. I don't agree with your assertion. I think we have made a proper provision in the welfare area, but people can always argue, and it's part of the I guess philosophical and political debate that goes on in this country, people can always argue that you should spend more and tax more. I would prefer to spend what is necessary and tax less. But I respect the fact that you may have a different view on that. But please don't misrepresent our position on hospital funding for the states. I know the state governments say that, but I've given you the figures. You couldn't be more wrong on that score.
BARTLETT:
Matthew thanks for calling. Hello Robert.
CALLER:
Hi. Mr Howard, I just wanted to ask you a question about higher education. The way the system currently works is that high school students compete academically for entry to university, but that 25 per cent of places can be reserved for upfront fee payers who don't need to achieve the same academic standards.
PRIME MINISTER:
Well when you say reserved...
CALLER:
Can I finish my question please?
PRIME MINISTER:
Yes, sure.
CALLER:
Your Government proposes to allow half of the university places to go to upfront fee paying students. Aren't you reforming the system in favour of the dumb rich and putting up a barrier to poorer students?
PRIME MINISTER:
No, we're not. That would be a legitimate criticism if we were cutting the number of funded places, but we're not. We're increasing the base funding levels for the universities. But we're increasing their capacity to have additional students if they're full fee paying, but we're not cutting the places that are going to be funded by the Government.
CALLER:
But you're increasing HECS by up to 30 per cent for the students who do come from poorer backgrounds and you're allowing universities...
PRIME MINISTER:
Well, when you say poorer...
CALLER:
... from wealthy backgrounds.
PRIME MINISTER:
When you say... not all of the students, it's not right to say that everybody who gets a HECS funded place comes from a poor background.
CALLER:
No that's true, but...
PRIME MINISTER:
Well I can assure you that that is not right.
CALLER:
[inaudible] paying upfront fees, are they?
PRIME MINISTER:
No, but can I just go back. I mean, the basis of your question is actually wrong. The people who get HECS - that is not in any way means tested.
CALLER:
[inaudible]
PRIME MINISTER:
But you just said, you just implied that everybody who was HECS funded came from a poor background.
CALLER:
Not at all.
PRIME MINISTER:
Well I'm glad.
CALLER:
Students now have the option of paying upfront and not meeting the same academic standards.
PRIME MINISTER:
Yes, but can I... that is also completely ignoring the fact that under our arrangement if you want to be a full fee paying student, you'll be able to take out a loan to cover the fees, and that will be repayable on very reasonable and very generous terms. So the proposition that the only people who will opt for a publicly funded place if they can't get a HECS guaranteed place will not all be wealthy people... there will be quite a lot of people who will say look, I want to go to university, I just missed out on the entrance score, I'll pay the full fees and I'll borrow the money and when I'm in a job I'll pay it back. I think there will be a hell of a lot of people who are going to do that.
BARTLETT:
You want to be on a good job when you finish university to pay that loan back Prime Minister.
PRIME MINISTER:
Look, HECS you don't have to start paying back until you get to $30,000.
CALLER:
[inaudible] loan scheme?
PRIME MINISTER:
Well the loan scheme is going to be quite reasonable in that you won't have to be a hugely wealthy person in order to pay it back.
BARTLETT:
But it's CPI plus what? Is it 3.5% or 3%?
PRIME MINISTER:
3.5%. Well that's not unreasonable.
BARTLETT:
So it could be about 6%.
PRIME MINISTER:
Well it's a real rate of 3.5. I mean, interest rates are quite low now, unlike what they were a few years ago.
BARTLETT:
Robert, thanks for calling this morning. Hello Ed.
CALLER:
How are you going? Prime Minister, I just want to say, like Peter Costello said, that Labor's debt had been retired by $60 billion. Now my question is, what assets in total dollars have been sold off by your Government to acquire this?
PRIME MINISTER:
Well Ed, I don't have the exact figures on that. Obviously the sale of part of Telstra made a contribution to that debt retirement. It would have been contributed to from a variety of sources.
CALLER:
But you must have some sort of figure like, you know, like [inaudible]
PRIME MINISTER:
Well Ed I could go away and look up the figures, but I'm not denying that the sale of Telstra made a contribution - part of Telstra - made a contribution to the debt retirement. But as to what the precise figure is, I don't have that in my head. I'd have to go away and look it up.
CALLER:
Would it be somewhere around about $50 billion?
