MITCHELL:
Mr Howard, good morning.
PRIME MINISTER:
Good morning Neil.
MITCHELL:
Are you still cranky with Peter Costello for diverting attention on this?
PRIME MINISTER:
I';m not cranky with Peter. Could I just upfront say that I can fully understand Peter wanting to lead the Liberal Party. It';s a perfectly natural ambition for a very able person. He';s given an enormous amount to our party, he has been a wonderful Treasurer and deputy, and I just find it quite unsurprising that he would want to do so. I mean I was an ambitious person and I';d be a hypocrite if I denied ambition in other people. The question of whether I remain Prime Minister of Australia will be resolved by your listeners.
MITCHELL:
Well no but it won';t#8230;
PRIME MINISTER:
People all around Australia. And my position is that I will stay leader of the party for so long as it wants me to and it';s in the party';s best interests.
MITCHELL:
So you still endorse him as the next leader?
PRIME MINISTER:
Oh yes.
MITCHELL:
And will that happen in the next period of Government if you win?
PRIME MINISTER:
Look I am saying#8230; there are no deals. My position remains very simply that I will continue in this job, the public and my health willing, for so long as the Liberal Party wants me to and it';s in the party';s best interests. And I think the public understands that for a person who has been in politics for a long time, has been leader for a long time, but although in extremely good health and still very keen, that the answer I give is both honest and sensible.
MITCHELL:
So that means there is a possibility you could even serve out a full term?
PRIME MINISTER:
Look my position is as I have said Neil, and you know#8230;
MITCHELL:
(inaudible) asking you to commit.
PRIME MINISTER:
No, look they are plain, simple words. I';ll stay leader as long as the party wants me to and it';s in the party';s best interests. But I do understand Peter';s ambition, and I think there is a general view in the party if I were to go, he should take my place.
MITCHELL:
Has it been a bit tense the past few days?
PRIME MINISTER:
No look, Peter and I#8230; look, this Budget involved an enormous amount of focused work between Peter and I in relation to all the key measures over the last two weeks. I can';t remember a time when we have worked in closer, better professional harmony and this really all works together extremely well. And we';ve produced a very good Budget and it';s a product of that partnership which has been the key to the Government';s success over the last eight years.
MITCHELL:
It';s said you neglected to move a vote of thanks for him in the party room. Is that true?
PRIME MINISTER:
Look I#8230;
MITCHELL:
(inaudible)
PRIME MINISTER:
Well look hang on. Look I say many very, very kind things about Peter because I mean them, and I repeat now #8211; nobody has done more to produce the strong economy that we now have, than Peter has.
MITCHELL:
Did you neglect to mention that in the party room?
PRIME MINISTER:
I don';t talk about what happens in the party room. I say many generous things about Peter in the party room and I say a lot of generous things about him outside the party room.
MITCHELL:
Well you know that';s being viewed as significant. Is it?
PRIME MINISTER:
No, it';s the first I';ve heard of it.
MITCHELL:
Well it';s in the papers.
PRIME MINISTER:
Well I know it';s in the papers, but it';s the first I';ve heard of it. I hadn';t read#8230; I';ve been a little more focused on the stuff about the Budget.
MITCHELL:
Okay, Mark Latham has cancelled his trip to Washington because he thinks the election is close. Have you given the election much thought?
PRIME MINISTER:
Neil, I haven';t made up my mind when the election will be. I can assure Mr Latham it won';t be in June.
MITCHELL:
(inaudible) in June.
PRIME MINISTER:
Well it could be. Theoretically it could be, but it won';t be. I think Mr Latham has cancelled his visit for reasons other than the election. I think he has cancelled his visit because he thinks it was probably going to be a dud visit. But that';s his problem, that';s his issue. I think it is rather odd and regrettable that the alternative Prime Minister of Australia, which he is as the Leader of the Opposition, feels so unsure of the relationship between the putative Labor or future Labor Government, if there to be one, and the United States, that he feels he can';t go to that country. I mean he';s using the election thing as a decoy, as an excuse, but it';s not the real reason.
MITCHELL:
Is August in your mind?
PRIME MINISTER:
Neil, the election can be held at any time in practice after the 30th of June. We could hold it as late as early next year. That';s constitutionally possible. Very unlikely. The normal thing would be to have it in the second half of the year. I';m not going to say this or that is in my mind. I have not made up my mind. I won';t make up my mind for some time yet. People should not assume that I have made up my mind and I';m just keeping it from them. It will be a perfectly normal thing if the election is held at any time in the last six months of this year.
MITCHELL:
Okay. Now this Budget, do you expect this will increase the birth rate?
PRIME MINISTER:
I hope it does. I don';t know that it will. I hope it does.
