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Transcript 20913

Interview with Alan Jones Radio 2GB

Photo of Howard, John

Howard, John

Period of Service: 11/03/1996 to 03/12/2007

More information about Howard, John on The National Archive website.

Release Date: 15/09/2003

Release Type: Interview

Transcript ID: 20913

JONES:

The Prime Minister';s on the line. Prime Minister, good morning.

PRIME MINISTER:

Good morning Alan.

JONES:

PM, there';s talk today that listed companies are going to deliver double digit annual profit growth this year and we';re talking about a very strong local economy, 81,000 new jobs in August, housing starts, new vehicle purchases. But hundreds of thousands of people listening to you with very big mortgages. Are we looking at an increase in interest rates before Christmas and what would be the attitude of your Government to that?

PRIME MINISTER:

Alan, I can';t give guarantees either way about the level of interest rates, they are set by the Reserve Bank and they will be determined by the Bank according to its assessment of the economy. What I can point out is that interest rates now for the average loan are $450 a month lower than they were when the Government came to office seven and a half years ago and that is a remarkable difference and when you take into account that people';s wages have gone up ahead of inflation during that time it means that people are much better off as a result of the policies over the last seven and a half years.

JONES:

Has it encouraged perhaps people though to bite off more than they might be able to chew if things turn the other way?

PRIME MINISTER:

There';s no doubt that low interest rates are one of the reasons why the cost of housing and the value of homes has gone up, it is easier to service a loan now because the interest rate is much lower, it is very much easier to service a loan now. We have in a sense become the victims of our own prosperity and you have a situation where if you';ve got a house, or a unit, you';re happy because the value of it has gone up. I haven';t found a single person stopping me in the street saying I';m angry with you Howard, the value of my property has increased over the last seven and a half years. They don';t do that because people are pleased. But there is obviously a difficulty with some home buyers and that';s one of the reasons we';ve asked the Productivity Commission to look at it, but remember incidentally that 85 per cent of first home buyers don';t buy or build new houses, they buy existing dwellings and all this talk about the impact of the GST, there is no GST on the cost of an existing dwellings, there is only GST on the materials component of a new dwelling. So when you';re looking at taxes, the real tax slug on housing is in the area of stamp duty and I think there';s a problem with the release of land by local councils and state governments, I think that is an issue because the old laws of supply and demand apply.

JONES:

PM at the weekend they said that you';re in Queensland addressing the State Liberal Party up there and virtually talking as if you';re in election mode. You said on Friday that the failure by the Opposition to pass changes to unfair dismissal laws had cost Australia up to 80,000 jobs. The only way to get those things is with a double dissolution, are we looking at an early election or a double dissolution election?

PRIME MINISTER:

Nothing has changed on that front, nothing at all. I said some time ago that I preferred governments to run their full terms, that obviously if there were an overwhelming issue of public policy that will necessitate an alteration to that then circumstances might be different. But really nothing has changed. This latest outbreak of talk didn';t come from me, I think it may have originated from an article written by Michael Costello in The Australian, he was Kim Beazley';s former chief of staff, by definition almost he wouldn';t know much about the thinking of the Government on the subject. But look Alan every term of Parliament about this time you get this talk. Now nothing has changed and look obviously nobody in my position can absolutely rule things out. But it remains my belief that the public does not appreciate governments for their own political convenience calling early elections, and in the past they have punished governments for doing so and I have no reason to believe things will be different in the future. If there is a good and proper reason then it';s a different consideration.

JONES:

Could I just come back to the jobs again, a total of 86,000 mostly full time jobs in August, that was the fifth largest monthly increase on record.

PRIME MINISTER:

Since 1978, yes.

JONES:

Correct. Unemployment down from 6.2 to 5.8. But interestingly when you break that up 4,000 new jobs in retailing, 50,000 news construction jobs, and real estate, legal accounting and marketing 38,000 new jobs. But, the rural sector lost 45,000 jobs. Now does Australia';s future, can Australia';s future lie in retailing, construction, real estate, accounting and the services sector at the expense of a rural sector progressively being seemingly wiped out?

PRIME MINISTER:

Alan, our future lies with all of those industries, including the rural industry and can I just sound a word of caution, the monthly figures can bounce around, that was a ripper figure last Thursday, 5.8 per cent, fantastic figure. It could change next month, there';s a volatility, but the long term trend is that unemployment is dramatically lower.

JONES:

I suppose I';m asking you what you consider between now or going into the next election, putting a plan together or put someone in charge, a guru of water, who could in fact devise a scheme to overcome drought in a country which has a water surplus that is progressively losing in the agricultural sector and losing jobs in that sector.

PRIME MINISTER:

We have made progress on water Alan, I know it';s an interest of yours and you articulate the issue very well. But we have made a lot of progress. The meeting of the Premiers was notable for its difference on the issues, we had a great outcome on water and we had a petulant walk out on health, but that';s another matter. On water I think we';ve made a huge amount of progress and I believe that at a ministerial level, John Anderson will handle that issue extremely well and I';m very grateful myself that he';s decided to stay on as leader of the National Party because I think he does have a real commitment and importantly, and he acknowledges this himself, he';s able to work in very close cooperation with his New South Wales Labor counterpart Craig Knowles. Now that is the sort of cooperation in the national interest that the public wants. They';re fed up with buck passing and arguments between the Commonwealth and the State.

JONES:

Nothing he did about the Murray Darling is going to provide another cup of water for any farmer anywhere in Australia.