PRIME MINISTER:
I don't have the figure with me.
BARTLETT:
Alright.
PRIME MINISTER:
You might be able to tell me, but I don't have the figure with me.
BARTLETT:
Do you know the answer Ed, or is it...
CALLER:
No, no, no. But...
PRIME MINISTER:
Well I don't... look I could find it out if you leave your name and address with the station, I'll write you a letter giving you the figure. I'm not trying to avoid it Ed, I just don't pretend to carry every single figure that I might be asked for around in my head. I'm sorry. I plead guilty to that.
BARTLETT:
Fair enough.
CALLER:
[inaudible] the Treasurer, it was a pretty wild statement to make. Like when he can't back up...
PRIME MINISTER:
There's nothing wild about it. I mean, the statement he made was completely backed up. He said $66 billion had been retired. Now that... I mean, you're not contesting that. That was a statement of fact. It was the truth. And selling assets is not something that only this Government has done. The former Government sold the Commonwealth Bank - remember? And so let's, you know, let's be fair.
BARTLETT:
Ed, thanks for your call this morning. Hello Brian.
CALLER:
Yeah, good morning.
BARTLETT:
Morning.
CALLER:
Question for the Prime Minister. Do you ever get sick and tired of people who criticise but do not provide solutions?
PRIME MINISTER:
On occasions. I accept that it's part of the territory, but on occasions I think oppositions in particular and some others could be a little more constructive and say, well we don't agree with this, and if we were in government we would do the following. Now, the tax cuts were a good example of it. Of course, I would have liked them to have been more. But look, I accept that it goes with the territory that people will criticise without offering alternative solutions, so I'll continue to exercise total self-control on that subject.
BARTLETT:
Are you a member of the Liberal Party Brian?
CALLER:
Certainly not.
BARTLETT:
Thanks for your call this morning. Hello Margaret.
CALLER:
Hello.
BARTLETT:
Go ahead Margaret.
CALLER:
Prime Minister, a question for you. The Australian Institute of Sport - young people attending those, will they also have to take out loans or be subject to HECS? Because it's a type of university really, isn't it?
PRIME MINISTER:
That's a good question. I'll have to let you know. I don't know. But it's a good question.
BARTLETT:
It was a good question.
PRIME MINISTER:
Yes, and a fair question. If you leave your name and address, I'll find out and I'll let you know. I don't know the answer to that. Congratulations. I know you're not ... it's a fair question. I just don't know the answer.
CALLER:
I really do think that they quite often go on to earn much more money than young science students.
PRIME MINISTER:
I agree. I understand the point. I mean, it's not a university in that sense and I think probably the answer is that I'll find out for you. I think it's probably no, but I'll just find out for you.
CALLER:
Okay.
BARTLETT:
So the question is will people who attend the sports institute have to pay more in [inaudible]
PRIME MINISTER:
It's not a tertiary institution or education institution in the same category as a university, and probably the answer is no, but I will find out for the lady.
BARTLETT:
Okay, we'll come back to you on that one.
PRIME MINISTER:
It's a good question. I don't think they're included, but I'd better make sure before saying definitely.
BARTLETT:
Margaret, thank you.
CALLER:
Thank you.
BARTLETT:
Prime Minister, can I ask you something. A lot has been said about this Governor General situation. Can you clear something up for us this morning?
PRIME MINISTER:
I'll try.
BARTLETT:
Why do you continue to support someone who has been found to protect a self-confessed paedophile?
PRIME MINISTER:
Well, in relation to the description you have used, I mean what he... I think the reference of the language you used may not completely accurately describe... I'm not saying you're being misleading in what occurred. My position in relation to his future I stated last Friday, sorry last Sunday. I said that he would stand aside while these allegations in the Victorian Supreme Court were dealt with and it was only after they had been dealt with that he could give proper consideration to his longer-term tenure of the office. And he has told me very plainly that in making that decision, he will have regard above everything else, to the dignity and the standing of the office. Now, I think that is a fair and accurate statement of my position and is an accurate statement of his position, and I don't think I can usefully add anything to it.
BARTLETT:
That case aside, I mean when you saw the details of that church inquiry and you read the words - the untenable, the unsatisfactory - when you read the detail, an inquiry from his own organisation, previous organisation, talking about how he had left...
PRIME MINISTER:
It was an inquiry by two people appointed by the Archdiocese of Brisbane.