MITCHELL:
But you wouldn';t expect people to have children for the sake of $5,000.
PRIME MINISTER:
No, no. I think what this will do is to create a climate where people believe that the challenges for child rearing and the challenge of juggling work and family and who is in the workforce full or part time or who is at home full or part time, that that is a more recognised dilemma. I think people will see that this Government through this Budget, more than any Government with any Budget, has put front and centre the modern challenge of raising families and juggling their work and family responsibilities. And that will send a very reassuring signal, not only to people who have young children, but many older people who have passed through that responsibility and want the young people who have that responsibility now to get more help. I';ve talked to a lot of people who say look, do something for my children and their children. I talk to older Australians who say look after the kids, I';m in a comfortable position, look after the kids. You do get that from a lot of older people.
MITCHELL:
A lot of calls coming through. I';ll just go to those in a moment. Just a couple of specifics though. Do you accept that people on average weekly earnings without kids just get next to nothing in this?
PRIME MINISTER:
Well there is certainly a focus on people with families. There is no doubt about that. And we took the view in relation to the tax cuts that we could not find the money for a significant across the board tax cut.
MITCHELL:
So if I';m on $48,000, which is average weekly earnings, and haven';t got children, what do I get?
PRIME MINISTER:
Well, if you don't have children you don't get a tax cut. I'm not denying that. But, of course, if you've got children and your wife is working part-time you do extremely well out of this. And mind you, if you're on $48,000 a year and you've got three children and a wife at home full-time or perhaps only in the workforce part-time, may I say with respect, that your expenses are much greater and your burdens are much heavier than a single person on $48,000.
MITCHELL:
Well, that's true but I'm not well paid, I'm not rich.
PRIME MINISTER:
No, I'm not saying you're#8230;but you're not paying as much tax and you're still in the 30-cent tax bracket. The aim of this was to stop people who worked a bit harder and a bit extra and earned a bit more bumping into the 42 and 47 tax bracket. Do you know that 37% of all male full-time earners earn more than $52,000 a year and for females it's 49, that's full-time workers, and unless something were done to stop those people going from the 30 to 42 cent bracket you'd have a situation where people who by no stretch of imagination can be regarded as well-off are paying 42 cents in the dollar on part of their income. And under this 80% of Australian taxpayers will, throughout the forward estimate period, the next three or four years, pay no more than 30 cents in the dollar. You'll be able to pass from $21,600 to $63,000 a year in annual income and not go above 30 cents in the dollar. Now, that's important for incentive, it's important to encourage people and we decided in relation to the tax cuts to place an emphasis on that and I accept that.
MITCHELL:
Does that mean these are probably the last tax cuts for some years?
PRIME MINISTER:
No, I wouldn't say that. Obviously the day after the latest budget I'm not going to start talking about what the budget might be in two or three years time but I'm wouldn't say that for a moment. I know some people, like ACCESS Economics, have gone around saying that. I don't necessarily accept that for a moment. That's far too cataclysmic a view of what lies ahead of us.
MITCHELL:
In two or three years time will you be controlling what's in it?
PRIME MINISTER:
Well, that's a matter for the Australian people.
MITCHELL:
Just a call first. Terry, go ahead please, Terry.
CALLER:
Good morning, Mr Howard. My husband earns $45,000 a year. I'm unable to work because I've got MS which incurs a lot of expense. What benefit are we going to receive from this (inaudible)?
MITCHELL:
Do you have children, Terry?
CALLER:
No, they've left home now.
PRIME MINISTER:
You don't have any family responsibilities.
CALLER:
No.
PRIME MINISTER:
Well, if your husband is earning $45,000 a year he, of course, is paying no more than 30 cents in the dollar on that, whereas if you were under present tax scales earning $52,000 a year he would start to pay 42 cents in the dollar.
MITCHELL:
But there's nothing#8230;
PRIME MINISTER:
No, look I'm not#8230;there is not a tax cut for somebody in that position. You say what is in the budget, well, it may well be that because of your medical condition - and I don't know all of the incidence of it - it may well be as a result of your medical condition that you are entitled to the very significant benefits of the new Medicare safety net. Now, I don't#8230;I mean, I'd have to have all the details of your medical expenses. Now, that new safety net is funded in the budget, although it was announced several months ago but it is funded in the budget.
MITCHELL:
Okay, we'll take a break and come back with more from the Prime Minister with some specifics for other people and questions.
[commercial break]
MITCHELL:
14 to nine. Budget day. Prime Minister, or the day after budget, Prime Minister in our Canberra studio. A lot of people calling through with comments. We';ll get your comments after nine and we';ll take some questions specifically to the Prime Minister. Mr Howard, what';s in it for pensioners?