PRIME MINISTER:

It';s not just the Murray Darling though Alan. It is also about the sensible use of the available water resources.

JONES:

Today in New South Wales there is talk about, you know, demountable classrooms, the kids being taught in demountable classrooms, you';ve got problems with hospitals. Do you think that Australia as a nation is getting a little bit run down and needs regeneration? Do we need a commitment to infrastructure…

PRIME MINISTER:

I certainly agree that over the long-term infrastructure in a country as big as Australia is important. I agree with that. And it';s not only important in areas like rail, but it';s also important in areas like roads. I accept that. That is quite right. I think it';s wrong to say the country is being run down. Any nation that has had the economic performance we';ve had is hardly running down. But I do accept your view that infrastructure investment over the medium and longer term is very necessary. And that requires a sensible partnership between the Commonwealth and the States.

JONES:

We';ve got a water surplus in this country. We don';t have a water deficit. We do have a water surplus. How does our infrastructure help us get the water from where it is to where we need it?

PRIME MINISTER:

Well there';s no one simple answer to that. It depends upon the availability and the cost of diversion and the cost of conveying water from the area of surplus to the area of shortage, and whether on a cost-benefit analysis, that is feasible. Now the view of many is that in most cases, it';s not. I';m not convinced that that is always the case, but the view of many is that in most cases the cost-benefit involved is such that it is not worth that kind of investment. It is better to invest in other ways of boosting infrastructure.

JONES:

PM, Mark Vaile I think has done a hell of a job in the last week in Mexico, almost with his hands behind his back, trying to negotiate this global farm trade agreement. How can that ever achieve anything where you';ve got America and the European Union with annual subsidies to their agricultural sector of almost half a trillion dollars?

PRIME MINISTER:

Well it';s fairly difficult to see how it can, unless there is some movement on that front. And you mention half a trillion dollars, and that really underlines Australia';s problem. Because of the amount of money involved, we can';t afford to go into competition with the big boys. What we';ve got to try and do is get some breakthrough on the world front and it';s too early to say what the outcome of this Cancun meeting will be. And of course if I can jump from that to the US Free Trade Agreement, I don';t want to overestimate the prospects of success on that front – I';m hopeful, there is some encouraging signs, but we';d be foolish to think that it';s a cut and dried understanding – but if we can get a breakthrough on that front, that breakthrough will of course include greater access for Australian agriculture into the enormous American market. A small concession by America, given the size of her market, would be a huge boost to Australian farmers.

JONES:

Right. But see you';ve got little countries, west African countries like Mali and Benin and Berkina Faso. We only ever hear of them at the Olympic Games. But they';ve now formed themselves a group of 21 and they say that America';s attitude is subsidies, $2 million subsidies to the US continent, is costing 10 million jobs in those little countries.

PRIME MINISTER:

Well broadly speaking, they are right. The greatest thing the developed countries of the world, the wealthy countries of the world, could do for the poor countries is not to stop globalisation, but rather to open their markets to the few things that those poor countries can sell.

JONES:

Did you talk to George Bush about this? What does he say?

PRIME MINISTER:

Well the last time I discussed trade with him, he said that he was in favour of achieving more open trade and he certainly made very positive noises about the free trade agreement. I would expect to talk to him again in some more detail about these issues, all of them, at the APEC meeting which is in October in Bangkok.

JONES:

As well as a bit of rugby when he comes to Australia during the Rugby World Cup. Just a quick one before you go PM. I see Peter Costello says that you';re going to accept at least 61 recommendations of the HIH Royal Commission. Why shouldn';t the insurance industry be asked to create a sinking fund which would support policy holders in the event of a collapse of another insurance company?

PRIME MINISTER:

Well I won';t give a yes or no answer to that. I guess the industry itself would have a view on that.

JONES:

The taxpayers are currently doing it for HIH.

PRIME MINISTER:

Well the taxpayers are putting quite a bit into HIH…

JONES:

$200 million?

PRIME MINISTER:

… as indeed, may I say in defence of the Federal Government, is the taxpayer putting quite a lot of money into helping the medical profession in relation to the collapse of their medical insurance system. I know we';ve come under a lot of attack, I think unfairly from the doctors on that. They forget the fact that we put a lot of money into that and we have relieved the burden of retired doctors over 65. We have provided an 80 per cent subsidy for the premium increases in the very exposed specialties, and we have also agreed it would [inaudible] over $2 million to contribute about 50 per cent of the costs. So the taxpayer is doing quite a lot on that front as well.

JONES:

Just before you go, is the PM likely to be leading a cause, singing Waltzing Matilda when the Wallabies play?

PRIME MINISTER:

Try and stop us.

JONES:

Try and stop us – is that the word?

PRIME MINISTER:

Try and stop us. I mean this is just ridiculous. I can';t believe this. I really cannot believe that grown men, I think all in this case – I';d better be careful, would be so foolish.

JONES:

But Australians being what they are, it most probably only encourages them to defy it.

PRIME MINISTER:

People will… I mean I am going to start, I think I';ll start a campaign to encourage every single Australian to learn all the verses.

JONES:

That';s it. Join 2GB and News Ltd. That';s what we';re doing. Put the Prime Minister head of a campaign.

PRIME MINISTER:

I think you ought to play it at the beginning… they ought to run it on the front page so we know, everybody knows every darn word of it.

JONES:

Good on you.

PRIME MINISTER:

Okay.

JONES:

Good to talk to you.

PRIME MINISTER:

Bye.

[ends]

Transcript 20913