BARTLETT:
But the facts are not in dispute, as I understand it. Correct me if I'm wrong.
PRIME MINISTER:
No, no, some of the facts are in dispute.
BARTLETT:
But not the fact that a man [inaudible]. This fact is what I'm talking about.
PRIME MINISTER:
I understand as I have read the relevant section of the report, so I mean...
BARTLETT:
[inaudible] confesses to him to abusing a child, to being a paedophile, and he allows him to continue in his job. Do you think anyone anywhere deserves to be in a position of authority, regardless of whether he's Governor General or head of the local water authority, if he has engaged in that sort of conduct?
PRIME MINISTER:
Well he's not engaged in any conduct himself. I mean, you have to be very careful.
BARTLETT:
No, I just spelled it out for you. I'm asking do you think that's acceptable?
PRIME MINISTER:
Well I think the Governor General made a very serious error of judgement. I do. And the question of his longer-term tenure of the office, I dealt with on Sunday and I don't have anything to add to that.
BARTLETT:
Prime Minister, thank you very much for joining us this morning. I know you've got a busy media schedule. We appreciate you talking to our listeners around the State.
PRIME MINISTER:
Thank you.
[ends] 14 May 2003
TRANSCRIPT OF THE PRIME MINISTER THE HON JOHN HOWARD MP INTERVIEW WITH LIAM BARTLETT, RADIO 6WF, PERTH
Subjects: Federal Budget
E&OE.................................................................................................
BARTLETT:
And we're joined by Prime Minister John Howard from the Canberra studios. Prime Minister, good morning.
PRIME MINISTER:
Good morning Liam.
BARTLETT:
Nice to talk to you, thanks for making yourself available to our listeners.
PRIME MINISTER:
Thank you. There's a bit of echo still.
BARTLETT:
Little bit of echo? Well we'll work on that as we go, hopefully it will disappear. Look you've been copping flack this morning around the country for the surprise package in the Budget, the tax cuts, that many are saying is not enough.
PRIME MINISTER:
Well tax cuts are never enough, I understand that. But are people who are criticising them seriously saying it would be better if we had not given them? I don't think they're saying that and I don't think that is reasonable. We worked out what we needed to spend on necessary areas, we wanted to keep the Budget in surplus because it's good economic management to do so and the Treasurer and I decided that we should return what was left over after providing for the surplus and the necessary spending to the people who really own the money and that's the Australian taxpayer. So I understand that people would like more, we would have liked to have given more, if we hadn't of had a drought, if we hadn't have had to fund the war in Iraq, if we hadn't had a number of additional things, maybe the tax cuts would have been larger but they do represent $2.4 billion a year, $10 billion over the period of the forward estimates.
BARTLETT:
But that's not really a lot considering the extra money you're getting, especially out of the taxpayers.
PRIME MINISTER:
Yes, but Liam you have to look at what you've got left over after you've made adequate provision. I mean people who are asking for larger tax cuts are really saying that we should spend less in the areas that we're spending in or that we should go into deficit. Now we're not going into deficit because we think that is irresponsible, it will push up inflation, it will push up interest rates. We're not doing that and that's a fundamental of our economic approach. So people are now saying the tax cuts should have been larger, they're really saying that we should not have spent money in some of the areas where we have spent money. Well maybe we could be told what the areas that our critics such as the Opposition, I mean the Opposition is saying it's not enough having asked for tax relief, well would the Opposition please outline the areas where we should spend less. Are they saying we should spend less on Defence? Less on security? Less on health? Less on education?
BARTLETT:
Isn't the criticism more about the cynicism of the move, or the possible cynicism. Well let's put it this way, the average worker in Australia as a result of these tax cuts picks up around about an extra $4 a week. Now that's basically what? A cup of coffee and a scone...
PRIME MINISTER:
You say it is cynical so therefore what you're really saying is that is unless it's a huge tax, it's $15 or $20 a week, we should never give a tax cut. I mean it's all very well for you to say it is cynical, I would have thought it's the opposite of cynical actually to provide...
BARTLETT:
... you don't think it's political tokenism?
PRIME MINISTER:
Well I mean in other words no matter what we do in this area we're wrong? If we hang on to the money, we're hoarding the people's money, if we provide a modest tax cut, well that's not enough so therefore it's cynical, I mean really.
BARTLETT:
Well I'm not selling the Budget Prime Minister.