PRIME MINISTER:
Well, pensioners continue to get the indexation and, of course, the massive increase in funding for the aged care sector will be very important for the peace of mind and the future comfort of older people who may have to go into an aged care facility. The amount of money that';s gone into that is very significant and if you are a carer, and many pensioners are, there are very significant additional benefits.
MITCHELL:
Self-funded retirees?
PRIME MINISTER:
Well, self-funded retirees had a very big tax break three years ago when we introduced the aged person';s tax offset and that effectively means that the first $20,000 of their income is tax free and we also had major extension of the pensioner health benefit card so that people out to quite generous levels of income were receiving that card and the benefits that flowed from it. You can';t touch every group in every budget and where some budgets in the past particularly focused on retired people and increased their benefits. I mean, taxation reform delivered a thing called dividend imputation credits which has proved remarkably valuable and important for many self-funded retirees. When you link that with the tax offset you have a very significant set of benefits for those people.
MITCHELL:
But you would accept, I mean talked about here people earning around, you know, $48,000 or less, pensioners, self-funded retirees, you do accept this is targeted at middle and higher income earners.
PRIME MINISTER:
It';s targeted at people who have the greatest family responsibilities. There';s no argument about that. It';s also targeted at people who work harder and who aspire to earn more and we need as a nation to encourage those people and it also recognises that some of the other groups have in earlier budgets received significant tax benefits and significant tax adjustments. You can';t bring down an intelligent budget that doesn';t have some degree of targeting and most people would agree that a middle income family with a number of children paying off a mortgage even in this era of low interest rates is passing through that time of their life when they have the peak financial commitments and this budget is designed to address that, it does address it very squarely and unapologetically.
MITCHELL:
Trevor, go ahead please Trevor.
CALLER:
Yeah, I';d like to just say where do they get this $62,000 (inaudible) a year? I';m earning $48,000#8230;
PRIME MINISTER:
I didn';t say that.
MITCHELL:
I know, that';s right. $48,000
PRIME MINISTER:
No, I did#8230;
CALLER:
Yeah, well, I';m on $48,000
PRIME MINISTER:
No, well what, no I understand that Sir, but I didn';t say $62,000. What I said was that 37 per cent of male full time earners, full time workers are now earning more than $52,000 a year and then unless you fix that tax scale which we';re proposing to do in this budget, those people will start paying 42 cents in the dollar on some of their income and I don';t think that';s good for incentive, I don';t think that encourages people to work harder, it discourages them from working overtime.
MITCHELL:
Well, that';s a good point. Trevor, what do you earn, how much?
CALLER:
But I earn $48,000.
PRIME MINISTER:
But do you get any over time?
CALLER:
No, we';re not allowed to work over time.
PRIME MINISTER:
Sir, do you have any children.
CALLER:
No, I don';t. I';m single.
PRIME MINISTER:
No, well, look if you';re single and you don';t have any children#8230;
CALLER:
But I pay my bills (inaudible) same as what a family person pays.
PRIME MINISTER:
Well, you don';t actually, with great respect Trevor, if you';re just looking after yourself and you';re not supporting a wife and children then your bills are lower than the bloke next door who';s supporting a wife and two children. I mean, mate, it is true, let';s#8230; we';ve got to compare apples with apples and we, I think, fairly take the view that if you are going to target you ought to target the people who';ve got family responsibility. Now, I';m not saying everybody';s got to be married, it';s a free country. But I think it';s fair to say that a bloke on the equivalent income to you who';s got three children or two children or one child and perhaps his wife as well who might only be working part time or she might be at home full time if your kids are very young, his bills are higher than yours they really are.
MITCHELL:
Prime Minister, you agree with the Treasurer, one child for the father, one for the mother and one of the country#8230;
PRIME MINISTER:
Absolutely. I think we do need to try and boost the birth rate in this country and I';m certainly and I totally agree with that. It';s advice I gave him once, so you know, there you are.
MITCHELL:
How many kids has he got?
PRIME MINISTER:
He';s got three.
MITCHELL:
Did you advise him?
PRIME MINISTER:
It';s just a joke between us.
MITCHELL:
I';m glad to see you';re on good terms. Is there a chance this could stimulate the economy when it doesn';t really need it which if it does happen obviously could have a pressure on interest rates?
PRIME MINISTER:
No, it won';t. Yes, but there is, if you look at the figures, there is a slight moderation from three and three quarters per cent to three and a half per cent in the growth and I don';t think this will, in the words of Alan Wood, who';s one of the respected economic commentators, I don';t think there';ll be a blip on the Reserve Bank';s radar screen on this.
MITCHELL:
Corporate Australia didn';t get much.
