BARTLETT:
John Howard, good morning.
PRIME MINISTER:
Good morning, Liam.
BARTLETT:
Mr Howard, thank you very much for talking to us this morning. There';s money everywhere in this Budget. Tax cuts, maternity payments, family tax payments. The Financial Review in fact is calling it Costello';s $37 billion vote grab. Will it work for you at the ballot box?
PRIME MINISTER:
Well, there are a lot of things that the Australian public will take into account when they finally vote. That';s a matter for them to decide. This Budget does contain a lot of very good and generous measures. All of that has been made possible by the fact that over the last eight years we have run the economy very well. You can';t do these things if you don';t have a strong Budget. You can';t do these things if you';ve got high debts. You can';t do these things if you have low growth. You can';t do these things if you have a poorly performing economy and the strongest message I would communicate to the Australian people is that these sorts of benefits are the dividend of good economic management and if you don';t have that good economic management then you can';t do these things. I';m still getting a bit of delay incidentally.
BARTLETT:
I';m sorry, I can';t do anything from my end, but I';m hoping the technicians will fix it up for you.
PRIME MINISTER:
Okay, it';s not too bad.
BARTLETT:
Good on you. Hard for the electorate not to be cynical though, isn';t it, when there';s this much money flying around and an election which is literally only months away.
PRIME MINISTER:
I don';t know that they';re quite as cynical as some would like to believe. But, obviously, that is something that we';ll have to allow the Australian public to take a decision on. Our fiscal position has been very strong over the last year and we found as the months went by that not only did we have a much bigger Budget surplus in the current financial year, thus enabling us to make a number of very valuable one off payment#8230;
BARTLETT:
That was because you were taking too much tax in the first place, wasn';t it?
PRIME MINISTER:
No, it was because interestingly enough the economy was growing more strongly than we anticipated. One of the greatest areas of additional revenue collection, Liam, was in fact in the area of company tax which we had cut from 36 cents in the dollar to 30 cents in the dollar when we brought in tax reform. So that really does give the lie to the argument that we were taking too much tax. We cut the rate, yet the collections were higher and they were higher because the economy was performing more strongly. Now that';s a very interesting story and it';s a very interesting lesson and we found that as we got towards the preparation of the Budget that the surplus this current financial year which had been anticipated you know at a lower level than what it was heading towards, meant that we were in a position to return some of that in one-off payments to the Australian public. The family tax additional $600 a child in addition to the ongoing reform of an additional $600 each year. And also that very valuable one-off payment to the carers who I think most people appreciate and also the extra capital into nursing homes.
BARTLETT:
So you ensure that many families will receive a $600 bonus in the next seven weeks before the end of June and then another $600, Prime Minister, in their tax returns virtually as they walk into a polling station. How can you say that';s not buying votes?
PRIME MINISTER:
Well, look, I don';t know when they';re walking into a polling booth. I just don';t know. I haven';t made up my mind about the election date. I knew I';d get asked about this, but there';ll be an election#8230; everybody knows there';s going to be an election around about sometime in the second half of this year because three years is up #8211; there';s nothing secret about that.
BARTLETT:
Well, are you really going to spend $16 million to advertise the details of this Budget?
PRIME MINISTER:
Well, there will be an advertising campaign. But Budgets that contain new measures do need to be explained. It is amazing how even sometimes months or even years after a benefit has been introduced, people don';t know of its existence.
BARTLETT:
#8230; responsibility for themselves Prime Minister.
PRIME MINISTER:
Well, but then if they find they';ve been missing out on a benefit they complain many of them to the Government and I get questioned by diligent reporters on the ABC and other programmes as to why we didn';t make all of this information known to the Australian public.
BARTLETT:
It';s $16 million to make yourself look good.
PRIME MINISTER:
You know you';re damned if you do, and you';re damned if you don';t. There is nothing wrong with advertising benefits, nothing wrong with making plain to the Australian public that a benefit is available and I think it';s a perfectly legitimate thing to do because anything that is based on certain criteria that has an income test, that has some kind of eligibility criteria associated with it does need explaining and I think those sort of campaigns are justified.
BARTLETT:
Let';s take some calls Prime Minister, in the limited time we have, Sean';s on the phone, hello Sean.
CALLER:
Yeah, good morning Liam, how are you?
BARTLETT:
Good thank you.
CALLER:
Yeah, Mr Howard, how are you?
PRIME MINISTER:
Very well Sean.
CALLER:
A quick question for you, 1997, before the Liberal Party got into power, you made a speech on national TV and one of your election promises was you were going to let family couples split their incomes.
PRIME MINISTER:
Well can I tell you, I did not make a speech in 1997 about income splitting. Years ago, and over the years I';ve looked at income splitting and effectively under the present tax system if you have a child under five with the family tax benefits you have the benefit of income splitting up to about $65,000 a year of combined family income. We';ve actually run some models on that and I like the philosophy of income splitting, and if you combine the benefits under the family tax A and B, especially where there';s a child under five, most couples have the benefit of income splitting up to about $65,000 a year. We';ve done some careful modelling on that and in a more effective way we have delivered that benefit. But I wouldn';t have made that as a promise in 1997 because it wasn';t in our election policy in ';96 when I was elected#8230;
CALLER:
Must have been ';96, I watched it on national TV with about#8230;
PRIME MINISTER:
No, I';m sorry, I remember this very carefully because I';ve followed this debate and I';m sympathetic to the philosophy of income splitting and we have in reality delivered it to couples whose combined incomes are about $65,000 where they have a child under five.