PRIME MINISTER:
No but I am answering your criticism and I got to sell the Budget, I accept that, of course I accept that and I am reacting, quite properly I'm reacting and responding to what people have said by my responses. I mean I don't mind, (inaudible) come on your programme I'm perfectly happy to deal with the criticisms that you're passing on, I don't object to that at all. I'm just trying to explain in very direct language that the criticism of cynical is unfair, I mean we're halfway through our term, it's not a Budget bought down on the eve of an election, it's halfway through our term, some people are surprised. You know why a lot of the media are having a go at us over this because they didn't predict and it surprised them and when you're surprised in the media you've got to sort of find an angle and the truth is there's no angle to this...
BARTLETT:
Well I'm not asking you the question because I'm surprised, I'm asking you the question because...
PRIME MINISTER:
Most of your mates here are.
BARTLETT:
I'm asking you the question to try to get to the nub of the reason behind it, the thinking behind it because...
PRIME MINISTER:
I have already told you the reasoning behind it.
BARTLETT:
Because the whole point of the question about tokenism is that you and your Treasurer have made a lot since it was handed down last night about giving something about, that's the theme of your sell, giving something back. Now if you really wanted to do something substantial and appear to be serious why don't you take that substantive link and address bracket creep and index tax thresholds or something like that if you want to give something back.
PRIME MINISTER:
Can I repeat the reasoning, the process behind it? The process behind it is we worked out what we had to spend money on, we're going to spend more money on Defence, more money on security, we had to make the big provision for drought, we've put a billion dollars over four years extra into Medicare, we're putting extra money into higher education. Having done all of that and provided for an adequate surplus, not a big surplus and an adequate, I mean it's only $2 billion in a huge budget but we think that is sufficient cushion is to keep us out of deficit. But having decided all of those things we then worked out that we had an opportunity of providing a modest tax cut and I mean that is the process, I don't think that is cynical, I think that's just being very transparent and very open with people. Now you ask me about bracket creep, this will address part of the bracket creep issue, it doesn't address it all but we didn't have the resources to address all of that but I make the point that since the introduction of the new tax system three years ago, because so many taxpayers lie between $20,000 and $50,000 a year, fewer people are affected by bracket creep. I mean if you have a lot of steps in the tax rates covering most taxpayers then bracket creep is a bigger problem than if, as it (inaudible) now, you have really a $30,000 area where people's incomes can rise without them paying a higher tax rate.
BARTLETT:
Well this morning there's a tax analyst...
PRIME MINISTER:
Still getting that echo incidentally.
BARTLETT:
I'm sorry about that, there's not much I can do.
PRIME MINISTER:
No, sorry, it's okay.
BARTLETT:
I noticed you haven't given the ABC any extra money, maybe if we have a few more funds we could fix that.
PRIME MINISTER:
Oh yeah, come on. We had, no, no you raised it, you can't get away with raising something like that and then skipping onto something else. We promised in the last election campaign that we would maintain real funding to the ABC and we have kept that promise. So you know I don't want to say any more about it then that but you raised it.
BARTLETT:
Alright. Just coming back to bracket creep there was a tax analyst this morning saying that within six years, the estimate is that within six years any person currently with average earnings of $46,000 will pay the highest marginal rate of 48.5 cents.
PRIME MINISTER:
Well that is Liam, if the scales were not adjusted.
BARTLETT:
(inaudible) you have got something...
PRIME MINISTER:
No, it's no question of having anything up your sleeve I'm just making an observation. Look I'm not making presumptions about who's going to be making decisions in six years time, that's up to the Australian people, we've got several elections between now and then. But I make the observation...
BARTLETT:
You might still be there.
PRIME MINISTER:
Well let's just put that aside for a moment, I'm trying to answer your question. I make the observation that governments will adjust the tax brackets and our philosophy is, really as I outlined it a moment ago, you put money aside for necessary spending, you make sure you've got an adequate surplus and anything that is left over has to be returned to the people who own it. Now that is our philosophy and it'll be the philosophy of the government on this occasion and it'll be the philosophy that will govern our future budget because I'm not somebody who believes that if you've got a bit of money left over you should find something new to spend it on, I think that's the wrong way to go, I think if you've got something left over you should give it back to the people who gave it to you in the first place and that's your listeners. I mean I'd like to give more back but we didn't have more consistent with the other obligations we had. So there's really nothing cynical, it's very transparent, it's halfway through our term. It's just a case of we had something over and we returned it to the people who own it.