PRIME MINISTER:
Corporate Australia is doing better than at any time in this country';s history. The profit share of Australian companies is at an all time high and small business gets a very significant benefit with 740,000 companies only having to put in an annual BAS return instead of the monthly or a quarterly one.
MITCHELL:
Where did the philosophy for this budget come from? It looks political, it looks a bit cynical, it looks like something that could win an election. Did you actually#8230; did you and Peter Costello sit down and say this is the way to do it?
PRIME MINISTER:
Peter Costello and I work very closely, obviously, on the benefits and tax side of it, that happens in all budgets and we work very closely and we came to agreement. We certainly identified areas that we believed needed to be targeted. Our starting point was terrific, our starting point was that we had a strong economy, a bigger than expected surplus this year because company tax collections especially were much higher.
MITCHELL:
Is it fair to say that most of it is predicated on you winning the election, it';s timed that way. You don';t win the election, people don';t get it.
PRIME MINISTER:
After it is legislated the people get it whoever wins the election. But I mean, once the law is the law, people get benefits unless a future government takes those benefits away. Now, I don';t know what Mr Latham would do if he became Prime Minister, I know he won';t run the economy as well as we have and I know therefore interest rates will trend uppish and will go back to the days of big debts and big deficits because that was the Labor way.
MITCHELL:
So the economy';s an election issue, clearly.
PRIME MINISTER:
Management of the economy is the central election issue. What I';ll be saying is that none of these benefits would have been possible if it hadn';t have been for the good economic management of the last eight years.
MITCHELL:
We';ll come back to the calls after nine, I know you need to get away soon, just one other area if I could, when did Australia find out about the mistreatment of prisoners in Iraq?
PRIME MINISTER:
Well the dimension of it and everything, I must confess I didn';t know or appreciate it all until the last few weeks, like everybody else. I';m told that there was an indication at an official level of the Red Cross report, the Red Cross indicated that they were satisfied that the Americans intended to respond and of course a few weeks after that the detail has come out#8230;
MITCHELL:
Were you told about#8230;?
PRIME MINISTER:
Well no, no, but I didn';t expect to be because there were no Australians involved. I mean you';ve got to make this, can we just get one thing straight, Australia had no prisoners of war, at no stage did we even have formal custody of them because we had an arrangement with the Americans that they would have custody of them. And the reason why that report that came back about the IC#8230; the Red Cross report was not passed up the line was, at that stage the Red Cross was satisfied with the American response, but even more importantly there were no Australians involved.
MITCHELL:
So when did that Red Cross report come to the Australian Government?
PRIME MINISTER:
I';m told that the report itself did not come to the Australian government until after all the publicity occurred. Bear in mind this was not a report to us, and the Red Cross had never given it to us, it came, we obtained a copy but we obtained that copy, I am told, after the balloon went up.
MITCHELL:
Is it, do you think it';s systemic or is it a few idiots?
PRIME MINISTER:
Well I hear this morning, and I haven';t seen a full report, that the military officer who carried out the investigation has said it wasn';t systemic.
MITCHELL:
Do you agree that those images, they';re almost like a recruiting poster for terrorists.
PRIME MINISTER:
Well they';re very bad, Neil, of course they';re bad#8230;
MITCHELL:
They must add to the tension.
PRIME MINISTER:
Well Neil I think it';s appalling and what distresses me is that it';s unfair on those tens of thousands of American and other soldiers who are doing the right thing and risking their lives every day. I mean people who are entitled to feel most betrayed by this behaviour are the decent American troops who are risking their lives in doing the right thing and not maltreating anybody and have sought to bring about a better Iraq and a freer Iraq and I think we have to bear that in mind and I';m pleased that attempts are now being made to bring these people to justice. I mean the difference is that if you did much worse than this under Saddam you got promoted, under the Americans and perhaps also the British, I';m not sure of the involvement there, it';s a little less clear, you were court marshalled and punished and dealt with. Just how widespread it was, I';m not in a position to know at this stage, I have sought and obtained assurances about Hicks and Habib who are in Guantanamo Bay and I mentioned that in Parliament yesterday but it doesn';t alter my view about our involvement, but it';s a difficult period for the Americans and it';s a time where they have to apply the rigour of the law against people who';ve done the wrong thing.
MITCHELL:
Thank you very much. Last question, will the barbecue be stopped all over Australia this weekend?
PRIME MINISTER:
I think there';ll be a few more beers consumed.
MITCHELL:
A few at the Lodge with Peter Costello tonight?
PRIME MINISTER:
I think we';re both still doing, will still be doing interviews but I';m sure we';ll get an opportunity to have a drink at some stage after that.
MITCHELL:
Thank you very much for your time.
PRIME MINISTER:
Thank you.
[ends]