MCGRATH:
Prime Minister, good morning. You are effectively trying to defy history, aren't you, by winning a fourth term. Only Bob Hawke and Robert Menzies could do it. The economy is booming but your credibility is under unprecedented attack.
PRIME MINISTER:
Well, the Australian people will make decisions about my credibility. They'll also make a decision about who they better trust to keep their interest rates down, who they better trust to protect their living standards, who they better trust to deliver a strong budget so we can spend more on health and education and who they better trust to lead Australia in the fight against international terrorism. Every election is different. It's a mistake to draw slavishly on historical comparisons. The world today and Australia today is very different from what it was in 1990 when Bob Hawke ran and won a fourth election and very different from what it was in 1963, when Sir Robert Menzies ran and won his seventh election. Everything is different and you have to look at it in the circumstances of the time. And, in the end, people will make a decision: who is more likely to protect my personal and financial security? Who is more likely to effectively lead this country in this dangerous, difficult international climate. That is the fundamental issue of trust in this election campaign.
MCGRATH:
Now, you said just then it's a mistake to draw slavishly on historic comparisons, but isn't that what you're doing when you say that interest rates are higher, historically under Labor Governments?
PRIME MINISTER:
It's a fact...
MCGRATH:
... aren't you drawing there on historic comparisons...
PRIME MINISTER:
... no, the point I am making ...you're drawing a political comparison, because situations are different. And the reality is that Labor Governments over the last 30 years, have always delivered higher interest rates. I mean, it is an undeniable fact that the average interest rate now is $500, the mortgage repayment per month, is about $500 lower than it would have been if the interest rates that abtained under Paul Keating had continued under my Government. Nobody can dispute that interest rates over the last eight and a half years have been at historic lows. Now, I'm very happy to talk about interest rates, because it goes to the very heart and soul of people's personal and family financial security.
MCGRATH:
On that point, though, no-one can dispute also that interest rates around the world have been at historic lows. And, in fact, Australians' interest rates have been higher than many other developed countries.
PRIME MINISTER:
But the real question people have got to ask themselves is - who do they think will deliver the lower interest rates in the future? Do people really believe, that in a climate of rising international interest rates, that interest rates are more likely to remain lower under a Latham Labor Government than they will under a Coalition Government led by me with Peter Costello as Treasurer? I mean, if you look at the last eight and a half years, you look at the policies, you look at the determination of Labor to hand that control of industrial relations to the union movement, thus undermining the productivity gains which have underpinned the real wage growth of 14 per cent over the last eight and a half years, which is also feeding into the high living standards that average Australians are enjoying. I mean, look, however you look at it...
MCGRATH:
Interest rates on the way up though aren't they...
PRIME MINISTER:
However you look at it interest rates will always be lower under a Coalition Government...
MCGRATH:
But they're going up as the Reserve Banks says...
PRIME MINISTER:
...they will also be lower under a Coalition Government. That is the guarantee I give.
MCGRATH:
But you have no proof of that. I mean, Labor is promising that they will cut spending and taxation as a proportion of GDP. That should take pressure off interest rates.
PRIME MINISTER:
Catherine, don't listen to what they say, look at what they have done. Look at what we have done. I mean, I rest on that, that comparison. Every time under a Labor Government over the last 30 years, interest rates have gone up. They went up under Whitlam, they went up under Keating, they went up under Hawke and they will go up under Latham, because the policies of Labor are policies that send the budget into deficit. They can promise that they would not send the budget into deficit, but when they were last in Government, they did. We inherited a $10 billion deficit, a $96 billion debt. Now a Labor Government led by Mark Latham will be no different and it's a huge risk to the interest rate liabilities of middle Australia.
MCGRATH:
Let's go back, though, to this central point. Interest rates are rising under you now, we've had two rates increases and the Reserve Bank is...
PRIME MINISTER:
They're at historical lows. But the question...
MCGRATH:
It's going to rise again...
PRIME MINISTER:
The issue is - who is more likely to keep them lower in the future? People are...
MCGRATH:
But they are going up...
PRIME MINISTER:
...yes, but the point I'm making to you, Catherine, is that they're far more likely on the track record of both parties in government and the policies of both parties, they're far more likely to be higher under a Labor Government than under us. I mean, people know that interest rates now are at historic lows, that the average mortgage repayment is $500 lower than what it would have been if Mr Keating's rates had continued. So therefore, on all of the field evidence interest rates will be higher under Labor, they always go up under Labor.
MCGRATH:
Prime Minister, you are fighting this campaign on economic credibility. What major plan do you have for the future? You've had tax reform, you've had substantial labour market reform, but what's next on economic reform?
PRIME MINISTER:
Well, we will be unveiling in the course of the campaign a number of policies that address some of the central issues that this country must deal with over the next decade, the demographic change, the balance between the environment and development, the need to further encourage and bring forward the entrepreneurial culture of this country and that includes a robust defence of the existing industrial relations system and no return to a union dominated industrial relations system. What we have to do is to entrench and expand the economic strength and the economic prosperity of the last decade and you won't do that by handing back control of industrial relations to the union movement.
MCGRATH:
Dealing with your policies, though, after eight years, why are we only hearing about these sort of things now?
PRIME MINISTER:
Well, we've talked about demographic change now for two or three years. The Treasurer has led the debate in Australia on that issue, he produced an intergenerational report, he's forced the Labor Party finally to recognise the reality of some cost control in relation to the Pharmaceutical Benefits Scheme, after they said for two and a half years that it was going to be the end of all humanity if they supported that change, they've finally backflipped and supported it. We have been talking about this issue and the need to grapple with an ageing population for two or three years.
MCGRATH:
Now the campaign is starting today, but Parliament is sitting and the Senate is sitting, Cabinet will meet as normal, you're not yet the caretaker Prime Minister. It's a most bizarre start, forced into the timing really by the attacks on your credibility.
PRIME MINISTER:
I am sorry, Catherine, there's always a gap of two or three days between the announcement of the election and the commencement of the...
MCGRATH:
You don't normally have one House sitting and the other not.
PRIME MINISTER:
Well, Catherine, it's not bizarre at all and the reason that I didn't advise a prorogation of the Parliament yesterday to take effect yesterday, was that people, may I say, like your good self would immediately say well you're avoiding Senate scrutiny. I mean, I could have advised prorogation yesterday, but I didn't.
MCGRATH:
But you're starting this campaign in a more defensive position than you have the previous campaign.
PRIME MINISTER:
Well, the Australian people will resolve all of that. I am not into commentary. I'm into talking to the Australian people about my plans for the future. This election is about the next ten years. It's not about the last three days of the last election campaign. And the Australian people want to know from me, they want to know from Mr Latham, what our plans are for Australia and they particularly will make a decision on who they better trust to protect and defend their economic wellbeing.
MCGRATH:
And they want to know about Peter Costello, is he going to take over from you? What's going to happen in the next term?
PRIME MINISTER:
My position on that is very clear. I am immensely fortunate to have what I... who I regard as the finest Treasurer this country's had, as my deputy. I will continue if the Australian people are kind enough to re-elect me - and that's always the big proviso, naturally - if they're kind enough to re-elect me I'll continue as leader for so long as my party wants me to. And I don't think even my fiercest critics suggest that I've lost the energy, the commitment, focus or the zeal for the job.
MCGRATH:
Prime Minister, thank you very much. We look forward to the six week campaign.
PRIME MINISTER:
Thank you.
[ends]