BARTLETT:
Do you expect this to be your Treasurer's final Budget?
PRIME MINISTER:
Oh look I'm not going to get into game, that's about my future and I'm not saying anything about that beyond what I've said in the past. All I can is that he's done an extremely good job as Treasurer and we've worked together very closely and very effectively.
BARTLETT:
You said on AM this morning Prime Minister there was no reason why this Government should go to the polls early. Now what if the Opposition could present you with a reason? Say for instance they block your education reform package in the Senate, which they're already making noises about, of course there's also the Medicare package. I mean are you prepared to go to the wall and force a double dissolution over either of those measures?
PRIME MINISTER:
Well I hope the Senate passes both measures, I really do and I'm not going to hypothesise beyond that. The point I was making on AM and I repeat it on your programme is that the public expects a government to serve out its full term and unless there's a very good reason for going early, a very good reason in the national interest as distinct from the private political interest of the government the public does get cynical and they'd be entitled to get cynical if we had an election for no good reason. Now no Prime Minister can put his hand on his heart and say there will never be circumstances in which I don't have an early election but all I can say to you at the moment is I don't want an early election, I'm not contemplating one and as far as the Senate is concerned I hope it adopts a constructive attitude towards our health and education reforms.
BARTLETT:
But how far are you prepared to back yourself in?
PRIME MINISTER:
Well I'm just not going to start speculating on that at the present time, I mean to start talking about what we might do if the Senate blocks our legislation when it hasn't even been put up is getting altogether too premature. Let's see what the Senate does when we put the legislation up and let's see what the independents and the minor parties end up doing.
BARTLETT:
It hasn't been too premature for them to say they don't intend to let it pass.
PRIME MINISTER:
Well I don't think all of them have been quite as adamant as that. That's not what I've heard.
BARTLETT:
The education package, HECS fees could increase by up to 30 per cent, universities are setting their own fees. Are we creating an enclave for the elite?
PRIME MINISTER:
Certainly not because there are still the provision of the HECS funded places, and there's increased money for that. Clearly in some cases there will be a greater student contribution but the idea that that's going to create an enclave for the elite, we tried in the Whitlam years and really until the late 1980s we tried this idea of kidding people that you could have totally free university education. And it didn't work.
BARTLETT:
Why didn't it work?
PRIME MINISTER:
Well it didn't result in a significant, a really significant change in the socio-economic enjoyment of a university education.
BARTLETT:
Did you enjoy a free university education?
PRIME MINISTER:
No, not entirely no. I attended university at a time when fees were charged unless you had a Commonwealth scholarship. I mean the first year I was at university my mother as it was, my widowed mother paid my university fees in the first year and then I was fortunate enough to pick up a Commonwealth scholarship for the second, third and fourth years and like people for time in memorial I had a part time job in the first couple of years that I was at university when I wasn't articled and then I got a job as an articled clerk at a pittance but very good training. I mean most university students now have part time jobs, and I think we've got to remember also that 70 per cent of boys and girls who leave school don't immediately go into university. Many of them don't want a university education, they have to pay taxes to fund the provision of university places for those who do go to university and I think it's only fair that people who get a university education and then earn considerably higher incomes as a result of that training, make a contribution. Can I make the point to your listeners...
BARTLETT:
[inaudible]
PRIME MINISTER:
But what is unfair about that - if you are advantaged by something which is largely funded by the State, why shouldn't you make some contribution? What people lose sight of is that even after the contributions, the HECS contributions, the taxpayer is still funding about 70 per cent of the cost of educating somebody at a university.
BARTLETT:
But presumably using your logic, those people go on to become the highest taxpayers. So is that a clever thing for the country to do?
PRIME MINISTER:
I think it's a very clever thing to have a university system where there is some contribution made by the person who enjoys the income benefits of that education. I think that's not only logical, I think it's fair. You've not only got to be fair to that person, you've got to be fair to all the people in the community who pay their taxes and who don't go to university.
BARTLETT:
14 to 9. We're talking with the Prime Minister from Canberra. And Prime Minister, let's take some calls. Matthew is on the line. Hello Matthew.
CALLER:
Hi.
BARTLETT:
Matthew, the Prime Minister is listening.
CALLER:
Prime Minister, I have a question about the surplus. What I want to know is that given that the States are all having to increase their taxes to pa