BARTLETT:
Thanks Sean, thanks for your call, I';ve got to move on. Lyn is next, hello Lyn.
CALLER:
Good morning, good morning Prime Minister.
PRIME MINISTER:
Good morning.
CALLER:
I wanted to thank you for putting money into the aged care homes, I think that';s a wonderful thing and should be done. I';m disappointed that you didn';t give more tax relief to the lower income earners. But what I';m ringing about to ask you is, what are you doing, or what are you going to do for the ordinary old aged pensioners? The money you put into the homes are for people who are in those homes, but the old aged pensioner who, we';re all trying to stay at home to save putting more money on the state, but what are you going to do for us? You didn';t mention anything in the Budget.
PRIME MINISTER:
Well there are no new measures but we do of course maintain the full indexation of pensions, furthermore we tie them as no government has done before to male total average weekly earnings, at 25 per cent of that, so that there';s a double insurance that it keeps pace with the rate of inflation. This was a Budget that we decided would target families, young children, families, with particular benefits, but you are right in saying that the extra money that';s gone into aged care will help not only people who are in aged care facilities now but people who may need them in the future. The changes we';ve made in relation to carers, and a very significant number of older people are carers, we have bought in a number of changes there, one will increase the availability of respite care for older carers, we';re going to liberalise the rules so that you can get carer payment if you';re looking after somebody who';s not residing with you if you provide 20 hours of care a week. We';re also providing some one-off payments in relation to the carer payment and the carer allowance of $1,000 and $600 respectively#8230;
BARTLETT:
Alright, PM, that';s#8230;
PRIME MINISTER:
No, no#8230;
BARTLETT:
Lyn was talking about pensions not#8230;
PRIME MINISTER:
No, no, well I';m talking about pensions#8230;
BARTLETT:
Alright, well#8230;
PRIME MINISTER:
No, hang on, I';m talking about pensioners who are carers and a lot of them are and I just wanted to make that point.
BARTLETT:
Okay, thanks very much Lyn for that call. Barry is next, hello Barry.
CALLER:
Morning, morning Mr Howard.
PRIME MINISTER:
How are you?
CALLER:
I';ve just done three years on a pension bonus scheme, I';m 68, I';ve only got two years before I get my bonus. What I';d like to know Mr Howard is would you consider staying in work to set an example to us oldies (inaudible) and therefore help out a lot of old people that can';t get work?
PRIME MINISTER:
Well#8230;
CALLER:
#8230; interrupt me young man, just remember if you stay on til you';re 70 the (inaudible) for you. Now what do you think?
PRIME MINISTER:
Liam, I think you';re the young man, I';m quite happy to be so described. We';re both younger than this bloke. Look I think it';s terrific you';re still working at 68 and I would encourage Australians to emulate your example. The biggest challenge though we have is really getting people who are retiring and dropping out of the workforce in their middle 50s. If only we could get that aged cohort of 55 through to 64 to stay in the workforce longer we would bring about a very big change in relation to the participation levels in the Australian economy. And we need a cultural change#8230;
CALLER:
And what about you staying on, setting an example?
PRIME MINISTER:
Well I';m still here.
CALLER:
No, I know but what about keep going?
BARTLETT:
I don';t think Peter would be too happy about that.
PRIME MINISTER:
Well look I';ll keep going as long as my party wants to and it';s in my party';s best interests. But in the end I have to say the Australian people will decide my future, nobody else, I';m in their hands. I serve them, nobody else.
BARTLETT:
Just a quick text message to the programme Prime Minister from Eddie, Eddie says Liam, I have a family payment debt, will I get to see the $600?
PRIME MINISTER:
Well you';ll certainly see the $600 as being paid before the 30th of June. But in relation to the next $600, and this is $600 a child there is, as the Treasurer said last night, a reconciliation at the time you put your tax in, your tax return in, and the debt will be offset against that other $600. So that';s not unreasonable. But the eligibility is the $1200 extra a child, the first $600, the one before the 30th of June, is completely unrelated to any debt you might have.
BARTLETT:
The first $600 bonus is completely#8230;
PRIME MINISTER:
Unrelated to any debt you might have. The second one is obviously there';ll be a set off against any debt and that is not unreasonable. But I';m told that 65 per cent incidentally, 60 #8211; 65 per cent of families have neither debts or are entitled to an overpayment so you';re looking there, in those cases, of $1200 a child.
BARTLETT:
You could afford more of course if you didn';t waste the $16 million on glossy advertising.
PRIME MINISTER:
Well I don';t think that is unjustified.
BARTLETT:
Prime Minister, thanks very much for your time this morning.
PRIME MINISTER:
Thank you.
[ends]